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TMI Blog2020 (11) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... was thus held that it would cause greater public inconvenience if it were held that neglecting to observe the provisions of the statute made the verdicts of all juries taken from the list ipso facto null and void so that no jury trials could be held until a duly revised list had been prepared. In T.V. Usman v. Food Inspector, Tellicherry Municipality, Tellicherry [ 1994 (1) TMI 292 - SUPREME COURT] , the time period during which report of the analysis of a sample Under Rule 7(3) of the Prevention of Food Adulteration Rules, 1955 was to be given, was held to be directory as there was no time-limit prescribed within which the prosecution had to be instituted. When there was no such limit prescribed then there was no valid reason for holding the period of 45 days as mandatory. Of course, that does not mean that the Public Analyst can ignore the time-limit prescribed under the rules. He must in all cases try to comply with the time-limit. But if there is some delay, in a given case, there is no reason to hold that the very report is void and, on that basis, to hold that even prosecution cannot be launched. This Court distinguished between failure of an individual to act in a given tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the object and purpose of the said time limit is to ensure that such applications are decided expeditiously so as to enable secured creditors to take physical possession quickly and realise their dues. Moreover, as stated earlier, the consequences of non-compliance with the time limit are not specified and the sequitur thereof would be that the District Collector/District Magistrate concerned would not be divested of jurisdiction upon expiry of the time limit. In this connection, it is also pertinent to bear in mind that if the consequences of non-compliance test is applied, the borrower, guarantor or lessee, as the case may be, is not adversely affected or prejudiced, in any manner, whether such applications are decided in 60, 70 or 80 days. On the other hand, the secured creditor is adversely affected if the provision is construed as mandatory and not directory in as much as it would delay the process of taking physical possession of assets instead of expediting such process by entailing the filing of another application for such purpose. For all these reasons, the time limit stipulation in the amended Section 14 of the SARFAESI Act is directory and not mandatory. 2. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the basis that once the liability of a borrower to repay crystallises; it becomes due and that on account of delay, the account of such borrower becomes substandard and non-performing. 4. Recently, this Court noticed the objects and reasons for amending the Act in 2014 and held that the Magistrate takes possession of the asset and forwards such asset to the secured creditor Under Section 14(1); the management of the business of a borrower can actually be taken over Under Section 15 of the Act and that Section 13(4) must be read in the light of Sections 14 and 15. These are separate and distinct modes of exercise of powers by a secured creditor under the Act [Hindon Forge Private Limited and Anr. v. State of Uttar Pradesh through District Magistrate, Ghaziabad and Anr. (2019) 2 SCC 198]. 5. Section 14 of the Act, as originally enacted, empowered the Chief Metropolitan Magistrate or the District Magistrate to take possession of such assets and documents relating to secured assets. Later, by the Central Act No. 1 of 2013, which came into force on 15.1.2013, a proviso to Sub-section (1) of Section 14 of the Act was inserted contemplating that upon filing of an affidavit, in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 SC 751] . The principle of literal construction of the statute alone in all circumstances without examining the context and scheme of the statute may not serve the purpose of the statute [Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd. and Ors., (1987) 1 SCC 424] . 8. The question as to whether, a time limit fixed for a public officer to perform a public duty is directory or mandatory has been examined earlier by the Courts as well. A question arose before the Privy Council in respect of irregularities in the preliminary proceedings for constituting a jury panel. The Municipality was expected to revise the list of qualified persons but the jury was drawn from the old list as the Sheriff neglected to revise the same. It was in these circumstances, the decision of the jury drawn from the old list became the subject matter of consideration by the Privy Council. It was thus held that it would cause greater public inconvenience if it were held that neglecting to observe the provisions of the statute made the verdicts of all juries taken from the list ipso facto null and void so that no jury trials could be held until a duly revised list had been prepared [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uished between failure of an individual to act in a given time frame and the time frame provided to a public authority, for the purposes of determining whether a provision was mandatory or directory, when this Court held that it is a well-settled principle that if an act is required to be performed by a private person within a specified time, the same would ordinarily be mandatory but when a public functionary is required to perform a public function within a time-frame, the same will be held to be directory unless the consequences therefor are specified [Nasiruddin and Ors. v. Sita Ram Agarwal, (2003) 2 SCC 577] . 13. In P.T. Rajan v. T.P.M. Sahir and Ors. (2003) 8 SCC 498, this Court examined the affect of non-publication of final electoral rolls before the time of acceptance of nomination papers. The Court held as under: 48. Furthermore, even if the statute specifies a time for publication of the electoral roll, the same by itself could not have been held to be mandatory. Such a provision would be directory in nature. It is a well-settled principle of law that where a statutory functionary is asked to perform a statutory duty within the time prescribed therefor, the same would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now, coming to the Judgments referred to by Mr. Khan. In A.K. Pandey, the Respondent was not provided 96 hours of interval time as contemplated by the relevant rules, before commencing a trial by the Court Martial. This Court held that such proceedings were vitiated as the purpose of the time limit was that before the Accused is called upon for trial, he must be given adequate time to give a cool thought to the charge or charges for which he is to be tried, decide about his defence and ask the authorities, if necessary, to take reasonable steps in procuring the attendance of his witnesses. He may even decide not to defend the charge(s) but before he decides his line of action, he must be given clear ninety-six hours. 18. Harshad Govardhan Sondagar was a case where the person in possession claimed tenancy rights in the premises as well as a protected tenancy, being a tenant prior to creation of a mortgage. It was held that the remedy of an aggrieved person against a decision of Chief Metropolitan Magistrate or a District Magistrate lay only before the High Court. However, after the aforesaid judgment was rendered on 3.4.2014, the Act had been amended and Sub-section 4A was inserted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the possession. The District Magistrate will still be enjoined upon, the duty to facilitate delivery of possession at the earliest. 21. Even though, this Court in United Bank of India v. Satyawati Tondon and Ors. (2010) 8 SCC 110 held that in cases relating to recovery of the dues of banks, financial institutions and secured creditors, stay granted by the High Court would have serious adverse impact on the financial health of such bodies/institutions, which will ultimately prove detrimental to the economy of the nation. Therefore, the High Court should be extremely careful and circumspect in exercising its discretion to grant stay in such matters. Hindon Forge Private Limited has held that the remedy of an aggrieved person by a secured creditor under the Act is by way of an application before the Debts Recovery Tribunal, however, borrowers and other aggrieved persons are invoking the jurisdiction of the High Court Under Articles 226 or 227 of the Constitution of India without availing the alternative statutory remedy. The Hon'ble High Courts are well aware of the limitations in exercising their jurisdiction when affective alternative remedies are available, but a word of caut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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