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TMI Blog2022 (1) TMI 1464X X X X Extracts X X X X X X X X Extracts X X X X ..... be maintainable. Whether Chief Judicial Magistrate would have the jurisdiction to entertain an application under Section 14 of the SARFAESI Act, 2002? - HELD THAT:- A perusal of Section 14 nowhere reflects that the authorities mentioned therein are required to act only after issuance of a notification to that effect. Besides, learned Senior Counsel for the Opposite Parties have not been able to show any provision, where by a notification was contemplated to be issued for any authority to exercise jurisdiction and/or Chief Judicial Magistrate could only act thereafter. Once the notified provision (Section 14) itself enables the authority to exercise jurisdiction, it is sufficient for the said authority to exercise powers as provided for with in the ambit of the provision. Consequently, the aforesaid argument of the Opposite Party Nos.2 and 3 cannot sustain and hence is rejected - the issue in affirmative and therefore hold that the Chief Judicial Magistrate would be equally competent to entertain an application filed by the secured creditor under Section 14 of the Act, 2002 and would be entitled to pass such orders as would be required to provide assistance to the secured creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Possession Notice dated 21st February, 2018 issued under Section 13 (4) of the SARFAESI Act. 3. The Petitioner-secured creditor filed an application under Section 14 of the SARFAESI Act before the District Magistrate (DM), Cuttack in April, 2018 seeking providing of official assistance for taking over actual physical possession of the secured asset-mortgaged residential property. Since the same was not decided within the stipulated time, the Petitioner approached this Court by filing a Writ Petition which was disposed of vide order dated 11th December, 2018 directing the District Magistrate (DM), Cuttack to dispose of the application within a period of six months. 4. The District Magistrate (DM), Cuttack vide order dated 19th of June, 2019 decided the application on merits of the case, while rejecting the application filed by the Petitioner-Finance Company. The Petitioner was constrained to file W.P.(C) No.16549 of 2019 assailing the aforesaid order dated 19th of June, 2019 which was disposed of by a Division Bench of this Court vide order dated 19th of September, 2019 directing the District Magistrate, Cuttack to decide the application, with in the scope of Section 14 of the SARF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Nos.2 and 3 submits that the present petition is not maintainable, as the petitioner has not availed the alternative statutory remedy by filing an application under Section 17 of the SARFAESI Act, 2002 before the DRT to lay challenge to the impugned order dated 09.03.2021 passed by Chief Judicial Magistrate (Opposite Party No.1). He further submits that the petitioner has not brought on record the reply dated 04.04.2018 submitted by the Opposite Party Nos.2 and 3 pursuant to which Rs.7,57,108/- was deposited with the petitioner creditor which disentitles it to maintain the present petition. Still further, the petitioner cannot be permitted to maintain two parallel remedies for the same cause i.e. one before the District Magistrate and the other one before the Chief Judicial Magistrate (Opposite Party No.1). That apart, there is no notification issued by the Government of India authorizing Chief Judicial Magistrate to exercise jurisdiction under Section 14 of the Securitisation Act, 2002. He thus submits that the present petition is devoid any merit and prays for dismissal of the same. 10. Having heard both the sides and after carefully scrutinizing the record of the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xx xxx 17. [Application against measures to recover secured debts.] - (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter with in forty-five days from the date on which such measures had been taken: [Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.] [Explanation. For the removal of doubts, it is here by declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.] [(1A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdiction- (a) the cause of action, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y challenge to an order passed by the Magistrate is conspicuous by its absence . The scheme of the Act, does not provide for a remedy to the secured creditor within the ambit and scope of Section 17 in absence of an impugned act of a secured creditor. In order to invoke the jurisdiction of the Tribunal and maintain an application before it, it is necessary that there ought to be an action of a secured creditor which is a subject matter of challenge before the DRT. The scope of relief which the Tribunal is intended to grant is provided for under Section 17(4) which also does not in any way provide for an order which the secured creditor is looking for in the present petition. The secured creditor therefore would not have a remedy to challenge an order of the Magistrate before the Tribunal in such circumstances. 14. Still further Division Bench of Punjab and Haryana High Court Allahabad Bank V/s District Magistrate, Ludhiana 2021 (3) PLR 690; 2021 (4) RCR (Civil) 571 authored by one of us (J. Jaswant Singh) while considering a similar issue has held in extracted Para 30 as under :- 30. .. It thus clear, that the District Magistrate does not assume any adjudicatory function while exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are taken by the secured creditor or his authorized officer. The remedy, therefore, under Section 17 of the SARFAESI Act, would not be available to the secured creditor or his authorized officer for rejection of an application preferred by the said secured creditor or his authorized person under the SARFAESI Act. In the light of the above, the order which has been passed by the District Magistrate under Section 14 of the SARFAESI Act is final qua the petitioner and under these circumstances, the remedy available to the petitioner is only under Article 226/227 of the Constitution of India, which remedy the petitioner has rightly availed of. Reliance on the judgment of the Hon'ble Supreme Court in Kaniyalal Lalchand Sachdev and others' case (supra) by the counsel for respondent No.2 is totally misplaced, where the Hon'ble Supreme Court was considering Section 17 of the SARFAESI Act when the person aggrieved was neither the secured creditor nor the authorized officer but any other person. The said judgment, therefore, would not be attracted to the present case. [Emphasis supplied] 16. We respectfully agree with the aforesaid views and while reiterating the same, reject th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e therefore supports the impugned order and prays for dismissal of the present petition. 19. Having heard learned counsel for the respective parties, we find that this issue would not detain us any longer, in view of the authoritative pronouncement of the Hon ble Supreme Court in the case of Authorised Officer, Indian Bank V/s D. Visalakshi and another 2019 AIR SC 4619 where in in Para 34 and 48, it has been held as under- 34. Notably, the powers and functions of the CMM and the CJM are equivalent and similar, in relation to matters specified in the Cr.P.C. These expressions (CMM and CJM) are interchangeable and synonymous to each other. Moreover, Section 14 of the 2002 Act does not explicitly exclude the CJM from dealing with the request of the secured creditor made thereunder. The power to be exercised under Section 14 of the 2002 Act by the concerned authority is, by its very nature, non judicial or State s coercive power. Furthermore, the borrower or the persons claiming through borrower or for that matter likely to be affected by the proposed action being in possession of the subject property, have statutory remedy under Section 17 of the 2002 Act and/or judicial review under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Magistrate. Therefore, both the authorities are equally competent to exercise the jurisdiction. 21. As regards the next contention advanced on behalf of Opposite Party Nos.2 to 3 that there is no notification issued by the Government of India authorizing Chief Judicial Magistrate to exercise powers under Section 14 is concerned, the same is also equally without merit. A perusal of Section 14 nowhere reflects that the authorities mentioned therein are required to act only after issuance of a notification to that effect. Besides, learned Senior Counsel for the Opposite Parties have not been able to show any provision, where by a notification was contemplated to be issued for any authority to exercise jurisdiction and/or Chief Judicial Magistrate could only act thereafter. Once the notified provision (Section 14) itself enables the authority to exercise jurisdiction, it is sufficient for the said authority to exercise powers as provided for with in the ambit of the provision. Consequently, the aforesaid argument of the Opposite Party Nos.2 and 3 cannot sustain and hence is rejected. 22. In view of above, we answer the first issue in affirmative and therefore hold that the Chief Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions taken by the secured creditor under the Act. 27. It is to be noticed that Section 14 of the Act, 2002 was amended with effect from 15.01.2013 and a proviso was added, which requires the secured creditor to file an application accompanied with an affidavit duly affirmed by the authorised officer of the secured creditor with respect to 9 points stipulated therein. Such recording of satisfaction is only to be restricted with regard to the factual correctness of the affidavit filed by the secured creditor and cannot be stretched to include any quasi-judicial or an adjudicatory function. Hon'ble Supreme Court in Standard Chartered Bank v. Noble Kumar 9 held as under :- 26. An analysis of the 9 sub-clauses of the proviso which deal with the information that is required to be furnished in the affidavit filed by the secured creditor indicates in substance that (i) there was a loan transaction under which a borrower is liable to repay the loan amount with interest, (ii) there is a security interest created in a secured asset belonging to the borrower, (iii) that the borrower committed default in the repayment, (iv) that a notice contemplated under Section 13(2) was in fact issued, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trict Magistrate is required to pass an order within 60 days, but there is no similar provision for the officer so deputed by him in terms of Section 14(1A) of the Act, 2002 to implement the order in a time bound manner. Since the very object of the Act, 2002 is for ensuring speedier recovery of public money we find, that there ought to have been time limits provided for such officer as well. This would ensure that the orders passed, by the District Magistrate are not frustrated by undue delay by the implementing officer(s). Therefore, we find that the intent of timely action under Section 14 would be complete only when time lines are equally provided at the stage of execution as well. It is only then, in our considered opinion would the real object of Act, 2002 be fully achieved. [32] Two principles of construction one relating to casus omissus and the other in regard to reading the statute as a whole appear to be well settled. Under the first principle, a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself. However, at the same time the need for supplying casus omissus should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiny to ensure that the object of the said provision is not frustrated. [33] In view of the aforesaid discussion, in our opinion, following principles would emerge as regards the scope of functions of the District Magistrate while exercising powers under Section 14 of the Securitisation Act, 2002:- (i) District Magistrate would not involve in any process of adjudication of any inter se rights of the parties, while examining any application under Section 14 of the Act, 2002. (ii) Proviso to Section 14 makes it mandatory to record satisfaction by the District Magistrate which is to be restricted with regard to the factual correctness of the 9-point affidavit to be filed by the secured creditor. It cannot examine the legal validity of the steps so taken by the secured creditor as depicted in the affidavit. If the borrower is aggrieved of such steps the remedy would be to approach the DRT. (iii) If any person is aggrieved of the order of the District Magistrate, the aggrieved person can approach the Debts Recovery Tribunal, under Section 17 of the Act, 2002 as an order passed under Section 14 is in pursuance to the steps provided under Section 13(4). (iv) In case, if the District Magis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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