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TMI Blog2025 (3) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... ss if the District Magistrate or the Chief Metropolitan Magistrate, for any reason whatsoever, fails to act within the aforesaid time period. The secured creditor will be required to restart the process under Section 14 all over again which, in turn, will lead to further delay in recovery of the loan amount. There is no reason as to why a secured creditor will be made to suffer financially due to inaction or non-action or delayed action on the part of the statutory authorities. The very purpose and object of the Act will be frustrated if the recovery process fails. The same will aid in unjust enrichment of the borrower and financial loss to the secured creditor. The Act prescribes a remedy to the secured creditor to recover the unpaid loan amount by taking possession of the secured asset. If the secured creditor is not able to take possession of the mortgaged asset, then the lender will not be in a position to recover the dues. Merely holding the documents of the mortgaged asset, will not serve the purpose. It is only when the mortgaged property is sold, that the lender will get an opportunity to recover the dues unpaid by the borrower - There cannot be two opinions that the Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in July, 2014. A notice was issued by the bank demanding payment from the borrower. As the borrower failed to repay the loan amount, notice under Section 13(4) of the Act was issued in November, 2014. As the bank intends to take possession of the secured asset, a request was made before the District Magistrate under Section 14(1) of the Act on 14th October, 2022 along with the required affidavit affirmed by the authorized officer of the bank. 4. The District Magistrate, on receipt of the application from the bank, issued notice to the bank and the borrower to remain present at a hearing with all relevant original documents on 22nd March, 2024. The parties were present in the hearing, but no order has been passed by the District Magistrate. 5. According to the bank, a sum of Rs. 46, 92, 59, 815.61/- as in June, 2014 with further interest, incidental expenses, costs are due and payable by the borrower. 6. Learned advocate for the petitioners submit that the District Magistrate ought to have taken prompt necessary steps on receipt of the application made under Section 14(1) of the Act and ought not to have slept over the matter for such a long period of time. 7. It has been submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only directory and not a mandatory one. As no consequences has been prescribed in the Act for not taking steps within the stipulated time limit, accordingly, the District Magistrate may be permitted to take steps in response to the application made by the bank. 14. In support of the aforesaid submission learned advocate representing the State relies on the judgment delivered by the Hon'ble Supreme Court in the matter of C. Bright vs. District Collector & Ors. reported in (2021) 2 SCC 392. 15. In reply to the objection raised by the State respondent in maintaining the writ petition in the original side, learned advocate for the petitioner relies on the judgment delivered by the Hon'ble Division Bench of this Court in the matter of Amala Roy Das alias Amala Das Roy vs. State of West Bengal reported in AIRONLINE 2022 CAL 1154. 16. The issue which falls for consideration in the instant writ petition is whether the time limit for taking action by the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the Act is mandatory or not? Whether the Chief Metropolitan Magistrate or the District Magistrate can proceed to dispose of the application under Section 14 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard, to take possession of the secured assets and documents and forward the same to the secured creditor at the earliest. The aforesaid Act is a ministerial act and cannot brook delay. Time is the essence and spirit of the subject enactment. 20. In R.D. Jain (supra) the Court observed that as per the second proviso to Section 14 of the Act, suitable order for taking possession of the secured asset is required to be passed within a maximum period of sixty days from the date of application. Relying on the aforesaid observation the private respondents argue that, the time limit so fixed in the Act is mandatory and on failure to act within the stipulated time period, the District Magistrate becomes functus officio and cannot proceed any further to decide the Section 14 application. 21. Reference has also been made to the judgment of Anita Garg (supra) to impress the Court that the time limit in the Act is mandatory and the same cannot be extended under any circumstances. Paresh Kumar Mukherjee (supra) has been cited by the private respondents in support of the proposition that the Court cannot ignore the statutory provision, even if, it considers a distress to the result from its op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-action or delayed action on the part of the statutory authorities. The very purpose and object of the Act will be frustrated if the recovery process fails. The same will aid in unjust enrichment of the borrower and financial loss to the secured creditor. 27. If the submission of the borrower is to be accepted, then it will be a herculean task for the banks and financial institutions to recover the loan amount from the defaulting borrowers. The secured creditor will be left running from pillar to post to get the loan amount liquidated and the borrower may resort to all sorts of antics to delay in paying off the dues and lastly the banks and financial institutions may be compelled to write off the dues as bad debt. The entire business of lending will go for a toss if the procedure for recovery of loan is not a robust one. The borrower should not harbour the idea that once loan is obtained there is no way for the secured creditor to recover the same. At the same time the secured creditor should be assured that if the borrower fails to repay the loan amount, there is a mechanism in place to recover the same. Public money cannot be left to be squandered in such a manner. 28. The Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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