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2015 Supreme(AP) 840

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
DILIP BABASAHEB BHOSALE, C. PRAVEEN KUMAR & M.S.K. JAISWAL, JJ.
M/s. T.R. Jewellery, a proprietary concern Rep. by its Proprietor Thiriveedhi Suresh Babu & Others – Petitioners
Versus
M/s. State Bank of India, Vedayapalem Branch, Nellore & Another – Respondents
Writ Petition Nos. 17589 & 17625 of 2014
Decided On : 27-11-2015

Advocates Appeared:
For the Petitioner:B. Chandrasen Reddy, Advocate.
For the Respondent: B.S. Prasad, Standing Counsel.

Headnote:

Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14 - Physical possession of schedule property - Chief Judicial Magistrate exercising his jurisdiction in Corporation area can assist secured creditor in taking possession of secured asset and pass an order in favor of secured creditor for purpose of taking possession or control of any secured asset - Petition proceed to decide reference came to be filed by a Secured Creditor before Court of Chief Judicial Magistrate Nellore requesting said Court to take by exercising powers said provision - By an order Chief Judicial Magistrate passed an order appointing an Advocate-Commissioner to take physical possession of schedule property by making an inventory of articles in schedule property after conducting - He was further directed to deliver property to secured creditor proper acknowledgment - Challenging same above Writ Petition came to be filed - Held, From judgments referred to above it is clear that Magistrate is only authorizing subordinate officers to take possession of assets after examining factual correctness of assertion made in affidavit - Therefore it can be said beyond any shadow of doubt that any assistance taken by financial institution/secured creditor for recovery of asset before authority referred to is only procedural in nature and no adjudication is involved - Hence word order used in proviso is only an administrative order made for taking possession of secured asset if all other conditions are fulfilled - That being so authorizing or adding an authority to exercise said power would not amount to delegation of power thereby violating mandate of provision - Writ Petition Dismissed (Para 37)

JUDGMENT :

C. Praveen Kumar, J.

Disagreeing with the view expressed in W.P.No.5347 of 2014 another Division Bench of this Court vide its order dated 24.07.2014 in W.P.Nos.17589 and 17625 of 2014 referred the following question to be decided by a Full Bench. In terms of the said order of reference, these Writ Petitions are posted before us to answer the question framed in the order of reference, which is as under:-

“Whether the Chief Judicial Magistrate exercising his jurisdiction in Corporation area can assist secured creditor in taking possession of secured asset and pass an order in favour of secured creditor for the purpose of taking possession or control of any secured asset?”

Taking Writ Petition No.17589 of 2014 as a lead petition, we proceed to decide the reference. An application under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short “the SARFAESI Act”) came to be filed by a Secured Creditor before the Court of Chief Judicial Magistrate, Nellore requesting the said Court to take physical possession of the schedule property by exercising powers under the said provision. By an order dated 08.05.2014, the learned Chief Judicial Magistrate passed an order appointing an Advocate-Commissioner to take physical possession of the schedule property by making an inventory of the articles in the schedule property after conducting a panchanama. He was further directed to deliver the property to the secured creditor under proper acknowledgment. Challenging the same, the above Writ Petition came to be filed.

Referring to Section 14 of the SARFAESI Act, a Division Bench of this Court in W.P. No.5347 of 2014 while holding that in non-metropolitan areas District Magistrate alone is competent to pass an order under Section 14 of the SARFAESI Act, set-aside the order passed by the Chief Judicial Magistrate. A coordinate bench of this Court, differed with the view expressed therein and referred the matter to a Full Bench observing that the nomenclature “Chief Metropolitan Magistrate (CMM)” used in Section 14 of the SARFAESI Act is inclusive of the nomenclature “Chief Judicial Magistrate (CJM)” as the powers and functions of both are one and the same.

Sri B.Chandrasen Reddy, the learned counsel for the petitioners mainly submits that under Section 14 of the SARFAESI Act, the Chief Judicial Magistrate has no jurisdiction to entertain an application made under the said provision. According to him, since SARFAESI Act is a self-contained Code, Section 3(2) of the Cr.P.C., cannot be made use of to come to a conclusion that the Chief Metropolitan Magistrate referred to in Section 14 includes C.J.M. in non-metropolitan area. He submits that if really the legislature intended to extend such power to C.J.M., they would have incorporated the same atleast in the amendment brought to Section 14 in the year 2013. Since the language of Section 14 is clear and unambiguous, no jurisdiction can be vested with the Chief Judicial Magistrate in a non-metropolitan area for exercising the power of assistance under Section 14 of the SARFAESI Act. He further submits that since the power is exercised by the Chief Metropolitan Magistrate while doing a judicial act, the same cannot be delegated to Chief Judicial Magistrate by giving a wider meaning to the nomenclature “Chief Metropolitan Magistrate”. He places reliance on the word “orders” used in proviso to Section 14 of the SARFAESI Act in support of his plea. Sri Sharad Sanghi, learned counsel for petitioners, in connected matter, urged that the Court cannot supply the omissions if any made by the Legislature and can only interpret the Law.

Both the counsel placed reliance on the Full Bench judgment of the Madras High Court (Madurai Bench) in K. Arockiyaraj v. The Chief Judicial Magistrate, Srivilliputhur and another, 2013 (4) L.W. 485 and two Division Bench judgments of the Bombay High Court in Arjun Urban Co-operative Bank Limited, Solapur




































































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