IMPORTANT POINT
Application under S. 14 of SARFAESI Act can be made only to Chief Metropolitan Magistrate, but orders passed by In-charge Chief Metropolitan Magistrate not bad in law

B. P. Colabawalla, J.—By these Petitions under Article 226 of the Constitution of India, the Petitioners challenge the orders passed by the In-charge Chief Metropolitan Magistrate, Mumbai, under the provisions of section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the “SARFAESI Act”).

2. In all these Petitions, the issue raised before us is that all these orders passed under section 14 by the In-charge Chief Metropolitan Magistrate, are a nullity on the ground that he had no authority and/or power to pass the impugned orders. In other words, it is the contention of the Petitioners in all these Petitions, that an Application under section 14 of the SARFAESI Act can be made only to the Chief Metropolitan Magistrate, and therefore, the orders passed by the In-charge Chief Metropolitan Magistrate are bad in law and ought to be set aside by us, in our extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India. Since this is the only point canvassed and which requires our consideration, we are not setting out the facts in each of the above Writ Petitions. For the sake of completeness of this judgment, we will refer to the facts in Writ Petition (L) No.2634 of 2015.

3. In this Writ Petition, it is the case of the Petitioners that the Respondent Bank had sanctioned certain credit facilities to Respondent No.4 (Sharavan Bishnoi, Proprietor of M/s Ganpat Steel). In respect of the aforesaid facilities, the Respondent Bank claims a mortgage over Flat No.15, 6th Floor, Building No.2, Navjeevan Co-operative Housing Society, Dr. D. V. Marg, Lamington Road, Mumbai, 400 008 (hereinafter referred to as “mortgage property”). Since Respondent No.4 defaulted in repayment of the credit facilities granted to him, a Demand Notice dated 20th February, 2013 was issued under section 13(2) of the SARFAESI Act. After the issuance of the aforesaid Demand Notice and since it was not complied with, the Respondent Bank took possession of the mortgaged property under section 13(4) of the SARFAESI Act.

4. To challenge the aforesaid action, on 20th September, 2013, the Petitioners filed Securatization Application No.62 of 2015, inter alia, challenging the 13(2) Notice as well as the measures taken by the Respondent Bank under section 13(4) of the SARFAESI Act. Since the Respondent Bank was unable to get physical possession of the mortgaged property, it filed an Application under section 14 of the SARFAESI Act in the Court of the Chief Metropolitan Magistrate (being case No.192/SA/2013) requesting him to take possession of the mortgaged property and hand over the same to the Respondent Bank. This Application under section 14 came to be allowed on 15th October, 2013 by the In-charge Chief Metropolitan Magistrate.

5. This order dated 15th October, 2013 of the In-charge Chief Metropolitan Magistrate, was sought to be challenged by the Petitioners before the Debts Recovery Tribunal (DRT), by seeking amendments to Securitization Application No.62 of 2014. In view of the fact that the Applicants therein (Petitioners herein) were ready and willing to pay the outstanding debts of the Respondent bank and offered to deposit (i) a sum of Rs.50,00,000/- within one week from the date of the said order; (ii) a further a sum of Rs.50,00,000/- by the following week; and (iii) the balance outstanding debt with interest, within six months from 28th July 2015, the DRT –II, Mumbai, directed the Petitioners to deposit the aforesaid amounts as per the aforementioned time schedule, failing which, the Securitization Application was to stand dismissed.

6. It is the case of the Petitioners that due to financial constraints as well as non co-operation of the borrower (Respondent No.4 herein), the Petitioners could not comply with the aforesaid order of deposit. In view thereof, Securitization Application No.62 of 2014 was dismissed by the DRT – II, Mumbai, on 2