Back
IN THE HIGH COURT OF CALCUTTA
Dipankar Datta, J.
Dinesh Kumar Agarwal - Appellants
Vs.
State of West Bengal - Respondent
W.P. No. 27120 (W) of 2012
Decided On: 01.02.2013
SECURED ASSETS - JURISDICTION - SECTION 14 - CHIEF JUDICIAL MAGISTRATE - The Chief Judicial Magistrate lacked jurisdiction to entertain an application under Section 14 of the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002, as the authority to direct assistance is vested with the District Magistrate in non-metropolitan areas.
Fact of the Case:
A bank filed an application under Section 14 of the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002, before the Chief Judicial Magistrate, Barasat, North 24-Parganas, to enforce its security interest. The Magistrate ordered the Officer-in-Charge of the local police station to take possession of the secured asset and deliver it to the bank's authorized representative. However, the Magistrate later dropped the proceedings on the ground that the petitioner had not taken steps.
Finding of the Court:
The court held that the Chief Judicial Magistrate lacked jurisdiction to entertain the application under Section 14 of the Act, as the authority to direct assistance is vested with the District Magistrate in non-metropolitan areas. The court also held that the bank's possession of the secured asset was illegal and contrary to the provisions of the Act.
Issues: 1. Whether the Chief Judicial Magistrate had jurisdiction to entertain the application under Section 14 of the Act. 2. Whether the bank's possession of the secured asset was legal.
Ratio Decidendi: 1. Section 14 of the Act does not refer to the Chief Judicial Magistrate as an authority who is empowered to direct assistance. 2. The Act empowers the District Magistrate, not the Chief Judicial Magistrate, to extend assistance in non-metropolitan areas. 3. A statutory authority can exercise powers only to the extent conferred on it by law.
Final Decision: The court allowed the writ petition and directed the bank to restore possession of the secured asset to the petitioners within three days. The court also held that the bank could enforce its security interest either by proceeding under Section 13(4) of the Act or by filing an application afresh under Section 14 before the District Magistrate, North 24-Parganas.
Dipankar Datta, J.
1. For enforcing its security interest, the respondent bank approached the Chief Judicial Magistrate, Barasat, North 24-Parganas (hereafter the said Magistrate) with an application under section 14 of the Securitization and Reconstruction of the Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Act). The application was registered as M.P. Case No. 169/2011. An order was passed on 16th September, 2011 by the said Magistrate directing the Officer-in-Charge, Baguihati Police Station "to take actual possession of the immovable property/secured assets mentioned in the schedule of the petition along with Title Deeds and other documents i.c.w. the said assets from the O.P. and deliver the same to the authorized representative of the applicant/Bank....." It was further observed in the order that should there be resistance from any quarter, the officer-in-charge shall be at liberty to use so much force that is necessary for the purpose of taking possession of the secured asset. For the purpose of submission of report, the application was made returnable on 9th December, 2012. On the returnable date i.e. 9th December, 2012, the said Magistrate recorded that the petitioner has not taken steps and directed the M.P. Case No. 169/2011 to be dropped.
2. Despite termination of proceedings initiated purportedly under section 14 of the Act, the authorized officer of the bank with the assistance of the said officer-in-charge took over possession of the secured asset on 6th November, 2012.
3. It is not in dispute that the bank had deposited police costs amounting to Rs. 35,149/- pursuant to which assistance was extended for the purpose of taking over possession of the secured asset. Document to this effect has been produced by the learned counsel for the bank, which shall be retained with the records.
4. The basic contention raised by the petitioners is that the application under section 14 of the Act was not maintainable before the said Magistrate.
5. Mr. Chakraborty, learned counsel for the petitioners, refers to section 14 of the Act, which empowers the District Magistrate to exercise power of the nature specified therein. He has placed reliance on the decision of the Bombay High Court reported in AIR 2008 (NOC) 2474 (BOM) (Indusind Bank Ltd. Vs. State of Maharashtra) in support of his submission that the said Magistrate had no jurisdiction to entertain the application.
6. It is next contended by Mr. Chakraborty that even it is assumed that the said Magistrate had jurisdiction, possession of the secured asset could not have been taken on 6th November, 2012 with the assistance of the police since the application under section 14 of the Act, registered as M.P. Case No. 169/2011, did not survive after 9th December, 2012.
7. He has, accordingly, prayed for an order on the bank to restore possession of the secured asset in favour of the petitioners.
8. Learned counsel for the bank has raised two points while opposing the writ petition.
9. According to him, possession of the secured asset having been taken over by the bank, remedy of the petitioners now lies in approaching the Debts Recovery Tribunal having jurisdiction in terms of section 17 of the said Act and this writ petition ought not to be entertained. In support of his submission, he has relied on the decision of the Supreme Court reported in AIR 2007 SC 712 (M/s. Transcore vs. Union of India & Anr.). Reliance has also been placed by him on another decision of the Supreme Court of recent origin reported in (2010) 8 SCC 110 (United Bank of India vs. Satyawati Tondon & Ors.).
10. Next, it is submitted that the said Magistrate had the jurisdiction to entertain the application under section 14 of the said Act. In support of such contention, reliance has been placed by learned counsel on a decision of the Kerala High Court reported in [2006 (2) D.R.T.C. 408 (Ker.)] [Solaris Systems (P.) Ltd. vs. Oriental Bank of Commerce]. According t
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
