The time limit under Section 14 of the Act is directory; failure to act within stipulated time does not render the authority functus officio, emphasizing timely recovery for creditors.

JUDGMENT :

Amrita Sinha, J.

1. The writ petition is at the instance of a bank challenging the inaction on the part of the District Magistrate in taking steps in response to the request made by the bank under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (herein after referred to as ‘the Act’ for the sake of brevity).

2. The facts leading to the request made by the bank are as follows:-

3. The respondent no. 3, borrower availed loan facility from the bank in November, 2007. As the loan amount was not paid in accordance with the loan agreement, the account of the said respondent was marked as non performing asset 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 14^th 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 22^nd 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 submitted that the inaction on the part of the District Magistrate is in violation of the provisions of the Act and the Rules made thereunder. Non action/ inaction on the part of the District Magistrate is resulting in wrongful loss to the bank.

8. Prayer has been made to direct the District Magistrate to take steps strictly in accordance with Section 14 (1) of the Act.

9. Learned advocate representing the borrower strenuously opposes the prayer of the petitioner. It has been submitted that the second and third proviso to Section 14 (1) stipulates a time period within which the District Magistrate ought to have taken steps on receipt of the application made by the secured creditor under Section 14 (1) of the Act. On expiry of the prescribed time period, the District Magistrate become functus officio and, accordingly, no direction can be passed upon the District Magistrate, at this stage, to proceed with the application filed by the bank.

10. It has been contended that the Court ought not to revive the application under Section 14 (1) which has died a natural death due to efflux of the prescribed time period.

11. In support of the aforesaid submission the borrower relies on the decisions of the Hon’ble Supreme Court in the matter of Balkrishna Rama Tarle dead through legal representatives & Anr. Vs. Phoenix Arc Private Limited & Ors. reported in (2023) 1 SCC 662 and R.D. Jain & Company vs. Capital First Limited & Ors. reported in (2023) 1 SCC 675. Reliance has also been placed on the decision passed by the Hon’ble Division Bench of this Court in the matter of Birbhum District Central Co-operative Bank Limited & Ors. vs. Paresh Ku