Back
High Court of Madhya Pradesh
Prakash Shrivastava, Smt. Anjuli Palo, JJ.
RACHNA MAHAWAR - APPELLANT
Versus
DISTRICT MAGISTRATE & ORS. - RESPONDENTS
W. P. No. 5877 of 2021
Decided On : 01-04-2021
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Jurisdiction of Additional District Magistrate - Section 14
Fact of the Case:
The petitioner filed a petition aggrieved by the order passed by the Additional District Magistrate under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the Act). The petitioner raised a preliminary objection regarding the availability of an alternate remedy of appeal.
Finding of the Court:
The court considered the jurisdiction of the Additional District Magistrate to pass an order under section 14 of the Act. It held that the power under section 14 can be exercised by the Additional District Magistrate, and the order passed by the Additional District Magistrate cannot be held to be beyond jurisdiction. The appropriate remedy for the petitioner is to file an appeal under section 17 of the Act.
Issues: The issues raised included the availability of an alternate remedy of appeal and the interpretation of the term 'District Magistrate' under section 14 of the Act.
Ratio Decidendi: The court relied on the judgment of the Supreme Court in the matter of Authorised Officer, Indian Bank vs. D. Visalakshi and another, (2019) 20 SCC 47, which held that the term 'District Magistrate' as contained in section 14 of the Act is inclusive of Additional District Magistrate. The court also referred to the judgment in the matter of Hari Chand Aggarwal vs. Batala Engineering Co. Ltd. and others, AIR 1969 SC 483, to distinguish the nature of power exercisable under section 14 of the Act from the power under Section 29 of the Defence of India Act (1962).
Final Decision: The writ petition was disposed of after granting liberty to the petitioner to avail the remedy of appeal under section 17 of the Act.
ORDER PRAKASH SHRIVASTAVA, J. – This petition has been filed by the petitioner aggrieved with the order dated 16-2-2021 passed by the Additional District Magistrate under section 14 of the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short ‘the Act’).
2. A preliminary objection has been raised in respect of availability of alternate remedy of appeal.
3. Submission of learned counsel for the petitioner is that against such an order the remedy of appeal under section 17 of the Act is not available and that the power under section 14 can be exercised only by the District Magistrate and not the Additional District Magistrate.
4. I have heard the learned counsel for the parties and perused the record.
5. The issue relating to the jurisdiction of the Additional District Magistrate to pass an order under section 14 of the Act needs consideration by this Court because if the Additional District Magistrate had no jurisdiction to pass the impugned order then the availability of alternative remedy of appeal will not come in the way of the petitioner from approaching this Court.
6. Section 14 of the Act gives the power to Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset. The term “District Magistrate” has not been defined under the Act. Section 37 of the Act makes it clear that the application of other laws is not barred and provides as under : –
“37. Application of other laws not barred. – The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force.”
7. The term “District Magistrate” has been defined under section 20 of the Cr.P.C., which reads as under : –
“20. Executive Magistrates. – (1) In every district and in every metropolitan area, the State Government may appoint as many persons as it thinks fit to be Executive Magistrates and shall appoint one of them to be the District Magistrate. (2) The State Government may appoint any Executive Magistrate to be an Additional District Magistrate, and such Magistrate shall have such of the powers of a District Magistrate under this Code or under any other law for the time being in force, as may be directed by the State Government. (3) Whenever, in consequence of the office of a District Magistrate becoming vacant, any officer succeeds temporarily to the executive administration of the district, such officer shall, pending the orders of he State Government, exercise all the powers and perform all the duties respectively conferred and imposed by this Code on the District Magistrate. (4) The State Government may place an Executive Magistrate in charge of a sub-division and may relieve him of the charge as occasion requires; and the Magistrate so placed in charge of a sub-division shall be called the Sub-divisional Magistrate. (4A) The State Government may, by general or special order and subject to such control and directions as it may deem fit to impose, delegate its powers under sub-section (4) to the District Magistrate. (5) Nothing in this section shall preclude the State Government from conferring, under any law for the time being in force, on a Commissioner of Police, all or any of the powers of an Executive Magistrate in relation to a metropolitan area.”
8. A District Magistrate while passing an order under section 14 of the Act, exercises only administrative or executive function. Section 20 of the Cr.P.C. makes it clear that the Additional District Magistrate also exercises the same power as are exercisable by the District Magistrate as per the direction of the State Government. Hence, the power under section 14 of the A
The main legal point established is that the power under section 14 of the Act can be exercised by the Additional District Magistrate, and the appropriate remedy for challenging an order under sectio....
The District Magistrate or Chief Metropolitan Magistrate must personally exercise the powers under S.14 of the Securitisation Act, as these powers cannot be delegated.
The Court clarified the jurisdiction of the Chief Judicial Magistrate under Section 14 of the SARFAESI Act, holding that both the District Magistrate and Chief Judicial Magistrate have the jurisdicti....
The nature of power under Section 14 of the Act is executory and ministerial in nature and not adjudicatory.
Possession of the secured asset can be taken by the secured creditor before confirmation of sale of the secured assets as well as post confirmation of sale.
A District Magistrate's authority under the SARFAESI Act is administrative; subsequent orders can be made to modify the officer assigned for asset possession without it being deemed functus officio.
The Additional Chief Metropolitan Magistrates and Additional District Magistrates can exercise the powers under Section 14 of the SARFAESI Act.
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
