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IN THE HIGH COURT OF MADHYA PRADESH
Sushrut Arvind Dharmadhikari and Pranay Verma, JJ.
Equitas Small Finance Bank Limited v. The State of
Madhya Pradesh
Writ Petition No. 26176 of 2023 (Indore);
Decided on 23.11.2023
(1) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 14 -- listing case for purpose of arguments on registration -- Chief Judicial Magistrate has to consider two aspects before passing order u/s. 14 -- (i) to determine whether secured assets fall within their territorial jurisdiction -- (ii) whether notice u/s. 13 (2) has been furnished -- listing case for purpose of arguments on registration absolutely illegal, and not requirement of law. (2019) 20 SCC 47 and (2013) 9 SCC 620 followed. Writ Petition No. 3024 of 2023 relied on. 2018 (3) MPLJ 123 and HDFC Bank Writ Petition No. 14976 of 2022 referred to. [Paras 15 & 18
(2) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 14 -- scope of power -- statutory obligation upon District Magistrate/Additional District Magistrate/Chief Judicial Magistrate to immediately move into action by passing order after verification of compliance of all formalities by secured creditor referred to in proviso to S. 14 (1) -- District Magistrate/Additional District Magistrate/Chief Judicial Magistrate has to act within stipulated time limit and pass suitable order for purpose of taking possession of secured assets -- nature of power is executory and ministerial, not adjudicatory. (2023) 1 SCC 675 and (2023) 3 SCC 210 followed. [Para 16
(3) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 14 -- secured assets given on lease or tenancy by borrower prior to mortgage -- tenants/lessee, on apprehension of dispossession from mortgaged property, approach High Court -- before deciding application u/s. 14, District Magistrate/Additional District Magistrate/Chief Judicial Magistrate shall follow mandate as held in cases of Harshad Govardhan Sondagar and Vishal N. Kalsaria. (2014) 6 SCC 1 and (2016) 3 SCC 762 referred to. [Para 17
(4) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 -- S. 14 -- guidelines/directions issued to be followed by District Magistrate/Additional District Magistrate/Chief Judicial Magistrate while passing orders for deciding applications u/s. 14 of Act. [Para 20B
¼1½ foÙkh; vkfLr;ksa dk çfrHkwfrdj.k vkSj iquxZBu rFkk çfrHkwfr fgr dk çorZu vf/kfu;e] 2002 & /kkjk 14 & çdj.k dks jftLVªhdj.k ij cgl ds ç;kstukFkZ lwphc) djuk & /kkjk 14 ds v/khu vkns'k ikfjr djus ds iwoZ eq[; U;kf;d eftLVªsV dks nks igyqvksa ij fopkj djuk gksrk gS & (i) ;g voèkkfjr djuk fd çfrHkwr vkfLr;k¡ mudh {ks=h; vf/kdkfjrk ds Hkhrj vkrh gSa ;k ugha & (ii) D;k /kkjk 13 ¼2½ ds v/khu lwpuk nh xbZ gS & çdj.k dks jftLVªhdj.k ij cgl ds ç;kstukFkZ lwphc) djuk furkar voS/k] rFkk fof/k dh vis{kk ughaA ¼2019½ 20 ,l lh lh 47 rFkk ¼2013½ 9 ,l lh lh 620 vuqlfjrA fjV ;kfpdk Øekad 3024 lu~ 2023 voyafcrA 2018 ¼3½ ,e ih ,y ts 123 rFkk fjV ;kfpdk Øekad 14976 lu~ 2022 fufnZ"VA ¼iSjk 15 ,oa 18½
¼2½ foÙkh; vkfLr;ksa dk çfrHkwfrdj.k vkSj iquxZBu rFkk çfrHkwfr fgr dk çorZu vf/kfu;e] 2002 & /kkjk 14 & 'kfä dh O;kfIr & ftyk eftLVªsV@vij ftyk eftLVªsV@eq[; U;kf;d eftLVªsV ij çfrHkwr ysunkj }kjk /kkjk 14 ¼1½ ds ijarqd esa fufnZ"V leLr vkSipkfjdrkvksa ds vuqikyu ds lR;kiu ds mijkar vkns'k ikfjr dj vfoyac dkjZokbZ djus dh dkuwuh ck/;rk gS & ftyk eftLVªsV @vij ftyk eftLVªsV@eq[; U;kf;d eftLVªsV dks fu;r le; lhek ds Hkhrj dk;Z djuk gksrk gS rFkk çfrHkwr vkfLr;ksa dk dCtk ysus ds ç;kstukFkZ mi;qä vkns'k ikfjr djuk gksrk gS & 'kfä dh ç—fr fu"iknd vkSj fyfidh;- U;k;fu.kkZf;d ughaA ¼2023½ 1 ,l lh lh 675 rFkk ¼2023½ 3 ,l lh lh 210 vuqlfjrA ¼iSjk 16½
¼3½ foÙkh; vkfLr;ksa dk çfrHkwfrdj.k vkSj iquxZBu rFkk çfrHkwfr fgr dk çorZu vf/kfu;e] 2002 & /kkjk 14 & m/kkj ysus okys }kjk ca/kd ds iwoZ çfrHkwr vkfLr;‚a iV~Vs ;k fdjk, ij nh xbZa & ca/kd laifÙk ls csdCtk fd, tkus dh vk'kadk gksus ij vfHk/kkfj;ksa@iV~Vsnkjksa ds mPp U;k;ky; tkus ij & ftyk eftLVªsV@vij ftyk eftLVªsV@eq[; U;kf;d eftLVªsV /kkjk 14 ds v/khu vkosnu fofuf'pr djus ds iwoZ g"kZn xkso/kZu lksankxj rFkk fo'kky ,u- dylkfj;k ds çdj.kksa esa ;Fkk vfHkfu/kkZfjr vkKk dk ikyu djsaA ¼2014½ 6 ,l lh lh 1 rFkk ¼2016½ 3 ,l lh lh 762 fufnZ"VA ¼iSjk 17½
¼4½ foÙkh; vkfLr;ksa dk çfrHkwfrdj.k vkSj iquxZBu rFkk çfrHkwfr fgr dk çorZu vf/kfu;e] 2002 & /kkjk 14 & vf/kfu;e dh /kkjk 14 ds vèkhu vkosnu fofuf'pr djrs le; ftyk eftLVªsV@vij ftyk eftLVªsV@eq[; U;kf;d eftLVªsV }kjk ikyu fd, tkus gsrq ekxZn'kZu@funs'k tkjhA ¼iSjk 20[k½
ORDER
1. Heard on the question of admission and interim relief. The instant writ petition under Article 226/227 of the Constitution of India has been filed by the petitioner being aggrieved by the inaction of Chief Judicial Magistrate, Khargone who is sitting tight over the application filed by the petitioner u/S 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(referred to as”SARFAESI Act” hereinafter) praying for the following relief :
“It is therefore prayed that for the peculiar facts contained herein and ground raised, the learned Chief Judicial Magistrate be directed to register the cases as listed in Annexure P-5 and dispose of then same within 30 days as prescribed in law.”
2. Brief facts of the case are that the petitioner is a banking company involved in the business of advancing housing loans to its customers.The petitioner had filed an application u/S 14 of the SARFAESI Act before the Chief Judicial Magistrate, Khargone [referred to as CJM, Khargone” hereinafter]against one Mr. Badruddin & ors in the month of December, 2022. The learned CJM, Khargone has neither registered the application nor taken any steps to proceed in the matter and in contravention to the provisions of section 14 of the SARFAESI Act, the CJM is listing the matter for arguments on registration. Being aggrieved, the petitioner filed an application dated 8.9.2023 under the Right to Information Act, 2005 seeking status of all similar SARFAESI Act matters pending before the CJM, Khargone which was forwarded by the State Public Information Officer, Distt. & Sessions Court, Mandleshwar to the CJM who has issued the list of cases u/S 14 of SARFAESI ACT pending before the CJM, Khargone annexed with the petition. Now the present petition is preferred.
3. Learned counsel for the petitioner submitted that the CJM, Khargone has failed to consider that the petitioner company is a secured creditor and the property in question is secured by way of mortgage. The CJM exceeded its jurisdiction by listing the cases u/S 14 of SARFAESI Act for the purpose of arguments on registration. In fact, the CJM ought to have considered only two aspects :
(i) Determine whether the secured assets fall within its territorial jurisdiction?
(ii) Whether notice u/S 13(2) of the SARFAESI Act has been furnished or not?
4. In support of his contention, learned counsel for the petitioner relied on the judgment passed by Single Bench of this Court in the case of Cholamandalam Investments and Finance Ltd. v. Additional District Magistrate and Others [2018(3) MPLJ 123] wherein , in para 20 it is held that :
20. “It has been held that the District Magistrate has to consider only two aspects. He has to first determine whether the secured asset falls within his territorial jurisdiction and secondly whether the notice under section 13(2) has been furnished or not and no adjudication has been contemplated at that stage.”
5. He further relied upon the order passed by the Division Bench of this Court in the case of HDFC Bank Ltd. v. Additional District Magistrate, Indore & Others in W.P. No. 14976/2022.
6 . Learned counsel for the respondent/State submitted that petition may be disposed of with directions to the CJM, Khargone to decide the applications filed u/S 14 of the SARFAESI Act within a time bound period.
7. Heard, learned counsel for the parties and perused the record.
8. Before adverting to the relief sought in the petition, it is apt to go through the provisions of section 14 of the SARFAESI Act which are reproduced below for convenience :
9. Section 14 of the SARFAESI Act :
“14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.--
(1) Where the possession of any secured assets is required to be taken by the secured creditor or if any of the secured
The District Magistrate's role under Section 14 of the SARFAESI Act is ministerial, requiring prompt action without adjudicating disputes between parties.
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 power of a designated magistrate under the recovery statute to facilitate possession of secured assets is purely ministerial, not adjudicatory. It requires no prior notice to debtors, no pre-regi....
The powers under Section 14 of the SARFAESI Act are ministerial; prior notice to the borrower is not required. Remedies are limited to the Debt Recovery Tribunal following action under the Act.
(1) Possession of secured asset – Powers exercisable by CMM/DM under Section 14 of SARFAESI Act are ministerial step – Section 14 of SARFAESI Act does not involve any adjudicatory process qua points ....
Point of Law : Nature of powers to be exercised by learned Chief Metropolitan Magistrate/learned District Magistrate, High Court in impugned judgment and order has rightly observed and held that powe....
The Chief Judicial Magistrate holds equivalent jurisdiction as the Chief Metropolitan Magistrate under the SARFAESI Act, permitting administrative orders for asset recovery.
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