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2025 Supreme(Online)(CAL) 560
CALCUTTA HIGH COURT
Justice Amrita Sinha, J
STATE BANK OF INDIA AND ANR – Appellant
Versus
STATE OF WEST BENGAL AND ORS – Respondent
WPO 14 / 2025
Mr. Indrajit Bhattacharjee, Adv., Mr. Paritosh Sinha, Adv., Mr. Debangshu Dinda, Adv., Mr. Kallol Basu, Adv., Mr. Nimesh Mishra, Adv., Mr. Shauvik Sarkar, Adv., Mr. Atreya Chakraborty, Adv., Ms. Shreejita Sen, Adv.
The time limit for action under Section 14 of the Act is directory, allowing the District Magistrate to act beyond the stipulated period without losing jurisdiction.
Headnote:(A) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14 - Writ petition challenging inaction of District Magistrate regarding application for possession of secured asset - The court held that the time limit for action under Section 14 is directory, not mandatory, and failure to act within the stipulated time does not render the District Magistrate functus officio. (Paras 16, 24, 31)
(B) The court emphasized the importance of timely action by the District Magistrate to uphold the objectives of the Act, ensuring that secured creditors are not left remediless due to delays. (Paras 25, 27)
(C) The court directed the District Magistrate to dispose of the application within four weeks. (Para 31)
Facts of the case:
The bank filed a writ petition against the District Magistrate's inaction regarding a request for possession of a secured asset after the borrower defaulted on a loan. (Paras 1-3)
Findings of Court:
The court found that the District Magistrate retains jurisdiction to act under Section 14 despite delays and directed prompt action on the bank's application. (Paras 24, 31)
Issues: The main issues were whether the time limit for action under Section 14 is mandatory and whether the District Magistrate can act after the time limit has expired. (Paras 16, 20)
Ratio Decidendi: The court ruled that the time limit is directory, allowing the District Magistrate to act beyond the stipulated period, emphasizing the need for timely recovery of debts. (Paras 24, 31)
Result: Writ petition allowed; District Magistrate directed to act within four weeks.
| Table of Content |
|---|
| 1. writ petition challenging inaction (Para 1 , 2 , 3 , 7 , 8) |
| 2. hearing scheduled by district magistrate (Para 4) |
| 3. amount due from borrower (Para 5) |
| 4. inaction of district magistrate (Para 6) |
| 5. maintainability of writ petition (Para 9 , 10 , 11 , 12) |
| 6. time limit is directory (Para 13 , 14 , 15) |
| 7. time limit for action (Para 16) |
| 8. interpretation of time limit (Para 17) |
| 9. supreme court ruling (Para 18 , 19 , 20 , 21 , 22 , 23) |
| 10. jurisdiction remains despite delays (Para 24 , 25 , 26 , 27 , 28 , 29 , 30) |
| 11. writ petition allowed (Para 31 , 32 , 33) |
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 14th 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 22nd 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 Cou
