The District Magistrate under SARFAESI Act retains authority to substitute authorized officers for possession of secured assets, and such actions do not render him 'functus officio' as they are ministerial in nature.

JUDGMENT :

16th April, 2025 THE APPELLATE TRIBUNAL :

1. This appeal (Misc. Appeal No. 19 of 2024) was decided and allowed vide judgment and order dated 30th August, 2024. WPA 27110 of 2024 was filed by the Respondents before the Hon’ble Calcutta High Court which was decided on 12.11.2024. In the judgment of the Hon’ble High Court it was ordered that :

“12. The appellate forum will only revisit the issue of service of notice of appeal upon the writ petitioners. If it appears that the writ petitioners were duly served, but they deliberately chose not to appear at the appellate stage, then the judgment passed by the Tribunal shall hold good.

13. If it is found that proper notice was not served upon the petitioners, then it will be open for the appellate authority to revisit the whole issue of the appeal all over again.

16. It is made clear that this Court has not entered into the merits of the appeal at all. If the petitioners fail to overcome the issue of notice before the Appellate Tribunal, then it will be open for the petitioners to agitate the other points in the impugned judgment before the competent forum in accordance with law, if so advised.”

Thereafter matter on service of notice was considered wherein it was observed that notices were served upon the Respondents No. 2 and 3. Respondent No. 2 is the sole proprietor, hence service upon Respondent No. 1 is also deemed to be sufficient. However, in the interest of justice, in compliance of the order of the Hon’ble High Court opportunity was granted to the Respondents to appear and argue the matter. Learned Counsel for Respondent as well as Appellant argued the matter.

2. Instant appeal is preferred against order dated 27th February, 2024, passed by Learned DRT-III, Kolkata, in S.A. 102 of 2021 (M/s. G. K. Communication -vs- Union Bank of India) whereby Learned DRT restrained the Appellant Bank from proceeding further in respect of the secured assets on the basis of the impugned order dated 4.1.2024 passed by Learned District Magistrate, South 24 Parganas.

3. Feeling aggrieved by the order, dated 4.1.2024, Appellant Bank preferred the instant appeal.

4. Heard the Learned Counsel for the parties and perused the record.

5. As per the pleadings of the parties the facts of the matter are that Respondent No. 1 is a proprietorship concern and Respondent No. 2 is the proprietor of the same. Respondents No. 3 and 4 were Guarantors of the Respondents No. 1 and 2. Erstwhile Andhra Bank (now merged in the Union Bank of India) granted a loan of Rs.1.44 crore to the Respondents wherein the Respondents No. 3 and 4 have created equitable mortgage in favour of the Bank by depositing Title Deeds. Account became irregular and was classified as N.P.A. Notice under Section 13 (2) of the SARFAESI Act, 2002 (hereinafter referred to as the Act) dated 3.12.2018, demanding an amount of Rs.1,49,13,651.39p was issued. Thereafter, notice under Section 13 (4) of the Act dated 27.2.2019 was also sent to the Respondents which was duly served. Appellant Bank proceeded under the SARFAESI Act, 2002 . An attempt was made by the Respondents for One Time Settlement which too could not be fructified. Thereafter, Appellant obtained an order under Section 14 of the Act from District Magistrate, South 24 Parganas on 18.11.2020. I.A. 842 of 2023, challenging the order of the District Magistrate, was filed by the Respondents which was dismissed on 18.5.2023 by the Learned DRT. Since possession could not be obtained and the then Authorised Executive Magistrate, Mr. Kaushik Pal, was transferred, thus, vide order dated 4.1.2024, District Magistrate, South 24 Parganas authorized one Shri Prasun Kumar Dhara WBCS (Executive) to take physical possession. I.A. 566 of 2024 was filed by the Respondents challenging the order dated 4.1.2024 which was disposed of by the impugned order.

6. Initially an order dated 12.11.2020 was passed by the Learned District Magistrate, 24 Parganas (South) under Section 14 of the Act. It was challenged by