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2022 Supreme(Online)(KER) 63047
HIGH COURT OF KERALA
GOPINATH P, J
THE SOUTH INDIAN BANK LTD – Appellant
Versus
THE CHIEF JUDICIAL MAGISTRATE – Respondent
WP(C)/35767/2022
SUNIL SHANKER VIDYA GANGADHARAN SANDHRA.S, GOVERNMENT PLEADER
The court clarified that Section 14 of the SARFAESI Act requires actual possession rather than symbolic possession for valid enforcement actions.
Headnote:
SARFAESI - Writ Petition - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act - Section 14 - The court interpreted Section 14's intention, emphasizing the need for actual possession rather than symbolic possession, which influenced its decision to quash the lower court's order.
Fact of the Case:
The petitioner challenged a Chief Judicial Magistrate's order under Section 14 of the SARFAESI Act, claiming that the Advocate Commissioner's report indicated only symbolic possession was taken, contrary to the intent of the Act.
Finding of the Court:
The court found that the lower court's closure of proceedings based on a report of symbolic possession contradicted the purpose of Section 14 of the SARFAESI Act.
Issues: Whether the closure of proceedings by the Chief Judicial Magistrate under Section 14 of the SARFAESI Act was justified in light of the Advocate Commissioner's report indicating only symbolic possession.
Ratio Decidendi: The court held that the essence of Section 14 is to ensure actual possession is taken, and the mere report of symbolic possession does not fulfill the statute's requirements.
Final Decision: The writ petition is allowed, and the lower court's order is quashed.
J U D G M E N T
The petitioner has approached this court being aggrieved by the fact that proceedings initiated against the petitioner under the provisions of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (hereinafter referred to as the SARFAESI Act) has culminated in Ext.P5 order of the Chief Judicial Magistrate, Kasaragod. It is pointed out that despite the report of the Advocate Commissioner appointed by that court (Ext.P4) which indicates that the Advocate Commissioner was not able to take physical possession of the property, the learned Magistrate closed the proceedings under of the SARFAESI Act recording that since Advocate Commissioner has reported that the possession has already been taken and 'handed over to the petitioner' the petition is only to be closed. The learned counsel appearing for the petitioner states that the very purpose of has been defeated as the Advocate Commissioner has clearly stated in his report that he could only take symbolic possession of the property. Having regard to the facts and circumstances of the case and considering the fact that the challenge in this writ petition is to an order under of the SARFAESI Act, I do not deem it necessary to issue notice to the party respondents, 2. Having heard the learned counsel for the petitioner and having perused Ext.P5 order of the learned Chief Judicial Magistrate and Ext.P4 report of the Advocate Commissioner appointed by that court, it appears that the learned counsel for the petitioner is right in submitting the very purpose of has been defeated by the leaned Magistrate closing the proceedings on the basis of a report filed by the Advocate Commissioner that he had taken symbolic possession of the property.
3. In the result this writ petition is allowed. Exhibit P5 is quashed. C.M.P No.216/2022 will stand restored to the file of the Chief Judicial Magistrate. The learned Chief Judicial Magistrate, Kasaragod shall complete the proceedings in accordance with law after taking note of the observations in this judgment.
