The Chief Judicial Magistrate lacks jurisdiction to adjudicate borrower petitions under Section 14 of the SARFAESI Act, serving only a ministerial role.

JUDGMENT

This Writ Petition has been filed inter-alia seeking a declaration that Ext.P3 petition filed by the 2nd respondent before the Chief Judicial Magistrate Court, Kozhikode (hereinafter referred to as ‘the CJM’) is not maintainable and the issues raised in the petition cannot be adjudicated by the Chief Judicial Magistrate .

The brief facts:-

2. The petitioner, a banking company, initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the SARFAESI Act’) to recover amounts due under a loan availed by respondent Nos.2, 3 and 4 from it. The 2^nd respondent challenged the proceedings by an application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal-I, Ernakulam (hereinafter referred to as ‘the Tribunal’). The application was numbered as S.A. No.432 of 2024 before the Tribunal. The Tribunal, on 12.08.2024, issued a conditional interim order on I.A. No.2861 of 2024 in S.A. No.432 of 2024. The interim order of the Tribunal in I.A. No.2861 of 2024 in S.A. No.432 of 2024 was challenged before this Court by the 2nd respondent by filing OP(DRT) No.264 of 2024. This Court, on 22.08.2024, directed that the 2^nd respondent shall not be ousted from the secured asset subject to the condition that he pays a sum of Rs.1,00,00,000/- (Rupees one Crore only) towards the loan liability on or before 30.09.2024. When OP(DRT) No.264 of 2024 came up for consideration on 30.09.2024, this Court was informed that no amount had been paid by the 2^nd respondent and therefore, this Court, by Exhibit P5(a) judgment dated 30.09.2024 dismissed O.P(DRT) No.264 of 2024. It appears that after the dismissal of OP(DRT) No.264 of 2024, Exhibit P3 petition was filed by the 2nd respondent before the Chief Judicial Magistrate Court, Kozhikode (in the proceedings initiated by the petitioner- bank under Section 14 of the SARFAESI Act before that Court) seeking the following reliefs:-

“a) An order may be issued to recall the Advocate Commissioner appointed in CMP 747/2024;

b) An order and direction may be issued to furnish a fresh affidavit to the petitioner in CMP 747/2024;

c) To pass an order for the dismissal of CMP 747/2024 on the ground that the averments in the affidavit are not satisfactory to this Hon’ble court;

d) To pass an interim order directing the Advocate Commissioner to abstain from executing the order until the disposal of this CMP;

e) For such other relief as this Hon’ble Court may deem fit and proper in the circumstance of this case.’’

The petitioner bank filed an Exhibit P4 counter statement, also arguing that Exhibit P3 petition was not maintainable. The petitioner is before this Court aggrieved by the fact that the CJM has not disposed of the Exhibit P3 petition despite it being brought to the court's notice that the petition is not maintainable.

3. Sri. Mohan Jacob George, the learned counsel appearing for the petitioner, submits that the power of the Magistrate under Section 14 of the SARFAESI Act has been considered by the Supreme Court inBalkrishna Rama Tarle v. Phoenix ARC (P) Ltd.; (2023) 1 SCC 662. It is submitted that this Court also considered the powers exercised by the Magistrate under of the SARFAESI Act in State Bank of India, TVM and Another v. Chief Judicial Magistrate, Kollam and Others ; 2021 (6) KHC 83. It is submitted that, on the application of the law laid down by the Supreme Court inBalkrishna Rama Tarle (supra) and this Court inState Bank of India, Tvm (supra), it is clear that no application will lie at the instance of the borrower before the CJM as the CJM does not exercise any adjudicatory power while deciding applications under of the SARFAESI Act.

4.