A status quo order from the DRT does not preclude the Magistrate from keeping the MC pending rather than dismissal, allowing future proceedings under Section 14 of the SARFAESI Act.

JUDGMENT

(Dated this the 28^th day of November 2025)

The petitioner, being a financial institution, sought the assistance of the Additional Chief Judicial Magistrate, Ernakulam, by filing M.C.No.80 of 2023 under section 14 of the SARFAESI Act for taking physical possession of the secured assets created by the borrowers while taking a loan. While the MC was pending, the respondents filed S.A.No.716 of 2025 before the DRT – I, Ernakulam. On 15.10.2025, the DRT passed an order to maintain status quo in respect to the property under mortgage. Thereafter, the same was extended. In the meanwhile, the M.C.No.80 of 2023 came up for consideration before the learned CJM, Ernakulam, on 27.10.2025. On that day, by Ext.P3 order, the MC was dismissed on the ground that steps are not taken by the petitioner to substitute the commissioner stating that there is a status quo order in force, whereby the bank is precluded from taking physical possession of the secured assets.

2. The petitioner submits that when the matter is pending before DRT and a status quo order is passed not to take physical possession of secured assets, the bank cannot invoke action under Section 14 and seek assistance of the Magistrate to take physical possession through a Commissioner. Merely because a status quo order is passed by DRT, the Magistrate ought not have dismissed the same, but instead, should have kept the M.C. pending, till the status quo order is either varied or vacated and therefore, seeks to set aside Ext.P3.

3. A counter affidavit is filed by the 1st respondent, in which it is contended that it is on the basis of the petitioner’s submission that they are not intending to take physical possession in view of the order of the DRT that, the Learned Magistrate has dismissed the petition. The 3^rd respondent is no more and without impleading the legal heirs in Section 14 petition, the bank cannot proceed further. Therefore, the W.P.(C) be dismissed.

4. Section 14 is invoked by a secured creditor where the possession of secured asset is taken by a secured creditor or if any of the secured asset is required to be sold or transferred by the secured creditor under the provisions of the Act.

5. The learned Magistrate had dismissed the Section 14 application on the sole ground that there is a status quo order from the DRT and therefore, the bank will not be able to take physical possession of the secured assets and hence, no assistance is required as of now.

6. Regarding the question of dismissal of the petition on the ground of status quo order by the DRT, the learned Magistrate ought to have kept the M.C. pending as the S.A. is now posted for final hearing. Since the S.A. is now posted for final hearing to

11.12.2025, if Ext.P3 is not interfered with, the bank will have to initiate fresh proceedings under Section 14 of the Act to obtain a fresh order. Therefore, on a consideration of the facts and circumstances of the case and taking note that the S.A. is posted for final hearing to 11.12.2025, I deem it appropriate to set aside Ext.P3 and restore M.C.No.80 of 223 back to file. The petitioner bank shall take fresh steps in the M.C. to implead the legal heirs of the 3^rd respondent, who passed away on 6.6.2025 within 2 weeks from the date of restoring the MC. Thereafter, it will be open to the petitioner to obtain orders in M.C. once the status quo is vacated and the S.A. is disposed.

With these directions, this W.P. is disposed of.