M/s R.D. Jain and Co. Versus Capital First Ltd. & Ors.

M/s R.D. Jain and Co. Versus Capital First Ltd. & Ors. - Supreme Court Case Judgment 2022 -

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 175 OF 2022

M/s R.D. Jain and Co. …Appellant(s)

Versus

Capital First Ltd. & Ors. …Respondent(s)

J U D G M E N T

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 22.12.2017 passed by the High

Court of Judicature at Bombay in Writ Petition No.

1961/2017, by which, the Division Bench of the High

Court while interpreting Section 14 of the Securitisation

and Reconstruction of Financial Assets and Enforcement

Security Interest Act, 2002 (hereinafter referred to as the

“SARFAESI Act”) has held that (i) the District Magistrate,

Chief Metropolitan Magistrate is not a persona designata

for the purposes of Section 14 of the SARFAESI Act; (ii) the

expression “District Magistrate” and the “Chief

Metropolitan Magistrate” as appearing in Section 14 of the

SARFAESI Act shall deem to mean and include Additional

District Magistrate and Additional Chief Metropolitan

Magistrate for the purposes of Section 14 of the SARFAESI

Act, the borrower has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as

under:

2.1 That respondent No. 1 herein – Financial Institution –

Capital First Limited is the secured creditor (hereinafter

referred to as the “secured creditor”) within the meaning of

Section 2(1)(zd) of the SARFAESI Act. That the secured

creditor instituted proceedings under the SARFAESI Act for

recovery of the amount due and payable by the appellant

herein – borrower. The said proceedings initiated under

Section 13(4) of the SARFAESI Act, the secured creditor

proceeded to take possession of the secured asset. However,

the borrowers refused to handover the physical possession

of the secured asset. The secured creditor took symbolic

possession of the secured asset on 21.01.2017 and affixed

the possession notice at the said secured asset. That on

17.03.2017, the secured creditor filed an application under

Section 14 of the SARFAESI Act with the learned Chief

Metropolitan Magistrate Court, Esplanade, Mumbai, interalia, praying for assistance from the learned Chief

Metropolitan Magistrate in taking physical possession of the

secured asset. The matter was adjourned from time to time

and lastly, it was adjourned to 29.07.2017. As mandated by

second proviso to subsection (1) of Section 14 of the

SARFAESI Act, the application was required to be disposed

of within a period of 30 days and as the application was not

decided within the period mandated by the statute, the

secured creditor moved an application for advancement. The

said application came to be dismissed by the learned Chief

Metropolitan Magistrate, interalia, on the ground that the

said application is a fresh application and many old

applications are pending. Therefore, the secured creditor

approached the High Court by way of the present writ

petition for an appropriate direction and order directing the

learned Chief Metropolitan Magistrate to dispose of their

cases/applications under Section 14 of the SARFAESI Act in

a time bound manner.

2.2 That the Division Bench of the High Court issued directions

to the learned Chief Metropolitan Magistrate to make an

endeavour to dispose of the pending applications as

expeditiously as possible and preferably within a period of

thirty days from the date of receipt of writ along with the

order. The learned Chief Metropolitan Magistrate vide

communication dated 14.08.2017 brought to the notice of

the High Court that, “Even though, the SARFAESI Act, 2002

provides for expeditious disposal of the applications filed

under Section 14 of the said Act, there are as many as 924

cases pending under the said Act as on 09.08.2017 on the

file of the Court of the Chief Metropolitan Magistrate,

Esplanade, Mumbai. Out of 924 cases, 509 cases are filed

in the year 2017. However, there are 27 cases of the year

2014, 96 cases of the year 2015 and 291 cases of the year

2016, still pending for disposal. As per the direction of the

Hon’ble High Court, preference should be given to the old

pending cases for disposing of the same. Therefore, the

preference is being given to the pending old cases rather

than fresh new cases.”

2.3 On receiving the aforesaid report, the High Court was of the

opinion that considering the volume of applications filed

under Section 14 of the SARFAESI Act and pendency of

such applications, the learned Chief Metropolitan

Magistrate, who is an authority under Section 14 of the

SARFAESI Act cannot decide such applications within a

time bound period in terms of the first and second proviso

to Section 14(1) of the SARFAESI Act. After opining so, the

High Court proceeded to consider the issue as to how to

minimize the pendency. In this context, after considering

the relevant provisions of the SARFAESI Act as well as

Section 17(2) and Section 19 of the Code of Criminal

Procedure, the High Court has observed that the Additional

Chief Metropolitan Magistrate (for short “ACMM”), being

invested with all the judicial powers of the Chief

Metropolitan Magistrate, can be considered at par with the

Chief Metropolitan Magistrate. The High Court has also

observed that so far as the exercise of judicial powers are

concerned, the Chief Metropolitan Magistrate and the

Additional Chief Metropolitan Magistrate stand on the same

footing and one cannot be said to be either inferior or

subordinate to the other. It is further observed and held

that as the status of Chief Metropolitan Magistrate and

Additional Chief Metropolitan Magistrate is same and

identical, the Additional Chief Metropolitan Magistrate can

exercise the powers under Section 14 of the SARFAESI Act.

While holding so, the Division Bench of the High Court has

heavily relied upon the decisions of the Division Bench of

the High Court in the case of State of Maharashtra Vs.

Shanti Prasad Jain in Criminal Reference No. 9 of 1977

decided on 29.09.1977 by which, on a reference the Division

Bench of the High Court held and concluded that the Chief

Metropolitan Magistrate and the Additional Chief

Metropolitan Magistrate are courts of the same status

having the same or identical jurisdiction so far as the trial of

criminal cases is concerned. Further, by taking into

consideration the fact that the powers of the Chief

Metropolitan Magistrate under Section 14 of the SARFAESI

Act being purely executionary in nature and having no

element of quasijudicial functions ultimately it is observed

and held by the High Court as under:

“(I) The District Magistrate, Chief Metropolitan

Magistrate is not a persona designata for the

purposes of Section 14 of the SARFAESI Act.

(II) The expression “District Magistrate” and the

“Chief Metropolitan Magistrate” as appearing in

Section 14 of the SARFAESI Act shall deem to

mean and include Additional District Magistrate

and Additional Chief Metropolitan Magistrate for

the purposes of Section 14 of the SARFAESI Act.”

2.4 Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the High Court holding that

the District Magistrate, Chief Metropolitan Magistrate is not

by persona designata for the purposes of Section 14 of the

SARFAESI Act and that the expression “District Magistrate”

and the “Chief Metropolitan Magistrate” as appearing in

Section 14 of the SARFAESI Act shall deem to mean and

include Additional District Magistrate and Additional Chief

Metropolitan Magistrate for the purposes of Section 14 of

the SARFAESI Act, the borrower has preferred the present

appeal.

3. Shri Purvish Jitendra Malkan, learned Advocate has

appeared on behalf of the appellant – borrower and Shri

Sachin Patil, learned Advocate has appeared on behalf of

the State. None has appeared on behalf of the respondent

No. 1 – secured creditor.

4. Shri Malkan, learned counsel appearing on behalf of the

borrower has vehemently submitted that the High Court has

committed a grave error in holding that powers under

Section 14 of the SARFAESI Act can be exercised by the

Additional Chief Metropolitan Magistrate and Additional

District Magistrate also. It is vehemently submitted that the

High Court has also committed a very serious/grave error in

holding that the District Magistrate and the Chief

Metropolitan Magistrate is not a persona designata for the

purposes of Section 14 of the SARFAESI Act.

4.1 Shri Malkan, learned counsel appearing on behalf of the

borrower has submitted that the impugned judgment and

order passed by the High Court is just contrary to the

decisions of the Gujarat High Court, Kerala High Court and

the Calcutta High Court. It is submitted that the High Court

of Gujarat, has been pleased to hold that:

“1) District Magistrate and Additional District

Magistrate are two different and distinct authorities;

2) The powers conferred on the District Magistrate

or the Chief Metropolitan Magistrate, as the case may

be, under Section 14 are interalia that the powers are

conferred specifically on these authorities. One of the

aspects of the power to be exercised is that the District

Magistrate or the Chief Metropolitan Magistrate has to

satisfy himself about compliance of the requirement of

the Section. The satisfaction is personal satisfaction.

The District Magistrate or the Chief Metropolitan

Magistrate are conferred with the powers in their

specific capacity as Chief Metropolitan Magistrate of

the District Magistrate. They themselves only are the

competent authorities to exercise the powers. The

nature of powers under Section 14 would not permit

transfer/delegate of exercise of powers under the said

provision to different person or authorities.”

4.2 It is submitted that while holding as above the Gujarat High

Court heavily relied upon the decision of this Court in the

case of Hari Chand Aggarwal Vs. Batala Engineering Co.

Ltd. and Ors.; (1969) 2 SCR 201. It is submitted that as

held by this Court in the case of Hari Chand Aggarwal

(supra) the District Magistrate and Additional District

Magistrate are the distinct authorities and the Additional

District Magistrate is subordinate to the District Magistrate

and therefore, the Additional District Magistrate being

subordinate cannot exercise the powers of the District

Magistrate.

4.3 It is submitted that the Gujarat High Court has also

considered and relied upon its earlier Division Bench

judgment in the case of Shivam Water Treaters P. Ltd. Vs.

Authorised Officer, State Bank of India in Special Civil

Application No. 12632 of 2013 decided on 17.09.2013 by

which the Division Bench of the High Court observed and

held as under:

“7. In the past, this very Bench had an occasion to

consider the question as to whether the power

conferred under Section 14 of the Securitisation Act

can be delegated by a Chief Metropolitan Magistrate in

favour of the Additional Chief Metropolitan Magistrate.

In that context, this bench held that the action of the

Chief Metropolitan Magistrate, Ahmedabad in exercise

of his powers under Section 19 Clause (3) of the Code

of Criminal Procedure, 1973 read with Rule 10 Clause

(1) of Chapter XXXII of the Criminal Manual, 1977

regarding the distribution of business amongst the

Metropolitan Magistrates, Ahmedabad, thereby

empowering the Additional Chief Metropolitan

Magistrate, Ahmedabad to accept and decide the cases

under the provisions of the Securitisation Act, arising

within the limits of Ahmedabad Municipal

Corporation, was without jurisdiction.

8. In the case before us, the question is a bit

different one as to whether a District Magistrate can

delegate such power to the Sub Divisional Magistrate.”

It is submitted that thereafter it is specifically observed

and held that it is only the District Magistrate who can

exercise the powers under Section 14 of the SARFAESI Act.

4.4 Making the above submissions and relying upon the

decisions of this Court in the case of Hari Chand Aggarwal

(supra) and the decisions of High Court of Gujarat, Kerala

and Calcutta, it is prayed to allow the present appeal and

quash and set aside the impugned judgment and order

passed by the High Court and to hold that it is only the

District Magistrate or the Chief Metropolitan Magistrate who

are conferred with the powers in their specific capacity as

Chief Metropolitan Magistrate or District Magistrate to

exercise the powers under Section 14 of the SARFAESI Act.

5. Shri Sachin Patil, learned counsel appearing on behalf of

the State has supported the impugned judgment and order

passed by the High Court. It is submitted that looking to the

mandate under Section 14 of the SARFAESI Act to decide

and dispose of the applications under Section 14 within a

maximum period of 60 days and looking to the volume of

the work and applications pending with the District

Magistrates or the Chief Metropolitan Magistrates and that

they have also to look after and consider other duties

including the administrative work and with a view to see

that the ultimate object and purpose of providing the time

lines in deciding the applications under Section 14 of the

SARFAESI Act, it is prayed to dismiss the present appeal.

6. Heard. While considering the issue whether the Additional

District Magistrate or Additional Chief Metropolitan

Magistrate may exercise the powers under Section 14 of the

SARFAESI Act and/or the issue whether the expression

“District Magistrate” and the “Chief Metropolitan Magistrate”

as appearing in Section 14 of the SARFAESI Act shall deem

to mean and include Additional District Magistrate and

Additional Chief Metropolitan Magistrate for the purposes of

Section 14 of the SARFAESI Act, the powers exercisable by

the District Magistrate (for short “DM”) and the Chief

Metropolitan Magistrate (for short “CMM”) under Section 14

of the SARFAESI Act are first required to be considered.

Section 14 of the SARFAESI Act reads as under:

“14. Chief Metropolitan Magistrate or District Magistrate to

assist secured creditor in taking possession of secured asset.

—(1) Where the possession of any secured assets is required

to be taken by the secured creditor or if any of the secured

assets is required to be sold or transferred by the secured

creditor under the provisions of this Act, the secured creditor

may, for the purpose of taking possession or control of any

such secured assets, request, in writing, the Chief

Metropolitan Magistrate or the District Magistrate within

whose jurisdiction any such secured asset or other

documents relating thereto may be situated or found, to take

possession thereof, and the Chief Metropolitan Magistrate or

as the case may be, the District Magistrate shall, on such

request being made to him—

(a) take possession of such asset and documents relating

thereto; and

(b) forward such asset and documents to the secured

creditor:

[Provided that any application by the secured creditor shall

be accompanied by an affidavit duly affirmed by the

authorised officer of the secured creditor, declaring that—

(i) the aggregate amount of financial assistance granted and

the total claim of the Bank as on the date of filing the

application;

(ii)the borrower has created security interest over various

properties and that the Bank or Financial Institution is

holding a valid and subsisting security interest over such

properties and the claim of the Bank or Financial Institution

is within the limitation period;

(iii)the borrower has created security interest over various

properties giving the details of properties referred to in subclause (ii)above;

(iv) the borrower has committed default in repayment of the

financial assistance granted aggregating the specified

amount;

(v) consequent upon such default in repayment of the

financial assistance the account of the borrower has been

classified as a nonperforming asset;

(vi) affirming that the period of sixty days notice as required

by the provisions of subsection (2) of section 13, demanding

payment of the defaulted financial assistance has been

served on the borrower;

(vii) the objection or representation in reply to the notice

received from the borrower has been considered by the

secured creditor and reasons for nonacceptance of such

objection or representation had been communicated to the

borrower;

(viii) the borrower has not made any repayment of the

financial assistance in spite of the above notice and the

Authorised Officer is, therefore, entitled to take possession of

the secured assets under the provisions of subsection (4) of

section 13 read with section 14 of the principal Act;

(ix) that the provisions of this Act and the rules made

thereunder had been complied with:

Provided further that on receipt of the affidavit from

the Authorised Officer, the District Magistrate or the Chief

Metropolitan Magistrate, as the case may be, shall after

satisfying the contents of the affidavit pass suitable orders

for the purpose of taking possession of the secured assets

[within a period of thirty days from the date of application]

[Provided also that if no order is passed by the Chief

Metropolitan Magistrate or District Magistrate within the

said period of thirty days for reasons beyond his control, he

may, after recording reasons in writing for the same, pass

the order within such further period but not exceeding in

aggregate sixty days.]

Provided also that the requirement of filing affidavit

stated in the first proviso shall not apply to proceeding

pending before any District Magistrate or the Chief

Metropolitan Magistrate, as the case may be, on the date of

commencement of this Act.]

(2) For the purpose of securing compliance with the

provisions of subsection (1), the Chief Metropolitan

Magistrate or the District Magistrate may take or cause to be

taken such steps and use, or cause to be used, such force,

as may, in his opinion, be necessary.

(3) No act of the Chief Metropolitan Magistrate or the

District Magistrate [any officer authorised by the Chief

Metropolitan Magistrate or District Magistrate] done in

pursuance of this section shall be called in question in any

court or before any authority.”

6.1 That in the year 2013 by Act 1 of 2013, Section 14 (1A) has

been inserted by which now, while exercising the powers

under Section 14 of the SARFAESI Act, the District

Magistrate or the Chief Metropolitan Magistrate may

authorise any officer subordinate to him to take possession

of such assets and documents relating thereto; and to

forward such assets and documents to the secured creditor.

Section 14 (1A) as inserted in the year 2013 reads as

under:

“[(1A) The District Magistrate or the Chief Metropolitan

Magistrate may authorise any officer subordinate to him,—

(i)to take possession of such assets and documents

relating thereto; and

(ii) to forward such assets and documents to the

secured creditor.]”

6.2 Even as observed and held by this Court in the recent

decision of NKGSB Cooperative Bank Limited Vs. Subir

Chakravarty & Ors. (Civil Appeal No. 1637/2022) decided

on 25.02.2022, it is open to the CMM/DM to appoint an

advocate and authorise him/her to take possession of the

secured assets and documents relating thereto and to

forward the same to the secured creditor under Section

14(1A) of the SARFAESI Act.

7. Now so far as the powers exercisable by DM and CMM

under Section 14 of the SARFAESI Act are concerned,

statement of objects and reasons for which SARFAESI Act

has been enacted reads as under:

“STATEMENT OF OBJECTS AND REASONS

The financial sector has been one of the key drivers in India's

efforts to achieve success in rapidly developing its economy.

While the banking industry in India is progressively

complying with the international prudential norms and

accounting practices there are certain areas in which the

banking and financial sector do not have a level playing field

as compared to other participants in the financial markets in

the world. There is no legal provision for facilitating

securitisation of financial assets of banks and financial

institutions. Further, unlike international banks, the banks

and financial institutions in India do not have power to take

possession of securities and sell them. Our existing legal

framework relating to commercial transactions has not kept

pace with the changing commercial practices and financial

sector reforms. This has resulted in slow pace of recovery of

defaulting loans and mounting levels of nonperforming

assets of banks and financial institutions. Narasimham

Committee I and II and Andhyarujina Committee constituted

by the Central Government for the purpose of examining

banking sector reforms have considered the need for changes

in the legal system in respect of these areas. These

Committees, inter alia, have suggested enactment of a new

legislation for securitisation and empowering banks and

financial institutions to take possession of the securities and

to sell them without the intervention of the court. Acting on

these suggestions, the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest

Ordinance, 2002 was promulgated on the 21st June, 2002 to

regulate securitisation and reconstruction of financial assets

and enforcement of security interest and for matters

connected therewith or incidental thereto. The provisions of

the Ordinance would enable banks and financial institutions

to realise longterm assets, manage problem of liquidity,

asset liability mismatches and improve recovery by

exercising powers to take possession of securities, sell them

and reduce nonperforming assets by adopting measures for

recovery or reconstruction.”

Thus, the underlying purpose of the SARFAESI Act is

to empower the financial institutions in India to have

similar powers as enjoyed by their counterparts, namely,

international banks in other countries. One such feature is

to empower the financial institutions to take possession of

securities and sell them. The same has been translated into

provisions falling under Chapter III of the SARFAESI Act.

Section 13 deals with enforcement of security interest. SubSection (4) thereof envisages that in the event a default is

committed by the borrower in discharging his liability in full

within the period specified in subsection (2), the secured

creditor may take recourse to one or more of the measures

provided in subsection (4). One of the measures is to take

possession of the secured assets of the borrower including

the right to transfer by way of lease, assignment or sale for

realising the secured asset. That, they could do through

their “authorised officer” as defined in Rule 2(a) of the

Security Interest (Enforcement) Rules, 2002.

7.1 After taking over possession of the secured assets, further

steps to lease, assign or sale the same could also be taken

by the secured creditor. However, Section 14 of the

SARFAESI Act predicates that if the secured creditor

intends to take possession of the secured assets, must

approach the CMM/DM by way of an application in writing,

and on receipt of such request, the CMM/DM must move

into action in right earnest. After passing an order thereon,

he/she (CMM/DM) must proceed to take possession of the

secured assets and documents relating thereto for being

forwarded to the secured creditor in terms of Section 14(1)

read with Section 14(2) of the SARFAESI Act. As noted

earlier, Section 14(2) is an enabling provision and permits

the CMM/DM to take such steps and use force, as may, in

his opinion, be necessary.

7.2 At this stage, it is required to be noted that along with

insertion of subsection (1A), a proviso has also been

inserted in subsection (1) of Section 14 of the SARFAESI

Act whereby the secured creditor is now required to comply

certain conditions and to disclose that by way of an

application accompanied by affidavit duly affirmed by its

authorised officer in that regard. SubSection (1A) is in the

nature of an explanatory provision and it merely restates

the implicit power of the CMM/DM in taking services of any

officer subordinate to him. As observed and held by this

Court in the case of NKGSB Cooperative Bank Ltd.

(supra), the insertion of subsection (1A) is not to invest a

new power for the first time in the CMM/DM as such.

8. Thus, considering the scheme of the SARFAESI Act, it is

explicit and crystal clear that possession of the secured

assets can be taken by the secured creditor before

confirmation of sale of the secured assets as well as postconfirmation of sale. For taking possession of the secured

assets, it could be done by the “authorised officer” of the

Bank as noted in Rule 8 of the Security Interest

(Enforcement) Rules, 2002.

8.1 However, for taking physical possession of the secured

assets in terms of Section 14(1) of the SARFAESI Act, the

secured creditor is obliged to approach the CMM/DM by

way of a written application requesting for taking possession

of the secured assets and documents relating thereto and

for being forwarded to it (secured creditor) for further action.

The statutory obligation enjoined upon the CMM/DM is to

immediately move into action after receipt of a written

application under Section 14(1) of the SARFAESI Act from

the secured creditor for that purpose. As soon as such an

application is received, the CMM/DM is expected to pass an

order after verification of compliance of all formalities by the

secured creditor referred to in the proviso in Section 14(1) of

the SARFAESI Act and after being satisfied in that regard, to

take possession of the secured assets and documents

relating thereto and to forward the same to the secured

creditor at the earliest opportunity. As mandated by Section

14 of the SARFAESI Act, the CMM/DM has to act within the

stipulated time limit and pass a suitable order for the

purpose of taking possession of the secured assets within a

period of 30 days from the date of application which can be

extended for such further period but not exceeding in the

aggregate, sixty days. Thus, the powers exercised by the

CMM/DM is a ministerial act. He cannot brook delay. Time

is of the essence. This is the spirit of the special enactment.

As observed and held by this Court in the case of NKGSB

Cooperative Bank Ltd. (supra), the step taken by the

CMM/DM while taking possession of the secured assets and

documents relating thereto is a ministerial step. It could be

taken by the CMM/DM himself/herself or through any

officer subordinate to him/her, including the advocate

commissioner who is considered as an officer of his/her

court. Section 14 does not oblige the CMM/DM to go

personally and take possession of the secured assets and

documents relating thereto. Thus, we reiterate that the step

to be taken by the CMM/DM under Section 14 of the

SARFAESI Act, is a ministerial step. While disposing of the

application under Section 14 of the SARFAESI Act, no

element of quasijudicial function or application of mind

would require. The Magistrate has to adjudicate and decide

the correctness of the information given in the application

and nothing more. Therefore, Section 14 does not involve an

adjudicatory process qua points raised by the borrower

against the secured creditor taking possession of secured

assets.

9. Thus, in view of the scheme of the SARFAESI Act, more

particularly, Section 14 of the SARFAESI Act and the nature

of the powers to be exercised by learned Chief Metropolitan

Magistrate/learned District Magistrate, the High Court in

the impugned judgment and order has rightly observed and

held that the power vested in the learned Chief Metropolitan

Magistrate/learned District Magistrate is not by way of

persona designata.

10. Now the next question which is posed for consideration of

this Court is, whether, the Additional Chief Metropolitan

Magistrate can be said to be subordinate to the Chief

Metropolitan Magistrate. For that purpose the relevant

provisions of the Cr.PC, namely, Sections 11, 12, 15, 16, 17,

19 and 35, are required to be referred to which are extracted

as under:

“11. Courts of Judicial Magistrates.—(1) In every district (not

being a metropolitan area) there shall be established as

many Courts of Judicial Magistrates of the first class and of

the second class, and at such places, as the State

Government may, after consultation with the High Court, by

notification, specify: 1 [Provided that the State Government

may, after consultation with the High Court, establish, for

any local area, one or more Special Courts of Judicial

Magistrates of the first class or of the second class to try any

particular case or particular class of cases, and where any

such Special Court is established, no other Court of

Magistrate in the local area shall have jurisdiction to try any

case or class of cases for the trial of which such Special

Court of Judicial Magistrate has been established.] (2) The

presiding officers of such Courts shall be appointed by the

High Court. (3) The High Court may, whenever it appears to

it to be expedient or necessary, confer the powers of a

Judicial Magistrate of the first class or of the second class on

any member of the Judicial Service of the State, functioning

as a Judge in a Civil Court.

12. Chief Judicial Magistrate and Additional Chief Judicial

Magistrate, etc.—(1) In every district (not being a

metropolitan area), the High Court shall appoint a Judicial

Magistrate of the first class to be the Chief Judicial

Magistrate. (2) The High Court may appoint any Judicial

Magistrate of the first class to be an Additional Chief Judicial

Magistrate, and such Magistrate shall have all or any of the

powers of a Chief Judicial Magistrate under this Code or

under any other law for the time being in force as the High

Court may direct. (3) (a) The High Court may designate any

Judicial Magistrate of the first class in any subdivision as

the Subdivisional Judicial Magistrate and relieve him of the

responsibilities specified in this section as occasion requires.

(b) Subject to the general control of the Chief Judicial

Magistrate, every Subdivisional Judicial Magistrate shall

also have and exercise, such powers of supervision and

control over the work of the Judicial Magistrates (other than

Additional Chief Judicial Magistrates) in the subdivision as

the High Court may, by general or special order, specify in

this behalf.

15. Subordination of Judicial Magistrates.—(1) Every Chief

Judicial Magistrate shall be subordinate to the Sessions

Judge; and every other Judicial Magistrate shall, subject to

the general control of the Sessions Judge, be subordinate to

the Chief Judicial Magistrate. (2) The Chief Judicial

Magistrate may, from time to time, make rules or give special

orders, consistent with this Code, as to the distribution of

business among the Judicial Magistrates subordinate to

him.

16. Courts of Metropolitan Magistrates.—(1) In every

metropolitan area, there shall be established as many Courts

of Metropolitan Magistrates, and at such places, as the State

Government may, after consultation with the High Court, by

notification, specify. (2) The presiding officers of such Courts

shall be appointed by the High Court. (3) The jurisdiction

and powers of every Metropolitan Magistrate shall extend

throughout the metropolitan area.

17. Chief Metropolitan Magistrate and Additional Chief

Metropolitan Magistrate.—(1) The High Court shall, in

relation to every metropolitan area within its local

jurisdiction, appoint a Metropolitan Magistrate to be the

Chief Metropolitan Magistrate for such metropolitan area. (2)

The High Court may appoint any Metropolitan Magistrate to

be an Additional Chief Metropolitan Magistrate, and such

Magistrate shall have all or any of the powers of a Chief

Metropolitan Magistrate under this Code or under any other

law for the time being in force as the High Court may direct.

19. Subordination of Metropolitan Magistrates.—(1) The

Chief Metropolitan Magistrate and every Additional Chief

Metropolitan Magistrate shall be subordinate to the Sessions

Judge; and every other Metropolitan Magistrate shall,

subject to the general control of the Sessions Judge, be

subordinate to the Chief Metropolitan Magistrate. (2) The

High Court may, for the purposes of this Code, define the

extent of the subordination, if any, of the Additional Chief

Metropolitan Magistrates to the Chief Metropolitan

Magistrate. (3) The Chief Metropolitan Magistrate may, from

time to time, make rules or give special orders, consistent

with this Code, as to the distribution of business among the

Metropolitan Magistrates and as to the allocation of business

to an Additional Chief Metropolitan Magistrate.

35. Powers of Judges and Magistrates exercisable by their

successorsinoffice.—(1) Subject to the other provisions of

this Code, the powers and duties of a Judge or Magistrate

may be exercised or performed by his successorinoffice. (2)

When there is any doubt as to who is the successorinoffice

of any Additional or Assistant Sessions Judge, the Sessions

Judge shall determine by order in writing the Judge who

shall, for the purposes of this Code or of any proceedings or

order thereunder, be deemed to be the successorinoffice of

such Additional or Assistant Sessions Judge. (3) When there

is any doubt as to who is the successorinoffice of any

Magistrate, the Chief Judicial Magistrate, or the District

Magistrate, as the case may be, shall determine by order in

writing the Magistrate who shall, for the purpose of this

Code or of any proceedings or order thereunder, be deemed

to be the successorinoffice of such Magistrate.”

10.1 From the aforesaid provisions, it can be seen that any

Metropolitan Magistrate can be appointed by the High Court

to be the Chief Metropolitan Magistrate. The High Court

may appoint any Metropolitan Magistrate to be an

Additional Chief Metropolitan Magistrate, and such

Magistrate shall have all or any of the powers of a Chief

Metropolitan Magistrate under Cr.PC or under any other law

for the time being in force as the High Court may direct. The

Chief Metropolitan Magistrate and every Additional Chief

Metropolitan Magistrate shall be subordinate to the

Sessions Judge; and every other Metropolitan Magistrate

shall, subject to the general control of the Sessions Judge,

be subordinate to the Chief Metropolitan Magistrate. Thus

the judicial powers and the powers, under the Cr.PC which

may be exercised by the Chief Metropolitan Magistrate, can

be exercised by the Additional Chief Metropolitan Magistrate

also. Thus, the Additional Chief Metropolitan Magistrate can

be said to be at par with the Chief Metropolitan Magistrate

in so far as the powers to be exercised under the Cr.PC are

concerned. The Chief Metropolitan Magistrate in addition,

may have administrative powers. However, for all other

purposes and more particularly the powers to be exercised

under the Cr.PC both are at par. Therefore, the Additional

Chief Metropolitan Magistrate cannot be said to be

subordinate to the Chief Metropolitan Magistrate in so far as

exercise of judicial powers are concerned.

10.2 In view of the above discussion and as observed hereinabove

when the powers to be exercised by the Additional Chief

Metropolitan Magistrate are at par with the powers to be

exercised by the Chief Metropolitan Magistrate [Section

17(2) of Cr.PC] and the Chief Metropolitan Magistrate and

Additional Chief Metropolitan Magistrate shall be

subordinate to the Sessions Judge (Section 19 of the Cr.PC)

and the steps to be taken by the Chief Metropolitan

Magistrate under Section 14 of the SARFAESI Act as

observed hereinabove are ministerial in nature and does not

involve any adjudicatory process and there is no element of

any quasijudicial function, we see no reason to take a

different view than the view taken by the Bombay High

Court in the impugned judgment. We hold that the

expression “Chief Metropolitan Magistrate” as appearing in

Section 14 of the SARFAESI Act shall deem to mean and

include Additional Chief Metropolitan Magistrate for the

purposes of Section 14 of the SARFAESI Act.

10.3 Similarly, when the Additional District Magistrates are

conferred with the powers to be exercised by the District

Magistrates either by delegation and/or by special orders

and the Additional District Magistrates are exercising the

same powers which are being exercised by the District

Magistrates, the same analogy can be applied, more

particularly, when the powers exercisable under Section 14

of the SARFAESI Act, are ministerial steps.

11. The issue/question may also be considered from another

angle. It cannot be disputed and even judicial notice can be

taken of the fact that the CMMs and/or even the DMs are

required to perform so many other duties under different

statutes. They have to perform many administrative duties

also. District Magisters are in overall administrative control

of their jurisdiction/district. Similarly, CMMs are also

required to perform administrative duties and they have

also to deal with the other cases/criminal trials and many

trials under special statutes also. It cannot be disputed that

the litigations under the SARFAESI Act and proceedings

and/or applications under Section 14 of the SARFAESI Act

are increasing. Even as noticed by the High Court in the

impugned judgment and order, as on 09.08.2017, 926 cases

were pending under Section 14 of the SARFAESI Act before

only one CMM. Therefore, a number of applications under

Section 14 are pending. It also cannot be disputed that the

SARFAESI Act provides for expeditious disposal of the

applications filed under Section 14 of the SARFAESI Act. As

per, second proviso to Section 14, suitable orders for the

purpose of taking possession of the secured assets are

required to be passed within a maximum period of sixty

days from the date of the application. Therefore, if the

submission on behalf of the appellants that only the

concerned CMM/DM alone would have jurisdiction to decide

the applications under Section 14 of the SARFAESI Act is

accepted, in that case, it will be practically impossible for

the concerned CMM/DM to decide the application under

Section 14 of the SARFAESI Act expeditiously and within

the time stipulated under second proviso to Section 14 of

the SARFAESI Act. If the interpretation which we propose

that, the District Magistrate/Chief Metropolitan Magistrate

under Section 14 of the SARFAESI Act includes the

Additional District Magistrate/Additional Chief Metropolitan

Magistrate, the same can be said to be a purposive

interpretation to achieve the object and purpose of

proceedings under the SARFAESI Act, more particularly

when as observed hereinabove, the orders to be passed

under Section 14 of the SARFAESI Act are ministerial steps

and to assist the secured creditor in getting/obtaining the

possession of the secured property. Thus, there is no

element of exercise of adjudicatory powers under Section 14

of the SARFAESI Act. All these aspects have been

considered in detail by the High Court in the impugned

judgment and order.

12. We are in complete agreement with the view taken by the

High Court that (i) the District Magistrate, Chief

Metropolitan Magistrate is not a persona designata for the

purposes of Section 14 of the SARFAESI Act; (ii) the

expression “District Magistrate” and the “Chief Metropolitan

Magistrate” as appearing in Section 14 of the SARFAESI Act

shall deem to mean and include Additional District

Magistrate and Additional Chief Metropolitan Magistrate for

the purposes of Section 14 of the SARFAESI Act.

13. The contrary view taken by the other High Courts, namely,

Gujarat High Court in the case of Pushpa Devi B Jain W/o

Bhawarlal M Jain Vs. Indian Overseas Bank in Special Civil

Application No. 19102/2015; Calcutta High Court in the

case of Shri Chellaperumal & Anr. Vs. The Authorised

Officer & Ors. in M.A. No. 26/2014 and Kerala High Court

in the case of Aseena Vs. SubDivisional Magistrate and

Ors. in W.P. (C) No. 3331/2007, is not a good law and are

specifically overruled.

14. In view of the above and for the reasons stated above, the

present appeal fails and the same deserves to be dismissed

and is accordingly dismissed. We hold that the powers

under Section 14 of the SARFAESI Act can be exercised by

the concerned Additional Chief Metropolitan Magistrates of

the area having jurisdiction and also by the Additional

District Magistrates, who otherwise are exercising the

powers at par with the concerned District Magistrates either

by delegation and/or special order. The present appeal is

accordingly dismissed. No costs.

………………………………….J.

[M.R. SHAH]

NEW DELHI; ………………………………….J.

July 27, 2022 [B.V. NAGARATHNA]

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