Full Judgment Text
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
Signature Not Verified
Digitally signed by R
Natarajan
Date: 2022.07.27
17:20:02 IST
Reason:
Security Interest Act, 2002 (hereinafter referred to as the
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“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
2
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, inter
alia, 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
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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
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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
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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
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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.
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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:
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“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
9
(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.
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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
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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:
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“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 sub
clause (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;
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(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
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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
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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
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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. Sub
Section (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
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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.
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(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 post
confirmation 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
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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
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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.
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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
22
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
23
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
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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
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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
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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
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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
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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
29
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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