CJM Exercising Section 14 SARFAESI Powers Cannot Refer Proceedings to Mediation as the Function is Ministerial.

The petitioner, a secured creditor (Axis Bank), filed an application under Section 14 of the SARFAESI Act before the Special Additional Chief Judicial Magistrate (ACJM), Ernakulam, seeking assistance to take physical possession of a secured asset following a default by the borrowers

On 04.12.2025, the ACJM passed an initial order (Ext.P1) to take possession via an Advocate Commissioner

However, on 04.03.2026, the ACJM passed a subsequent order (Ext.P2) referring the matter to mediation

The petitioner challenged this referral order, contending that the Magistrate lacks the jurisdiction to refer a Section 14 application to mediation

1. Whether a Chief Judicial Magistrate or Additional Chief Judicial Magistrate has the power to refer a matter to mediation while exercising jurisdiction under Section 14 of the SARFAESI Act.

Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, which mandates that the Magistrate must assist secured creditors in taking possession within a stipulated timeframe of 30 to 60 days

The Magistrate's role under Section 14 is purely ministerial and non-adjudicatory, involving no quasi-judicial function or independent application of mind regarding the underlying dispute. [R.D. Jain and Co. (M/s) v. Capital First Ltd. and Others (2023) 1 SCC 675; C.R. Sindhu v. State of Kerala and Others 2007 (4) KHC 944]

The Court reasoned that Section 14 of the SARFAESI Act does not involve an adjudicatory process; rather, the Magistrate is only required to verify the affidavit's compliance with statutory requirements

Since the Magistrate performs a "ministerial act" and not a quasi-judicial one, there is no scope for exercising discretion to refer parties to mediation

The Court emphasized that "time is the essence" of the enactment, noting the statutory 30-day limit (extendable to 60 days) for passing orders

Because the Magistrate is not expected to resolve disputes but merely to ensure the handing over of possession, the order for mediation was deemed to be outside the scope of the Magistrate's limited jurisdiction under the Act

The High Court allowed the writ petition and set aside the order dated 04.03.2026 (Ext.P2). The Magistrate was directed to proceed with the application under Section 14 of the SARFAESI Act and pass appropriate orders for taking possession as per law