Whether property taken under SARFAESI forms part of the secured asset must be decided by the CJM.

The appellant, claiming to be the mortgagee of the properties, initiated enforcement under the SARFAESI Act and obtained an order under Section 14 appointing an Advocate Commissioner to take possession.

The Chief Judicial Magistrate (CJM) directed that possession be taken only of the mortgaged property, while permitting the respondents to produce documents showing that the property identified was not a secured asset.

The respondents later alleged that an adjoining, unmortgaged property had been taken. The CJM dismissed their challenge in 2018, but the appellant’s subsequent application for repossession remained pending.

Separately, the Tahsildar’s order (Ext.P10) found the Village Officer’s action wrongful and substantially accepted the respondents’ contention regarding the property taken.

In the writ petition challenging Ext.P10, the Single Judge set it aside insofar as it dealt with matters covered by the CJM’s orders and the delivery, but permitted the Tahsildar to proceed on the complaint against the Village Officer.

The appellant appealed, contending that this direction could undermine the CJM’s order.

1. Whether the Single Judge’s direction permitting the Tahsildar to act on the complaint against the Village Officer could affect or undermine the CJM’s orders and the pending repossession proceedings.

2. Whether the dispute over whether the property taken was part of the secured asset should be decided in the pending proceeding before the CJM, with any challenge to SARFAESI measures pursued before the Debt Recovery Tribunal.

The Court considered Sections 13(2), 13(4), 14 and 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Sections 13(2) and 13(4) provide the statutory process for enforcement of a security interest; Section 14 enables the secured creditor to seek assistance in taking possession; and Section 17 provides a remedy before the Debt Recovery Tribunal against measures taken under the Act.

A secured creditor may take possession only of property forming part of the secured asset.

The Tahsildar’s inquiry into a complaint against the Village Officer could not determine or affect matters governed by the CJM’s orders or the SARFAESI proceedings.

No precedent was cited.

The Court considered the appellant’s concern against the procedural posture: the repossession application remained pending before the CJM, and the Single Judge had set aside Ext.P10 to the extent it dealt with matters covered by the CJM’s orders and the delivery.

The direction to the Tahsildar was limited to taking lawful steps on the complaint against the Village Officer; it did not empower the Tahsildar to alter or affect the CJM proceedings.

The CJM was to decide whether the property sought to be repossessed was a secured asset, based on the record and after hearing the parties.

Any grievance about SARFAESI measures could be taken to the DRT under Section 17.

The Tahsildar’s permitted action was confined to the complaint against the Village Officer and could not affect the proceedings before the CJM.

The CJM was to decide the pending repossession application after giving the parties a reasonable opportunity to be heard; the respondents were not foreclosed from relying on new material to show that the property was not a secured asset.

No order as to costs was made.