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TMI Blog2015 (11) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... d before us is that all these orders passed under section 14 by the In-charge Chief Metropolitan Magistrate, are a nullity on the ground that he had no authority and/or power to pass the impugned orders. In other words, it is the contention of the Petitioners in all these Petitions, that an Application under section 14 of the SARFAESI Act can be made only to the Chief Metropolitan Magistrate, and therefore, the orders passed by the In-charge Chief Metropolitan Magistrate are bad in law and ought to be set aside by us, in our extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India. Since this is the only point canvassed and which requires our consideration, we are not setting out the facts in each of the above Writ Petitions. For the sake of completeness of this judgment, we will refer to the facts in Writ Petition (L) No.2634 of 2015. 3. In this Writ Petition, it is the case of the Petitioners that the Respondent Bank had sanctioned certain credit facilities to Respondent No.4 (Sharavan Bishnoi, Proprietor of M/s Ganpat Steel). In respect of the aforesaid facilities, the Respondent Bank claims a mortgage over Flat No.15, 6th Floor, Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 2015. Being aggrieved thereby, the Petitioners filed Appeal (L) No.302 of 2015 before the Debts Recovery Appellate Tribunal (DRAT). Whilst this Appeal was pending, on 3rd September, 2015 the Petitioner received a Notice dated 7th August, 2015 issued by the Assistant Registrar (attached to the CMM), to take possession of the mortgaged property on 9th September, 2015. In view thereof, on 4th September, 2015, the Petitioner moved a praecipe before the DRAT and prayed for urgent circulation for ad-interim relief, which circulation was denied to the Petitioners. It is in these circumstances that the Petitioners are before us. 7. In this background, Mr Cama, learned counsel appearing on behalf of the Petitioners, contended that the orders passed by the In-charge Chief Metropolitan Magistrate were without jurisdiction and ultra-vires the provisions of the SARFAESI Act. According to Mr Cama, as per section 14 of the SARFAESI Act, only the Chief Metropolitan Magistrate (in Metropolitan Cities) and the District Magistrate (outside the Metropolitan Cities), alone have jurisdiction to entertain and pass orders under section 14 of the SARFAESI Act. He submitted that in the present case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1981) 3 SCC 132 9. With the help of the learned counsel, we have perused the papers and proceedings in the above mentioned Writ Petitions, along with the orders passed by the In-charge Chief Metropolitan Magistrate and which have been impugned herein. Before we deal with the present controversy, we must mention here that though several other grounds have been raised in these Writ Petitions, none have been argued before us. The only point canvassed in these Writ Petitions was that the orders passed by the In-charge Chief Metropolitan Magistrate under section 14 of the SARFAESI Act, are a nullity as he is not the authority who can entertain and decide an Application under the provisions of section 14. In this view of the matter, we have not dealt with any other argument/ground that has been set out in the above Writ Petitions. 10. Having said this, we shall now deal with the rival contentions. To understand the above controversy, we would have to refer to certain provisions of the SARFAESI Act as well as the Code of Criminal Procedure, 1973 (for short, "the CrPC, 1973"). 11. The SARFAESI Act was brought into force to regulate the securitization and reconstruction of financial ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge in full his liabilities to the secured creditor within sixty days from the date of the notice, failing which the secured creditor shall be entitled to exercise all or any of the measures under section 13(4) thereof. Section 13(3) and 13(3A) deal with the contents of the 13(2) notice as well as the procedure to be followed before any measures are taken under section 13(4). Thereafter, section 13(4) inter alia provides that in case the borrower fails to discharge his liability in full within the period specified in the 13(2) notice, the secured creditor may take recourse to one or more measures [as set out in section 13(4)] to recover his secured debt. Section 13(4) of the SARFAESI Act reads as under:- "(4) In case the borrower fails to discharge his liability in full within the period specified in sub-section (2), the secured creditor may take recourse to one or more of the following measures to recover his secured debt, namely:- (a) 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; (b) take over the management of the business of the borrower including the right to tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 non-performing asset; (vi) affirming that the period of sixty days notice as required by the provisions of sub-section (2) of section 13, demanding payment of the defaulted financial assistance has been served on the borrower; (vii) the objection or representation in rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Application has to be dealt with is also set out in the said section. 15. As can be seen from the aforesaid provisions, wide powers have been given to banks and financial institutions to recover their secured debts by enforcing their security without the intervention of the Court. In order to gain possession of the secured assets, banks and financial institutions are also empowered to approach the Chief Metropolitan Magistrate or the District Magistrate, to take their assistance in that regard. All these provisions have been enacted keeping in mind the object and purpose of quick and efficacious recovery of secured debts due to banks and financial institutions who play a very vital role in our country's economic growth. 16. Having noted the provisions of the SARFAESI Act and the purpose sought to be achieved thereby, we shall now make a brief reference to the provisions of the CrPC, 1973. The CrPC, 1973 is an Act to consolidate and amend the law relating to criminal procedure. Section 6 of the CrPC, 1973 deal with the classes of Criminal Courts and stipulates that besides the High Courts and the Courts constituted under any law, other than this Code, there shall be, in every S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court may direct. 18. Section 19 deals with subordination of Metropolitan Magistrates and reads thus:- "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." 19. Section 19(1) stipulates that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pulated in section 14 of the SARFAESI Act. The Respondent Banks, having filed their Applications under section 14 before the correct forum / authority, were entitled to presume that the In-charge Chief Metropolitan Magistrate had the power and/or authority to hear and decide their Applications. It is not as if the Respondent Banks were aware of the authority/power, or the lack thereof, of the In-charge Chief Metropolitan Magistrate who disposed of their Applications under section 14 of the SARFAESI Act. Furthermore, it is not as if the Incharge Chief Metropolitan Magistrate was a usurper and/or an intruder who had assumed jurisdiction of an office / title he was not entitled to in law. The law does not contemplate that when a judicial officer is absent, a vacuum is created in the process. In these circumstances we do not think that the Petitioners can today question the authority of the said In-charge Chief Metropolitan Magistrate to pass the orders impugned herein and thereby thwart the securitization proceedings initiated by the Respondent Banks. We, therefore, find that the argument canvassed on behalf of the Petitioners that the In-charge Chief Metropolitan Magistrate had no ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther rule also based on public policy. The defective appointment of a de facto judge may be questioned directly in a proceeding to which he be a party but it cannot be permitted to be questioned in a litigation between two private litigants, a litigation which is of no concern or consequence to the judge except as a judge. Two litigants litigating their private titles cannot be permitted to bring in issue and litigate upon the title of a judge to his office. Otherwise so soon as a judge pronounces a judgment a litigation may be commenced for a declaration that the judgment is void because the judge is no judge. A judge's title to his office cannot be brought into jeopardy in that fashion. Hence the rule against collateral attack on validity of judicial appointments. To question a judge's appointment in an appeal against his judgment is, of course, such a collateral attack." (emphasis supplied) 24. We find that in the facts of the present case, this judgment will apply with full force. It is not as if the In-charge Chief Metropolitan Magistrate is an intruder or usurper as set out in the aforesaid Supreme Court decision, but is one who holds the office under the color of lawful au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make no difference in the present case. 25. Even otherwise, we find that in pursuance of section 17(2) of the CrPC, 1973, by a Notification No.A-3902 / 2015 dated 21st October, 2015 the High Court has empowered the Additional Chief Metropolitan Magistrate who holds charge of the Chief Metropolitan Magistrate in the latter's absence, to entertain and decide Applications filed under Section 14 of the SARFAESI Act. The said Notification reads as under:- "In pursuance of Sub Section (2) of Section 17 of the Code of Criminal Procedure the High Court empowers the Additional Chief Metropolitan Magistrate who hold the charge of the Chief Metropolitan Magistrate in latter's absence, to entertain and decide the applications filed under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002." 26. In this view of the matter and considering the fact that a specific Notification has now been issued, it would be an exercise in futility to accept the submissions made on behalf of the Petitioners and set aside the impugned orders and remand the matter back to the Court of the Chief Metropolitan Magistrate for fresh consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad approached the Chief Judicial Magistrate, the Chief Judicial Magistrate could not have entertained the Application filed under section 14. Clearly, this judgment has no application to the facts of the present case. In the case of Arjun Urban Co-Operative Bank Ltd.1, the Petitioner had approached the wrong authority which was not at all empowered to entertain and decide Applications filed under section 14 of the SARFAESI Act. It is in these circumstances that the findings given in the aforesaid judgment have to be considered and read. In the facts before us such is not the case. In the present case, admittedly, the Applications (under section 14 of the SARFAESI Act) were filed in the Court of the Chief Metropolitan Magistrate which is admittedly the authority named in section 14 of the SARFESI Act. Since the Chief Metropolitan Magistrate was absent that the orders came to be passed by the In-charge Chief Metropolitan Magistrate under section 14 of the Act. We, therefore, find that this judgment has absolutely no application to the facts of the present case and would not carry the case of the Petitioners any further. 29. The next judgment relied upon by Mr Cama is the judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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