Kerala High Court
The Federal Bank Limited vs A.V.Punnus on 25 May, 2012
Author: V. Chitambaresh
Bench: V.Chitambaresh
IN THE HIGH COURT OF KERALAAT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE V.CHITAMBARESH
TUESDAY, THE 29TH DAY OF OCTOBER 2013/7TH KARTHIKA, 1935
OP (DRT).No. 3311 of 2013 (O)
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AGAINST THE ORDER/JUDGMENT IN SA 308/2013 of
DEBT RECOVERY TRIBUNAL, ERNAKULAM
PETITIONER(S):
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THE FEDERAL BANK LIMITED
HEAD OFFICE ATALUVA
BRANCH AT NEDUMBASSERY
REPRESENTED BY CHIEF MANAGER
R.K.SARASWATHY,ASSET RECOVERY BRANCH,
MARINE DRIVE, ERNAKULAM.
BY ADVS.SRI.A.ANTONY
SMT.LEELAMMAANTONY
RESPONDENT(S):
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A.V.PUNNUS, S/O.LATE A.V.VARKEY
RESIDING ATATHIKAKUZHY HOUSE
ATHANI P.O. NEDUMBASSERY
ERNAKULAM DISTRICT-683 585.
BY ADV. SRI.SHAJI CHIRAYATH
BY ADV. SMT.JIJI M. VARKEY
BY ADV. SRI.M.M.SHAJAHAN
BY ADV. SMT.SAVITHA GANAPATHIYATAN
THIS OP (DEBT RECOVERY TRIBUNAL) HAVING BEEN FINALLY HEARD ON
29-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
OP (DRT).No. 3311 of 2013 (O)
APPENDIX
PETITIONER(S)' EXHIBITS
EXT.P1 - TRUE COPY OF THE CRL.M.P.NO.1814 OF 2012 FILED BY THE
PETITIONER BEFORE THE CHIEF JUDICIAL MAGISTRATE
COURT, ERNAKULAM DATED 25-05-2012.
EXT.P2 - TRUE COPY OF THE ORDER DATED 30-07-2013 IN
CRL.M.P.NO.1814 OF 2012 OF THE PETITIONER BEFORE THE
CHIEF JUDICIAL MAGISTRATE COURT, ERNAKULAM.
EXT.P3 - TRUE COPY OF THE ORDER DATED 26-08-2013 IN
INTERLOCUTARYAPPLICATION NO.2489 OF 2013 IN
SECURITISATION APPLICATION NO.308 OF 2013 OF THE DEBTS
RECOVERY TRIBUNAL, ERNAKULAM.
RESPONDENT(S)' EXHIBITS
/TRUE COPY/
P.A. TO JUDGE.
"C.R."
V. CHITAMBARESH, J
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OP(DRT) NO. 3311 OF 2013
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Dated this the 29th day of October, 2013
JUDGMENT
Is the Advocate Commissioner an officer subordinate to the District Magistrate or the Chief Metropolitan Magistrate in the context of Section 14 (1A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the SARFAESI Act for short)?
2. The petitioner bank moved the court of the Chief Judicial Magistrate at Ernakulam in Crl. M.P. No. 1814/2012 under Section 14 of the SARFAESI Act seeking to appoint an Advocate Commissioner. This was for the purpose of assisting the bank to take actual physical possession of the property offered as security interest by the respondent borrower at the time of availing the loan. The court of the Chief Judicial Magistrate allowed the request and issued a warrant of appointment to the Advocate Commissioner to hand over 2 OP(DRT)No. 3311/2013 possession of the property to the bank and report. The borrower aggrieved by the warrant of appointment filed Securitisation Application No. 308/2013 on the file of the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. The borrower contended that the secured asset is an agricultural property exempted from the purview of the SARFAESI Act and that the Advocate Commissioner is not an officer subordinate authorised. The Debts Recovery Tribunal after hearing the borrower and the bank held that there is dearth of material to hold prima facie that the secured asset is an agricultural land and hence exempt under Section 31 (i) of the SARFAESI Act. Nevertheless an interim order was passed in I.A. No. 2489/2013 in S.A. No. 308/2013 by the Debts Recovery Tribunal interdicting the Advocate Commissioner from taking physical possession. This was on the premise that the Advocate Commissioner is not an officer subordinate to the Chief Judicial Magistrate empowered to take possession under Section 14 (1A) of the SARFAESI Act. The interim order so passed by the Debts Recovery Tribunal is challenged by the bank under Article 227 of the Constitution of 3 OP(DRT)No. 3311/2013 India pointing out that several interim orders of the nature are being passed clogging the recovery proceedings.
3. I heard Mr. A. Antony, Advocate on behalf of the petitioner bank and Mr. Shaji Chirayath, Advocate on behalf of the respondent borrower.
4. Section 14 (1A) of the SARFAESI Act is as follows:
"14. Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset -- (1) x x x x x x x x x x x x x x x x x x x x x x x x x x x x x (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". (emphasis supplied) A division bench of this Court has in Muhammed Ashraf Vs. Union of India [2008 (4) KLT 1] held that a Chief Judicial Magistrate in a non-metropolitan area stands in the same footing as Chief Metropolitan Magistrate in metropolitan area. Their designations are used synonymously to denote the authority depending upon where one is situated in a metropolitan area or non-metropolitan area. It was categorically held therein after a 4 OP(DRT)No. 3311/2013 conspectus of all statutory provisions that the jurisdiction under Section 14 of the SARFAESI Act can be exercised by the Chief Judicial Magistrate in non-metropolitan areas. The Supreme Court dismissed Special Leave to Appeal (Civil) No. 1671/2009 filed against the judgment of the division bench which I respectfully follow. It is unnecessary to discuss this issue again since the decision in Muhammed Ashraf's case is eloquent wherein the provisions of the Code of Criminal Procedure, 1973 were also called in aid. I am unable to subscribe to the contrary view held by the full bench of the High Court of Madras in K. Arockiaraj Vs. The Chief Judicial Magistrate and others [2013 (4) KLT S.N.39]. The observation therein that the SARFAESI Act is complete Act by itself and that the provisions of the Code of Criminal Procedure, 1973 cannot be imported for the purpose of interpretation does not impress me.
5. The power of the Magistrate to appoint an Advocate Commissioner for identification of the secured assets and to take possession of the same for handing it over to the bank has also been upheld in Muhammed Ashraf's case. The source for that 5 OP(DRT)No. 3311/2013 power can be traced to Section 14 (2) of the SARFAESI Act to take such steps as are necessary [See: Sakiri Vasu Vs. State of Uttar Pradesh [2008 (1) KLT 724 (SC)]. It may however appear at first blush that such an Advocate Commissioner is not an officer subordinate to the District Magistrate or the Chief Judicial Magistrate. But a reference to Sections 12 and 17 of the Code of Criminal Procedure, 1973 indicates that the term District Magistrate or Chief Metropolitan Magistrate denotes the court and not the officer in person. An Advocate Commissioner is certainly an officer subordinate to the court and the words employed in Section 14 (1A) of the SARFAESI Act are not to be understood as meaning an officer subordinate in service. Section 284 of the Code of Criminal Procedure, 1973 in fact empowers an Advocate Commissioner to record the examination of witnesses whose personal appearance in court is dispensed with. Similar provisions can be found in Order XXVI Rule 17 of the Code of Civil Procedure, 1908 enabling the Advocate Commissioner to record evidence of witnesses and Section 75 (g) thereof to perform any ministerial act even. Taking over possession of the secured asset 6 OP(DRT)No. 3311/2013 and handing over the same to the creditor bank is nothing but a ministerial act of the Advocate Commissioner on behalf of the court. The Advocate Commissioner exercising such function under Section 14 (1A) of the SARFAESI Act is only discharging his duty as an officer subordinate to the court presided by the Magistrate. The contention of the borrower that the Advocate Commissioner is not an officer subordinate in service to the Chief Judicial Magistrate and hence incompetent is only to be rejected.
6. The interim order of the Debts Recovery Tribunal in I.A. No. 2489/2013 in S.A. No. 308/2013 interdicting the Advocate Commissioner from taking physical possession of the secured asset is hereby quashed. The Debts Recovery Tribunal is directed to adjudicate on the surviving issue as regards the nature of the property offered as security interest and take the proceedings to a logical end without delay.
The Original Petition is allowed. No costs.
V. CHITAMBARESH JUDGE ncd