In an important judgment, the Bombay High Court has held that for the purposes of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, the District Magistrate or the Chief Metropolitan Magistrate is not a persona designata and the Additional District Magistrate or Additional Chief Metropolitan Magistrate has the same judicial powers.
The judgment was passed by a bench of Justice BR Gavai and Justice SK Shinde in a writ petition filed by a company called Capital First Ltd.
The petitioner company is a secure creditor within the meaning of Section 2(1)(zd) of the SARFAESI Act. Asserting its right to get applications filed under Section 14 of the said Act, before the Chief Metropolitan Magistrate at Esplanade Court, decided in a time-bound manner, the company has sought appropriate directions from the high court.
Section 14 of the SARFAESI Act requires the Chief Metropolitan Magistrate or District Magistrate to assist a secured creditor in taking possession of secured asset.
It has been stated in the petition that in view of amended provisions of Section 14 of the Act, the Chief Metropolitan Magistrate or District Magistrate is required to pass suitable orders within 30 days from the date of application, which period could be extended not exceeding in aggregate 60 days.
However, when the high court directed the Chief Metropolitan Magistrate to ‘endeavour to dispose of’ petitioner’s pending applications, the CMM stated in his reply that as on August 9, 2017, some 924 cases were pending under the SARFAESI Act. Out of these cases, 509 were filed in 2017. Thus, as per directions of the high court to give preference to old cases over the new ones, the applications are yet to be decided, the CMM’s reply stated.
The court then asked lawyers for both parties to give suggestions within the framework of law for expeditious disposal of such applications.
Submissions and Final Judgment
Birendra Saraf appeared for the petitioner in the matter and HS Venegavakar appeared for the State of Maharashtra.
Saraf referred to Section 14 of the said Act and relevant provisions of the Code of Criminal Procedure, and submitted that Chief Metropolitan Magistrate and Additional Chief Metropolitan Magistrate are courts of the same status having the same and identical jurisdiction as far as criminal trials are concerned.
He also submitted that the intention of Legislature of providing speedy remedy for enforcement of security interest in time bound manner, can be best carried out by reading the expression ‘Chief Metropolitan Magistrate’ to also include the ‘Additional Chief Metropolitan Magistrate’.
In the case of State of Maharashtra v Shanti Prasad Jain, it was held that the Chief Metropolitan Magistrate and the Additional Chief Metropolitan Magistrate are courts of the same status having the same and identical jurisdiction so far as the trial of criminal cases is concerned.
The court accepted Saraf’s argument that on two separate occasions, the high court has issued a notification authorising the Additional Chief Metropolitan Magistrate to discharge all functions of the Chief Metropolitan Magistrate.
Thus, the court held: