The appeal is arisen due to there are conflicting views of different high courts on a question whether the chief judicial magistrate is competent to process the request of the ...
No Acts & Articles mentioned in this case
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S).6295 OF 2015
The Authorised Officer, Indian Bank ..…Appellant(s)
Versus
D. Visalakshi and Anr. ….Respondent(s)
With
Civil Appeal No(s) 75547555 of 2019
(Arising out of SLP (C) No(s).1243012431 of 2015)
Criminal Appeal No(s) 14631464 of 2019
(Arising out of SLP (Crl.) No(s).393394 of 2019)
Civil Appeal No(s) 7557 of 2019
(Arising out of SLP (C) No(s) 23193 of 2019)
(Arising out of Diary No(s).47134 of 2018
Civil Appeal No(s) 7558 of 2019
(Arising out of SLP (C) No(s).7121 of 2019)
Criminal Appeal No(s) 1465 of 2019
(Arising out of SLP (Crl.) No(s).3507 of 2019)
Criminal Appeal No(s) 1478 of 2019
(Arising out of SLP (Crl.) No(s).3689 of 2019)
Criminal Appeal No(s) 1466 of 2019
(Arising out of SLP (Crl.) No(s).4351 of 2019)
Criminal Appeal No(s) 1467 of 2019
(Arising out of SLP (Crl.) No(s).4293 of 2019)
2
Criminal Appeal No(s) 1468 of 2019
(Arising out of SLP (Crl.) No(s).4387 of 2019)
Criminal Appeal No(s) 1469 of 2019
(Arising out of SLP (Crl.) No(s) 8870 of 2019)
(Arising out of Diary No(s).15461 of 2019)
Criminal Appeal No(s) 1470 of 2019
(Arising out of SLP (Crl.) No(s) 8871 of 2019)
(Arising out of Diary No(s).15465 of 2019)
Criminal Appeal No(s) 1471 of 2019
(Arising out of SLP (Crl.) No(s) 8872 of 2019)
(Arising out of Diary No(s).15467 of 2019)
Criminal Appeal No(s).900 of 2019
Criminal Appeal No(s) 1472 of 2019
(Arising out of SLP (Crl.) No(s).5058 of 2019)
Criminal Appeal No(s) 1473 of 2019
(Arising out of SLP (Crl.) No(s).5368 of 2019)
Criminal Appeal No(s) 1475 of 2019
(Arising out of SLP (Crl.) No(s).5268 of 2019)
Criminal Appeal No(s).945 of 2019
Civil Appeal No(s) 75607561 of 2019
(Arising out of SLP (C) No(s).1372213723 of 2019)
Criminal Appeal No(s) 1476 of 2019
(Arising out of SLP (Crl.) No(s).5346 of 2019)
Criminal Appeal No(s) 1477 of 2019
(Arising out of SLP (Crl.) No(s).5351 of 2019)
J U D G M E N T
3
A.M. Khanwilkar, J.
Delay condoned. Leave granted in Special Leave Petitions.
2.The seminal question involved in these appeals is: whether
the Chief Judicial Magistrate (for short, “CJM”) is competent to
process the request of the secured creditor to take possession of
the secured asset under Section 14 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (for short, “2002 Act”)? There are conflicting
views of different High Courts on this question. The High Courts
of Bombay, Calcutta, Madras, Madhya Pradesh and Uttarakhand
have interpreted the said provision to mean that only the Chief
Metropolitan Magistrate (for short, “CMM”) in metropolitan areas
and the District Magistrate (for short, “DM”) in nonmetropolitan
areas are competent to deal with such request. On the other
hand, the High Courts of Kerala, Karnataka, Allahabad and
Andhra Pradesh have taken a contrary view of the same
provision, to mean that it does not debar or preclude the CJM in
the nonmetropolitan areas to exercise power under Section 14 of
the 2002 Act.
4
3.The earliest decision is of the Division Bench of the High
Court of Kerala at Ernakulam in Muhammed Ashraf and Anr.
Vs. Union of India (UOI) and Others
1
. The Court noted that
Section 14 of the 2002 Act expressly refers to CMM in relation to
metropolitan areas and DM for nonmetropolitan areas. It then
went on to observe that as the powers and functions of CJM in
nonmetropolitan areas and CMM in metropolitan areas are one
and the same (with only difference that CMM exercises powers in
metropolitan areas and CJM in nonmetropolitan areas); and the
expression CJM and CMM are interchangeably used namely, one
is synonymous for the other depending on the area under its
jurisdiction, by interpretative process, it concluded that in non
metropolitan areas, apart from DM, the CJM is also competent to
exercise powers under Section 14 of the 2002 Act. This decision
was carried in appeal before this Court being SLP (C) No.1671 of
2009 which, however, came to be dismissed on 2
nd
February,
2009 as no ground to interfere with the impugned judgment was
made out.
1. AIR (2009) Ker. 14
5
4.Soon thereafter, another Division Bench of the High of
Kerala in Radhakrishnan, V.N. Vs. State of Kerala and Anr.
2
,
reiterated the view taken in Muhammed Ashraf (supra) and
declined to refer the matter to a full bench for reconsideration.
5.However, around the same time, the High Court of Bombay
(Aurangabad Bench) in IndusInd Bank Ltd., (formerly known
as Ashok Leyland Finance Ltd.) through its Legal Executive,
Ravindrakumar Prakash Bhargodev Vs. The State of
Maharashtra through Police Station
3
, had taken a
diametrically opposite view. It had held that it is not open to
substitute the word, “CMM” for “CJM”. For, there is no indication
in the 2002 Act that the legislature had intended to empower the
CJM outside the metropolitan areas, although the judicial officer
(CMM) was entrusted with the power to deal with such request in
the metropolitan areas. Again in Arjun Urban Cooperative
Bank Ltd., Solapur Vs. Chief Judicial Magistrate, Solapur
and Ors.
4
, another Division Bench of the High Court of Bombay
opined that Section 14 of the 2002 Act, in no univocal terms,
2 MANU/KE/0677/2008 (Cr. M.C. No.4369 of 2008 dated 20.11.2008)
3 2008 (110) BOM LR 2880 (decided on 22.04.2008)
4 2009 (5) Mh. L.J. 380
6
constricts the exercise of powers only by the CMM or DM, as the
case may be.
6.However, in 2013, the High Court of Karnataka in Kaveri
Marketing Vs. The Saraswathi Coop. Bank Ltd.
5
took the
same view as taken by the High Court of Kerala that the CJM can
also exercise powers under Section 14 of the 2002 Act. But the
Single Judge of the High Court of Calcutta in Dinesh Kumar
Agarwal Vs. State of West Bengal
6
and the full bench of
Madras High Court in K. Arockiyaraj Vs. The Chief Judicial
Magistrate, Srivilliputhur Virudhunagar District and The
Housing Development Finance Corporation Limited
7
took a
different view as taken by the High Court of Bombay and held
that the CMM or DM, as the case may be, alone can exercise
powers under Section 14 of the 2002 Act. Later, the High Court
of Madras in T.C. Ramadoss and Ors. Vs. The Chief Manager
& Authorised Officer State Bank of India and Ors.
8
, the High
Court of Madhya Pradesh in Shyam Sunder Rohra Vs.
5 111 (2013) BC 582
6 2013 (1) CHN 671
7 AIR (2013) Mad. 206
8 AIR (2015) Mad. 67
7
IndusInd Bank
9
, the High Court of Uttarakhand at Nainital in
Deepak Aggarwal Vs. State of Uttarakhand and Others
10
and
the Division Bench of the High Court of Calcutta in Andhra
Bank and Ors. Vs. Sri Dinesh Kumar Agarwal and Ors.
11
also
held that CMM or DM, as the case may be, alone can exercise
power under Section 14 of the 2002 Act.
7.Whereas, the High Court of Judicature at Hyderabad for the
State of Telangana and the State of Andhra Pradesh in M/s T.R.
Jewellery and Another Vs. State Bank of India and
Another
12
and the High Court of Allahabad in Abhishek Mishra
Vs. State of U.P. and Others.
13
, by interpretative process opined
that even the CJM was competent to exercise powers under
Section 14 of the 2002 Act.
8.The borrowers or the persons claiming through borrowers,
would contend that literal interpretation of Section 14 of the
2002 Act must be preferred. In which case, the secured creditor
can seek assistance “only” of CMM in metropolitan areas and DM
9 AIR (2017) M.P. 36
10 MANU/UC/0012/2012
11 (2013) 4 CHN 95
12 AIR (2016) A.P. 125 (FB)
13 AIR (2016) All. 210
8
in nonmetropolitan areas, for the purpose of taking over
possession of the secured asset or property (instead of resorting
to recovery of property by other means). As the provision is
univocal, it cannot be interpreted in any other manner. To do so
would entail in doing violence to the legislative intent. There is
presumption that Parliament had complete knowledge of the
existing laws and was conscious of the distinction or similarity
between the scope of powers to be exercised by the CMM, DM
and CJM, as the case may be, in terms of the provision of Cr.P.C.
and other laws. Despite such awareness, the parliament
consciously chose to identify clearly, the authority which can
entertain the application(s) of the secured creditor under Section
14 of the 2002 Act. In that sense, the provision is in the nature of
defining the authority persona designata, namely CMM and DM
for the concerned area.
9.If so, contends the learned counsel, it is not open for the
Court to take recourse of interpretative process to include
another authority such as CJM merely because the functions
discharged by the CJM and CMM under the Cr.P.C. and other
laws are similar. There is no room for invoking the doctrine of
9
Casus Omissus in light of the unambiguous provision in the form
of Section 14 of the 2002 Act. Thus, the similarity of functions
discharged by the CMM and CJM under the Cr.P.C. would be of
no avail. Rather, the Court must follow the maxim “cum inverbis
nulla ambiguitas est, non debet admitti voluntatis quaestio” and
prefer the plain language of the statute. To demonstrate the
distinction between the hierarchy of the judicial officers, reliance
has been placed on a chart which clearly distinguishes them on
the basis of their functions as nonJudicial Magistrate and
Judicial Magistrate in the concerned area. The office of DM
essentially discharges executive functions and comes within the
nonJudicial Magistrate category. On the other hand, the office of
CMM or CJM would involve both executive and judicial functions.
This distinction is crucial and it must be presumed that the
Parliament was conscious about this distinction. It is also urged
that the Parliament in various Acts, including the Sick Industrial
Companies (Special Provision) Act, 1985 – Section 29, Banking
Regulation Act, 1949 – Section 45S, Industrial Reconstruction
Bank of India, 1984 – Section 51, National Housing Bank Act,
1987 – Section 36H, Companies Act, 1956 – Section 10FP,
10
Companies Act, 2013 – Section 429 and Small Industries
Development Bank of India Act, 1989 Section 39, have enacted
similar provisions empowering CMM/DM, for seeking assistance
to take possession of the property sold or leased.
10.It is urged that taking any other view would require re
writing of Section 14 of the 2002 Act and in the process doing
violence to the legislative intent. That must be eschewed. It is
urged that in contradistinction to the expression used in Section
14 “CMM” and “DM”, Section 30 of the same Act (2002 Act) refers
to the authority as “Metropolitan Magistrate” or a “Judicial
Magistrate”, as the case may be for taking cognizance of offences
punishable under the Act.
11.To buttress the above submissions, reliance is placed on
Shankarlal Aggarwal and Ors. Vs. Shankarlal Poddar and
Ors.
14
, Municipal Corporation of Delhi Vs. Shiv Shanker
15
,
Ratan Lal Adukia Vs. Union of India
16
, Kishorebhai
Khamanchand Goyal Vs. State of Gujarat and Another
17
,
M/s. Unique Butyle Tube Industries Pvt. Ltd. Vs. U.P.
14 AIR (1965) SC 507
15 (1971) 1 SCC 442
16 (1989) 3 SCC 537
17 (2003) 12 SCC 274
11
Financial Corporation and Ors.
18
, Delhi Financial Corpn.
and Another Vs. Rajiv Anand and Others
19
, A.N. Roy,
Commissioner of Police and Another Vs. Suresh Sham
Singh
20
, Standard Chartered Bank Vs. V. Noble Kumar and
Others
21
, Harshad Govardhan Sondagar Vs. International
Assets Reconstruction Company Limited and Others
22
, Shree
Bhagwati Steel Rolling Mills Vs. Commissioner of Central
Excise and Another.
23
, Authorized Officer, State Bank of
Travancore and Others. Vs. Mathew K.C.
24
, Commissioner of
Customs (Import), Mumbai Vs. Dilip Kumar and Company
and Others
25
.
12.Per contra, the secured creditors (Banks) and auction
purchasers would commend us with the view taken by the High
Courts of Kerala, Andhra Pradesh, Allahabad and Karnataka.
According to them, the process under Section 14 of the 2002 Act
18 AIR (2003) SC 2103
19 (2004) 11 SCC 625
20 (2006) 5 SCC 745
21 (2013) 9 SCC 620
22 (2014) 6 SCC 1
23 (2016) 3 SCC 643
24 (2018) 3 SCC 85
25 (2018) 9 SCC 1
12
can be invoked by the secured creditor only for taking possession
of the secured assets. The application is required to be filed by
the secured creditor supported by an affidavit stating due
compliances of the stipulations provided therefor. The inquiry
envisaged under Section 14 of the 2002 Act, to be undertaken by
the CMM or DM, is minimal and basic in nature. It is only to
satisfy itself about the factual position stated by the secured
creditor in the concerned application including the appended
affidavit filed therewith. It is not an adjudicatory process
muchless to decide about the rights and liabilities of the
contesting parties. The nature of inquiry is essentially one of
exercise of administrative or executive powers. SubSection (1A)
enables the DM or CMM to authorise any officer subordinate to
him to take possession.
13.The CMM and CJM are clothed with powers as per the
scheme of Cr.P.C.. The office of CMM and CJM are
interchangeable and they discharge similar functions in their
respective jurisdictions namely, metropolitan and non
metropolitan areas, as the case may be. The recent enunciation
of this Court expounds that the inquiry requires judicious
13
approach. Therefore, it could be effectively exercised by CJM in a
nonmetropolitan area. There is no express provision in the 2002
Act, so as to disregard the dispensation under the Cr.P.C.,
concerning the exercise of powers by the CMM and CJM
respectively. On the other hand, Section 37 of the 2002 Act
makes it amply clear that the application of provisions of Cr.P.C.
is not completely ruled out. Section 37 of the 2002 Act postulates
that the application of other laws in force would continue to
apply and the provisions of 2002 Act or the Rules made
thereunder shall be in addition thereto and not in derogation
thereof.
14.It is urged that the 2002 Act does not define the term
“CMM” or “DM”. Reliance is then placed on Section 2(k) of Cr.P.C.
which defines the expression “metropolitan area” and Section 3 of
Cr.P.C. which defines the expression “CMM” or “DM”. The
adjudicatory process like sifting of evidence, trial etc. is required
to be undertaken only by a Judicial Magistrate. The Executive
Magistrate can exercise only executive powers. Indisputably, the
powers of CJM in nonmetropolitan area and CMM in
metropolitan area are equal and those terms are used as
14
synonymous. Additionally, reliance is placed on Section 12 of
Cr.P.C. concerning the Judicial Magistrate and Additional
Judicial Magistrate, Section 14 concerning local jurisdiction,
Section 16 and 17 concerning courts of Metropolitan Magistrate,
CMM and Additional Chief Metropolitan Magistrate respectively.
Section 20 of Cr.P.C. deals with the office of Executive
Magistrates. Relying on the exposition of this Court in All India
Judges’ Association and Others Vs. Union of India and
Others
26
, it is urged that incontrovertibly the post of CJM and
CMM must be equated and they have to be placed in the same
cadre of Civil Judge (Senior Division). Reliance is also placed on
Standard Chartered Bank (supra), to contend that there is no
difference in the jurisdiction or powers exercisable by the CJM
and CMM, except operating in different territorial area. It is thus
urged that expressions “CMM/DM” in Section 14 be construed as
also including “CJM” in a nonmetropolitan area.
15.Reliance is then placed on Sindhi Education Society and
Another Vs. Chief Secretary, Government of NCT of Delhi
26 (2002) 4 SCC 247
15
and Others
27
, Rani Kusum (Smt.) Vs. Kanchan Devi (Smt.)
and Others
28
and Vinay Tyagi Vs. Irshad Ali Alias Deepak
and Others
29
, to buttress the submission that Section 14 of the
2002 Act must receive a construction which would advance the
cause of justice and legislative object sought to be achieved. A
purposive interpretation of Section 14 as including the office of
CJM in a nonmetropolitan area would further the legislative
intent as it would enable the secured creditor to approach the
CJM to take possession of the secured assets thereat.
16.It is urged that the borrowers or the persons claiming
through borrowers, cannot be heard to make any grievance, if the
application filed under Section 14 is dealt with by a judicial
mind; and moreso because the nature of inquiry to be
undertaken is circumscribed. In that, it is merely verification of
compliances by the secured creditor. In any case, the aggrieved
borrower has a statutory remedy of appeal against the order
passed by the CJM as would be available against the order
passed by CMM/DM. Similarly, all contentious issues available to
the borrowers or the persons claiming through them could be
27 (2010) 8 SCC 49
28 (2005) 6 SCC 705
29 (2013) 5 SCC 762
16
raised by them even before the CJM, who would be equally
competent to deal with the same as would be done by the
CMM/DM, as per law. Considering the fact that the CMM and
CJM both discharge similar functions and are treated equivalent
for all purposes in the respective territorial jurisdictions, it is not
a case of application being processed by someone who is inferior
and not competent or qualified to do so.
17.To buttress the above submissions reliance is placed on
Vishal N. Kalsaria Vs. Bank of India and Others
30
, State of
A.P. Vs. Polamala Raju Alias Rajarao
31
, Sri Nasiruddin Vs.
State Transport Appellate Tribunal
32
, Bhudan Singh and
Another Vs. Nabi Bux and Another
33
, K.P. Varghese Vs.
Income Tax Officer, Ernakulam and Another
34
, Atma Ram
Mittal Vs. Ishwar Singh Punia
35
and M/s. Girdhari Lal and
Sons Vs. Balbir Nath Mathur and Others
36
.
30 (2016) 3 SCC 762
31 (2000) 7 SCC 75
32 (1975) 2 SCC 671
33 (1969) 2 SCC 481
34 (1981) 4 SCC 173
35 (1988) 4 SCC 284
36 (1986 2 SCC 237
17
18.It is also urged that in certain States, the functions of the
DM are discharged by the Deputy Commissioner of the State
such as in the State of Jharkhand. Therefore, the interpretation
put forth by the High Courts that application under Section 14 of
the 2002 Act can also be moved before the CJM in a non
metropolitan area, would subserve the interests of all concerned
and also effectuate the legislative intent of expeditious resolution
of matters under the 2002 Act without intervention of the Court.
Lastly, it is urged that if this Court upholds the view taken by the
concerned High Courts that CJM is not competent to deal with
the action under Section 14 of the 2002 Act, this Court may
invoke the doctrine of prospective overruling and save all the
orders passed by the CJM’s to this end.
19.We have heard Mr. Dhruv Mehta, Mr. Sudhivasudevan, Mr.
Jaideep Gupta and Mr. Jayanth Muthraj, Senior Advocates, Mr.
Kuriakose Varghese, Mr. A. Karthik, Mr. E. Easwaran, Mr. Sajith
P. Warrier Mr. Govind Manoharan, Ms. Nina Gupta, Mr. Roy
Abraham, Mr. Philip K. Varghse, Mr. Rakesh K. Sharma, Mr.
Radha Shyam Jena, Mr. Himanshu Munshi, Mr. Ram Swarup
Sharma, Mr. Garvesh Kabra and Mr. Mudit Sharma, Advocates.
18
20.We deem it apposite to reproduce Section 14 of the 2002
Act. The same reads thus:
“14. Chief Metropolitan Magistrate or District
Magistrate to assist secured creditor in taking
possession of secured asset.(1) Where the
possession of any secured asset is required to be taken
by the secured creditor or if any of the secured asset is
required to be sold or transferred by the secured
creditor under the provisions of this Act, the secured
creditor may, for the purpose of taking possession or
control of any such secured asset, request, in writing,
the Chief Metropolitan Magistrate or the District
Magistrate within whose jurisdiction any such secured
asset or other documents relating thereto may be
situated or found, to take possession thereof, and the
Chief Metropolitan Magistrate or, as the case may be,
the District Magistrate shall, on such request being
made to him
(a) take possession of such asset and
documents relating thereto; and
(b) forward such assets and documents to
the secured creditor:
1
[Provided that any application by the secured creditor
shall be 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;
19
(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 nonperforming asset;
(vi) affirming that the period of sixty days
notice as required by the provisions of
subsection (2) of section 13, demanding
payment of the defaulted financial
assistance has been served on the
borrower;
(vii) the objection or representation in
reply to the notice received from the
borrower has been considered by the
secured creditor and reasons for non
acceptance of such objection or
representation had been communicated to
the borrower;
(viii) the borrower has not made any
repayment of the financial assistance in
spite of the above notice and the
Authorised Officer is, therefore, entitled to
take possession of the secured assets
under the provisions of subsection (4) of
section 13 read with section 14 of the
principal Act;
(ix) that the provisions of this Act and the
rules made thereunder had been complied
with:
Provided further that on receipt of the affidavit from
the Authorised Officer, the District Magistrate or the
Chief Metropolitan Magistrate, as the case may be,
shall after satisfying the contents of the affidavit pass
suitable orders for the purpose of taking possession of
20
the secured assets
2
[within a period of thirty days from
the date of application]:
3
[Provided
4
[also] that if no order is passed by the Chief
Metropolitan Magistrate or District Magistrate within
the said period of thirty days for reasons beyond his
control, he may, after recording reasons in writing for
the same, pass the order within such further period
but not exceeding in aggregate sixty days.]
Provided also that the requirement of filing affidavit
stated in the first proviso shall not apply to proceeding
pending before any District Magistrate or the Chief
Metropolitan Magistrate, as the case may be, on the
date of commencement of this Act.]
5
[(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.]
(2) For the purpose of securing compliance with the
provisions of subsection (1), the Chief Metropolitan
Magistrate of the District Magistrate may take or cause
to be taken such steps and use, or cause to be used,
such force, as may, in his opinion, be necessary.
(3) No act of the Chief Metropolitan Magistrate or the
District Magistrate
6
[any officer authorised by the Chief
Metropolitan Magistrate or District Magistrate] done in
pursuance of this section shall be called in question in
any court or before any authority.
1. Ins. By Act 1 of 2013, sec. 6(a) (w.e.f. 1512013, vide
S.O. 171 (E), dated 1512013).
2. Subs. By Act 44 of 2016, sec. 12(i) (w.e.f. 192016,
vide S.O. 2831(E), dated 1
st
September, 2016).
3. Ins. By Act 44 of 2016, sec. 12(ii) (w.e.f. 192016,
vide S.O. 2831(E), dated 1
st
September, 2016).
4. Corrected by Corrigendum Notification, published in
the Gazette of India, Extra., Pt.II, Sec. 1, No.56, dated
8
th
September, 2016.
21
5. Ins. By Act 1 of 2013, sec. 6(b) (w.e.f. 1512013, vide
S.O. 171(E), dated 1512013).
6. Ins. By Act 1 of 2013, sec. 6(c) (w.e.f. 1512013, vide
S.O. 171(E), dated 1512013).”
The unamended provision as applicable at the relevant time when
the decision was rendered by the High Court of Kerala in
Muhammed Ashraf (supra), was somewhat different. Sub
section (1A) was not in vogue. That has come by way of an
amendment in 2013. The provision was amended in 2013 and
further amended in 2016, as is reproduced in the extracted
portion hitherto.
21.The Division Bench of the High Court of Kerala in
Muhammed Ashraf (supra), after adverting to the unamended
Section 14 of the 2002 Act had opined that the said provision is a
procedural measure whereby the CMM or DM, as the case may
be, is obligated to render assistance to the secured creditor to
take possession of the secured assets or documents. The said
authority is empowered to take such steps and use such force, as
may be necessary for taking possession of the secured assets and
documents relating thereto. Strikingly, the act of the authority is
protected and its action cannot be questioned in any Court or
22
before any authority in terms of Section 34 of the 2002 Act. It
also noted that a trial or adjudication of dispute by the authority
is not contemplated under this Section. However, the limited
inquiry to be undertaken is whether secured property is
identifiable and whether 60 days’ notice was issued under
Section 13(2) enabling the secured creditor to resort to Section
13(4) and take possession of the secured assets. The Court
unerringly opined that Section 14 of the 2002 Act is only for the
purpose of executing the power and assisting the secured creditor
to take possession of the secured assets. The borrower or person
affected by such action has a right of judicial review before the
Writ Court as ordained by this Court in Mardia Chemicals Ltd.
and Others v. Union of India and Others
37
. The Division Bench
then noted that the 2002 Act is a selfcontained code, including
the powers of the Tribunal to declare any of the measures taken
by the secured creditor invalid and consequential restoration of
possession to persons from whom the possession was taken. The
Court reiterated that in absence of any adjudicatory power vested
in the authority referred to in Section 14 of the 2002 Act, it had
37 (2004) 4 SCC 311 (paragraph Nos.80 and 81)
23
no powers to exercise the powers vested in the Tribunal.
Whereas, it can only facilitate the secured creditor in taking
possession of the secured assets after verification of the basic
facts regarding the entitlement of the secured creditor to get such
possession. The Court then adverted to the exposition of this
Court in Transcore Vs. Union of India and Another
38
, which
had analysed the provisions of the 2002 Act. It then adverted to
the Gujarat High Court decision in Bank of India Vs. Pankaj
Dilipbhai Hemnani and Others
39
and agreed with the dictum
therein that the authority referred to under Section 14 of the
2002 Act can only verify whether 60 days’ notice as prescribed
under Section 13(2) was issued or not and whether secured asset
is identifiable. It then noted that after such inquiry the authority
before taking action is obliged to satisfy itself in that regard. At
the same time, it cannot enter upon adjudication or trial of a
dispute while exercising power under Section 14 of the 2002 Act.
The Parliament has invested power under Section 14 of the 2002
Act, in a senior functionary so as to avoid an arbitrary and high
handed action at the instance of secured creditor. The Court then
38 (2008) 1 SCC 125(paragraph No.74)
39 AIR 2007 Guj. 201
24
adverted to the decision in Solaris Systems Pvt. Ltd. and
Another Vs. Oriental Bank of Commerce and Another
40
, of a
Single Judge of the same High Court, which for the first time had
held that CJM for nonmetropolitan areas was competent to deal
with the application under Section 14 of the 2002 Act. The Court
then noticed the definition of metropolitan area in Section 2(k) of
Cr.P.C., Section 3 regarding construction of references which
equates the CJM to that of the CMM whilst exercising jurisdiction
in the concerned areas. Considering the legislative scheme in that
regard, the Court concluded that the powers of the CJM in non
metropolitan areas and CMM in metropolitan areas, are one and
the same with only difference being that the CMM exercises
powers in metropolitan areas. The Court then analysed the
decision of this Court in Unique Butyle Tube Industries Pvt.
Ltd. (supra) and distinguished the same by holding that in the
present case, the question was whether the term CMM in
metropolitan areas will include CJM in nonmetropolitan areas.
The Court went on to observe that the legislation must be
understood in a reasonable manner. For that, it took support
40 I.L.R. 2006 Ker 645
25
from the dictum in Holmes Vs. Bradfield Rural District
Council
41
and also in Sri Nasiruddin (supra) wherein this Court
adopted “just reasonable and sensible” interpretation of the
provision. The Court then noted the dictum of Denning, L.J. in
Seaford Court Estates Ltd. Vs. Asher
42
which was quoted with
approval by this Court in M. Pentiah Vs. Muddala
Veeramallapa
43
, Bangalore Water Supply and Sewerage
Board Vs. A. Rajappa and Others
44
and NEPC Micon Ltd. Vs.
Magna Leasing Ltd.
45
etc.. The Court also adverted to the
enunciation of House of Lords in Inco Europe Ltd. and Ors. Vs.
First Choice Distribution (a firm) and Ors.
46
wherein it is
observed that Court can add words in its interpretative process in
suitable cases to give effect to the purpose of legislature. The
Court then noted that in Padmasundara Rao and Others Vs.
State of Tamil Nadu and Others
47
, a Constitution Bench of this
Court had held that “a casus omissus cannot be supplied by the
41 1949 (1) All ER 381 (Page 384)
42 (1949) 2 All ER 155, P. 164(CA)
43 (1961) 2 SCR 295
44 (1978) ILLJ 349 SC
45 1999 CriLJ 2883
46 2000 (2) All ER 109
47 (2002) 255ITR 147 (SC)
26
Court except in the case of clear necessity and when reason for it
is found in the four corners of the statute itself…”. Lastly, the
Court adverted to the decision in National Insurance Co. Ltd.
Vs. Laxmi Narain Dhut
48
which had considered the dictum in
Reserve Bank of India and Others Vs. Peerless General
Finance and Investment Company Ltd. and Another
49
; and
Kehar Singh and Others Vs. State (Delhi Admn.)
50
to hold that
if the statutory provision is open to more than one interpretation,
then the Court must adopt the one which represents the true
intent of the legislature. However, the function of the Court is
only to expound and not to legislate. At the same time, the
process of construction combines both literal and purposive
approaches. Finally, the Court went on to observe that in the
present case there was no casus omissus. In that, CJM in
metropolitan areas are designated as CMM and vice versa
mutatismutandis by implication and reference by the areas of
jurisdiction both stand on the same footing to denote the
authority depending upon where he is situated. On that basis, it
48 2007 (2) KLT 470 (SC) (paragraph Nos.34 and 35)
49 (1996) 1 SCC 642
50 (1988) 3 SCC 609
27
concluded that in nonmetropolitan areas, apart from the DM,
the powers can be exercised by the CJM also to render assistance
to the secured creditor in taking possession of the secured
assets; and in doing so, the Magistrate can appoint a
Commissioner for identification of the secured assets and taking
possession thereof and if there is any resistance, ask for police
assistance and take any effective steps to have possession of the
secured assets taken over.
22.The full Bench of the High Court of Judicature at
Hyderabad for the State of Telangana and the State of Andhra
Pradesh in M/s T.R. Jewellery (supra) also analysed the
provisions of the 2002 Act and noted that the object of the Act is
to achieve speedier recovery of the dues declared as Non
Performing Assets (NPAs), without the intervention of the
Tribunals or the Courts and for quick resolution of disputes
arising out of the action taken for recovery of such dues apart
from making better availability of capital liquidity and resources
to help in the growth of economy and welfare of the people. As
regards to Section 14 of the Act, it noted that the purpose
28
underlying is to assist the secured creditor for taking possession
or control of the secured assets by requesting the authority
referred to therein. The Court then went on to analyse the
scheme of the Cr.P.C. and noted that the executive powers are to
be exercised by the Executive Magistrate, whereas sifting of
evidence shall be exercisable only by a Judicial Magistrate.
Further, from the scheme of the Cr.P.C., it is clear that the CJM,
CMM and the DM are separately referred to in the Code and High
Court has been empowered to appoint CJM and CMM while the
State Government appoints one of the Executive Magistrate as
DM in every District. The Court then adverted to the decisions of
different High Courts which have had the occasion to deal with
the question under consideration in reference to Section 14 of the
2002 Act, as to whether the CJM in nonmetropolitan areas, is
equally competent to entertain or deal with the application moved
by the secured creditor. It then adverted to Sections 35 and 37 of
the 2002 Act and noted the decision of this Court in Mathew
Varghese Vs. M. Amritha Kumar and Others
51
to conclude that
the application of the provisions of the Cr.P.C., would be in
51 (2014) 5 SCC 610
29
addition to and not in derogation of the provisions of 2002 Act
and the provisions of the Code cannot be excluded from
consideration while dealing with the 2002 Act. It disagreed with
the Full Bench of the Madras High Court that Section 35 of the
2002 Act would override the provisions of Cr.P.C.. After analysing
the other decisions, it went on to hold that in terms of Section 14
of the 2002 Act, the CJM can authorise any officer subordinate to
him to take possession of such assets after examining the
correctness of the assertion made in the affidavit. Thus, it is only
a procedural step without any adjudication of any dispute
whatsoever. The action is therefore, only an administrative order
made for taking possession of the secured assets, if all other
conditions are fulfilled. Having already noted that the powers
exercised by the CMM and DM in terms of Section 14 of the 2002
Act are synonymous to each other and that they are not
adjudicatory in nature, it answered the question under
consideration in the affirmative. The Court then noted that there
was no casus omissus nor it was reading something into the
provision which the legislature never intended nor trying to
interpret the provision so as to defeat the intention of the
30
legislature. Whereas, the Court was only resorting to a purposive
interpretation to effectuate the intention of the legislature for
which the enactment was made. Thus, it concluded that exercise
of power by the CJM in nonmetropolitan areas, who exercises
the same powers as that of CMM in metropolitan areas, would
not in any way abrogate or contradict the dispensation predicated
in Section 14 of the 2002 Act. Moreso, it would not cause even a
tittle of prejudice to any of the parties. Whereas, it would ensure
a just process under the aegis of a judicial mind (CJM) in
rendering assistance to the secured creditors to recover
possession of their assets thereby achieving the object for which
the 2002 Act has been enacted.
23.Similarly, the Karnataka High Court at Bangalore in Kaveri
Marketing (supra), opined that the expression CMM be
construed as inclusive of CJM for nonmetropolitan areas, as the
powers of CJM and CMM are identical. Thus, the High Court of
Karnataka also opined that the CJM in nonmetropolitan areas
would be competent to entertain and deal with application under
Section 14 of the 2002 Act.
31
24.Similar view has been taken by the Division Bench of the
High Court of Allahabad in Abhishek Mishra (supra). It is held
that Section 14 of the 2002 Act is a procedural measure enabling
the secured creditor to take possession of the secured assets by
making application to the authority specified therein. Even the
Allahabad High Court adverted to the scheme of the provisions in
the Cr.P.C. bestowing executive and judicial power in the
concerned authority. Besides, it made reference to the same
decisions as noticed by the High Court of Kerala in Muhammed
Ashraf (supra) and concluded as under:
“34. Applying the above well settled principles of
interpretation of Statute, the answer to the issue is
nomenclature 'Chief Metropolitan Magistrate' used by
legislature is Section 14 of the Act includes Chief
Judicial Magistrate functioning in nonmetropolitan
area and shall have jurisdiction to entertain an
application made under Section 14 of the SARFAESI
Act, 2002. In our considered opinion, there is no casus
omissus. The interpretation given by us does not
amount to reading anything in the provision, which
the legislature never intended to, nor the
interpretation given by us, in any way, defeats the
intention of the Legislature. It is a purposive
interpretation to advance the true intention of the
legislature for enacting the Act, viz. speedy recovery of
bad debts of the banks and financial institutions
declared as NPAs. On the contrary, adopting the
principles of literal construction in interpretation of
32
the word 'Chief Metropolitan Magistrate' would not
only defeat the object and purpose of legislation but
would lead to manifestly anomalous result which
could not have been intended by the legislature. As per
Lord Reid in the case of Luke Vs. IRC, 1966 AC 557,
where to apply words would literally defeat the obvious
intention of the legislation and produce a wholly
unreasonable result, we must do some violence to the
words and so achieve that obvious intention and
produce a rational construction.
35. The view taken by us finds support from the Full
Bench decision of Andhra Pradesh High Court in the
case of T.R. Jewellery & Ors. Vs. State Bank of India &
Ors. (supra) and a Division Bench of High Court of
Kerala in the case of Muhammed Ashraf, C. Arifa Vs.
Union of India, we are unable to agree with contrary
view taken by Bombay High Court in the case of
Indusind Bank Ltd. Vs. State of Maharashtra and High
Court of Madras in K. Arockiyaraj Vs. The Chief
Judicial Magistrate, Srivilliputhur & Anr.,
MANU/TN/1796/2013 : 2013 (4) L.W. 485. The Full
Bench of Madras High Court in the case of K.
Arockiyaraj (supra) was of the view that phraseology
used in Section 14 of the Act, 2002 should be given its
true meaning without taking any assistance from Code
of Criminal Procedure in view of Section 35 of Act,
2002, which provides that provisions of the Act will
override all other laws which includes Code of
Criminal Procedure. It was also held that when
SARFAESI Act is a complete code, there is no need to
take resort to Section 3 of Cr.P.C.
36. With respect to the learned Judges, we have been
unable to persuade ourselves to agree to the view
taken. The Full Bench failed to take notice of Section
37 of the Act, 2002 which provides that application of
other laws is not barred. The said section reads as
under.
"37. Application of other laws not barred.
The provisions of this Act or the rules
made thereunder shall be in addition to,
and not in derogation of, the Companies
Act, 1956 (1 of 1956), the Securities
Contracts (Regulation) Act, 1956 (42 of
33
1956), the Securities and Exchange Board
of India Act 1992 (15 of 1992), the
Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of
1993) or any other law for the time being
in force."
37. There can be no manner of doubt that words "any
other law for time being in force" used in Section 37
would also include Code of Criminal Procedure within
its ambit and the application of provisions of Cr.P.C.
cannot be excluded from consideration while dealing
with the provisions of Act, 2002. Hence, the view taken
by Full Bench of Madras High Court that in view of
Section 35 of Act, 2002, the provisions of said Act
would override the provisions of Cr.P.C. and the words
'Chief Metropolitan Magistrate' used in Section 14
should be given literal interpretation without taking
any aid or assistance of Cr.P.C. does not, to us, appear
to be correct.
38. Fort the aforesaid facts and discussions, we are of
the considered view that nomenclature 'Chief
Metropolitan Magistrate' used in Section 14 of Act,
2002 is inclusive of 'Chief Judicial Magistrate'
functioning in a nonmetropolitan area and shall have
jurisdiction to entertain an application made by a
secured creditor under Section 14 of Act, 2002.”
25.We shall now turn to the other decisions taking the view
that only DM in a nonmetropolitan area is competent to deal
with the application filed by the secured creditor under Section
14 of the 2002 Act. The Division Bench of the High Court of
Bombay in IndusInd Bank Ltd. (supra) after adverting to the
statement of objects and reasons of the 2002 Act, opined that the
secured creditor is not required to obtain a decree from a
34
competent Court/DRT before being entitled to take steps for the
purpose of enforcement of recovery in relation to the secured
assets. While dealing with the specific issue as to whether, the
CJM is competent to deal with the application filed by the
secured creditor under Section 14 of the 2002 Act, the Court
went by the plain text of Section 14 of the 2002 Act to hold that
the CJM was not competent to do so; and that only the CMM in
metropolitan areas and DM in nonmetropolitan areas is
competent to assist the secured creditor in taking possession of
the secured assets, in terms of the 2002 Act. It noted that the
reference to expression CJM is conspicuously absent in Section
14 of the 2002 Act and, therefore, the legislature did not intend
to entrust the stated function to CJM in a nonmetropolitan area,
although the same is entrusted to CMM, a judicial officer, in
metropolitan area. Yet again, in Arjun Urban Cooperative
Bank Ltd. (supra), another Division Bench of the High Court of
Bombay reiterated the exposition in IndusInd Bank Ltd. (supra)
after adverting to the dictum in Trade Well and Another Vs.
Indian Bank and Another
52
, Transcore (supra) and Unique
52 (2007) Cri. LJ 2544
35
Butyle Tube Industries Pvt. Ltd. (supra). It noticed the Kerala
High Court decision in Muhammed Ashraf (supra) and agreed
therewith only to the extent that there was no casus omissus in
Section 14 of the 2002 Act as it refers to two distinct
authorities. However, it went on to disagree with the view taken
therein that CJM is also competent to deal with such
applications; because, in its view, when literal construction of
Section 14 of the 2002 Act was explicit then there was no need to
supplement any word(s) thereto. For, the interpretation of Section
14 of the 2002, as it stands, does not lead to any absurd results.
It did notice that the authority referred to in Section 14 of the
2002 Act has no power to adjudicate upon any rights of the
parties but can only render assistance to the secured creditor to
recover possession. It opined that nothing prevented the
legislature from adding the words CJM in Section 14 of the 2002
Act. It then went on to advert to the dictum of Lord Denning in
Seaford Court Estates Ltd. (supra) and House of Lords in Inco
Europe Ltd. (supra) wherein, it was held that a Court can add
words in its interpretative process in suitable cases, if omission
or inadvertence of drafting is noticed to give effect to the purpose
36
of the legislation, but not otherwise. It held that there was no
inadvertence in drafting of Section 14 of the 2002 Act, when it
referred to two distinct authorities, namely, CMM and DM. The
High Court of Bombay thus, adopted the route of literal
interpretation of the provision as it stands.
26.The next decision is of the High Court of Uttarakhand at
Nainital in Deepak Aggarwal (supra), which adopted the view
taken by the High Court of Bombay in IndusInd Bank Ltd.
(supra) and concluded that only CMM in metropolitan areas and
DM in nonmetropolitan areas would be competent to deal with
the application moved by the secured creditor under Section 14
of the 2002 Act for taking possession of the secured assets.
27.The Single Judge of High Court of Calcutta in Dinesh
Kumar Agarwal (supra), while dealing with the question under
consideration relied on his previous decision in Ronit Nirman
Pvt. Ltd. Vs. State Bank of India and Others
53
, wherein he
had agreed with the principle expounded by the High Court of
53 A.S.T. 1337 of 2011 (dated 18
th
October, 2011)
37
Bombay in IndusInd Bank Ltd. (supra). The Court opined that
once an authority has been named for the purpose of rendering
assistance, the Court cannot confer jurisdiction on any other
authority, who has not been named in the statutory provision for
exercising such powers. That would amount to usurping
legislative function. It, thus, disagreed with the view taken by the
High Court of Kerala, which had held to the contrary that the
CJM is equally competent to entertain application filed by the
secured creditor under Section 14 of the 2002 Act. This decision
of the Single Judge was carried in appeal before the Division
Bench in Andhra Bank (supra), which in turn upheld the view
taken by the Single Judge that only CMM in metropolitan areas
and DM in nonmetropolitan areas were competent to deal with
the application filed by the secured creditor under Section 14 of
the 2002 Act. The Division Bench disagreed with the view taken
by the High Court of Kerala on the ground that the language of
Section 14 of the 2002 Act was unambiguous and did not
warrant construction to empower the CJM in nonmetropolitan
areas.
38
28.The Full Bench of the High Court of Madras in K.
Arockiyaraj (supra) adverted to the exposition in Mardia
Chemicals Ltd. (supra), K. R. Chandrasekaran Vs. Union of
India
54
, which had considered the objects of enactment in
question. It noted that the 2002 Act is a selfcontained code and
after adverting to the relevant provisions observed in paragraph
Nos.15 and 16 of its judgment as under:
“15. On perusal of Sections 13(2), 13(4), 14(1) &
14(2), it is evident that the Secured Creditor can
proceed against the Secured Assets, if the borrower
makes any default in repayment of secured debts or
any installment thereof. Any person aggrieved
against the order passed under Section 13(4) of the
Act is given a right of Appeal under Section 17 of
the Act. The adjudication of the rights of parties will
come only if the action of the Secured Creditor is
challenged in an Appeal filed under Section 17. A
further appeal to the Appellate Tribunal (DRAT) is
also provided under Section 18 of the Act.
16. Section 14, inserted through the Amendment
Act No. 1 of 2013, contemplates delegation of power
to assist, by the District Magistrate/Chief
Metropolitan Magistrate, to any officer subordinate
to him, amplifies the intention of the Parliament to
treat the power of assistance as an executive
function and not as a judicial function. If the power
is a judicial function, adjudicatory in nature, there
may not be such delegation to any subordinate
officer. It is well settled in law that the adjudicating
authority cannot delegate his power as it will run
54 2012 (2) CWC 115
39
contrary to the Principle 'Delegata potestas non
potest deligari'.”
It then adverted to the dictionary clause of the 2002 Act and
noted that subsection 2(2) saved in the Indian Contract Act
1872; Transfer of Property Act, 1882; the Companies Act, 1956;
the Securities and Exchange Board of India Act, 1992; and which
are not inconsistent with the definition given in the 2002 Act. It
also noted that the authority referred to in Section 14 is not
expected to undertake adjudication of rights of the concerned
parties. It then noted Section 34 and 35 of the 2002 Act and went
on to observe as follows:
“20. From the perusal of the above Section 35, it is
evident that the provisions of SARFAESI Act, 2002,
shall have the effect notwithstanding anything
inconsistent therewith contained in any other law
for the time being in force. Thus, the SARFAESI Act
will override other laws including the provisions of
Crl. P.C. Section 36 of the Act deals with limitation.
The limitation question can be raised after passing
an order under Section 13(4), if the claim in respect
of the financial asset is not made within the period
of limitation prescribed under the Limitation Act.
Thus, the applicability of Limitation Act, 1963, is
permitted under Section 36, however, as per
Section 35, the application of Crl. P.C. is not
permitted.”
40
In this backdrop the Full Bench examined the decision of the
Division Bench of the same High Court in Indian Overseas
Bank Vs. Sree Aravindh Steels Ltd.
55
, which had relied on
Sections 3, 5 and 8 of the Cr.P.C. concerning the jurisdictions of
CJM, CMM and Additional Chief Metropolitan Magistrate. It then
noticed Section 20 of the Cr.P.C. relating to the Executive
Magistrates and their local jurisdictions as specified therein.
After analysing these provisions, it went on to observe thus:
“25. On a perusal of the above referred provisions of
the Code of Criminal Procedure, Chief Metropolitan
Magistrate, Chief Judicial Magistrate and District
Magistrate are separately dealt with and only for the
purpose of convenience, the High Court is empowered
to appoint the Chief Judicial Magistrate to perform the
functions akin to Chief Metropolitan Magistrate in
Metropolitan areas, which includes judicial functions
and administrative functions. When Crl. P.C. itself is
dealing with District Magistrates and their jurisdiction,
the phraseology used in Section 14(1) should be given
its true meaning without any assistance from the
Criminal Procedure Code, particularly in the light of
Section 35 read with Section 2(2) of the SARFAESI Act,
2002.
26. Section 14 of the Act is very clear and
unambiguous. It states that the Chief Metropolitan
Magistrate or the District Magistrate can assist the
Secured Creditors in taking possession of the Secured
Assets. It means, in Metropolitan areas, the Secured
Creditors can approach either the Chief Metropolitan
Magistrate or the District Magistrate and in Non
Metropolitan areas, where there is no Chief
Metropolitan Magistrate, the Secured Creditors can
seek the assistance of the District Magistrate alone, as
55 2009 (1) CTC 341
41
no power is vested on the Chief Judicial Magistrate to
give assistance to the Secured Creditors in Non
Metropolitan areas. There is no omission in the said
section as contended by the learned Senior Counsel for
the respondents. If there is no authority mentioned to
assist the Secured Creditor in NonMetropolitan areas,
the Secured Creditors may be justified in contending
that in case of omission, the meaning given in Crl. P.C.
can be imported for the effective implementation of the
SARFAESI Act. The said situation being not there, the
learned Senior Counsel for the Respondent is not
justified in contending that wherever there is no Chief
Metropolitan Magistrate, the Chief Judicial Magistrate
will automatically get the powers to assist the Secured
Creditors. If such an interpretation is accepted, the
phraseology used in Section 14 that Chief Metropolitan
Magistrate or District Magistrate will have no
meaning.”
29.To buttress the above view, the Full Bench agreed with the
decisions of the High Court of Bombay in IndusInd Bank Ltd.
(supra), Arjun Urban Cooperative Bank Ltd. (supra). It also
relied on the decision of the High Court of Calcutta, which took
similar view as commended to the Full Bench. The Full Bench
then noted the decisions of this Court in Official Liquidator
Uttar Pradesh and Uttarakhand Vs. Allahabad Bank and
Others
56
, Sri Nasiruddin (supra), Bhudan Singh and Another
(supra), K.P. Varghese (supra), Atma Ram Mittal (supra),
Indian Administrative Service (S.C.S.) Association, U.P. and
56 (2013) 4 SCC 381
42
Others Vs. Union of India
57
, Nasiruddin and Others Vs. Sita
Ram Agarwal
58
, High Court of Gujarat and Another Vs.
Gujarat Kishan Mazdoor Panchayat and Others
59
, Prakash
Kumar Alias Prakash Bhutto Vs. State of Gujarat
60
and New
India Assurance Company Ltd. Vs. Nusli Neville Wadia and
Another
61
and also the dictum in Seaford Court Estates Ltd.
(supra), to conclude as follows:
“35. From the perusal of the above judgments as
well as the statutory provisions contained in
Section 14 of the SARFAESI Act, 2002, in its
independent existence, we are of the firm view that
Section 14 does not contemplate the Secured
Creditors to approach the Chief Judicial
Magistrates for assistance to secure their assets
and the Secured Creditors can approach the Chief
Metropolitan Magistrate in Metropolitan areas and
in NonMetropolitan areas, the Secured Creditors
has to approach the District Magistrate, and not the
Chief Judicial Magistrate.”
The Full Bench decision has been followed by the Division Bench
of the same High Court in T.C. Ramadoss (supra). In this
decision, the Court, additionally, considered the submission
57 (1993) Supp. 1 SCC 730
58 (2003) 2 SCC 577
59 (2003) 4 SCC 712
60 (2005) 2 SCC 409
61 (2008) 3 SCC 279
43
regarding prospective overruling and went on to observe as
follows:
“15. The doctrine of prospective overruling was
recognised for the first time in the American
jurisprudence in Great Northern Railway Co. Vs
Sunburst Oil & Refining Co. 287 U.S. 358 (1932) The
said doctrine was for the first time applied in Golak
Nath Vs State of Punjab MANU/SC/0029/1967 : AIR
1967 SC 1643 in India and thereafter referred and
relied on in various decisions, and as such, the
doctrine of prospective overruling is now an integral
part of the Indian Legal System. It is well settled that
the overruling decision is a new decision, because it
has overruled the settled precedent and it has decided
an issue of first impression, where at least one earlier
case has not foreshadowed the overruling decision. In
the case on hand, the Full Bench in K. Arokiyaraj
MANU/TN/1796/2013 : 2013 (6) MLJ 641: 2013 (4)
LW 485 (supra) has not unsettled the settled position
of law. The settled position of law has been interpreted
on plain reading of the provisions. Thus, the
contention of the learned counsel for the respondent
that the decision of the Full Bench would be applicable
prospectively does not merit acceptance and it is
accordingly rejected. The language of the relevant
provision is plain and clear admitting no confusion,
which has been interpreted by the Full Bench in its
decision.
16. It is a well settled principle of law that any order
passed by an authority without jurisdiction is void and
non est and as such, any consequential action taken
on the basis of the said order falls to the ground. (See
Chief Justice of A.P. Vs L.V.A. Dixitulu
MANU/SC/0416/1978 : (1979) 2 SCC 34, A.
Jithendernath Vs Jubilee Hills Cooperative House
Building Society MANU/SC/8138/2006 : (2006) 10
SCC 96, Ashok Leyland Ltd. Vs State of Tamil Nadu
MANU/SC/0020/2004 : (2004) 3 SCC 1, Union of
India Vs Pramod Gupta MANU/SC/0549/2005 :
(2005) 12 SCC 1, National Institute of Technology Vs
Niraj Kumar Singh MANU/SC/0687/2007 : (2007) 2
SCC 481, Hasham Abbas Sayyad Vs Usman Abbas
44
Sayyad MANU/SC/5541/2006 : (2007) 2 SCC 355,
Deepak Agro Foods Vs State of Rajasthan
MANU/SC/7812/2008 : (2008) 7 SCC 748,
Chandrabhai K. Bhoir Vs Krishna Arjun Bhoir
MANU/SC/8230/2008 : (2009) 2 SCC 315 and Union
of India Vs Association of Unified Telecom Service
Providers of India MANU/SC/1252/2011 : (2011) 10
SCC 543
17. Resultantly, we set aside the impugned order
dated 23.07.2012 passed by the CJM, reserving liberty
to the respondent bank to take recourse to the
appropriate jurisdictional forum under the provisions
of law.”
30.The Single Judge of the Madras High Court in Shyam
Sunder Rohra (supra), adopted the view taken by the Full Bench
of High Court of Madras in K. Arockiyaraj (supra) and
concluded that Section 14 of the 2002 Act does not permit
secured creditors to approach the CJM for assistance to secure
their assets but they must approach only CMM in Metropolitan
area and DM in nonmetropolitan area.
31.Going by the literal interpretation of Section 14 of the 2002
Act, it does appear that CMM or the DM within whose
jurisdiction the secured asset is situated in, is bestowed with the
authority to entertain the request of the secured creditor for
possession of such secured asset. It also appears that remedy is
45
provided before the designated authority, persona designata. That
is the view taken by the High Courts of Bombay, Calcutta,
Madras, Madhya Pradesh and Uttarakhand. At the same time,
the High Courts of Kerala, Karnataka, Allahabad and Andhra
Pradesh have taken a liberal approach and were persuaded to
invoke purposive interpretation and give expansive meaning to
the expression “CMM”, to include CJM for the nonmetropolitan
areas. That has been done in the context of the nature of inquiry
required to be conducted by the concerned authority.
32.Indisputably, the expressions “CMM” and “DM” have not
been defined in the 2002 Act. That definition can thus, be traced
to the provisions of Cr.P.C.. It is also well established by now that
the 2002 Act, is a selfcontained code. Concededly, the nature of
inquiry to be conducted by the designated authorities under the
2002 Act, is spelt out in Section 14 of the 2002 Act. The same is
circumscribed and is limited to matters specified in Clauses (i) to
(ix) of the first proviso in subsection (1) of Section 14 of the 2002
Act, inserted in 2013. Prior to the insertion of that proviso, it was
always understood that in such inquiry, it is not open to
adjudicate upon contentious pleas regarding the rights of the
46
parties in any manner. The stated authorities could only do
verification of the genuineness of the plea and upon being
satisfied that it is genuine, the adjudication thereof could then be
left to the Court of competent jurisdiction.
33.Suffice to observe that an inquiry conducted by the stated
authority under Section 14 of the 2002 Act, is a sui generis
inquiry. In that, majorly it is an administrative or executive
function regarding verification of the affidavit and the relied upon
documents filed by the parties. That inquiry is required to be
concluded within the stipulated time frame. While undertaking
such an inquiry, as is observed by this Court, the authority must
display judicious approach, in considering the relevant factual
position asserted by the parties. That presupposes that it is a
quasijudicial inquiry though, a nonjudicial process. The inquiry
does not result in adjudication of inter se rights of the parties in
respect of the subject property or of the fact that the transaction
is a fraudulent one or otherwise.
34.Notably, the powers and functions of the CMM and the CJM
are equivalent and similar, in relation to matters specified in the
47
Cr.P.C.. These expressions (CMM and CJM) are interchangeable
and synonymous to each other. Moreover, Section 14 of the 2002
Act does not explicitly exclude the CJM from dealing with the
request of the secured creditor made thereunder. The power to be
exercised under Section 14 of the 2002 Act by the concerned
authority is, by its very nature, nonjudicial or State’s coercive
power. Furthermore, the borrower or the persons claiming
through borrower or for that matter likely to be affected by the
proposed action being in possession of the subject property, have
statutory remedy under Section 17 of the 2002 Act and/or
judicial review under Article 226 of the Constitution of India. In
that sense, no prejudice is likely to be caused to the
borrower/lessee; nor is it possible to suggest that they are
rendered remediless in law. At the same time, the secured
creditor who invokes the process under Section 14 of the 2002
Act does not get any advantage muchless added advantage.
Taking totality of all these aspects, there is nothing wrong in
giving expansive meaning to the expression “CMM”, as inclusive
of CJM concerning nonmetropolitan area, who is otherwise
competent to discharge administrative as well as judicial
48
functions as delineated in the Cr.P.C. on the same terms as
CMM. That interpretation would make the provision more
meaningful. Such interpretation does not militate against the
legislative intent nor it would be a case of allowing an unworthy
person or authority to undertake inquiry which is limited to
matters specified in Section 14 of the 2002 Act.
35.Such a view has been taken by the High Court of Kerala as
early as in 2006 and on the same lines, are the decisions of the
other High Courts (Karnataka, Allahabad and Andhra Pradesh).
Be it noted, the challenge to the decision of the High Court of
Kerala was unsuccessful before this Court in SLP (C) No.1671 of
2009, which came to be dismissed on 2
nd
February, 2009.
36.Now we may turn to the decision in Standard Chartered
Bank (supra). The Court was called upon to consider the
argument that secured creditor before invoking the remedy under
Section 14 of the 2002 Act, must necessarily make an attempt to
take possession of the secured assets and can take recourse
thereto only if he fails in that effort and encounters resistance to
such an attempt. While considering that argument, the Court
analysed Sections 13, 14 and 15 of the 2002 Act and opined that
49
Section 14 of the 2002 Act enables the secured creditor who
desires to seek the assistance of “State’s coercive power” for
obtaining possession of the secured assets to make a request in
writing to the authority designated therein, within whose
jurisdiction the secured asset is located. It also noted that the
authority after receiving such request under Section 14 of the
2002 Act, was not expected to do any further scrutiny of the
matter except to verify from the secured creditor whether notice
under Section 13(2) of the Act has already been given or not and
whether the secured asset is located within his jurisdiction.
There is no adjudication of any kind at this stage. The Court also
noticed in paragraph 23 of the reported judgment that after
amendment of Section 14 of the 2002 Act, by inserting first
proviso therein, the designated authority has to satisfy itself only
with regard to the matters mentioned in clauses (i) to (ix). In
paragraph 25 of this decision, the Court noted as follows:
“25. The satisfaction of the Magistrate contemplated
under the second proviso to Section 14(1) necessarily
requires the Magistrate to examine the factual
correctness of the assertions made in such an affidavit
but not the legal niceties of the transaction. It is only
after recording of his satisfaction the Magistrate can
50
pass appropriate orders regarding taking of possession
of the secured asset.”
The Court then went on to observe in paragraph Nos.33 and 36
of the reported judgment as follows:
“33. We are of the opinion that the High Court clearly
erred in recording such a conclusion. The language of
Rule 8 does not demand such a construction. On the
other hand, a Magistrate whose functioning is
structured by the Code of Criminal Procedure is
required to act in accordance with the provisions of the
said Code unless expressly ordained otherwise by any
other law. It is not a case that Cr.P.C. never prescribed
for the procedure to be followed by the Magistrate in a
case where the Magistrate is required to take
possession of property. For example, under Section 83
of the Code, a criminal court is authorised to attach
the movable or immovable property or both belonging
to a proclaimed offender. Subsections (3) and (4) to
Section 83 specifically provide that once an order of
attachment under subsection (1) is made by the
criminal court, the property which is the subject
matter of such attachment shall either be seized or
taken possession of as the case may be depending
upon the fact whether the property is movable or
immovable. Both the subsections contemplate the
appointment of Receiver. It is declared under sub
section (6) that the powers, duties and liabilities of a
Receiver appointed under Section 83 are the same as
those of a Receiver appointed under the Code of Civil
Procedure, 1908.
XXX XXX XXX
36. Thus, there will be three methods for the secured
creditor to take possession of the secured assets:
36.1. (i) The first method would be where the secured
creditor gives the requisite notice under Rule 8(1) and
where he does not meet with any resistance. In that
case, the authorised officer will proceed to take steps
as stipulated under Rule 8(2) onwards to take
51
possession and thereafter for sale of the secured
assets to realise the amounts that are claimed by the
secured creditor.
36.2. (ii) The second situation will arise where the
secured creditor meets with resistance from the
borrower after the notice under Rule 8(1) is given. In
that case he will take recourse to the mechanism
provided under Section 14 of the Act viz. making
application to the Magistrate. The Magistrate will
scrutinise the application as provided in Section 14,
and then if satisfied, appoint an officer subordinate to
him as provided under Section 14(1A) to take
possession of the assets and documents. For that
purpose the Magistrate may authorise the officer
concerned to use such force as may be necessary.
After the possession is taken the assets and
documents will be forwarded to the secured creditor.
36.3. (iii) The third situation will be one where the
secured creditor approaches the Magistrate concerned
directly under Section 14 of the Act. The Magistrate
will thereafter scrutinise the application as provided in
Section 14, and then if satisfied, authorise a
subordinate officer to take possession of the assets
and documents and forward them to the secured
creditor as under clause 36.2.(ii) above.
36.4. In any of the three situations above, after the
possession is handed over to the secured creditor, the
subsequent specified provisions of Rule 8 concerning
the preservation, valuation and sale of the secured
assets, and other subsequent rules from the Security
Interest (Enforcement) Rules, 2002, shall apply.”
37.Concededly, the Court was not called upon to consider the
specific issue that arises for our consideration, in this batch of
cases. To wit, whether the CJM is competent to deal with the
request made by the secured creditor under Section 14 of the
52
2002 Act in the same manner as can be done by the CMM in
metropolitan areas and DM in nonmetropolitan areas.
Nevertheless, what is significant to note is that this decision
clearly delineates the nature of inquiry required to be conducted
by the authority referred to in the Section 14 of the 2002 Act. By
its very nature the inquiry, is an administrative or executive
measure and to borrow the phrase used in the said judgment,
“State’s coercive power” for obtaining possession of the secured
assets. It is possible to suggest that as the authority is required
to make inquiry and pass an order, it would partake the colour of
being a quasijudicial inquiry. In any case, the stated authority is
not empowered to adjudicate on any issue(s) that may be raised
regarding the rights of the concerned parties.
38.Reliance was also placed on the exposition in Harshad
Govardhan Sondagar (supra), wherein the appellants claimed to
be tenants of a mortgaged premises (secured asset); and as
borrowers (landlord/owner thereof) had committed default, the
secured creditor had invoked provisions of 2002 Act to enforce
the secured asset. In that backdrop, application was moved
before the CMM, Mumbai under Section 14 of the 2002 Act to
53
take possession of the premises and handover the possession
thereof to the secured creditor. While dealing with the challenge
to this action of the secured creditor, the Court noticing Section
14 of the 2002 Act concluded that for the purpose of transferring
the secured asset and for realising the secured asset, the secured
creditor will require the assistance of the CMM or the DM for
taking of possession of a secured asset from the lessee, where the
lease stands determined by any of the modes mentioned in
Section 111 of the Transfer of Property Act. The Court then went
on to examine the question about the remedies available to the
lessee where he is threatened to be dispossessed by any action
taken by the secured creditor under Section 13 of the 2002 Act.
In that context, the Court noted that Section 34 of the 2002 Act
makes it amply clear that no injunction can be granted by any
Court or other authority in respect of any action taken or to be
take in pursuance of any power conferred by or under the 2002
Act. Even this decision, if we may say so, deals with entirely
different issue then the question under consideration in the
present cases.
54
39.It is no more res integra that the CJM is equated with the
CMM for the purposes referred to in the Cr.P.C.; and those
expressions are used interchangeably being synonymous of each
other. This Court in All India Judges’ Association (supra), in
paragraph 31, opined as under:
“31. As we have already mentioned, the Shetty
Commission had recommended that the Chief
Metropolitan Magistrates should be in the cadre of
District Judges. In our opinion, this is neither proper
nor practical. The appeals from orders passed by the
Chief Metropolitan Magistrates under the provisions of
the Code of Criminal Procedure are required to be
heard by the Additional Sessions Judge or the
Sessions Judge. If both the Additional Sessions Judge
and the Chief Metropolitan Magistrate belong to the
same cadre, it will be paradoxical that any appeal from
one officer in the cadre should go to another officer in
the same cadre. If they belong to the same cadre, as
recommended by the Shetty Commission, then it
would be possible that the junior officer would be
acting as an Additional Sessions Judge while a senior
may be holding the post of the Chief Metropolitan
Magistrate. It cannot be that against the orders passed
by the senior officer it is the junior officer who hears
the appeal. There is no reason given by the Shetty
Commission as to why the post of the Chief
Metropolitan Magistrate be manned by the District
Judge, especially when as far as the posts of the Chief
Judicial Magistrates are concerned, whose duties are
on a par with those of the Chief Metropolitan
Magistrate, the Shetty Commission has recommended,
and in our opinion rightly, that they should be filled
from amongst Civil Judges (Senior Division).
Considering the nature and duties of the Chief
Judicial Magistrates and the Chief Metropolitan
Magistrates, the only difference being their location,
the posts of Chief Judicial Magistrate and Chief
Metropolitan Magistrate have to be equated and they
55
have to be placed in the cadre of Civil Judge (Senior
Division). We order, accordingly.”
40.Be it noted that Section 14 of the 2002 Act is not a
provision dealing with the jurisdiction of the Court as such. It is
a remedial measure available to the secured creditor, who
intends to take assistance of the authorised officer for taking
possession of the secured asset in furtherance of enforcement of
security furnished by the borrower. The authorised officer
essentially exercises administrative or executive functions, to
provide assistance to the secured creditor in terms of State’s
coercive power to effectuate the underlying legislative intent of
speeding the recovery of the outstanding dues receivable by the
secured creditor. At best, the exercise of power by the authorised
officer may partake the colour of quasijudicial function, which
can be discharged even by the Executive Magistrate. The
authorised officer is not expected to adjudicate the contentious
issues raised by the concerned parties but only verify the
compliances referred to in the first proviso of Section 14; and
being satisfied in that behalf, proceed to pass an order to
facilitate taking over possession of the secured assets.
56
41.It is well established that no Civil Court can interdict the
action initiated in respect of any matter, which a Debt Recovery
Tribunal or Debt Recovery Appellate Tribunal is empowered by or
under the 2002 Act, to determine and in particular, in respect of
any action taken or to be taken in pursuance of any power
conferred by or under the 2002 Act or under the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993. That
has been ordained by Section 34 of the 2002 Act.
42.The borrowers or the persons claiming through borrowers
had placed emphasis on Section 35 of the 2002 Act. The same
reads thus:
35. The provisions of this Act to override other
laws. The provisions of this Act shall have effect,
notwithstanding anything inconsistent therewith
contained in any other law for the time being in force
or any instrument having effect by virtue of any such
law.”
43.The construction of this provision plainly indicates that the
provisions of the Act will override any other law for the time being
in force. The question is: does the provisions of 2002 Act override
the provisions of the Cr. P.C., whereunder the functions to be
discharged by the CMM are similar to that of the CJM. Further,
57
the expressions “CMM and CJM” are used interchangeably in
Cr.P.C. and are considered as synonymous to each other. Section
14, even if read literally, in no manner denotes that allocation of
jurisdictions and powers to CMM and CJM under the Code of
Criminal Procedure are modified by the 2002 Act. Thus
understood, Section 14 of the 2002 Act, stricto sensu, cannot be
construed as being inconsistent with the provisions of the Code
of Criminal Procedure or viceversa in that regard. If so, the
stipulation in Section 35 of the 2002 Act will have no impact on
the expansive construction of Section 14 of the 2002 Act.
Whereas, there is force in the submission canvassed by the
secured creditors (Banks), that Section 37 of the 2002 Act
answers the issue under consideration. The same reads thus:
“37 Application of other laws not barred. The
provisions of this Act or the rules made thereunder
shall be in addition to, and not in derogation of, the
Companies Act, 1956 (1 of 1956), the Securities
Contracts (Regulation) Act, 1956 (42 of 1956), the
Securities and Exchange Board of India Act 1992 (15
of 1992), the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of 1993) or any
other law for the time being in force.”
The bare text of this provision predicates that the provisions of
the 2002 Act or the Rules made thereunder shall be in addition
to the stated enactments or “any other law for the time being in
58
force”. Having said that the provisions of the Section 14 of the
2002 Act are in no way inconsistent with the provisions of Code
of Criminal Procedure, it must then follow that the provisions of
the 2002 Act are in addition to, and not in derogation of the
Code.
44.Suffice it to observe that keeping in mind the subject and
object of the 2002 Act and the legislative intent and purpose
underlying Section 14 of the 2002 Act, contextual and purposive
construction of the said provision would further the legislative
intent. In that, the power conferred on the authorised officer in
Section 14 of the 2002 Act is circumscribed and is only in the
nature of exercise of State’s coercive power to facilitate taking
over possession of the secured assets.
45.It would be apposite to now advert to Section 17 of the
General Clauses Act, 1897. The same reads thus:
“17 Substitution of functionaries.(1) In any
[Central Act] or Regulation made after the
commencement of this Act, it shall be sufficient, for
the purpose of indicating the application of a law to
every person or number of persons for the time being
executing the functions of an office, to mention the
official title of the officer at present executing the
functions, or that of the officer by whom the functions
are commonly executed.
59
(2) This section applies also to all [Central Acts] made
after the third day of January, 1868, and to all
Regulations made on or after the fourteenth day of
January, 1887.”
This Court in Janardhan Vs. State of Maharashtra
62
was
called upon to examine somewhat similar challenge. In that case,
the challenge was to the search warrant issued by the Assistant
Commissioner of Police in respect of offences punishable under
Section 6 of the Bombay Prevention of Gambling Act, 1887. The
Court repelled that challenge by relying on Section 17 of the
Bombay General Clauses Act, 1886, which is pari materia to
Section 17 of the General Clauses Act, 1897. The Court opined
that though Section 6 of the Gambling Act specified the office of
Commissioner of Police as the authorised officer, however,
considering the sweep of Section 2(6) of the Bombay Police Act,
1951, which mentions that the term “Commissioner of Police”
would include an Assistant Commissioner, went on to hold that
the search warrant issued by the Assistant Commissioner was
valid. The Court, while dealing with the said challenge observed
as follows:
62 (1978) 2 SCC 465
60
“8. Analysing this definition it would appear that
any official title of the officer mentioned in any
Act made after the General Clauses Act would
deem by fiction of law to include any such official
title referred to in any Act passed after the General
Clauses Act.
9. Furthermore, not only the official title but even
the functions executed by the said officer would
also be deemed to have been exercised by the
officer designated in the subsequent Act. The
combined effect, therefore, of Section 6 of the
Gambling Act and Section 17(1) of the General
Clauses Act would be that the term “Commissioner
of Police” would include all officers who are
executing or performing the functions of the
Commissioner of Police as defined or authorised
under the latter Act, namely, the Police Act. It
would thus be seen that subsection (6) of Section 2 of
the Police Act clearly mentions that the term
“Commissioner of Police” would include an Assistant
Commissioner. Thus subsection (6) runs thus:
“2. In this Act, unless there is anything
repugnant in the subject or context:
* * *
(6) … A Commissioner of Police including
an Additional Commissioner of Police, a
Deputy Inspector General of Police
(including the Director of Police Wireless
and Deputy Inspector General of Police
appointed under Section 8A), a Deputy
Commissioner of Police and Assistant
Commissioner of Police...”
Section 11 of the Police Act runs thus:
“11. (1) The State Government may
appoint for any area for which a
Commissioner of Police has been
appointed under Section 7 such number
of Assistant Commissioners of Police as it
may think expedient.
61
(2) An Assistant Commissioner appointed
under subsection (1) shall exercise such
powers and perform such duties and
functions as can be exercised or
performed under the provisions of this Act
or any other law for the time being in force
or as are assigned to him by the
Commissioner under the general or
special orders of the State Government.”
A perusal of Section 11 of the Police Act leads to the
inescapable conclusion that an Assistant
Commissioner appointed under subsection (1) is to
perform such duties and functions as can be exercised
under the Act or any other law for the time being in
force, which undoubtedly includes the Gambling Act
which was a law in force at the time when the Police
Act was passed. Apart from this the Assistant
Commissioner could also perform those functions
which could be assigned to him by the Commissioner
under the general or special orders of the State
Government. The provision for assignment of powers
by the Government to the Commissioner are contained
in Section 10(2) of the Police Act which runs thus:
“10. (2) Every such Deputy Commissioner
shall, under the orders of the
Commissioner, exercise and perform any
of the powers, functions and duties of the
Commissioner to be exercised or
performed by him under the provisions of
this Act or any other law for the time being
in force in accordance with the general or
special orders of the State Government
made in this behalf.”
10. The High Court has found as a fact that there was
a notification by the State Government dated March
10, 1967 by which all the Assistant Commissioners of
Police including that of Nagpur were conferred powers
and functions of the Commissioner of Police. Thus, in
the instant case at the time when the offence was
committed two things had happened: (1) that in
Nagpur where the offence had taken place there was a
62
Commissioner of Police, and (2) that the Commissioner
of Police had been conferred the power by the
Government notification to assign his functions,
powers and duties to the Assistant Commissioner. In
these circumstances, therefore, we do not find any
difficulty in accepting the contention of the
respondent that having regard to the combined
reading of the provisions of Section 17 of the
General Clauses Act and the Police Act the term
“Commissioner of Police” appearing in Section 6 of
the Gambling Act would include even an Assistant
Commissioner who was legally and validly assigned
the powers, functions and duties of the
Commissioner of Police by the State Government
under Section 10(2) of the Police Act. As the
General Clauses Act was a statute which was passed
before the Gambling Act came into force, Section 17 of
the General Clauses Act could be called into aid to
interpret the scope and ambit of the term
“Commissioner of Police” as used in Section 6 of the
Gambling Act.
11. Learned counsel for the appellant, however,
submitted that the power of assignment of functions
by the Government given to the Commissioner of
police or the Assistant Commissioner could be
exercised only in respect of matters covered by the
Police Act and not beyond that. I am however unable
to agree with this contention which completely
overlooks the avowed object of Section 17 of the
General Clauses Act which has been passed to resolve
such anomalies and it is not possible to construe the
provisions of the Police Act in complete isolation by
ignoring the provisions of the General Clauses Act
which undoubtedly apply to the facts and
circumstances of the present case. For these reasons,
therefore, the second contention put forward by the
appellant also fails.”
(emphasis supplied)
In the concurring judgment, additionally, the Court observed
thus:
63
“19. It remains for consideration whether the Assistant
Commissioner of Police could be said to be executing
the functions of the Commissioner of Police under
Section 6(1) of the Act at the time when he issued the
special warrant. Reference in this connection may be
made to Section 11(2) of the Bombay Police Act, 1951,
which provides as follows:
“11. (2) An Assistant Commissioner
appointed under subsection (1) shall
exercise such powers and perform such
duties and functions as can be exercised
or performed under the provisions of this
Act or any other law for the time being in
force or as are assigned to him by the
Commissioner under the general or
special orders of the State Government.”
It was therefore permissible for the Assistant
Commissioner of Police not only to exercise such
powers and perform such duties and functions as he
could, in terms, exercise or perform under the
provisions of the Bombay Police Act, or any other law
for the time being in force, but also the duties and
functions assigned to him by the Commissioner of
Police under the general or special orders of the State
Government. The High Court has taken note in this
connection of the State Government Order APO3463
C2896(III)(E)V, dated March 10, 1967, which
empowered all Commissioners of Police to assign to
the Assistant Commissioners of Police working under
them any of their powers, duties and functions not
only under the provisions of the Bombay Police Act,
1951, but also under any other law for the time being
in force. The existence of such an order has not in fact
been challenged before us. The Assistant
Commissioner of Police was therefore the functionary
who could, by virtue of Section 17 of the Bombay
General Clauses Act, discharge the functions of the
Commissioner of Police under Section 6(1) of the Act in
the matter of issuing a special warrant like the one
issued in the present case. It is also not disputed that
the Commissioner of Police issued Order 2036, dated
September 19, 1967, authorising all Assistant
Commissioners of Police working under him to issue
search warrants under Section 6 of the Act to any
64
Police Officer working under them not below the rank
of a SubInspector of Police. As has been shown, this
was legally permissible, and it is futile to contend that
the High Court erred in rejecting the appellant’s
contention to the contrary.
46.Applying the principle underlying this decision, it must
follow that substitution of functionaries (CMM as CJM) qua the
administrative and executive or so to say nonjudicial functions
discharged by them in light of the provisions of Cr.P.C., would
not be inconsistent with Section 14 of the 2002 Act; nay, it would
be a permissible approach in the matter of interpretation thereof
and would further the legislative intent having regard to the
subject and object of the enactment. That would be a meaningful,
purposive and contextual construction of Section 14 of the 2002
Act, to include CJM as being competent to assist the secured
creditor to take possession of the secured asset.
47.Having said this, we need not to dilate on other decisions
pressed into service regarding the approach to be adopted in the
matter of interpretation of statutes.
48.To sum up, we hold that the CJM is equally competent to
deal with the application moved by the secured creditor under
65
Section 14 of the 2002 Act. We accordingly, uphold and approve
the view taken by the High Courts of Kerala, Karnataka,
Allahabad and Andhra Pradesh and reverse the decisions of the
High Courts of Bombay, Calcutta, Madras, Madhya Pradesh and
Uttarakhand in that regard. Resultantly, it is unnecessary to
dilate on the argument of prospective overruling pressed into
service by the secured creditors (Banks).
49.While parting we must note that Civil Appeal arising from
SLP (C) No.7121 of 2019 is directed against an interlocutory
order passed by the High Court in a pending appeal. This appeal
is, therefore, disposed of with liberty to the parties therein to
pursue the appeal pending before the High Court on any other
issue(s), if available as per law. That be decided in accordance
with law.
50.All these appeals are disposed of in the above terms with
liberty to the parties to pursue such other remedies as may be
permissible in law with regard to other issues, if any. The same
shall be considered on its own merits, in accordance with law. No
66
order as to costs. Pending applications in the respective appeals
are also disposed of in the above terms.
……………………………..J
(A.M. Khanwilkar)
……………………………..J
(Dinesh Maheshwari)
New Delhi;
September 23, 2019.
67
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION (C) NO(S).4665 of 2016
P.M. Kelukutty & Ors. …..Petitioner(s)
Versus
Young Mens Christian
Association & Ors. …..Respondent(s)
With
SLP (C) No.5109 of 2016 and SLP (C) No.5141 of 2016
O R D E R
These matters are detagged. List on 27
th
September, 2019,
at the bottom of the miscellaneous list for passing necessary
order(s).
……………………………..J
(A.M. Khanwilkar)
……………………………..J
(Dinesh Maheshwari)
New Delhi;
September 23, 2019.
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