Calcutta High Court (Appellete Side)
Indian Overseas Bank & Anr vs The State Of West Bengal & Ors on 23 September, 2024
Author: Shampa Sarkar
Bench: Shampa Sarkar
Item Nos.16& 17
23.09.2024
Court. No. 9
Cp
W.P.A. No. 21924 of 2023
Indian Overseas Bank & Anr.
Vs.
The State of West Bengal & Ors.
With
W.P.A. No. 15605 of 2024
Mr. Debabrata Mondal
Vs.
Indian Overseas Bank & Ors.
Mr. Rahul Sarkar,
Ms. Dipika Sarkar,
... for the Petitioners.
(in WPA 21924 of 2023)
for the respondent bank
(in WPA 15605 of 2024)
Mr. Abir Mondal
... for the petitioner
(in WPA 15605 of 2024)
for the Respondent No.6.
(in WPA 21924 of 2023)
Mr. Priyankar Saha
Ms. Rajyashree Mukherjee
....for the State
(in WPA 21924 of 2023)
Re: (WPA No.21924 of 2023)
1. None appears on behalf of the respondent no.4
despite repeated service. Affidavit of service is
taken on record.
2. The respondent no.5 expired. He was a co-
borrower with the respondent no. 4. The bank
has submitted that despite several efforts to
obtain the names of the heirs of the respondent
no.5, no information in this regard could be
gathered. In any event, the property has been
sold and the respondent No.4 and the heirs of
the respondent No.5 will not have any chance to
redeem the property. The respondent No.4 is the
wife of the respondent No.5.
3. The petitioner is aggrieved by an order dated
February 23, 2023, passed by the Additional
District Magistrate (General), Birbhum. The
Additional District Magistrate was of the view
that the application under Section 14 of the
SARFAESI Act was not maintainable as the
property had been sold.
4. Learned advocate for the State submits that
once the property was sold, resort to Section 14
of the said Act could not be taken. Only when
the possession of any secured asset was
required to be taken by the secured creditor for
sale or transfer thereof, the secured creditor
could approach the District Magistrate within
whose jurisdiction the secured asset was
situated with a request for taking over
possession of the secured asset.
5. Upon an interpretation of this Section, it appears
to this court that the bank being the secured
creditor may approach the District Magistrate in
order to take possession of the secured asset.
6. The decision of the Hon‟ble Apex Court in the
matter of R. D. Jain and Company vs. Capital
First Limited & Ors., reported in (2023) 1 SCC
675, records that the scheme of the SARFAESI
Act made it explicitly clear that possession of the
secured asset could be taken by the secured
creditor before confirmation of sale of the
secured assets as well as post-confirmation of
sale. The Hon‟ble Apex Court in paragraphs 22
to 26 has discussed the method and mechanism
to be followed by the District Magistrate.
7. The relevant paragraphs of the said judgment
are quoted below:-
„22. Thus, considering the scheme of
the SARFAESI Act, it is explicit and crystal clear
that possession of the secured assets can be
taken by the secured creditor before
confirmation of sale of the secured assets as well
as post-confirmation of sale. For taking
possession of the secured assets, it could be
done by the "authorised officer" of the Bank as
noted in Rule 8 of the Security Interest
(Enforcement) Rules, 2002.
23. However, for taking physical possession
of the secured assets in terms of Section 14(1) of
the SARFAESI Act, the secured creditor is obliged
to approach the CMM/DM by way of a written
application requesting for taking possession of
the secured assets and documents relating
thereto and for being forwarded to it (secured
creditor) for further action. The statutory
obligation enjoined upon the CMM/DM is to
immediately move into action after receipt of a
written application under Section 14(1) of
the SARFAESI Act from the secured creditor for
that purpose. As soon as such an application is
received, the CMM/DM is expected to pass an
order after verification of compliance of all
formalities by the secured creditor referred to in
the proviso in Section 14(1) of the SARFAESI Act
and after being satisfied in that regard, to take
possession of the secured assets and documents
relating thereto and to forward the same to the
secured creditor at the earliest opportunity.
24. As mandated by Section 14 of
the SARFAESI Act, the CMM/DM has to act within
the stipulated time-limit and pass a suitable
order for the purpose of taking possession of the
secured assets within a period of 30 days from
the date of application which can be extended for
such further period but not exceeding in the
aggregate, sixty days. Thus, the powers exercised
by the CMM/DM is a ministerial act. He cannot
brook delay. Time is of the essence. This is the
spirit of the special enactment.
25. As observed and held by this Court
in NKGSB Coop. Bank [NKGSB Coop. Bank
Ltd. v. Subir Chakravarty, (2022) 10 SCC 286 :
(2023) 1 SCC (Cri) 157] , the step taken by the
CMM/DM while taking possession of the secured
assets and documents relating thereto is a
ministerial step. It could be taken by the
CMM/DM himself/herself or through any officer
subordinate to him/her, including the Advocate
Commissioner who is considered as an officer of
his/her court. Section 14 does not oblige the
CMM/DM to go personally and take possession
of the secured assets and documents relating
thereto. Thus, we reiterate that the step to be
taken by the CMM/DM under Section 14 of
the SARFAESI Act, is a ministerial step. While
disposing of the application under Section 14 of
the SARFAESI Act, no element of quasi-judicial
function or application of mind would require.
The Magistrate has to adjudicate and decide the
correctness of the information given in the
application and nothing more. Therefore, Section
14 does not involve an adjudicatory process qua
points raised by the borrower against the
secured creditor taking possession of secured
assets.
26. Thus, in view of the scheme of
the SARFAESI Act, more particularly, Section 14 of
the SARFAESI Act and the nature of the powers to
be exercised by the learned Chief Metropolitan
Magistrate/learned District Magistrate, the High
Court in the impugned judgment and order has
rightly observed and held that the power vested
in the learned Chief Metropolitan
Magistrate/learned District Magistrate is not by
way of persona designata.‟
8. Under such circumstances, the order impugned
is set aside.
9. The Additional District Magistrate (General),
Birbhum/the District Magistrate, Birbhum is
directed to hear the application and dispose of
the same in accordance with law and upon
verification of the compliance of the formalities
as per the proviso to Section 14(1) of the said
Act, by the secured creditor.
10. The decision shall be taken within a month from
date without any delay.
11. Under such circumstances, the writ petition is
disposed. This order will be communicated to the
respondent No.4 and affixed in a conspicuous
place of the property for knowledge of all the
family members.
12. In view of such disposal, W.P.A. No. 15605 of
2024 is also disposed of.
13. There shall be no order as to costs.
14. Parties are directed to act on the basis of the
server copy of this order.
(Shampa Sarkar, J.)
