Cholamandalam Investment And Finance ... vs Savitri Gurjar on 18 March, 2026

                                      1




                                                       2026:CGHC:13061

                                                                     NAFR

             HIGH COURT OF CHHATTISGARH AT BILASPUR

                           WP227 No. 313 of 2026

Cholamandalam Investment And Finance Limited A Company Incorporated
Under The Companies Act, Through Authorised Signatory Arshad Hussain
Having Head Office At Chola Crest, C 54-55 And Super B-4, Thiru-Vi-Ka
Industrial Estate, Guindy, Chennai - 600032, Branch Office At 7th Floor,
Currency Tower, Vip Chowk, Telibandha, Raipur, Chhattisgarh.
                                                              ... Petitioner(s)

                                   versus

1 - Savitri Gurjar W/o Parmeshwar Gurjar Aged About 38 Years R/o Village
Jhagarkhand, Post Neosa, Tehsil - Pendraroad, District - Gaurela Pendra
Marwahi, Chhattisgarh 495117


2 - Parmeshwar Gurjar S/o Uday Narayan Gurjar Aged About 46 Years R/o
Village Jhagarkhand, Post Neosa, Tehsil - Pendraroad, District - Gaurela
Pendra Marwahi, Chhattisgarh 495117


3 - Savitri Material Supplier Through Proprietor Savitri Gurjar Ward No.4, Rest
House Road, Pendra Road, District - Gaurela Pendra Marwahi, Chhattisgarh
495117
                                                            ... Respondent(s)


For Petitioner(s)    :   Mr. Priyanshu Gupta, Advocate



             Hon'ble Shri Justice Ravindra Kumar Agrawal, J.

Order on Board

18/03/2026

1. The present writ petition is filed under Article 227 of the Constitution of

India to direct the learned Chief Judicial Magistrate, Pendraroad,

District - Gaurela Pendra Marwahi (C.G.) to decide the application

under Section 14 of the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002 (for short, 'the

SARFAESI Act') at the earliest.

2. Learned counsel for the petitioner would submit that the respondents

No. 1 to 3 had approached the petitioner herein for availing loan and

had mortgaged property against the said loan, since the said loan was

not being repaid by the respondents, the petitioner after complying with

the provisions of the SARFAESI Act had preferred an application before

the learned Chief Judicial Magistrate, Pendraroad, District - Gaurela

Pendra Marwahi (C.G) under Section 14 of the SARFAESI Act to get

the physical possession of the property mortgaged by the respondents

with the petitioner while availing loan from the petitioner which has

been registered as MJC Criminal Case No.11/2026. The application

has been preferred by the petitioner before the learned Chief Judicial

Magistrate on 21.01.2026 on which date, the learned Chief Judicial

Magistrate even after oral request by the petitioner proceeded to issue

notice for the appearance of the respondents and the next date was

given for 05.02.2026 on which date, the learned Chief Judicial

Magistrate had again passed an order for issuance of notice for the

appearance of the respondents. He would further submit that it is a

settled law that the act of Chief Judicial Magistrate in disposing the

application under Section 14 of the SARFAESI Act is a ministerial step

and no adjudication of any manner has to be done and it is also a

settled preposition reiterated by the High Court of Madhya Pradesh in

the matter of Aditya Birla Finance Limited v Shri Carnet alias

Fernandes Vemalayam (Writ Appeal No. 784 of 2018) vide order dated

13.03.2018 and also by this Hon'ble Court in the matter of M/s Aditya

Birla Finance Limited v The District Magistrate in WPC No. 1234 of

2023 vide order dated 15.03.2023 that issuance of notice for

appearance of the debtor is not required, therefore, the learned Chief

Judicial Magistrate, Pendraroad, District - Gaurela Pendra Marwahi

(C.G.) may be directed to decide the application under Section 14 of

the SARFAESI Act of the petitioner at the earliest.

3. So far as the proceedings drawn by learned Chief Judicial Magistrate,

Pendraroad under Section 14 of the SARFAESI Act is concerned,

particularly on the issue whether notice has to be issued under Section

14 or not, it would be relevant at this juncture to refer to a recent

Division Bench Judgment of the Madhya Pradesh High Court in the

case of Aditya Birla Finance Limited Vs. Shri Carnet Elias Fernandes

Vermalayam decided on 13.07.2018 wherein the Division Bench in very

categorical terms in paragraph 27 to 29 has held as under :-

"27. We do not find any merit in the said argument as well. The issue raised was a question of fact as to whether the petitioner is in possession of the W A No. 784/2018 property in question on the basis of lease agreement. The said judgment refers to the Supreme Court judgment reported as (2014) 6 SCC 1 (Harshad Govardhan Sondagar vs. International Assets Reconstruction Company Limited and others) to hold that such question is required to be decided while considering an application under Section 14 of the Act. But, present is not a case where any such question is required to be decided. The property in question is mortgaged in favour of the appellant; therefore, it is a secured asset. In respect of secured assets, the District Magistrate is duty bound to hand over physical possession to the secured creditor in terms of Section 14 of the Act. Therefore, such judgment provides no assistance to the argument raised.

28. Coming to the argument that opportunity of hearing was not granted to the writ-petitioners and that the order passed by the District Magistrate violates the principles of natural justice is again not tenable. The Bombay High Court in a judgment reported as 2007 Cri LJ 2544 (Bom.) (Trade Well vs. Indian Bank) has held that the District Magistrate is not required to give notice either to the borrower or to the third party. He is only to verify from the Bank whether notice under Section 13(2) of the Act has been issued or not. The said judgment has been quoted with approval by the Supreme Court in a judgment reported as (2013) 9 SCC 620 (Standard Chartered Bank, etc. vs. V. Noble Kumar and others, etc), wherein it was held as under:-

"22. However, the Bombay High Court in Trade Well v. Indian Bank [2007 Cri.L.J. 2544 (Bom.)] opined;

"2 ...CMM/DM acting under Section 14 of the NPA Act is not required to give notice either to the borrower or to the third party.

3. He has to only verify from the bank or financial institution whether notice under Section 13(2) of the NPA Act is given or not and whether the secured assets fall within his jurisdiction. There is no adjudication W A No. 784/2018 of any kind at this stage.

4. It is only if the above conditions are not fulfilled that the CMM/DM can refuse to pass an order under Section 14 of the NPA Act by recording that the above conditions are not fulfilled. If these two conditions are fulfilled, he cannot refuse to pass an order under Section 14."

The said judgment was followed by the Madras High Court in Indian Overseas Bank v. Sree Aravindh Steels Ltd. [AIR 2009 Mad. 10]. Subsequently, Parliament inserted a proviso to section 14(1) and also sub- section (1-A) by Act 1 of 2013.

*** *** ***

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 pass appropriate orders regarding taking of possession of the secured asset."

29. Thus, the proceedings under Section 14 of the Act are not proceedings to adjudicate the rights of the parties. Therefore, no notice is contemplated to be served upon the debtor, as such proceedings are taken only after serving notice under Section 13 of the Act."

4. The said view of the Division Bench was further reiterated by the

Division Bench of the Madhya Pradesh High Court again in the case of

DCB Bank Limited Vs. State of M.P. & Other, WPC 22260/18 decided

on 10.10.2018 wherein the judgment of Hon'ble the Supreme Court in

the case of Standard Chartered Bank, etc. Vs. V. Noble Kumar &

Others etc), (2013) 9 SCC 62 and also in the case of Aditya Birla

Finance Limited (Supra) was relied upon and held as under :-

"We find that the order passed by the District Magistrate is unsustainable, for the reason that no notice to the borrower is contemplated. The petitioner has filed an application under Section 14 on 16.10.2017 and many opportunities were granted to the parties before passing the impugned order on 2nd August, 2018. The allegation of payment of Rs.10 Lakhs seems to be an effort made by the borrower without any proof or supportive document thereof. Therefore, we find that the District Magistrate was not justified in rejecting the claim of the petitioner for providing assistance to take possession of the secured assets in terms of Section 14 of the Act."

5. In view of the aforesaid decisions and order dated 05.02.2020 passed

by the Co-ordinate Bench of this Court in WPC No. 222/2020 (DCB

Bank Limited V/s State of C.G. & Ors.), and order dated 15.03.2023

passed in WPC No. 1234/2023 (M/s Aditya Birla Finance Limited V/s

The District Magistrate), also considering the provisions of Section 14

of the SARFAESI Act, this Court has no hesitation to hold that the need

to notice the borrowers was not necessary or justified. However, since

the notices have been issued to the respondents, therefore, the

present writ petition can also be disposed of directing the learned Chief

Judicial Magistrate, Pendraroad, District - Gaurela Pendra Marwahi

(C.G.) to decide the application under Section 14 of the SARFAESI Act

of the petitioner at the earliest, preferably within a period of 60 days

from the date of receipt of copy of this order.

6. With the aforesaid observations, the writ petition stands disposed of.

Sd/-

(Ravindra Kumar Agrawal) JUDGE Sumit