Uttarakhand High Court
Mukesh Kumar vs District Magistrate Nainital And ... on 22 July, 2025
Author: Ravindra Maithani
Bench: Ravindra Maithani
HIGH COURT OF UTTARAKHAND AT NAINITAL
Writ Petition (M/S) No. 2030 of 2025
Mukesh Kumar .....Petitioner
Versus
District Magistrate Nainital and another .....Respondents
Present:-
Mr. Shiv Pande, Advocate for the applicant.
Mr. Devendra Pant, Standing Counsel for the
State/respondent no.1.
Mr. Siddharth Jain, Advocate for the respondent no.2.
Hon'ble Ravindra Maithani, J. (Oral)
The challenge in this petition is made the order dated
21.06.2025 passed by the respondent no.1/the District Magistrate,
Nainital ("the DM"), by which the operation of order dated
28.02.2025passed under Section 14 of the Securitization and
Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002 ("the Act") by the DM has been stayed.
2. Heard learned counsel for the parties and perused the
record.
3. Learned counsel for the petitioner submits that in
connection with the loan granted by the respondent no.2, ("the Bank"),
when default was made, proceedings under the Act were initiated by
the Bank. An application under Section 14 of the Act was moved to the
DM. Which was allowed on 28.02.2025. The property in question had
already been auctioned and the petitioner is the auction purchaser.
But, it is argued that by subsequent impugned order dated 21.06.2025,
the DM had stayed the operation of the earlier order dated 28.02.2025
passed under Section 14 of the Act. It is argued that once the order
under Section 14 of the Act is passed, the DM becomes functus officio.
He cannot release the order. It is also argued that now, it has been told
that the DM is hearing the dispute between the parties, which is not
permissible. In support of his contention, learned counsel has placed
reliance upon the principles of law, as laid down in the case of Kotak
Mahindra Bank Ltd. Vs. State of U.P. and others, 2016 SCC OnLine
Allahbad 3854.
4. In the case of Kotak Mahindra (supra), the Hon'ble Division
Bench of Allahabad High Court observed that the District Magistrate
has absolutely no jurisdiction to review order passed under Section 14
of the Act.
5. Learned counsel for the respondent no.2/Bank admits that
the DM has passed an order 28.02.2025 under Section 14 of the Act.
Thereafter, the DM has no authority to review and look into the matter.
6. Learned State counsel submits that on the application of
the defaulter the operation of the order passed under Section 14 of the
Act has been stayed by the DM.
7. The Act is self contained code with regard to the secured
assets. The statement, object and reason of the Act is to regulate
securitization and reconstruction of financial assets and enforcement of
security interest etc. In the process of recovery of loan amount, when
secured assets possession is to be taken, application is moved to the
DM or Chief Metropolitan Magistrate for taking possession. Once an
order is passed on that application, the Act does not provide any power
of review, recall to the District Magistrate or Chief Metropolitan
Magistrate.
8. In fact, in the case of Kotak Mahindra Bank Limited Vs.
Girnar Corrugators Private Limited and others, (2023) 3SCC 210, the
Hon'ble Supreme Court has categorically held that the DM is required
to assist the secured creditor in getting the possession of the secured
assets. It does not empower the District Magistrate to adjudicate and/or
decide the dispute even between the secured creditor and the debtor. In
para 34 of the judgment, the Hon'ble Supreme Court observed as
follows:-
"34. Under Section 14 of the Sarfaesi Act, the District
Magistrate or the Chief Metropolitan Magistrate as the case may
be is required to assist the secured creditor in getting the
possession of the secured assets. Under Section 14 of
the SARFAESI Act, neither the District Magistrate nor the
Metropolitan Magistrate would have any jurisdiction to
adjudicate and/or decide the dispute even between the secured
creditor and the debtor. If any person is aggrieved by the steps
under Section 13(4)/order passed under Section 14, then the
aggrieved person has to approach the Debts Recovery Tribunal
by way of appeal/application under Section 17 of
the SARFAESI Act."
9. In the instant case, the DM had already passed the order
under Section 14 of the Act on 28.02.2025. Thereafter, the DM becomes
the functus officio. He cannot recall or adjudicate any dispute between
any interesting parties. Therefore, this Court is of the view that the
order dated 21.06.2025 is not in accordance with law and it deserves to
be set aside.
10. The writ petition is allowed.
11. The impugned order is set aside.
12. The respondent nos. 1 and 2 are directed to carry out the
order 28.02.2025 passed under Section 14 of the Act.
(Ravindra Maithani, J)
22.07.2025
Jitendra
