Holding

A Chief Metropolitan Magistrate or District Magistrate may, under Section 14(1A) of the SARFAESI Act, appoint an advocate commissioner as a subordinate officer to take possession of secured assets and forward them to the secured creditor.

Summary

The NKGSB Cooperative Bank, a secured creditor, sought possession of a mortgaged flat after the borrowers defaulted on a loan, invoking Section 14 of the SARFAESI Act. The Chief Metropolitan Magistrate (CMM) appointed an advocate commissioner to take possession of the asset, a move upheld by several High Courts but struck down by the Bombay High Court. The borrowers challenged this appointment before the Supreme Court, raising the question whether Section 14(1A) permits a CMM/District Magistrate to authorize an advocate, who is not a subordinate officer in the traditional sense, to take possession. The Court applied the functional‑subordination test, held that an advocate is an officer of the court and therefore subordinate to the CMM/DM for the purpose of the statute. It emphasized the legislative intent of the SARFAESI Act to enable swift recovery of non‑performing assets and found no rule barring such appointments. Consequently, the Supreme Court set aside the Bombay High Court’s decision, allowed the appeals of the secured creditors, dismissed the writ petition, and ordered the separate hearing of the related SLP on a different issue.

Issues considered

Whether Section 14(1A) of the SARFAESI Act allows a Chief Metropolitan Magistrate/District Magistrate to authorize an advocate to take possession of secured assets and documents.
Interpretation of the phrase ‘any officer subordinate to him’ in Section 14(1A) – does it include an advocate as a subordinate officer.
Whether the functional‑subordination doctrine permits the appointment of an advocate commissioner under the Act.
Whether the 2013 amendment inserting sub‑section 1A alters the earlier power to appoint any subordinate officer.

Legislation cited

Code of Civil Procedure, 1908s. 12, s. 17
Code of Criminal Procedure, 1973s. 34
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002s. 13(4), s. 14(1), s. 14(1A), s. 14(2), s. 14(3), s. 38

Subjects

SARFAESI ActSection 14(1A)functional subordinationadvocate commissionersecured creditorpossession of secured assetsstatutory interpretationnon‑performing assets

Judgment

[2022] 1 S.C.R. 1177 1177

NKGSB COOPERATIVE BANK LIMITED A
v.
SUBIR CHAKRAVARTY & ORS.
(Civil Appeal No. 1637 of 2022)
B
FEBRUARY 25, 2022
[A. M. KHANWILKAR AND C. T. RAVIKUMAR, JJ.]
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002: s.14(1A) – Power of
CMM/DM to appoint and authorize an advocate to take possession C
of the secured assets and documents and to forward the same to the
secured creditors by virtue of s.14(1A) of the 2002 Act – Held:
Purpose of the 2002 Act is to empower the financial institutions to
manage the non performing assets by adopting measures for
recovery or reconstruction – s.13(4) states that when a default is D
committed by the borrower in discharging his liability in full, the
secured creditor may take recourse to one or more of the measures
– One of the measures is to take possession of the secured assets of
the borrower – If secured creditor intends to take possession of
secured assets, the application u/s.14 must be moved to CMM/DM
in writing – s.14(1A) added by amendment provides that CMM/DM E
may authorize any officer subordinate to him for the aforesaid
purpose – The statutory obligation enjoined upon the CMM/DM is
to immediately move into action after receipt of a written application
under s.14(1) of the 2002 Act – There is de jure functional
subordinate relationship between the CMM/DM and the advocate F
being an officer of the Court – There is no rule as such framed by
the central government which expressly or impliedly prohibits CMM/
DM to engage an advocate commissioner for taking possession –
Hence, by applying ‘functional subordination’ test, CMM/DM may
appoint advocate as a subordinate officer for the purpose of s.
G
14(1A) of the 2002 Act.

H
1177
1178 SUPREME COURT REPORTS [2022] 1 S.C.R.

A Allowing the Appeals filed by secured creditors and
delinking the SLP (Civil) No.12011 of 2020 filed by borrowers,
the Court
HELD: 1. The underlying purpose of the 2002 Act is to
empower the financial institutions in India to have similar powers
B as enjoyed by their counterparts, namely, international banks in
other countries. One such feature is to empower the financial
institutions to take possession of securities and sell them. Section
13 deals with enforcement of security interest. Sub-Section (4)
thereof envisages that in the event a default is committed by the
borrower in discharging his liability in full within the period
C specified in sub-Section (2), the secured creditor may take
recourse to one or more of the measures provided in Sub-Section
(4). One of the measures is to take possession of the secured
assets of the borrower including the right to transfer by way of
lease, assignment or sale for realising the secured asset. Section
D 14 of the 2002 Act predicates that if the secured creditor intends
to take possession of the secured assets, must approach the
CMM/DM by way of an application, in writing, and on receipt of
such request, the CMM/DM must move into action in right
earnest. After passing an order thereon, he/she (CMM/DM) must
proceed to take possession of the secured assets and documents
E relating thereto for being forwarded to the secured creditor in
terms of Section 14(1) read with Section 14(2) of the 2002 Act.
As noted earlier, Section 14(2) is an enabling provision and
permits the CMM/DM to take such steps and use force, as may,
in his opinion, be necessary. This position obtained even before
F the amendment of 2013 i.e., insertion of sub-Section (1A) and
continues to this date. Sub-Section (1A) is in the nature of an
explanatory provision and it merely restates the implicit power
of the CMM/DM in taking services of any officer subordinate to
him. The insertion of Sub-Section (1A) is not to invest a new
power for the first time in the CMM/DM as such. [Paras 22, 23,
G 24][1198-G-H; 1199-A-B; 1195-C-D; 1199-F-H]
2. 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 2002 Act from the secured

H
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1179

creditor for that purpose. It is common knowledge that in the A
respective jurisdictions, there is only one CMM/DM. If he is
expected to reach at every location himself for taking possession,
in some jurisdictions it would be impracticable, if not impossible,
for him to do so owing to large number of applications in the
given jurisdiction being a commercial city. Accordingly, strict
B
construct would defeat the legislative intent and purpose for
enacting the 2002 Act. Indeed, logistical problems of the Office
of the CMM/DM cannot be the basis to overlook the statutory
provision. 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. C
The Advocate Commissioner is not a new concept. The advocates
are appointed as Court Commissioner to perform diverse
administrative and ministerial work as per the provisions of Code
of Civil Procedure and Code of Criminal Procedure. An advocate
is an officer of the court. [Paras 28, 29, 36][1204-G-H;
D
1205-C-D; 1210-C-D]
3. Whereas, applying the “functional subordination” test,
this Court held that sub-Section (1A) of Section 14 of the 2002
Act is no impediment for the CMM/DM to engage services of an
advocate (an officer of the court) — only for taking possession of
secured assets and documents relating thereto and to forward E
the same to the secured creditor. It does not follow that the
advocate so appointed needs to be on the rolls in the Office of
the CMM/DM or in public service. There is intrinsic de jure
functional subordinate relationship between the CMM/DM and
the advocate being an officer of the court. The apprehension of F
the borrowers about improper execution of orders of the CMM/
DM passed under Section 14(1) of the 2002 Act by the Advocate
Commissioner, is plainly misplaced. There is no reason to assume
that the advocate so appointed by the CMM/DM would misuse
the task entrusted to him/her and that will not be carried out
strictly as per law or it would be a case of abuse of power. Rather, G
going by the institutional faith or trust reposed on advocates being
officers of the court, there must be a presumption that if an
advocate is appointed as commissioner for execution of the orders
passed by the CMM/DM under Section 14(1) of the 2002 Act,
H
1180 SUPREME COURT REPORTS [2022] 1 S.C.R.

A that responsibility and duty will be discharged honestly and in
accordance with rules of law. [Para 42][1212-E-H; 1213-A-C]
Authorised Officer, Indian Bank v. D. Visalakshi & Anr.
[2019] SCR 177 – relied on.
Muhammed Ashraf & Anr. v. Union of India & Ors.
B AIR 2009 Kerala 14; The Federal Bank Ltd.,
Ernakulam v. A.V. Punnus AIR 2014 Kerala 7; V.S.
Sunitha v. Federal Bank Ltd. 2018 SCC OnLine Ker
12866; S. Chandramohan & Anr. v. The Chief
Metropolitan Magistrate, Egmore, Chennai & Ors.
C 2014 SCC OnLine Mad 7869; Rahul Chaudhary v.
Andhra Bank & Ors. 2020 SCC OnLine Del 284; M/s.
J. Marks Exim (India) Pvt. Ltd. v. Punjab National Bank
2017 SCC OnLine Bom 2246; Sakiri Vasu v. State of
Uttar Pradesh & Ors. [2007] 11 SCR 980; Dattatraya
Moreshwar v. The State of Bombay & Ors. [1952] SCR
D 612; Mahadev Govind Gharge & Ors. v. Special Land
Acquisition Officer, Upper Krishna Project, Jamkhandi,
Karnataka [2011] 8 SCR 829; Sangram Singh v.
Election Tribunal, Kotah & Anr. [1955] SCR 1; A. St.
Arunachalam Pillai v. M/s. Southern Roadways Ltd. &
E Anr. 1960 SCR 764; S. Krishnaswamy Mudaliar & Anr.
v. P.S. Palani Pillai & Anr. AIR 1957 Mad 599; B.
Veeraswamy & Ors. v. State of Andhra Pradesh & Ors.
AIR 1959 AP 413; Lalit Mohan Das v. The Advocate-
General, Orissa & Anr. [1957] SCR 167; O.P. Sharma
& Ors. v. High Court of Punjab & Haryana [2011]
F 6 SCR 301; Satheedevi v. Prasanna & Anr. [2010] 6
SCR 657; M/s. Hiralal Rattanlal etc. etc. v. State of U.P.
& Anr. etc. etc. [1973] 2 SCR 502; Dipak Babaria &
Anr. v. State of Gujarat & Ors. [2014] 2 SCR 71 –
referred to.
G Case Law Reference
[2007] 11 SCR 980 referred to Para 9
[1952] SCR 612 referred to Para 12
[2011] 8 SCR 829 referred to Para 12

H [1955] SCR 1 referred to Para 12
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1181

[1960] SCR 764 referred to Para 17 A
[1957] SCR 167 referred to Para 38
[2011] 6 SCR 301 referred to Para 39
[2010] 6 SCR 657 referred to Para 43
[1973] 2 SCR 502 referred to Para 43 B
[2014] 2 SCR 71 referred to Para 43
[2019] SCR 177 relied on Para 44
CIVIL APPELLATE JURISDICTION: Civil Appeal No.1637 of
2022.
C
From the Judgment and Order dated 06.11.2019 of the High Court
of Judicature at Bombay in Writ Petition (L) 28480 of 2019.
With
Civil Appeal Nos.1638, 1639 and 1640 of 2022 and S.L.P. (Civil)
No.12011 of 2020. D
Rana Mukherjee, Sr. Adv., Manish Shanker Srivastava, Ms.
Kalpana, Ms. Pallavi Baghel, Abhishek Kumar Singh, Viraj Kadam, Soumya
Dutta, Devendra Kumar Singh, Karunakar Mahalik, Manoranjan Mishra,
Gouranga Biswal, B. Raghunath, Sriram P., Ms. N. C. Kavitha, Pawan
Kr. Dabas, Ms. Prerna Robin, Ms. Muskaan Garg, Ms. Jessica Bhardwaj, E
Ms. Daisy Hannah, Ms. Kanika Sharma, Ms. Oindrilla Sen, M. L. Ganesh,
K. V. Vijayakumar, Rahul Chitnis, Sachin Patil, Aaditya A. Pande, Geo
Joseph, Ms. Shwetal Shepal, Advs. for the appearing parties.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J. F
1. The seminal question involved in these cases is: whether it is
open to the District Magistrate1 or the Chief Metropolitan Magistrate2
to appoint an advocate and authorise him/her to take possession of the
secured assets and documents relating thereto and to forward the same
to the secured creditor within the meaning of Section 14(1A) of the G
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 20023?

1
for short, “DM”
2
for short, “CMM”
3
for short, “2002 Act” H
1182 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 2. The High Court of Judicature at Bombay4 vide judgment and
order dated 6.11.2019 in Writ Petition (L) No.28480 of 2019 opined that
the advocate, not being a subordinate officer to the CMM or DM, such
appointment would be illegal. Against this decision, four separate appeals5
have been filed by the concerned parties. On the other hand, the High
Court of Judicature at Madras6 vide judgment and order dated 18.3.2020
B
in C.R.P. No.790 of 2020 has taken a contrary view while following
earlier decision of the same High Court on the reasoning that the advocate
is regarded as an officer of the court and, thus, subordinate to the CMM
or the DM. Having so held, it allowed the civil revision petition filed by
the secured creditor (Canara Bank). Against this decision, a special leave
C petition7 has been filed by the borrowers.
3. The High Courts of Kerala (in Muhammed Ashraf & Anr. vs.
Union of India & Ors.8; The Federal Bank Ltd., Ernakulam vs.
A.V. Punnus9; and V.S. Sunitha vs. Federal Bank Ltd.10), Madras (in
S. Chandramohan & Anr. vs. The Chief Metropolitan Magistrate,
D Egmore, Chennai & Ors.11) and Delhi (in Rahul Chaudhary vs.
Andhra Bank & Ors.12), have taken the same view as in the case of
Canara Bank impugned in the special leave petition13 arising from the
decision of the Madras High Court.
4. Additionally relying on the dictum in M/s. J. Marks Exim
E (India) Pvt. Ltd. vs. Punjab National Bank14 decided by the Division
Bench of the Bombay High Court, it was urged that the coordinate Bench
of the Bombay High Court had answered the issue under consideration
in favour of the secured creditors and against the borrowers on the
same lines as the view taken by other three High Courts, namely, High

F 4
for short, “Bombay High Court”
5
Civil Appeal No….. of 2022 @ SLP (Civil) No.30240 of 2019; Civil Appeal No…..
of 2022 @ SLP (Civil) No.2055 of 2020; Civil Appeal No…..of 2022 @ SLP (Civil)
No……of 2022 @ Diary No.17059 of 2020; and Civil Appeal No…..of 2022 @ SLP
(Civil) No……of 2022 @ Diary No.23733 of 2020
6
for short, “Madras High Court”
7
SLP (Civil) No.12011 of 2020
G 8
AIR 2009 Kerala 14
9
AIR 2014 Kerala 7
10
2018 SCC OnLine Ker 12866
11
2014-5-L.W. 620: 2014 SCC OnLine Mad 7869
12
2020 SCC OnLine Del 284
13
see Footnote No.7
14
H 2017 SCC OnLine Bom 2246
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1183
[A. M. KHANWILKAR, J.]

Courts of Kerela, Madras and Delhi. However, in the judgment of the A
Bombay High Court of coordinate Bench impugned before this Court, it
has been observed that the dictum in the said decision had not considered
the precise question that has been dealt with in the impugned judgment.
5. Briefly stated, in each of the cases under consideration, the
CMM/DM appointed an advocate purportedly in exercise of powers B
under Section 14(1A) of the 2002 Act. In the cases arising from the
judgment of the Bombay High Court, the borrowers had urged before
the High Court that the Additional Chief Metropolitan Magistrate 15, 3rd
Court, Esplanade, Mumbai on application filed by the secured creditor
(Bank) under Section 14 of the 2002 Act passed an order dated 26.7.2019,
appointing an advocate to take possession of the secured assets and C
documents relating thereto and to forward the same to the secured
creditor. The order passed by the ACMM records that the Bank had
advanced a loan in the sum of Rs.4.44 crore on 31.1.2015 to the borrowers,
who had mortgaged Flat No.262, 26th Floor, Building No.02 with two
basement car spaces in a building known as ‘Kalpataru Pinnacle’ in D
Goregaon (West), Mumbai. Further, the borrowers had defaulted on
30.10.2017. Their account was declared Non-Performing Asset 16. As a
sequel, on 13.11.2017, a notice under Section 13(2) of the 2002 Act was
issued to them and posted by Registered Post A.D. The docket was
returned with ‘intimation posted’ meaning thereby, the noticees were
not available at the given address. The order further records that the E
Bank served the notice upon the borrowers by publication on 31.12.2017
calling upon them to pay the outstanding dues within sixty days. However,
loan amount remained unpaid. As a result, the secured creditor approached
the ACMM to pass appropriate directions, on which application the stated
order dated 26.7.2019 came to be passed appointing an advocate. The F
same was communicated to the borrowers by the advocate on 11.10.2019.
That order was challenged before the Bombay High Court by the
borrowers by way of writ petition17 under Article 226 of the Constitution
of India, which has been decided by the High Court vide impugned
judgment and order holding that Section 14(1A) of the 2002 Act does
not permit the CMM/DM to authorise an advocate. The language used G
in the provision is amply clear. Such delegation could be done only to an

15
for short, “ACMM”
16
for short, “NPA”
17
Writ Petition (L) No.28480 of 2019 H
1184 SUPREME COURT REPORTS [2022] 1 S.C.R.

A officer subordinate and none else. The High Court rejected the argument
that the overburdened CMM/DM had inadequate subordinate staff and
it would be difficult, if not virtually impossible for the secured creditor to
take possession of and realise the outstanding dues by disposing the
secured asset. The High Court was not impressed with that argument
and preferred to strictly construe the stated provision. The secured
B
creditors have assailed this decision by way of appeals 18 before this
Court.
6. Reverting to the special leave petition19 arising from the decision
of the Madras High Court. The Bank had given loan to the borrowers
upon mortgage of their property. Despite the demand to clear the
C outstanding dues, the loan amount remained unpaid. Resultantly, the Bank
classified the account as NPA followed by notice under Section 13(2) of
the 2002 Act dated 21.7.2017 to the borrowers. Eventually, the Bank
took symbolic possession of the property through its authorised officer
after issuing possession notice. That was published in two leading
D newspapers. The borrowers challenged the notice issued to them under
Section 13(4) of the 2002 Act. That challenge was unsuccessful.
Whereafter, the Bank invoked action under Section 14 of the 2002 Act
by filing application before the CMM for taking possession of the secured
assets. The borrowers challenged the sale notice by filing application
being S.A. No.59 of 2019. No injunction was granted in favour of the
E borrowers and to restrain the Bank from proceeding with the sale of the
secured property. Hence, the Bank pursued the application under Section
14 of the 2002 Act before the CMM, which came to be disposed of on
6.8.2019 by appointing an Advocate Commissioner to take possession
of the secured property. Thereafter, the application filed by the borrowers,
F being S.A. No.59 of 2019, came to be dismissed. In the interregnum, the
borrowers filed another application in S.A. No.399 of 2019, challenging
the order dated 6.8.2019 passed by the CMM, appointing an Advocate
Commissioner, in Crl. M.P. No.2995 of 2019. The Debts Recovery
Tribunal II20, Chennai was pleased to allow S.A.No.399 of 2019, inter
alia, holding that the procedure mandated under clauses (i) to (ix) of the
G proviso to Section 14(1) of the 2002 Act had not been complied with by
the secured creditor (Bank) and in any case, the appointment of the

18
see Footnote No.5
19
see Footnote No.7
20
H for short, “Tribunal”
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1185
[A. M. KHANWILKAR, J.]

Advocate Commissioner was illegal. The Tribunal allowed the challenge A
vide order dated 4.2.2020. That decision came to be assailed by the
Bank before the Madras High Court by way of civil revision petition 21
under Article 227 of the Constitution of India. The High Court noted two
issues arising for its consideration, in paragraph 9 of the impugned
judgment. The first issue was regarding the correctness of the conclusion
B
recorded by the Tribunal on the plea of non-compliance of clauses (i) to
(ix) of Section 14 of the 2002 Act. That came to be set aside being
manifestly erroneous (see paragraphs 10 and 11 of the impugned
judgment). However, on the second issue about power of the CMM/
DM to appoint an Advocate Commissioner, the High Court, amongst
other, relied upon its earlier decision as well as of the High Courts of C
Delhi and Kerala, to conclude that the Tribunal committed manifest error,
including not to take notice of the decision of the same High Court referred
to in the impugned judgment. In short, the Madras High Court accepted
the argument of the secured creditor (Bank) that it was open to the
CMM/DM to appoint an Advocate Commissioner for taking possession
D
of the secured assets and documents relating thereto for being forwarded
to the secured creditor in terms of Section 14(1A) of the 2002 Act. This
decision has been challenged by the borrowers by way of a special
leave petition22 before this Court.
7. We have heard Mr. Rana Mukherjee, learned senior counsel,
Mr. Viraj Kadam, Mr. Manish Shanker Srivastava, Mr. Devendra Kumar E
Singh and Mr. M.L. Ganesh, learned counsel appearing for the Banks,
Mr. B. Raghunath, learned counsel appearing for the borrowers and Mr.
Rahul Chitnis, learned counsel appearing for the State of Maharashtra.
8. As aforesaid, the one and only question common to all these
cases is: whether the CMM/DM can appoint an advocate in exercise of F
powers under Section 14(1A) of the 2002 Act? This issue arises because
of the expression used in the said provision, “may authorise any officer
subordinate to him”.
9. The earliest decision dealing with the issue under consideration
is that of the High Court of Kerala in Muhammed Ashraf23 wherein G
the Division Bench of the High Court rejected the argument that

21
C.R.P. No.790 of 2020
22
see Footnote No.7
23
supra at Footnote No.8 H
1186 SUPREME COURT REPORTS [2022] 1 S.C.R.

A mandate of Section 14 obliges the CMM/DM to go personally and
take possession of the secured assets and documents relating thereto.
It noted that Section 14(2) of the 2002 Act enabled the CMM/DM to
pass order even to take Police assistance and use all necessary powers
in taking possession of the secured assets. To buttress this view,
reference has been made to the decision of this Court in Sakiri Vasu
B
vs. State of Uttar Pradesh & Ors.24 wherein the Court noted that an
express grant of statutory powers carries with it by necessary
implication the authority to use all reasonable means to make such
grant effective. In other words, the authority had implied powers to
grant relief which is not expressly granted to it by the Act. On that
C logic, the Division Bench of the High Court of Kerala opined that it
would be open to the Magistrate who has the power under Section 14
of the 2002 Act to take possession of the secured assets including to
take assistance of Police including an Advocate Commissioner so as
to facilitate the secured creditor to take over the secured assets. As a
D result, the Magistrate could also appoint a commissioner for identification
of the secured assets and taking possession thereof. This decision has
attained finality owing to the dismissal of S.L.P. (Civil) No.1671 of
2009 on 2.2.2009 by this Court. Notably, this decision was rendered
before the amendment of Section 14 and in particular insertion of sub-
Section (1A)25.
E
10. The aforementioned decision, however, had been followed by
the learned Single Judge of the High Court of Kerala in the case of The
Federal Bank Ltd., Ernakulam 26 which had arisen after the
amendment of Section 14 of the 2002 Act and insertion of sub-Section
(1A) therein. Despite insertion of sub-Section (1A), learned Single Judge
F following the judgment in Muhammed Ashraf27,answered the issue in
the following words:
“5. …It may however appear at first blush that such an Advocate
Commissioner is not an officer subordinate to the District
Magistrate or the Chief Judicial Magistrate. But a reference to
G Sections 12 and 17 of the Code of Criminal Procedure, 1973

24
(2008) 2 SCC 409
25
Inserted by Act 1 of 2013, sec.6(b) (w.e.f. 15.1.2013, vide S.O.171(E), dated 15.1.2013)
26
supra at Footnote No.9
27
H supra at Footnote No.8
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1187
[A. M. KHANWILKAR, J.]

indicates that the term District Magistrate or Chief Metropolitan A
Magistrate denotes the court and not the officer in person. An
Advocate Commissioner is certainly an officer subordinate
to the court and the words employed in Section 14 (1A) of
the SARFAESI Act are not to be understood as meaning an
officer subordinate in service. Section 284 of the Code of
B
Criminal Procedure, 1973 in fact empowers an Advocate
Commissioner to record the examination of witnesses whose
personal appearance in court is dispensed with. Similar provisions
can be found in Order XXVI Rule 17 of the Code of Civil
Procedure, 1908 enabling the Advocate Commissioner to record
evidence of witnesses and Section 75 (g) thereof to perform any C
ministerial act even. Taking over possession of the secured asset
and handing over the same to the creditor bank is nothing but a
ministerial act of the Advocate Commissioner on behalf of the
court. The Advocate Commissioner exercising such function
under Section 14 (1A) of the SARFAESI Act is only
D
discharging his duty as an officer subordinate to the court
presided by the Magistrate. The contention of the borrower
that the Advocate Commissioner is not an officer
subordinate in service to the Chief Judicial Magistrate and
hence incompetent is only to be rejected.”
E
(emphasis supplied)
11. Once again, another learned Single Judge of the High Court
of Kerala in V.S. Sunitha28 reiterated the same view and held that the
Magistrate rendering assistance to the secured creditor is competent to
appoint a commissioner to take possession of the secured assets.
F
12. This very issue had also arisen before the Madras High Court
in S. Chandramohan29. The Division Bench of the Madras High Court
after adverting to Section 14(1A) of the 2002 Act went on to observe as
follows:
“8. …. G
The same is an enabling provision conferring power on the Chief
Metropolitan Magistrate or District Magistrate to authorise any
28
supra at Footnote No.10
29
supra at Footnote No.11 H
1188 SUPREME COURT REPORTS [2022] 1 S.C.R.

A officer subordinate to him to take possession of the assets and
documents relating thereto and forward the assets and documents
to the secured creditors.
9. The Advocate Commissioners appointed by the learned Chief
Metropolitan Magistrate is in tune with Section 14(1-A) of the
B SARFAESI Act, 2002. As per Section 14 of the Act, the secured
creditors can approach the Chief Metropolitan Magistrate/District
Magistrate to take possession of the assets and documents of the
secured creditor. The Chief Metropolitan Magistrate, instead of
personally visiting the spot to take possession of assets and
documents, can very well appoint the Advocate Commissioner to
C visit on his behalf, as in the case of issuing of commissions under
the Civil Procedure Code, as it is not possible for the Chief
Metropolitan Magistrate/District Magistrate to visit personally to
take possession.
10. The amendment inserted by Act 1 of 2013 viz., Section 14(1-
D A) is permitting the Subordinate Officers to do the above said
acts and nowhere prohibits the Chief Metropolitan Magistrate from
authorising an Advocate Commissioner to go on his behalf for
taking possession of assets and documents and forwarding the
same to the secured creditor. The amendment gives discretion to
the Chief Metropolitan Magistrate/District Magistrate either to
E authorise or take possession of such assets and document and the
word used being ‘may’, it is not always necessary on the part of
the Chief Metropolitan Magistrate to authorise any officer
subordinate to him. It is a well settled proposition of law that the
observance of the word ‘may’ used in the statute is only directory,
in the sense, non-compliance with those provisions will not render
F
the proceedings invalid. Sometimes, the word ‘shall’ may also be
directory and not mandatory. ….”
It then adverted to the decisions of this Court in Dattatraya
Moreshwar vs. The State of Bombay & Ors. 30, Mahadev Govind
Gharge & Ors. vs. Special Land Acquisition Officer, Upper Krishna
G Project, Jamkhandi, Karnataka31 and Sangram Singh vs. Election
Tribunal, Kotah & Anr.32 on the principles of interpretation of statute
and noted thus:
30
AIR 1952 SC 181
31
(2011) 6 SCC 321
H 32
AIR 1955 SC 425
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1189
[A. M. KHANWILKAR, J.]

“11.The object of the amendment introduced in Act 1 of A
2013 being to give assistance to the Chief Metropolitan
Magistrate/District Magistrate, the Chief Metropolitan
Magistrate is justified in appointing Advocate
Commissioners, instead of authorising Subordinate Officers
to take possession. It is well settled in law that Advocates
B
are also Officers of the Court, though not subordinate to
Chief Metropolitan Magistrate. As Officers of the Court, the
Advocates can perform their duty more effectively than the
Officers, subordinate to the Chief Metropolitan Magistrate in taking
possession of assets and documents and in delivering the same to
the Secured Creditor. Thus, in any event, the contention raised by C
the learned counsel appearing for the petitioner is devoid of merits.”
(emphasis supplied)
13. The issue also received attention of the High Court of Delhi in
Rahul Chaudhary33. The High Court answered the issue in the following
words: D
“3.1 To be noted, the receiver has been appointed by the learned
CMM vide order dated 05.12.2019.
4. The learned CMM has appointed an advocate to take
possession of the secured asset.
5. Counsel for the petitioner does not dispute that fact that the E
receiver appointed by the learned CMM has taken possession of
the subject secured asset on 16.01.2020.
6. It is, however, the say of the counsel for the petitioner that
appointment of an advocate as a receiver was contrary to the
provisions of Section 14 (1A) of the SARFAESI Act and, therefore, F
that part of the order passed by the learned CMM should be set
aside as was done by the Bombay High Court in the
aforementioned matter.
7. To my mind, the writ petition, in fact, has been rendered
infructuous, in a sense, that the receiver would have handed over G
the possession of the subject asset to the secured creditor, that is,
the Andhra Bank.
8. Nevertheless, according to me, the language of Section 14(1A)
of the SARFAESI Act uses the expression “may” and not “shall”.
33
supra at Footnote No.12 H
1190 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 8.1 There are two ways of appreciating the provision. First, that
the expression “may” relates to the choice of the subordinate
officer. The other meaning that can be placed on the provision is
that District Magistrate/CMM is vested with discretion to appoint
officers subordinate to him to take possession of the secured asset.
B 8.2 The District Magistrate/CMM is obliged to take possession
once an application in that behalf is preferred under sub-section
(1) of Section 14 of the SARFAESI Act by the secured creditor.
8.3 It is in the exercise of such power that recourse can be taken
by the District Magistrate/CMM to the provisions of sub-section
C (1A) of Section 14. This provision was introduced via Act 1 of
2013. Before that the District Magistrate/CMM were perhaps
taking recourse to sub-section (2) of Section 14 and, thus, appointing
advocates as receiver.
8.4 To my mind, after the insertion of sub-section (1A) in Section
14, the only change that has been brought about is that the District
D
Magistrate/CMM has now the discretion to appoint even their
subordinate officers as receivers.
8.5 Pertinently, sub-section (1A) of Section 14 does not bar
the appointment of advocates as receivers. The same position
obtains vis-à-vis Rule 8(3) of The Security Interest (Enforcement)
E Rules, 2002, which has been cited in the aforementioned judgment
of the Bombay High Court.
9. As was noticed in Subir Chakravarty’s case34, the District
Magistrates and the CMMs are overburdened. The position is no
different in Delhi.
F 10. Thus, in my view, since the provision vests discretion in the
District Magistrate/CMM and as long the discretion is exercised
with due care and caution, the appointment of advocates as
receivers cannot be faulted.”
(emphasis supplied)
G
As noticed from the extracted portion of the judgment, the High
Court of Delhi disagreed with the view taken by the Bombay High Court
in the impugned judgment which has been assailed in the cases under
consideration.

34
H see Footnote No.17
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1191
[A. M. KHANWILKAR, J.]

14. Concededly, there is conflict of opinion between the three A
High Courts35 on the one side and the Bombay High Court on the other.
In the impugned judgment, the Bombay High Court observed as follows:
“9 The language of the legislature is clear. The District Magistrate
or the Chief Metropolitan Magistrate may authorize any officer
subordinate to take possession of such asset and this means that B
the person authorized to take possession has to be an officer
subordinate to the District Magistrate or the Chief Metropolitan
Magistrate.
10 The decision dated 17th March 201736 passed by the Division
Bench was not premised on a challenge to the authorization in
C
favour of an Advocate to take possession of a secured asset. The
observations at the end of the order are probably the result of the
facts noted in the impugned order. The overburdened Metropolitan
Magistrates or the District Magistrates having inadequate
subordinate staff find it a handicap to deal with large number of
applications under Section 14 of the SARFAESI Act, 2002, but D
this would be no ground to violate the language of the statute. The
legislature may be requested to intervene. We propose to do that
at the end of the present order.
11 …..
12 A perusal of the sub-rule37 shows that after possession of E
immovable property is physically taken over by the Officer
authorized custody thereof can be handed over for care and
protection of the property to any person authorized or appointed
by him. Thus, after possession of a secured asset is taken over, its
custody can be entrusted to any person who need not be an Officer
F
of the Court or authorized subordinate staff of the Court. This
could perhaps solve half the problem faced by District Magistrates
and Chief Metropolitan Magistrates.
13 The cry of anguish in paragraph No.7 of the impugned order is
also justified. Each day, atleast two, if not three petitions, are filed
by way of mercy pleading to this Court that some time be given to G
the defaulting borrower to clear the defaulting loan so that the
property mortgaged can be saved. Wide and varied facts such as
35
High Courts of Kerala, Madras and Delhi
36
supra at Footnote No.14
37
Rule 8(3) of the Security Interest (Enforcement) Rules, 2002 H
1192 SUPREME COURT REPORTS [2022] 1 S.C.R.

A exams of the children are ensuing, old and aged parents, paternal
or maternal aunt are suffering from an ailment and are under
going treatment at a nearby hospital are pleaded. The borrower is
making attempts to sell another property to clear the outstanding
amounts etc. Equities are pleaded.
B 14 Courts in India being not only Courts of Justice but Courts of
Equity, the orders passed under Section 14 are stayed, but
ultimately the petitions fail.
15 Howsoever inconvenient it may be to a Court, rights of parties
cannot be curtailed in the manner done in the impugned order. If
C law permits, the borrower can always tender the outstanding
amounts to the Bank or the Financial Institution before a sale of
the secured assets take place.
16 The two troubling parts of the impugned order being dealt with
by us resulting in the hurdle in the way of the petitioner to seek
further reliefs from the Debt Recovery Tribunal having been clear,
D
we dispose of the petition expunging the directions in paragraph
No.7 of the impugned order, as also expunging the authorization
in favour of Ms.Priti S. Chavan, Advocate to take possession of
the Security as a Court Commissioner requiring the learned
Metropolitan Magistrate to appoint an officer subordinate to take
E possession of the secured asset who, in turn may give custody
thereof to any person.
16 We terminate the proceedings in the instant writ petition
observing that on the merits of the order passed, the petitioners
may approach the Debt Recovery Tribunal.”
F The above view taken by the Bombay High Court is one of strict
or literal interpretation of the provision as it exists.
15. At the outset, we must notice that the expression “any officer
subordinate to him” has been used in several legislations38 enacted by
38
G Section 14 of the Suppression of Immoral Traffic in Women and Girls Act, 1956;
Section 5 of the Orphanages and other Charitable Homes (Supervision and Control)
Act, 1960; Section 166 of the Manipur Land Revenue and Land Reforms Act, 1960;
Section 10K of the Export (Quality Control and Inspection) Act, 1963; Section 43A of
the Unlawful Activities (Prevention) Act, 1967; Section 5 of the Wild Life (Protection)
Act, 1972; Sections 55 and 165 of the Code of Criminal Procedure, 1973; Sections 64
and 70 of the Delhi Police Act, 1978; Section 41 of the Narcotic Drugs and Psychotropic
H Substances Act, 1985; Sections 11 and 16 of the Foreign Trade (Development and
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1193
[A. M. KHANWILKAR, J.]

Parliament/State Legislature. Somewhat similar expression has been used A
in Articles 53, 154 and 311 of the Constitution of India and in other
legislations39 enacted by Parliament/State Legislature with little variation
to further the intent of the concerned enactment.

Regulation) Act, 1992; Section 44 of the Delhi Rent Act, 1995 (also in 1958); Section 22
of the Chemical Weapons Convention Act, 2000; Section 17 of the Prevention of B
Money-Laundering Act, 2002; Section 30 of the Food Safety and Standards Act, 2006;
Sections 107, 108 and 112 of the Central Goods and Services Tax Act, 2017; Section 8
of the Fugitive Economic Offenders Act, 2018; and Section 31 of the Banning of
Unregulated Deposit Schemes Act, 2019.
39
Article 53 (“officers subordinate to him”), Article 154 (“officers subordinate to him”
and “any authority subordinate to the Governor”) and Article 311 (“an authority C
subordinate to that”) of the Constitution of India;
Section 376 (“police officer subordinate to such police officer”) of the Indian Penal
Code, 1860;
Section 2 (“members of the subordinate ranks of any police-force”) and Section 7 (“any
police-officer of the subordinate ranks”) of the Police Act, 1861;
Section 4A (“any such officer subordinate to him”) of the Guardians and Wards Act,
1890; D
Section 3(5) (“Officer subordinate to the Governor General of India”) of the General
Clauses Act, 1897;
Sections 8 and 22 (“officers subordinate to the Jailer”) and Section 48 (“officer
subordinate to the Superintendent”) of the Prisons Act, 1894;
Section 195 (“any officer subordinate to the Collector”) of the Indian Succession Act,
1925;
E
Section 34H (“any subordinate officer of his”), and Sections 110A and 110B (“any
person subordinate to him”) of the Insurance Act, 1938;
Section 2(a) (“any officer subordinate to that officer”) of the Indian Coconut Committee
Act, 1944;
Section 14A (“such officer or authority subordinate to the Central Government” and
“such officer or authority subordinate to the State Government”) of the Industrial
Employment (Standing Orders) Act, 1946; F
Section 39 (“authority subordinate to the Central Government” and “authority
subordinate to the State Government”) of the Industrial Disputes Act, 1947;
Section 2(g) (“subordinate officer”) of the Central Reserve Police Force Act, 1949;
Section 47 (“his subordinate in rank”) of the Army Act, 1950;
Section 17 (“by an officer subordinate to that Government” and “by an officer
subordinate to the State Government”) and Section 23 (“by an officer or authority
subordinate to that Government”) of the Requisitioning and Acquisition of Immovable G
Property Act, 1952;
Sections 24A and 24B (“any such officer subordinate to the Central Government or a
State Government”) and Section 43 (“such officer or authority subordinate to the
Central Government” and “such officer or authority subordinate to the State
Government”) of the Arms Act, 1959;
Section 56 (“an officer subordinate to the Administrator”) of the Children Act, 1960;
H
1194 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 16. The construct of the provision, however, must depend on the
context of the legislative intent and the purpose for which such
dispensation has been envisaged. The setting in which the expression
has been used in the concerned section of the Act would assume
significance.
B
Section 5 (“the officers subordinate to him”), Section 7 (“subordinate to the
Administrator and subordinate to the deputy commissioner or the sub-divisional
officer”), Section 68 (“subordinate to such officer”), Section 84 (“any revenue officer
subordinate to him”), Section 93 (“an officer subordinate to the sub-divisional officer”),
Section 95 (“any revenue officer subordinate to him”), Section 96 (“revenue officer
subordinate to the deputy commissioner” and “any officer subordinate to the appellate
C or revisional authority”) and Section 166 (“any officer or authority subordinate to
him”) of the Manipur Land Revenue and Land Reforms Act, 1960;
Section 5 (“any other officer of customs who is subordinate to him”), Section 28J (“the
customs authorities subordinate to him”), Section 129D (“adjudicating authority
subordinate to him” and “any officer of Customs subordinate to him”) and Section
129DA (“adjudicating authority subordinate to him”) of the Customs Act, 1962;
Section 10M (“any officer subordinate to the Director of Inspection and Quality
D Control”) and Section 13 (“authority subordinate to the Central Government”) of the
Export (Quality Control and Inspection) Act, 1963;
Section 79 (“any officer subordinate to the Board”) of the Punjab Reorganisation Act,
1966;
Section 42 (“any person subordinate to the State Government”) of the Unlawful
Activities (Prevention) Act, 1967;
E Section 21 (“authority subordinate to the Central Government” and “authority
subordinate to such Government”) of the Passports Act, 1967;
Section 34 (“any officer subordinate to it”) and Section 154 (“any police officer
subordinate to him”) of the Code of Criminal Procedure, 1973;
Section 12 (“an officer subordinate to that Government” and “an officer subordinate to
a State Government”) of the Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974;
F Section 3 (“subordinate ranks of the police force”), Section 12 (“other officers of
subordinate rank”), Section 20 (“his subordinates”), Sections 21 and 25 (“any police
officer of subordinate rank”), Section 58 (“officers subordinate to him”), Section 70
(“any officer subordinate to the Commissioner of Police”), Section 122 (“police officer
of subordinate rank”) and Section 147 (“any police officer of subordinate rank”) of the
Delhi Police Act, 1978;
Section 14 (“to which that officer is subordinate”) of the National Security Act, 1980;
G Section 23 (“an Income-tax Officer subordinate to him”) of the Hotel-Receipts Tax Act,
1980;
Section 17A (“the officer, subordinate to him”) of the Child and Adolescent Labour
(Prohibition and Regulation) Act, 1986;
Section 13 (“an officer subordinate to that Government”) of the Prevention of Illicit
Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988;
Section 93 (“by an officer or authority subordinate to the Central Government”) of the
H Railways Act, 1989;
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1195
[A. M. KHANWILKAR, J.]

17. This Court has had occasion to deal with identical provision in A
the Motor Vehicles Act, 193940, in the case of A. St. Arunachalam
Pillai vs. M/s. Southern Roadways Ltd. & Anr.41. Even in that case,
the Court had to resolve the conflicting views of the Full Bench of the
Madras High Court and of the High Court of Andhra Pradesh. The Full
Bench of the Madras High Court in S. Krishnaswamy Mudaliar &
B
Anr. vs. P.S. Palani Pillai & Anr.42 had occasion to consider the question
as to whether Regional Transport Officer was subordinate to the State
Transport Commissioner. While examining that question, the Full Bench
of the Madras High Court dealt with three views pressed into service
before it. The first view was founded on “administrative subordination”,
C
Section 6 (“such other officer subordinate to the Director General”) and Section 15 (“an
officer subordinate to the Director General”) of the Foreign Trade (Development and
Regulation) Act, 1992;
Sections 46 and 328 (“an officer subordinate to him”) of the New Delhi Municipal
Council Act, 1994;
Sections 23 and 24 (“any such subordinate officer to the enforcement officer”) and
D
Section 37 (“any subordinate officer”) of the Chemical Weapons Convention Act,
2000;
Section 80 (“any officer subordinate to the Board”) of the Bihar Reorganisation Act,
2000;
Section 81 (“any officer subordinate to the Board”) of the Uttar Pradesh Reorganisation
Act, 2000;
Section 26 (“such officer subordinate to the Central Government or the State E
Government”) of the Mahatma Gandhi National Rural Employment Guarantee Act,
2005;
Section 22 (“the officer, subordinate to him”) of the Maintenance and Welfare of
Parents and Senior Citizens Act, 2007;
Section 54 (“such officer subordinate to it”) of the Legal Metrology Act, 2009;
Section 43 (“employees who shall be subordinate to him”) of the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement F
Act, 2013;
Section 86 (“any officer subordinate to the Board”) of the Andhra Pradesh Reorganisation
Act, 2014;
Section 5 (“any other officer who is subordinate to him”) of the Central Goods and
Services Tax Act, 2017;
Section 45 (“an officer subordinate to that Government or the local authority”) of the
Human Immunodeficiency Virus and Acquired Immune Deficiency Syndrome G
(Prevention and Control) Act, 2017;
Section 100 (“authority subordinate to the Central Government” and “authority
subordinate to the State Government”) of the Industrial Relations Code, 2020.
40
for short, “1939 Act”
41
AIR 1960 SC 1191 (5-Judge Bench)
42
AIR 1957 Mad 599 H
1196 SUPREME COURT REPORTS [2022] 1 S.C.R.

A the second on “functional subordination” and the third on “statutory
subordination”. The Full Bench accepted the third view, namely, “statutory
subordination”, being a safer and logical approach. In the context of the
provisions of that Act, it was held that the Regional Transport Officer
was not subordinate to the State Transport Commissioner.
B 18. Analysing the same provision, being Section 44-A of the 1939
Act, the Full Bench of the High Court of Andhra Pradesh, however,
opined to the contrary in B. Veeraswamy & Ors. vs. State of Andhra
Pradesh & Ors.43. It followed the root of “administrative subordination”.
The matter reached this Court where the Constitution Bench by majority
upheld the view taken by the Full Bench of the High Court of Andhra
C Pradesh and, thus, invoked the “administrative subordination” logic. This
Court in the context of the statutory provisions and the Government
Orders issued by the concerned department concluded that the Regional
Transport Officers were subordinate to the Transport Commissioner. It
was also observed that in the matter of interpretation, the words of
D provisions must be looked at; and if they are expansive enough to mean
any officer subordinate to the Transport Commissioner, that must be
given effect to.
19. As aforesaid, while considering the purport of the expression
in Section 14(1A) of the 2002 Act, it must be noticed that the said
E provision was inserted vide Act 1 of 2013 with effect from 15.1.2013. In
absence of express provision, such as sub-Section (1A) under the
unamended Act, the CMM/DM could take possession of secured assets
on a written application made by the secured creditor under Section
14(1); and while doing so in terms of Section 14(2) of the 2002 Act, it
was open to the CMM/DM to take or cause to be taken such steps and
F use, or cause to be used, such force, as may, in his opinion be necessary.
This would include taking assistance of the local Police to obviate any
untoward situation or law and order problem at the site while taking over
possession. While construing that provision as early as in 2008, the High
Court of Kerala in the case of Muhammed Ashraf44 gave expansive
G meaning to the rule that it was open to the CMM/DM to take assistance
of an advocate to be appointed as a commissioner for taking possession
of the secured assets and documents relating thereto for being handed
over or forwarded to the secured creditor. It was an inherent or implicit
43
AIR 1959 AP 413
H 44
supra at Footnote No.8
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1197
[A. M. KHANWILKAR, J.]

power vested in the stated authority and more particularly because A
advocates were no less than officers of the court of the CMM/DM.
This view has been consistently followed not only by the High Court of
Kerala, but also by other High Courts such as High Courts of Madras
and Delhi. Most of the CMMs/DMs across the country have been
following that dispensation. The only discordant note can be discerned
B
from the decision of the Bombay High Court which is impugned before
us. The Bombay High Court has followed the strict and literal
interpretation rule and, thus, preferred “statutory subordination” logic.
The view so taken can be sustained only if we were to hold that legislative
intent in using the expression “any officer subordinate to him” completely
rules out the other option which is being followed since commencement C
of the Act in 2002.
20. Indeed, in the case of advocate, the logic of “administrative
subordination” or “statutory subordination” cannot be extended. Inasmuch
as, for being a case of “statutory subordination”, the provisions of the
2002 Act and the Security Interest (Enforcement) Rules, 200245 made D
thereunder, must expressly provide for such mechanism. This cannot be
said about the provisions of the 2002 Act and the Rules made thereunder.
Even the logic of “administrative subordination” as considered by this
Court in A. St. Arunachalam Pillai 46 cannot be invoked. For, the
advocate by no stretch of imagination can fit into the administrative set
up of the Office of the CMM/DM. E

21. That leaves us with the third possibility of “functional
subordination”. For invoking that logic, we must necessarily conclude
that the provisions under consideration are wide enough and expansive
to encompass engaging services of Advocate Commissioner. For that
purpose, we must first advert to the Statement of Objects and Reasons F
for which the 2002 Act has been enacted. The same reads thus:
“STATEMENT OF OBJECTS AND REASONS
The financial sector has been one of the key drivers in India’s
efforts to achieve success in rapidly developing its economy. While G
the banking industry in India is progressively complying with the
international prudential norms and accounting practices there are
certain areas in which the banking and financial sector do not

45
for short, “2002 Rules”
46
supra at Footnote No.41 H
1198 SUPREME COURT REPORTS [2022] 1 S.C.R.

A have a level playing field as compared to other participants in the
financial markets in the world. There is no legal provision for
facilitating securitisation of financial assets of banks and
financial institutions. Further, unlike international banks,
the banks and financial institutions in India do not have
power to take possession of securities and sell them. Our
B
existing legal framework relating to commercial
transactions has not kept pace with the changing
commercial practices and financial sector reforms. This has
resulted in slow pace of recovery of defaulting loans and
mounting levels of non-performing assets of banks and
C financial institutions. Narasimham Committee I and II and
Andhyarujina Committee constituted by the Central Government
for the purpose of examining banking sector reforms have
considered the need for changes in the legal system in respect of
these areas. These Committees, inter alia, have suggested
enactment of a new legislation for securitisation and empowering
D
banks and financial institutions to take possession of the securities
and to sell them without the intervention of the court. Acting on
these suggestions, the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Ordinance,
2002 was promulgated on the 21st June, 2002 to regulate
E securitisation and reconstruction of financial assets and
enforcement of security interest and for matters connected
therewith or incidental thereto. The provisions of the Ordinance
would enable banks and financial institutions to realise long-
term assets, manage problem of liquidity, asset liability
mismatches and improve recovery by exercising powers
F
to take possession of securities, sell them and reduce non-
performing assets by adopting measures for recovery or
reconstruction.”
(emphasis supplied)
22. The underlying purpose of the 2002 Act is to empower the
G financial institutions in India to have similar powers as enjoyed by their
counterparts, namely, international banks in other countries. One such
feature is to empower the financial institutions to take possession of
securities and sell them. The same has been translated into provisions
falling under Chapter III of the 2002 Act. Section 13 deals with
H enforcement of security interest. Sub-Section (4) thereof envisages that
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1199
[A. M. KHANWILKAR, J.]

in the event a default is committed by the borrower in discharging his A
liability in full within the period specified in sub-Section (2), the secured
creditor may take recourse to one or more of the measures provided in
sub-Section (4). One of the measures is to take possession of the secured
assets of the borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset. That, they could do
B
through their “authorised officer” as defined in Rule 2(a)47 of the 2002
Rules.
23. After taking over possession of the secured assets, further
steps to lease, assign or sale the same could also be taken by the secured
creditor. However, Section 14 of the 2002 Act predicates that if the
secured creditor intends to take possession of the secured assets, must C
approach the CMM/DM by way of an application, in writing, and on
receipt of such request, the CMM/DM must move into action in right
earnest. After passing an order thereon, he/she (CMM/DM) must
proceed to take possession of the secured assets and documents relating
thereto for being forwarded to the secured creditor in terms of Section D
14(1) read with Section 14(2) of the 2002 Act. As noted earlier, Section
14(2) is an enabling provision and permits the CMM/DM to take such
steps and use force, as may, in his opinion, be necessary. This position
obtained even before the amendment of 2013 i.e., insertion of sub-Section
(1A) and continues to this date.
E
24. Incidentally, it needs to be noted that along with insertion of
sub-Section (1A), a proviso has also been inserted in sub-Section (1) of
Section 14 of the 2002 Act whereby the secured creditor (Bank/Financial
Institution) is now required to comply certain conditions and to disclose
that by way of an application accompanied by affidavit duly affirmed by
its authorised officer in that regard. Sub-Section (1A) is in the nature of F
an explanatory provision and it merely restates the implicit power of the
CMM/DM in taking services of any officer subordinate to him. The
insertion of sub-Section (1A) is not to invest a new power for the first
time in the CMM/DM as such.
G
47
2. Definitions.—In these rules, unless the context otherwise requires,— (a)
“authorised officer” means an officer not less than a chief manager of a public sector
bank or equivalent, as specified by the Board of Directors or Board of Trustees of the
secured creditor or any other person or authority exercising powers of superintendence,
direction and control of the business or affairs of the secured creditor, as the case may
be, to exercise the rights of a secured creditor under the Act; H
1200 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 25. Thus understood, the question is: whether the past practice
followed by most of the courts across the country in recognising the
power of the CMM/DM to appoint an advocate as a commissioner to
assist him in merely taking possession of the secured assets and documents
relating thereto and to forward the same to the secured creditor, needs
to be discontinued as being prohibited owing to insertion of sub-Section
B
(1A)? Section 14 of the 2002 Act, as amended and applicable to the
cases on hand, 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 assets is
C
required to be taken by the secured creditor or if any of the secured
assets 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 assets,
request, in writing, the Chief Metropolitan Magistrate or the District
D 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—
E (a) take possession of such asset and documents relating
thereto; and
(b) forward such asset and documents to the secured
creditor:

F 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
G 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
H the limitation period;
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1201
[A. M. KHANWILKAR, J.]

(iii) the borrower has created security interest over various A
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; B
(v) consequent upon such default in repayment of the
financial assistance the account of the borrower has been
classified as a non-performing asset;
(vi) affirming that the period of sixty days notice as required
by the provisions of sub-section (2) of section 13, demanding C
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 D
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 E
of the secured assets under the provisions of sub-section
(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:
F
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 the secured assets within a period of thirty days
from the date of application: G
Provided 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. H
1202 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 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.
(1A) The District Magistrate or the Chief Metropolitan
B 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.
C
(2) For the purpose of securing compliance with the provisions of
sub-section (1), the Chief Metropolitan Magistrate or 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
D Magistrate 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.”
(emphasis supplied)

E 26. Considering the scheme of the 2002 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, that could be done by the “authorised officer” of the Bank as
noted in Rule 8 of the 2002 Rules, which reads thus:
F
“8. Sale of immovable secured assets.—(1) Where the secured
asset is an immovable property, the authorised officer shall take
or cause to be taken possession, by delivering a possession notice
prepared as nearly as possible in Appendix IV to these rules, to
the borrower and by affixing the possession notice on the outer
G door or at such conspicuous place of the property.
(2) The possession notice as referred to in sub-rule (1) shall also
be published, as soon as possible but in any case not later than
seven days from the date of taking possession, in two leading
newspapers, one in vernacular language having sufficient
H circulation in that locality, by the authorised officer.
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1203
[A. M. KHANWILKAR, J.]

(2-A) All notices under these rules may also be served upon the A
borrower through electronic mode of service, in addition to the
modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.
(3) In the event of possession of immovable property is actually
taken by the authorised officer, such property shall be kept in his
own custody or in the custody of any person authorised or B
appointed by him, who shall take as much care of the property in
his custody as a owner of ordinary prudence would, under the
similar circumstances, take of such property.
(4) The authorised officer shall take steps for preservation and
protection of secured assets and insure them, if necessary, till C
they are sold or otherwise disposed of.
(5) Before effecting sale of the immovable property referred to in
sub-rule (1) of rule 9, the authorised officer shall obtain valuation
of the property from an approved valuer and in consultation with
the secured creditor, fix the reserve price of the property and D
may sell the whole or any part of such immovable secured asset
by any of the following methods:—
(a) by obtaining quotations from the persons dealing with
similar secured assets or otherwise interested in buying the
such assets; or E
(b) by inviting tenders from the public;
(c) by holding public auction including through e-auction
mode; or
(d) by private treaty.
F
Provided that in case of sale of immovable property in the
State of Jammu and Kashmir, the provisions of Jammu and
Kashmir Transfer of Property Act, 1977 shall apply to the person
who acquires such property in the State.
(6) the authorised officer shall serve to the borrower a notice of G
thirty days for sale of the immovable secured assets, under sub-
rule (5):
Provided that if the sale of such secured asset is being
effected by either inviting tenders from the public or by holding
public auction, the secured creditor shall cause a public notice in H
1204 SUPREME COURT REPORTS [2022] 1 S.C.R.

A the Form given in Appendix IV-A to be published in two leading
newspapers including one in vernacular language having wide
circulation in the locality.
(7) every notice of sale shall be affixed on the conspicuous part
of the immovable property and the authorised officer shall upload
B the detailed terms and conditions of the sale, on the web-site of
the secured creditor, which shall include;
(a) the description of the immovable property to be sold,
including the details of the encumbrances known to the
secured creditor;
C (b) the secured debt for recovery of which the property is
to be sold;
(c) reserve price of the immovable secured assets below
which the property may not be sold;
(d) time and place of public auction or the time after which
D sale by any other mode shall be completed;
(e) deposit of earnest money as may be stipulated by the
secured creditor;
(f) any other terms and conditions, which the authorized
officer considers it necessary for a purchaser to know the
E nature and value of the property.
(8) Sale by any methods other than public auction or public tender,
shall be on such terms as may be settled between the secured
creditor and the proposed purchaser in writing.”
27. However, for taking physical possession of the secured assets
F in terms of Section 14(1) of the 2002 Act, as aforementioned, 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.
G 28. 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 2002 Act from the secured creditor for that purpose.
As soon as such 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 2002
H
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1205
[A. M. KHANWILKAR, J.]

Act and after being satisfied in that regard, to take possession of the A
secured assets and documents relating thereto and to forward the same
to the secured creditor at the earliest opportunity. The latter is a ministerial
act. It cannot brook delay. Time is of the essence. This is the spirit of the
special enactment. However, it is common knowledge that the CMM/
DM are provided with limited resources. That inevitably makes it difficult,
B
if not impossible, for the CMM/DM to fulfil his/her obligations with utmost
dispatch to uphold the spirit of the special legislation.
29. It is common knowledge that in the respective jurisdictions,
there is only one CMM/DM. If he is expected to reach at every location
himself for taking possession, in some jurisdictions it would be
impracticable, if not impossible, for him to do so owing to large number C
of applications in the given jurisdiction being a commercial city.
Accordingly, strict construct would defeat the legislative intent and
purpose for enacting the 2002 Act. Indeed, logistical problems of the
Office of the CMM/DM cannot be the basis to overlook the statutory
provision. However, we are persuaded to take the view that an advocate D
is and must be regarded as an officer of the court and subordinate to the
CMM/DM for the purposes of Section 14(1A) of the 2002 Act.
30. Furthermore, as was the situation obtaining before insertion
of sub-Section (1A) wherein the CMM/DM could avail the services of
an advocate or any officer subordinate to him for discharging the E
ministerial work of taking possession of the secured assets and documents
relating thereto, nothing prevents him/her from continuing to follow the
same regime even after the insertion of sub-Section (1A). At the same
time, while entrusting the act of taking possession of the secured assets
consequent to the order passed under Section 14(1) of the 2002 Act to
any officer subordinate to him, the CMM/DM ought to exercise prudence F
in appointing such person who will be capable of executing the orders
passed by him. Merely because he has power to appoint “any” officer
subordinate to him, it would not permit him to appoint a peon or clerk,
who is incapable of handling the situation.
31. Be that as it may, the expression “any” in section has not been G
defined in the 2002 Act or the 2002 Rules. So also, the expressions
“officer” and “subordinate” are not defined singularly or collectively.
The meaning of expression “any” as given in Black’s Law Dictionary48
reads thus:
48
6 th Edition H
1206 SUPREME COURT REPORTS [2022] 1 S.C.R.

A “Any. Some; one out of many; an indefinite number. One
indiscriminately of whatever kind or quantity. Federal Deposit Ins.
Corporation v. Winton, C.C.A. Tenn., 131 F.2d 780, 782. One or
some (indefinitely). Slegel v. Slegel, 135 N.J.Eq. 5, 37 A.2d 57,
58. “Any” does not necessarily mean only one person, but may
have reference to more than one or to many. Doherty v. King,
B Tex.Civ.App., 183 S.W.2d 1004, 1007.
Word “any” has a diversity of meaning and may be employed
to indicate “all” or “every” as well as “some” or “one”
and its meaning in a given statute depends upon the context
and the subject matter of the statute. Donohue v. Zoning Bd.
C of Appeals of Town of Norwalk, 155 Conn. 550, 235 A.2d 643,
646, 647.
It is often synonymous with “either”, “every” or “all”. Its
generality may be restricted by the context; thus, the giving
of a right to do some act “at any time” is commonly construed as
D meaning within a reasonable time; and the words “any other”
following the enumeration of particular classes are to be read as
“other such like,” and include only others of like kind or character.”
(emphasis supplied)
32. The expression “officer” as defined in the Black’s Law
E Dictionary49 reads thus:
“officer. (14c) 1.Someone who holds an office of trust,
authority, or command. • In public affairs, the term refers esp.
to a person holding public office under a national, state, or local
government, and authorized by that government to exercise some
F specific function. In corporate law, the term refers esp. to a person
elected or appointed by the board of directors to manage the daily
operations of a corporation, such as a CEO, president, secretary,
or treasurer. Cf. DIRECTOR (2).
(emphasis supplied)
33. The expression “subordinate” as given in P. Ramanatha Aiyar’s
G Advanced Law Lexicon50 reads thus:
“Subordinate” defined. Act 24, 1859, section 1; Mad Act 3, 1909,
section 2.

49
11th Edition
H 50
Volume 4 (6th Edition)
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1207
[A. M. KHANWILKAR, J.]

Belonging to an inferior rank, grade, class or order; dependent A
upon the authority or power of another [Section 121, Indian
Evidence Act (1 of 1872)]; a person or thing that is ranked lower.
By the use of the word ‘subordinate’ without any qualifying
words, the legislature has expressed its legislative
intention of making punishable such subordinates also who B
have no connection with the functions with which the
business or transaction is concerned. An Assistant Controller
of Imports in the office of the Joint Chief Controller of Imports
and Exports is a subordinate of the joint Chief Controller through
the acceptance of the bribe has nothing to do with the appeal
pending before the Joint Chief Controller. R.G. Jacob v Republic C
of India, AIR 1963 SC 550, 553. [Indian Penal Code (45 of 1860),
section 165 (omitted by Prevention of Corruption Act, 1988)]
The construction placed on the expression ‘subordinate’ occurring
in Rule 14(2) of the Rules is in consonance with the meaning and
import of the word ‘subordinate’ occurring in Article 311(1) of the D
Constitution. There is nothing in the Constitution which debars
the Government from exercising the power of appointing authority
to dismiss a Government servant from service. These Rules cannot
be read as implying that dismissal must be by the very authority
who made the appointment or by his immediate superior. There is
a compliance with Article 311(1) if the dismissing authority is not E
lower in rank or grade than the appointing authority. [Govt. of
A.P. v N. Ramanaiah, (2009) 7 SCC 165, 172, paras 23, 24]
[Constitution of India, Article 311(1); A.P. Civil Services (CCA)
Rules, 1991, rule 14(2)]
The word ‘subordinate’ in section (2)(f) means subordinate in F
law and not in fact. Although a person looking after the business
of another person as manager, may not in fact be subordinate to
the other person and may be acting on his own initiative, yet if, as
an individual manager, he is in law subordinate to the employer,
namely, the other person, he cannot be regarded as the “managing
G
agent” of employer as defined in section 2(1)(f), and no order of
compensation can be made against him. Raghunath Sahai v
Sarup Singh, MLJ : QD (1961-1965) Vol V C1952-1953 : 1962
All LJ 104 : 1962 All WR (HC) 91 : (1962) 1 LLJ 19 : (1961) 3
Fac LR 445 : (1962-63) 23 FJR 624 : AIR 1962 All 620 [Workmen’s
Compensation Act (8 of 1923), section 2(1)(f)] H
1208 SUPREME COURT REPORTS [2022] 1 S.C.R.

A The word ‘subordinate’ also means judicial or quasi judicial
administrative subordination to the Director of consolidation. Ram
Narain v Director of Consolidation, AIR 1965 All 172, 173.
[U.P. Consolidation of Holdings Act (5 of 1954), section 48 (as
amended in 1963), section 48]
B The provisions made in Section 133-A were already there when
Section 44-A was added to the Act by the Madras Act (XX of
1948). The latter Act does not contain any separate definition
of the word “subordinate”. Naturally, no definition was
necessary in view of the provision already made in Section 133-
A. It must be assumed that the Madras Legislature was aware of
C the existence of Section 133-A when it introduced Section 44-A,
and, when it used the word “subordinate” in that section, it
must have intended that the word “subordinate” should be
understood only in the manner to determine which provision
had already been made in Section 133-A of the Act. Krishna
D Swamy Mudaliar v Palani Pillai, MLJ : QD (1956-1960) Vol.IV
C151 : (S) AIR 1957 Mad 599 (FB). [Motor Vehicles Act (4 of
1939), section 133-A]
The word ‘subordinate’ occurring in Article 311(1), has reference
to subordination in rank and not subordination in respect of powers
E and duties. Article 311(1) cannot be read as implying that the removal
must be by the very same authority who made the appointment or
by his direct superior. It is enough that the removing authority is of
the same rank of grade. Laxminarayana Sarangi v State of Orissa,
MLJ : QD (1961-1965) Vol. II C1050 : AIR 1963 Orissa 8 : ILR
(1962) Cut 492. [Constitution of India, Article 311(1)]
F
The word ‘subordinate’ in Article 311(1) Constitution of India,
means subordination in rank and not subordination of function.
Mahadev Prasad Roy v. S.N. Chatterjee, AIR 1954 Pat 285.
The word ‘subordinate’ in Article 311(1) of the Constitution of
G India means subordinate in rank and not with reference to the
functions exercised. Consequently when no officer of equal rank
to the appointing officer is available then the order of dismissal or
removal will have to be passed by an officer of superior rank. In
no circumstances can such an order be passed by an officer of
lesser rank. Any rule or statute which permits such an action
H must be held to be ultra vires as infringing the provisions of Article
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1209
[A. M. KHANWILKAR, J.]

311(1) of the Constitution. Gurmukh Singh v UOI, New Delhi, A
MLJ : QD (1961-1965) Vol.II C1050 : 65 Punj LR 964 : AIR 1963
P&H 370
For the purposes of transfer applications of suits from the Original
Side of the High Court the Judge sitting on the original side is
subordinate to the appellate side of the High Court. (AIR 1923 B
Rang. 22)”
(emphasis supplied)
34. The expression “officer subordinate” as defined in
Venkataramaiya’s Law Lexicon & Legal Maxims51 reads thus:
“”Officer subordinate.”— What is the exact purport of the C
component words of the expression “any officer subordinate” used
in the Sec.44-A of the Motor Vehicles Act, 1939. “Any” is a word
which excludes limitation or qualification. It connotes wide
generality. Its use points to a distributive construction. The
word “any” is used in the sense of “any body”, “any person”.
D
The individual who is invested with the authority and is required to
perform the duties incidental to an office is an officer. For
determining whether officers are subordinate or not the test
is not whether a review of such of their determinations as
are quasi-judicial may be had, but whether in the performance
of their various duties they are subject to the direction and E
control of a superior officer, or are independent officers
subject only to such directions as the statute gives.— B.
Veeraswamy v. State of Andhra Pradesh, (1959) Andh. W.R.308
at p.314: A.I.R. 1959 A.P. 413 (F.B.)”
(emphasis supplied)
F
35. The expressions “officer, subordinate” and “officers
subordinate to him” as given in P. Ramanatha Aiyar’s Advanced Law
Lexicon52 read thus:
“Officer, subordinate. Officer belonging to an inferior rank,
grade, class or order.
G
Officers subordinate to him. A Minister is an officer subordinate
to the Governor. Shiv Bahadur Singh v State of Uttar Pradesh,
AIR 1953 SC 394.”
51
Vol.III (2nd Edition)
52
Volume 3 (6th Edition) H
1210 SUPREME COURT REPORTS [2022] 1 S.C.R.

A 36. As regards the procedure for taking possession of the secured
assets, it can be discerned from Section 13 read with Section 14 of the
2002 Act. Section 13(4) permits the secured creditor to take recourse to
one or more of the specified measures; and to enable the secured creditor
to do so even at the stage of pre-confirmation of sale; in terms of Section
14, the CMM/DM has power in that regard albeit after passing order
B on a written application given by the secured creditor for that purpose.
Once the order is passed, the statutory obligation cast upon the CMM/
DM stands discharged to that extent. The next follow-up step is of taking
possession of the secured assets and documents relating thereto. The
same is ministerial step. It could be taken by the CMM/DM himself/
C herself or through any officer subordinate to him/her, including the
Advocate Commissioner who is considered as an officer of his/her court.
The Advocate Commissioner is not a new concept. The advocates are
appointed as Court Commissioner to perform diverse administrative and
ministerial work as per the provisions of Code of Civil Procedure and
Code of Criminal Procedure. An advocate is an officer of the court. This
D has been expounded in Virginia Law Review53, in the following words:
“The duties of the lawyer to the Court spring directly from
the relation that he sustains to the Court as an officer in
the administration of justice. The law is not a mere private
calling but is a profession which has the distinction of being
E an integral part of the State’s judicial system. As an officer
of the Court the lawyer is, therefore, bound to uphold the dignity
and integrity of the Court; to exercise at all times respect for the
Court in both words and actions; to present all matters relating to
his client’s case openly, being careful to avoid any attempt to exert
private influence upon either the judge or the jury; and to be frank
F
and candid in all dealings with the Court, “using no deceit, imposition
or evasion,” as by misreciting witnesses or misquoting precedents.
“It must always be understood,” says Mr. Christian Doerfler, in
an address before the Milwaukee County Bar Association, in
December, 1911, “that the profession of law is instituted
G among men for the purpose of aiding the administration of
justice. A proper administration of justice does not mean that a
lawyer should succeed in winning a lawsuit. It means that he
should properly bring to the attention of the Court
everything by way of fact and law that is available and
53
H Vol. 11, No.4 (Feb 1925) pp. 263-77
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1211
[A. M. KHANWILKAR, J.]

legitimate for the purpose of properly presenting his client’s A
case. His duty as far as his client is concerned is simply to
legitimately present his side of the case. His duty as far as the
public is concerned and as far as he is an officer of the Court
is to aid and assist in the administration of justice.”
(emphasis supplied) B
37. It would be useful to advert to the enunciation in Black’s Law
Dictionary54 in respect of expression “amicus curiae” which reads thus:
“amicus curiae. [Latin “friend of the court”] (17C) Someone
who is not a party to a lawsuit but who petitions the court or is
requested by the court to file a brief in the action because that C
person has a strong interest in the subject matter.— Often
shortened to amicus. — Also termed friend of the court. Pl.
amici curiae”
38. Even this Court had occasion to expound about the role of the
advocate as being an officer of the court in Lalit Mohan Das vs. The D
Advocate-General, Orissa & Anr.55. The Constitution Bench observed
thus:
“(11) ….. A member of the Bar undoubtedly owes a duty to his
client and must place before the Court all that can fairly and
reasonably be submitted on behalf of his client. He may even E
submit that a particular order is not correct and may ask for a
review of that order. At the same time, a member of the Bar
is an officer of the Court and owes a duty to the Court in
which he is appearing. He must uphold the dignity and
decorum of the Court and must not do anything to bring
the Court itself into disrepute. ….” F
(emphasis supplied)
39. It is well established that an advocate is a guardian of
constitutional morality and justice equally with the Judge. He has an
important duty as that of a Judge. He bears responsibility towards the
society and is expected to act with utmost sincerity and commitment to G
the cause of justice. He has a duty to the court first. As an officer of the
court, he owes allegiance to a higher cause and cannot indulge in
consciously misstating the facts or for that matter conceal any material
54
11th Edition
55
AIR 1957 SC 250 H
1212 SUPREME COURT REPORTS [2022] 1 S.C.R.

A fact within his knowledge. In the case of O.P. Sharma & Ors. vs. High
Court of Punjab & Haryana56, the Court noted that in all professional
functions, an advocate should be diligent and his conduct should conform
to the requirements of the law by which he plays a vital role in the
preservation of society and justice system. As an officer of the court, he is
under a higher obligation to uphold the rule of law and justice system.
B
40. Be it noted that Section 38 of the 2002 Act empowers the
Central Government to make rules for carrying out the provisions of the
2002 Act. Sub-Section (2) thereof does not specifically/expressly refer
to power to make rule in respect of matter provided for in Section 14
unlike other provisions noted therein. However, it is open to the Central
C Government to frame rules in that regard by invoking clause (g) of sub-
Section (2) of Section 38. The same reads thus:
“38. Power of Central Government to make rules.—(1) ….
(2) In particular, and without prejudice to the generality of the
foregoing power, such rules may provide for all or any of the
D following matters, namely:—
(a) to (fc) …..
(g) any other matter which is required to be, or may be, prescribed,
in respect of which provision is to be, or may be, made by rules.”
41. Pertinently, no such rule has been framed by the Central
E Government in reference to sub-Section (1A) of Section 14 of the 2002
Act much less to expressly or by necessary implication prohibiting the
CMM/DM to engage an Advocate Commissioner for taking possession
of the secured assets. In absence thereof, exclusion of engagement of
an advocate as commissioner cannot be countenanced.
42. Whereas, applying the “functional subordination” test, we are
F
persuaded to take the view that sub-Section (1A) of Section 14 of the
2002 Act is no impediment for the CMM/DM to engage services of an
advocate (an officer of the court) — only for taking possession of secured
assets and documents relating thereto and to forward the same to the
secured creditor in furtherance of the orders passed by the CMM/DM
G under Section 14(1) of the 2002 Act in that regard. It does not follow that
the advocate so appointed needs to be on the rolls in the Office of the
CMM/DM or in public service. There is intrinsic de jure functional
subordinate relationship between the CMM/DM and the advocate being
an officer of the court. The apprehension of the borrowers about improper
56
H (2011) 6 SCC 86 (para 38)
NKGSB COOPERATIVE BANK LTD. v. SUBIR CHAKRAVARTY 1213
[A. M. KHANWILKAR, J.]

execution of orders of the CMM/DM passed under Section 14(1) of the A
2002 Act by the Advocate Commissioner, is plainly misplaced. Further,
being an officer of the court and appointed by the CMM/DM, the acts
done by the Advocate Commissioner would receive immunity under Section
14(3) of the 2002 Act — as an officer authorised by the CMM/DM.
There is no reason to assume that the advocate so appointed by the CMM/
DM would misuse the task entrusted to him/her and that will not be carried B
out strictly as per law or it would be a case of abuse of power. Rather,
going by the institutional faith or trust reposed on advocates being officers
of the court, there must be a presumption that if an advocate is appointed
as commissioner for execution of the orders passed by the CMM/DM
under Section 14(1) of the 2002 Act, that responsibility and duty will be C
discharged honestly and in accordance with rules of law.
43. For the view taken by us hitherto, the exposition in Satheedevi
vs. Prasanna & Anr.57, M/s. Hiralal Rattanlal etc. etc. vs. State of
U.P. & Anr. etc. etc.58, and Dipak Babaria & Anr. vs. State of Gujarat
& Ors.59, will be of no avail to the borrowers. In that, we have not
invoked the principle of casus omissus. In our view, in law, an advocate D
is an officer of the court and, thus, subordinate to the CMM/DM. Further,
there is no indication in the 2002 Act or the Rules made thereunder to
exclude such interpretation. For the same reason, the plea regarding
applying principle of ejusdem generis or noscitur a sociis and for that
matter, expressio unius est exclusio alterius, also need not detain us. E
44. The secured creditors would rely on the dictum of this Court
in Authorised Officer, Indian Bank vs. D. Visalakshi & Anr.60 wherein
this Court upon considering the nature of activities of the Chief Judicial
Magistrate61 on the one hand and that of the CMM/DM on the other,
held that the CJM is competent to process the request of the secured
F
creditor to take possession of the secured assets under Section 14 of the
2002 Act. However, it is unnecessary to dilate on that decision considering
the view taken hitherto that the advocate must be regarded as an officer
of the court and, in law, subordinate to the concerned CMM/DM within
their jurisdiction. This interpretation in applying “functional subordination”
test, would further the legislative intent and the purpose for enacting the G
2002 Act. We hold that it would be open to the CMM/DM to appoint an
57
(2010) 5 SCC 622
58
(1973) 1 SCC 216
59
(2014) 3 SCC 502
60
(2019) 20 SCC 47
61
for short, “CJM” H
1214 SUPREME COURT REPORTS [2022] 1 S.C.R.

A advocate commissioner to assist him/her in execution of the order passed
under Section 14(1) of the 2002 Act.
45. A fortiori, the judgment and order of the Bombay High Court
impugned in the present appeals62 is declared as not a good law. Whereas,
we uphold the conclusion of the three High Courts, namely, High Courts
B of Kerala, Madras and Delhi on the question under consideration.
46. Although, we have agreed with the view taken by the Madras
High Court about the power of the CMM/DM to appoint an Advocate
Commissioner, yet S.L.P (Civil) No. 12011 of 2020 filed by the borrowers
needs to be delinked and heard for admission separately, limited to the
C first issue about compliance or non-compliance of clauses (i) to (ix) of
Section 14 of the 2002 Act. That issue has been answered by the High
Court in favour of the secured creditor and against the borrowers, in
paragraphs 10 and 11 of the impugned judgment. The correctness
whereof will have to be considered on its own merits.

D 47. In view of the above:
(i) the appeals63 filed by the secured creditors are allowed.
Resultantly, the impugned judgment and order passed by the Bombay
High Court is set aside and the subject writ petition64 stands dismissed.
(ii) The special leave petition65 filed by the borrowers against the
E impugned judgment and order of the Madras High Court is delinked for
being heard for admission on 4.3.2022, on the limited issue (first issue)
regarding compliance or non-compliance of clauses (i) to (ix) of Section
14 of the 2002 Act in the fact situation of the present case.
(iii) No order as to costs.
F Pending application(s), if any, stands disposed of.

Devika Gujral Appeals disposed of.
(Assisted by : Shevali Monga, LCRA)

G 62
see Footnote No.5
63
Civil Appeal No….. of 2022 @ SLP (Civil) No.30240 of 2019; Civil Appeal No…..
of 2022 @ SLP (Civil) No.2055 of 2020; Civil Appeal No…..of 2022 @ SLP (Civil)
No……of 2022 @ Diary No.17059 of 2020; and Civil Appeal No…..of 2022 @ SLP
(Civil) No……of 2022 @ Diary No.23733 of 2020 [Footnote No.5]
64
Writ Petition (L) No.28480 of 2019 [Footnote No.17]
65
H SLP (Civil) No.12011 of 2020 [Footnote No.7]