Supreme Court of India
THE AUTHORISED OFFICER, INDIAN BANKversusD. VISALAKSHI AND ANR.
- Citation
- 2019 INSC 1067
- Decided
- 23 September 2019
- Disposal
- Disposed off
- Bench
- A M KHANWILKAR
Holding
A Chief Judicial Magistrate is equally competent to entertain a secured creditor's application under Section 14 of the SARFAESI Act, and the Act's provisions operate in addition to, not in derogation of, the Cr.P.C.
Summary
The Supreme Court examined whether a Chief Judicial Magistrate (CJM) in non‑metropolitan areas could entertain a secured creditor's application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for taking possession of secured assets. Conflicting decisions of various High Courts were noted: some limited the authority to the Chief Metropolitan Magistrate (CMM) in metropolitan areas and the District Magistrate (DM) elsewhere, while others held that the CJM could also exercise this power. The Court held that the terms CMM and CJM are synonymous in the Code of Criminal Procedure (Cr.P.C.) and that Section 14 does not expressly exclude the CJM, making the power a non‑judicial, coercive function that can be performed by the CJM. It further clarified that the SARFAESI Act, via Sections 35 and 37, operates in addition to, not in derogation of, the Cr.P.C. and other statutes. Consequently, the Court approved the view of the Kerala, Karnataka, Allahabad and Andhra Pradesh High Courts and reversed the contrary rulings of the Bombay, Calcutta, Madras, Madhya Pradesh and Uttarakhand High Courts. The appeals were disposed, granting the parties liberty to pursue any remaining issues before the High Courts.
Issues considered
- The competency of a Chief Judicial Magistrate (CJM) to process applications under Section 14 of the SARFAESI Act in non‑metropolitan areas.
- Whether Section 14 of the SARFAESI Act overrides the provisions of the Code of Criminal Procedure regarding the jurisdiction of CMM, DM and CJM.
- The interpretation of Sections 35 and 37 of the SARFAESI Act in relation to other statutes.
Legislation cited
- Code of Criminal Procedure, 1973s. 12, s. 14, s. 20, s. 2(k), s. 3, s. 83
- Companies Act, 1956
- General Clauses Act, 1897s. 17
- Recovery of Debts Due to Banks and Financial Institutions Act, 1993
- Securities and Exchange Board of India Act, 1992
- Securities Contracts (Regulation) Act, 1956
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002s. 13, s. 14, s. 15, s. 17, s. 34, s. 35, s. 37
Subjects
SARFAESI ActSection 14Chief Judicial MagistrateChief Metropolitan Magistratejurisdictionstatutory interpretationpurposive constructionnon‑metropolitan areasecured creditorpossession of secured assetCode of Criminal Procedure
Judgment
[2019] 13 S.C.R. 177 177
THE AUTHORISED OFFICER, INDIAN BANK A
v.
D. VISALAKSHI AND ANR.
(Civil Appeal Nos. 6295 of 2015)
SEPTEMBER 23, 2019 B
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 – s.14 – Chief Judicial
Magistrate (CJM) u/s. 14 – Competency of – There were conflicting
C
views of different High Courts regarding the competency of the CJM
to process the request of the secured creditors to take possession of
the secured asset u/s. 14 of the 2002 Act – The High Courts of
Bombay, Calcutta, Madras, Madhya Pradesh and Uttarakhand
interpreted the said provision to mean that only Chief Metropolitan
Magistrate (CMM) in metropolitan areas and the District Magistrate D
(DM) in non-metropolitan areas were competent to deal with such
request – However, the High Courts of Kerala, Karnataka,
Allahabad and Andhra Pradesh took a contrary view of the same
provision, to mean that it does not debar or preclude the CJM in the
non-metropolitan areas to exercise power u/s. 14 of the 2002 Act –
On appeal, held: The powers and functions of the CMM and the E
CJM are equivalent and similar, in relation to matters specified in
the Cr.P.C – These expressions (CMM and CJM) are interchangeable
and synonymous to each other – Moreover, s.14 does not explicitly
exclude the CJM from dealing with the request of the secured creditor
made thereunder – The power to be exercised u/s.14 of the 2002 F
Act by the concerned Authority is, by its very nature, non-judicial
or State’s coercive power – Taking totality of all the aspects, there
is nothing wrong in giving expansive meaning to the expression
‘CMM’, as inclusive of CJM concerning non-metropolitan area,
who is otherwise competent to discharge administrative as well as
the Judicial functions as delineated in the Cr.P.C. on same terms as G
CMM – Therefore, the CJM is equally competent to deal with the
application moved by the secured Creditor u/s. 14 of the Act –
Accordingly, the view taken by the High Courts of Kerala,
Karnataka, Allahabad and Andhra Pradesh were upheld and
approved.
H
177
178 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 – ss. 14, 35 and 37 –
Code of Criminal Procedure, 1973 – Does Provisions of the 2002
Act override the provisions of the Cr.P.C, whereunder the functions
to be discharged by the CMM are similar to that of the CJM – Held:
B The expressions ‘CMM’ and ‘CJM’ are used interchangeably in Cr.
P.C. and are considered as synonymous to each other – s.14, even
if read literally, in no manner denotes that allocation of jurisdictions
and powers to CMM and CJM under the Code of Criminal Procedure
are modified by the 2002 Act – Thus understood, s.14 of the 2002
Act, stricto sensu, cannot be construed as being inconsistent with
C the provisions of the Code of Criminal Procedure or vice-versa in
that regard – Further, s.37 of the 2002 Act predicates that the
provisions of the 2002 Act or the Rules made thereunder shall be in
addition to the stated enactments or “any other law for the time
being in force” – Having said that the Provisions of the s.14 of the
D 2002 Act are in no way inconsistent with the provisions of the Code
of Criminal Procedure, it must then follow that the provisions of the
2002 Act are in addition to and not in derogation of the Code.
Disposing of the appeals, the Court
HELD: 1. Be it noted that Section 14 of the Securitisation
E and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 is not a provision dealing with the
jurisdiction of the Court as such. It is a remedial measure available
to the secured creditor, who intends to take assistance of the
authorised officer for taking possession of the secured asset in
F furtherance of enforcement of security furnished by the borrower.
The authorised officer essentially exercises administrative or
executive functions, to provide assistance to the secured creditor
in terms of State’s coercive power to effectuate the underlying
legislative intent of speeding the recovery of the outstanding dues
receivable by the secured creditor. At best, the exercise of power
G by the authorised officer may partake the colour of quasi-judicial
function, which can be discharged even by the Executive
Magistrate. The authorised officer is not expected to adjudicate
the contentious issues raised by the concerned parties but only
verify the compliances referred to in the first proviso of Section
H
THE AUTHORISED OFFICER, INDIAN BANK v. 179
D. VISALAKSHI AND ANR.
14; and being satisfied in that behalf, proceed to pass an order to A
facilitate taking over possession of the secured assets.
[Para 40][216-C-F]
2. It is well established that no Civil Court can interdict
the action initiated in respect of any matter, which a Debt Recovery
Tribunal or Debt Recovery Appellate Tribunal is empowered by B
or under the 2002 Act, to determine and in particular, in respect
of any action taken or to be taken in pursuance of any power
conferred by or under the 2002 Act or under the Recovery of
Debts Due to Banks and Financial Institutions Act, 1993. That
has been ordained by Section 34 of the 2002 Act. [Para 41]
[216-F-G] C
3. The construction of s.35 of the 2002 Act provision plainly
indicates that the provisions of the Act will override any other
law for the time being in force. The question is: does the
provisions of 2002 Act override the provisions of the Cr. P.C.,
whereunder the functions to be discharged by the CMM are D
similar to that of the CJM. Further, the expressions “CMM and
CJM” are used interchangeably in Cr.P.C. and are considered
as synonymous to each other. Section 14, even if read literally, in
no manner denotes that allocation of jurisdictions and powers to
CMM and CJM under the Code of Criminal Procedure are E
modified by the 2002 Act. Thus understood, Section 14 of the
2002 Act, stricto sensu, cannot be construed as being inconsistent
with the provisions of the Code of Criminal Procedure or vice-
versa in that regard. If so, the stipulation in Section 35 of the
2002 Act will have no impact on the expansive construction of
Section 14 of the 2002 Act. Whereas, there is force in the F
submission canvassed by the secured creditors (Banks), that
Section 37 of the 2002 Act answers the issue under consideration.
The bare text of Section 37 predicates that the provisions of the
2002 Act or the Rules made thereunder shall be in addition to
the stated enactments or “any other law for the time being in G
force”. Having said that the provisions of the Section 14 of the
2002 Act are in no way inconsistent with the provisions of Code
of Criminal Procedure, it must then follow that the provisions of
the 2002 Act are in addition to, and not in derogation of the Code.
[Para 43][217-B-E, G-H]
H
180 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 4. Suffice it to observe that keeping in mind the subject
and object of the 2002 Act and the legislative intent and purpose
underlying Section 14 of the 2002 Act, contextual and purposive
construction of the said provision would further the legislative
intent. In that, the power conferred on the authorised officer in
B Section 14 of the 2002 Act is circumscribed and is only in the
nature of exercise of State’s coercive power to facilitate taking
over possession of the secured assets. [Para 44][218-A-B]
5. Applying the principle underlying in Janardhan vs. State
of Maharashtra it must follow that substitution of functionaries
(CMM as CJM) qua the administrative and executive or so to
C
say non-judicial functions discharged by them in light of the
provisions of Cr.P.C., would not be inconsistent with Section 14
of the 2002 Act; nay, it would be a permissible approach in the
matter of interpretation thereof and would further the legislative
intent having regard to the subject and object of the enactment.
D That would be a meaningful, purposive and contextual
construction of Section 14 of the 2002 Act, to include CJM as
being competent to assist the secured creditor to take possession
of the secured asset. [Para 46][222-E-F]
6. To sum up, this Court holds that the CJM is equally
E competent to deal with the application moved by the secured
creditor under Section 14 of the 2002 Act. This Court accordingly,
uphold and approve the view taken by the High Courts of Kerala,
Karnataka, Allahabad and Andhra Pradesh and reverse the
decisions of the High Courts of Bombay, Calcutta, Madras,
Madhya Pradesh and Uttarakhand in that regard. Resultantly, it
F is unnecessary to dilate on the argument of prospective
overruling pressed into service by the secured creditors (Banks).
[Para 48][222-G-H; 223-A]
Muhammed Ashraf and Anr. v. Union of India (UOI)
and Others AIR (2009) Ker. 14; Radhakrishnan, V.N.
G v. State of Kerala and Anr. MANU/KE/0677/2008 (Cr.
M.C. No.4369 of 2008 dated 20.11.2008); Kaveri
Marketing v. The Saraswathi Co-op. Bank Ltd. 111
(2013) BC 582; M/s T.R. Jewellery and Another v. State
Bank of India and Another AIR (2016) A.P. 125 (FB);
Abhishek Mishra v. State of U.P. and Others. AIR (2016)
H All. 210 – approved.
THE AUTHORISED OFFICER, INDIAN BANK v. 181
D. VISALAKSHI AND ANR.
IndusInd Bank Ltd., (formerly known as Ashok Leyland A
Finance Ltd.) through its Legal Executive,
Ravindrakumar Prakash Bhargodev v. The State of
Maharashtra through Police Station 2008 (110) BOM
LR 2880 (decided on 22.04.2008); Arjun Urban Co-
operative Bank Ltd., Solapur v. Chief Judicial
B
Magistrate, Solapur and Ors. 2009 (5) Mh. L.J. 380;
Dinesh Kumar Agarwal v. State of West Bengal 2013
(1) CHN 671; K. Arockiyaraj v. The Chief Judicial
Magistrate, Srivilliputhur Virudhunagar District and
The Housing Development Finance Corporation Limited
AIR (2013) Mad. 206; T.C. Ramadoss and Ors. v. The C
Chief Manager & Authorised Officer State Bank of India
and Ors. AIR (2015) Mad. 67; Shyam Sunder Rohra v.
IndusInd Bank AIR (2017) M.P. 36; Deepak Aggarwal
v. State of Uttarakhand and Others MANU/UC/0012/
2012; Andhra Bank and Ors. v. Sri Dinesh Kumar
D
Agarwal and Ors. (2013) 4 CHN 95 – not approved.
Shankarlal Aggarwal and Ors. v. Shankarlal Poddar
and Ors. AIR (1965) SC 507; Municipal Corporation
of Delhi v. Shiv Shanker (1971) 1 SCC 442 : [1971] 3
SCR 607; Ratan Lal Adukia v. Union of India (1989) 3
SCC 537 : [1989] 3 SCR 440; Kishorebhai E
Khamanchand Goyal v. State of Gujarat and Another
(2003) 12 SCC 274 : [2003] 5 Suppl. SCR 1;
M/s. Unique Butyle Tube Industries Pvt. Ltd. v. U.P.
Financial Corporation and Ors. AIR (2003) SC 2103 :
[2002] 5 Suppl. SCR 666; Delhi Financial Corpn. and F
Another v. Rajiv Anand and Others (2004) 11 SCC 625;
A.N. Roy, Commissioner of Police and Another v. Suresh
Sham Singh (2006) 5 SCC 745 : [2006] 3 Suppl. SCR
165; Standard Chartered Bank v. V. Noble Kumar and
Others (2013) 9 SCC 620 : [2013] 10 SCR 762; Shree
Bhagwati Steel Rolling Mills v. Commissioner of Central G
Excise and Another. (2016) 3 SCC 643 : [2015] 12 SCR
332; Authorized Officer, State Bank of Travancore and
Others. v. Mathew K.C. (2018) 3 SCC 85 : [2018] 1
SCR 233; Commissioner of Customs (Import), Mumbai
v. Dilip Kumar and Company and Others (2018) 9 SCC H
182 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 1 : [2018] 7 SCR 1191; Sindhi Education Society and
Another v. Chief Secretary, Government of NCT of Delhi
and Others (2010) 8 SCC 49 : [2010] 8 SCR 81; Rani
Kusum (Smt.) v. Kanchan Devi (Smt.) and Others (2005)
6 SCC 705 : [2005] 2 Suppl. SCR 752; Vinay Tyagi v.
Irshad Ali Alias Deepak and Others (2013) 5 SCC 762
B
: [2012] 13 SCR 1005; Vishal N. Kalsaria v. Bank of
India and Others (2016) 3 SCC 762 : [ 2016] 1 SCR
419; State of A.P. v. Polamala Raju Alias Rajarao (2000)
7 SCC 75 : [2000] 2 Suppl. SCR 329; Sri Nasiruddin
v. State Transport Appellate Tribunal (1975) 2 SCC 671
C : [1976] 1 SCR 505; Bhudan Singh and Another v. Nabi
Bux and Another (1969) 2 SCC 481 : [1970] 2 SCR
10; K.P. Varghese v. Income Tax Officer, Ernakulam and
Another (1981) 4 SCC 173 : [1982] 1 SCR 629; Atma
Ram Mittal v. Ishwar Singh Punia (1988) 4 SCC 284 :
[1988] 2 Suppl. SCR 528; M/s. Girdhari Lal and Sons
D
v. Balbir Nath Mathur and Others (1986) 2 SCC 237 :
[1986] 1 SCR 383; Mardia Chemicals Ltd. and Others
v. Union of India and Others (2004) 4 SCC 311 : [2004]
3 SCR 982; Transcore v. Union of India and Another
(2008) 1 SCC 125 : [2006] 9 Suppl. SCR 785; Bank of
E India v. Pankaj Dilipbhai Hemnani and Others AIR
2007 Guj. 201; Solaris Systems Pvt. Ltd. and Another
v. Oriental Bank of Commerce and Another I.L.R. 2006
Ker 645; Bangalore Water Supply and Sewerage Board
v. A. Rajappa and Others (1978) ILLJ 349 SC; NEPC
Micon Ltd. v. Magna Leasing Ltd. 1999 CriLJ 2883;
F
Inco Europe Ltd. and Ors. v. First Choice Distribution
(a firm) and Ors. 1999 CriLJ 2883; Padmasundara
Rao and Others v. State of Tamil Nadu and Others
(2002) 255ITR 147 (SC); National Insurance Co. Ltd.
v. Laxmi Narain Dhut 2007 (2) KLT 470 (SC); Reserve
G Bank of India and Others v. Peerless General Finance
and Investment Company Ltd. and Another (1996) 1
SCC 642 : [1996] 1 SCR 58; Kehar Singh and Others
v. State (Delhi Admn.) (1988) 3 SCC 609 : [1988] 2
Suppl. SCR 24 ; Mathew Varghese v. M. Amritha Kumar
and Others (2014) 5 SCC 610 : [2014] 2 SCR 736;
H
THE AUTHORISED OFFICER, INDIAN BANK v. 183
D. VISALAKSHI AND ANR.
Trade Well and Another v. Indian Bank and Another A
(2007) Cri. LJ 2544; Ronit Nirman Pvt. Ltd. v. State
Bank of India and Others A.S.T. 1337 of 2011 (dated
18 th October, 2011); K. R. Chandrasekaran v. Union
of India 2012 (2) CWC 115; Indian Overseas Bank v.
Sree Aravindh Steels Ltd. 2009 (1) CTC 341; Official
B
Liquidator Uttar Pradesh and Uttarakhand v. Allahabad
Bank and Others (2013) 4 SCC 381 : [2013] 4 SCR
207; Indian Administrative Service (S.C.S.) Association,
U.P. and Others v. Union of India (1993) Supp. 1 SCC
730 : [1992] 2 Suppl. SCR 389; Nasiruddin and Others
v. Sita Ram Agarwal (2003) 2 SCC 577 : [2003] 1 SCR C
634; High Court of Gujarat and Another v. Gujarat
Kishan Mazdoor Panchayat and Others (2003) 4 SCC
712 : [2003] 2 SCR 799; Prakash Kumar Alias Prakash
Bhutto v. State of Gujarat (2005) 2 SCC 409 : [2005] 1
SCR 408; New India Assurance Company Ltd. v. Nusli
D
Neville Wadia and Another (2008) 3 SCC 279 : [2007]
13 SCR 598 – referred to.
Harshad Govardhan Sondagar v. International Assets
Reconstruction Company Limited and Others (2014) 6
SCC 1 : [2014] 11 SCR 605 – distinguished.
E
All India Judges’ Association and Others v. Union of
India and Others (2002) 4 SCC 247 : [2002] 2 SCR
712; Janardhan v. State of Maharashtra (1978) 2 SCC
465 : [1978] 3 SCR 586 – relied on.
Holmes v. Bradfield Rural District Council 1949 (1) All F
ER 381; Seaford Court Estates Ltd. v. Asher (1949) 2
All ER 155; M. Pentiah v.. Muddala Veeramallapa
[1961] 2 SCR 295 – referred to.
Case Law Reference
AIR (2009) Ker. 14 approved Para 3 G
2008 (110) BOM LR 2880
(decided on 22.04.2008) not approved Para 5
2009 (5) Mh. L.J. 380 not approved Para 5
H
184 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 111 (2013) BC 582 approved Para 6
2013 (1) CHN 671 not approved Para 6
AIR (2013) Mad. 206 not approved Para 6
AIR (2015) Mad. 67 not approved Para 6
B AIR (2017) M.P. 36 not approved Para 6
(2013) 4 CHN 95 not approved Para 6
AIR (2016) A.P. 125 (FB) approved Para 7
AIR (2016) All. 210 approved Para 7
C
AIR (1965) SC 507 referred to Para 11
[1971] 3 SCR 607 referred to Para 11
[1989] 3 SCR 440 referred to Para 11
[2003] 5 Suppl. SCR 1 referred to Para 11
D
[2002] 5 Suppl. SCR 666 referred to Para 11
(2004) 11 SCC 625 referred to Para 11
[2006] 3 Suppl. SCR 165 referred to Para 11
[2013] 10 SCR 762 referred to Para 11
E
[2015] 12 SCR 332 referred to Para 11
[2018] 1 SCR 233 referred to Para 11
[2018] 7 SCR 1191 referred to Para 11
F [2002] 2 SCR 712 relied on Para 14
[2010] 8 SCR 81 referred to Para 15
[2005] 2 Suppl. SCR 752 referred to Para 15
[2012] 13 SCR 1005 referred to Para 15
G [2016] 1 SCR 419 referred to Para 17
[2000] 2 Suppl. SCR 329 referred to Para 17
[1976] 1 SCR 505 referred to Para 17
[1970] 2 SCR 10 referred to Para 17
H
THE AUTHORISED OFFICER, INDIAN BANK v. 185
D. VISALAKSHI AND ANR.
[1982] 1 SCR 629 referred to Para 17 A
[1988] 2 Suppl. SCR 528 referred to Para 17
[1986] 1 SCR 383 referred to Para 17
[2004] 3 SCR 982 referred to Para 21
[2006] 9 Suppl. SCR 785 referred to Para 21 B
AIR 2007 Guj. 201 referred to Para 21
I.L.R. 2006 Ker 645 referred to Para 21
1949 (1) All ER 381 referred to Para 21
C
(1949) 2 All ER 155 referred to Para 21
(1961) 2 SCR 295 referred to Para 21
(1978) ILLJ 349 SC referred to Para 21
1999 CriLJ 2883 referred to Para 21
D
(2002) 255ITR 147 (SC) referred to Para 21
2007 (2) KLT 470 (SC) referred to Para 21
[1996] 1 SCR 58 referred to Para 21
[1988] 2 Suppl. SCR 24 referred to Para 21
E
[2014] 2 SCR 736 referred to Para 22
(2007) Cri. LJ 2544 referred to Para 25
2012 (2) CWC 115 referred to Para 28
2009 (1) CTC 341 referred to Para 29 F
[2013] 4 SCR 207 referred to Para 29
[1992] 2 Suppl. SCR 389 referred to Para 29
[2003] 1 SCR 634 referred to Para 29
[2003] 2 SCR 799 referred to Para 29 G
[2005] 1 SCR 408 referred to Para 29
[2007] 13 SCR 598 referred to Para 29
[2014] 11 SCR 605 distinguished Para 38
[1978] 3 SCR 586 relied on Para 45 H
186 SUPREME COURT REPORTS [2019] 13 S.C.R.
A CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 6295
of 2015.
From the Judgment and Order dated 27.08.2013 of the Madurai
Bench of Madras High Court in Writ Petition being W.P. (MD) No.
7155 of 2012.
B
With
Civil Appeal Nos. 7554-7555, 7557, 7558, 7560-7561 of 2019,
Criminal Appeal Nos. 900, 945, 1463-1464, 1465, 1478, 1466, 1467,
1468, 1469, 1470, 1471, 1472, 1473, 1475, 1476, 1477 of 2019.
C
Dhruv Mehta, Sudhivasudevan, Jaideep Gupta, Jayanth Muthraj,
Sr. Advs., Himanshu Munshi, Manish Garani, Avinash Kumar Bharti,
Sanjay Kapur, Ms. Megha Karnwal, Bharath Gangadharan, Kauser
Husain, Ms. Shubhra Kapur, V. Balaji, MSM Asaithambi, C. Kannan,
Rakesh K. Sharma, Sriram P., M. S. Vishnu Shankar, Anshuman Ashok,
D
G. Prakash, Jishnu M. L., Ms. Priyanka Prakash, Ms. Beena Prakash,
Garvesh Kabra, Ms. Pooja Kabra, A. C. Philip, Rajvardhan Singh, Rabin
Majumder, P. V. Dinesh, Ms. Sindhu T. P., Mukund P. Unny, Bineesh K.,
Lakshman R. S., Ashwini Kumar Singh, Hiren Dasan, Uday Gupta, Chand
Qureshi, Harish Dasan, M. K. Tripathi, Ananga Bhattacharyya, Rohit
E Rao N., Ms. Devahuti Tamuli, Shourya Garg, M/S Veritas Legis, Govind
Manoharan, Manu Krishnan, A. Karthik, B. Sulaiman, Biju P Raman,
Ms. Usha Nandini V., Roy Abraham, Ms. Reena Roy, Ms. Seema Jain,
Akhil Abraham, Himinder Lal, Kuriakose Varghese, Divyam Agarwal,
Ms. Piyusha Singh, M/s. KMNP Law, P. V. Yogeswaran, Ashish Kumar
F Upadhyay, Y. Lokesh, Babul Kumar, Dr. Lalit Bhasin, Ms. Nina Gupta,
Ms. Palak Chadha, Dhawal Jain, Mudit Sharma, V. Prabhakar, Ms. Jyoti
Parasher, N. J. Ramchandar, S. Rajappa, Rajesh Kumar-I, Anant
Gautam, Anmol Mehta, Ms. Sakshi Gaur, Ms. Khushboo Aggarwal (for
M/S. Mitter & Mitter Co.), E. Easwaran, Sajith P. Warrier, Haris Beeran,
G Mushtaq Salim, Usman Ghani Khan, Radha Shyam Jena, K. Rajeev,
Sarfaraz Khan, Firasat Ali Siddiqui, Arvind Kumar, Vijay Pal, Ram Swarup
Sharma, Janendra Lal, Ms. Yasmin Tarapore, M/S. Janendra Lal & Co.,
P. I. Jose, Ms. P. S. Chandralekha, Philip K. Varghse, Aravindh S., Sanjay
Kapur, Bharath Gangadharan, Advs. for the appearing parties.
H
THE AUTHORISED OFFICER, INDIAN BANK v. 187
D. VISALAKSHI AND ANR.
The Judgment of the Court was delivered by A
A. M. KHANWILKAR, J.
1. Delay condoned. Leave granted in Special Leave Petitions.
2. The seminal question involved in these appeals is: whether the
Chief Judicial Magistrate (for short, “CJM”) is competent to process B
the request of the secured creditor to take possession of the secured
asset under Section 14 of the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act, 2002 (for
short, “2002 Act”)? There are conflicting views of different High Courts
on this question. The High Courts of Bombay, Calcutta, Madras, Madhya C
Pradesh and Uttarakhand have interpreted the said provision to mean
that only the Chief Metropolitan Magistrate (for short, “CMM”) in
metropolitan areas and the District Magistrate (for short, “DM”) in non-
metropolitan areas are competent to deal with such request. On the
other hand, the High Courts of Kerala, Karnataka, Allahabad and Andhra D
Pradesh have taken a contrary view of the same provision, to mean that
it does not debar or preclude the CJM in the non-metropolitan areas to
exercise power under Section 14 of the 2002 Act.
3. The earliest decision is of the Division Bench of the High Court
of Kerala at Ernakulam in Muhammed Ashraf and Anr. Vs. Union of E
India (UOI) and Others1. The Court noted that Section 14 of the 2002
Act expressly refers to CMM in relation to metropolitan areas and DM
for non-metropolitan areas. It then went on to observe that as the powers
and functions of CJM in non-metropolitan areas and CMM in metropolitan
areas are one and the same (with only difference that CMM exercises F
powers in metropolitan areas and CJM in non-metropolitan areas); and
the expression CJM and CMM are interchangeably used namely, one is
synonymous for the other depending on the area under its jurisdiction, by
interpretative process, it concluded that in non-metropolitan areas, apart
from DM, the CJM is also competent to exercise powers under Section
G
14 of the 2002 Act. This decision was carried in appeal before this Court
being SLP (C) No.1671 of 2009 which, however, came to be dismissed
on 2nd February, 2009 as no ground to interfere with the impugned
judgment was made out.
1 AIR (2009) Ker. 14 H
188 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 4. Soon thereafter, another Division Bench of the High of Kerala
in Radhakrishnan, V.N. Vs. State of Kerala and Anr. 2, reiterated the
view taken in Muhammed Ashraf (supra) and declined to refer the
matter to a full bench for reconsideration.
5. However, around the same time, the High Court of Bombay
B (Aurangabad Bench) in IndusInd Bank Ltd., (formerly known as
Ashok Leyland Finance Ltd.) through its Legal Executive,
Ravindrakumar Prakash Bhargodev Vs. The State of Maharashtra
through Police Station3, had taken a diametrically opposite view. It had
held that it is not open to substitute the word, “CMM” for “CJM”. For,
C there is no indication in the 2002 Act that the legislature had intended to
empower the CJM outside the metropolitan areas, although the judicial
officer (CMM) was entrusted with the power to deal with such request
in the metropolitan areas. Again in Arjun Urban Co-operative Bank
Ltd., Solapur Vs. Chief Judicial Magistrate, Solapur and Ors. 4,
another Division Bench of the High Court of Bombay opined that Section
D 14 of the 2002 Act, in no univocal terms, constricts the exercise of powers
only by the CMM or DM, as the case may be.
6. However, in 2013, the High Court of Karnataka in Kaveri
Marketing Vs. The Saraswathi Co-op. Bank Ltd. 5took the same view
as taken by the High Court of Kerala that the CJM can also exercise
E powers under Section 14 of the 2002 Act. But the Single Judge of the
High Court of Calcutta in Dinesh Kumar Agarwal Vs. State of West
Bengal6and the full bench of Madras High Court in K. Arockiyaraj Vs.
The Chief Judicial Magistrate, Srivilliputhur Virudhunagar District
and The Housing Development Finance Corporation Limited 7 took
F a different view as taken by the High Court of Bombay and held that the
CMM or DM, as the case may be, alone can exercise powers under
Section 14 of the 2002 Act. Later, the High Court of Madras in T.C.
Ramadoss and Ors. Vs. The Chief Manager & Authorised Officer
State Bank of India and Ors. 8, the High Court of Madhya Pradesh in
G 2 MANU/KE/0677/2008 (Cr. M.C. No.4369 of 2008 dated 20.11.2008)
3 2008 (110) BOM LR 2880 (decided on 22.04.2008)
4 2009 (5) Mh. L.J. 380
5 111 (2013) BC 582
6 2013 (1) CHN 671
7 AIR (2013) Mad. 206
8 AIR (2015) Mad. 67
H
THE AUTHORISED OFFICER, INDIAN BANK v. 189
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Shyam Sunder Rohra Vs. IndusInd Bank 9, the High Court of A
Uttarakhand at Nainital in Deepak Aggarwal Vs. State of Uttarakhand
and Others10 and the Division Bench of the High Court of Calcutta in
Andhra Bank and Ors. Vs. Sri Dinesh Kumar Agarwal and Ors. 11also
held that CMM or DM, as the case may be, alone can exercise power
under Section 14 of the 2002 Act. B
7. Whereas, the High Court of Judicature at Hyderabad for the
State of Telangana and the State of Andhra Pradesh in M/s T.R. Jewellery
and Another Vs. State Bank of India and Another 12 and the High
Court of Allahabad in Abhishek Mishra Vs. State of U.P. and Others. 13,
by interpretative process opined that even the CJM was competent to C
exercise powers under Section 14 of the 2002 Act.
8. The borrowers or the persons claiming through borrowers, would
contend that literal interpretation of Section 14 of the 2002 Act must be
preferred. In which case, the secured creditor can seek assistance “only”
of CMM in metropolitan areas and DM in non-metropolitan areas, for D
the purpose of taking over possession of the secured asset or property
(instead of resorting to recovery of property by other means). As the
provision is univocal, it cannot be interpreted in any other manner. To do
so would entail in doing violence to the legislative intent. There is
presumption that Parliament had complete knowledge of the existing
laws and was conscious of the distinction or similarity between the scope E
of powers to be exercised by the CMM, DM and CJM, as the case may
be, in terms of the provision of Cr.P.C. and other laws. Despite such
awareness, the parliament consciously chose to identify clearly, the
authority which can entertain the application(s) of the secured creditor
under Section 14 of the 2002 Act. In that sense, the provision is in the F
nature of defining the authority persona designata, namely CMM and
DM for the concerned area.
9. If so, contends the learned counsel, it is not open for the Court
to take recourse of interpretative process to include another authority
such as CJM merely because the functions discharged by the CJM and G
CMM under the Cr.P.C. and other laws are similar. There is no room for
9 AIR (2017) M.P. 36
10 MANU/UC/0012/2012
11 (2013) 4 CHN 95
12 AIR (2016) A.P. 125 (FB)
13 AIR (2016) All. 210
H
190 SUPREME COURT REPORTS [2019] 13 S.C.R.
A invoking the doctrine of Casus Omissus in light of the unambiguous
provision in the form of Section 14 of the 2002 Act. Thus, the similarity
of functions discharged by the CMM and CJM under the Cr.P.C. would
be of no avail. Rather, the Court must follow the maxim “cum inverbis
nulla ambiguitas est, non debet admitti voluntatis quaestio” and prefer
B the plain language of the statute. To demonstrate the distinction between
the hierarchy of the judicial officers, reliance has been placed on a chart
which clearly distinguishes them on the basis of their functions as non-
Judicial Magistrate and Judicial Magistrate in the concerned area. The
office of DM essentially discharges executive functions and comes within
the non-Judicial Magistrate category. On the other hand, the office of
C CMM or CJM would involve both executive and judicial functions. This
distinction is crucial and it must be presumed that the Parliament was
conscious about this distinction. It is also urged that the Parliament in
various Acts, including the Sick Industrial Companies (Special Provision)
Act, 1985 – Section 29, Banking Regulation Act, 1949 – Section 45S,
D Industrial Reconstruction Bank of India, 1984 – Section 51, National
Housing Bank Act, 1987 – Section 36-H, Companies Act, 1956 – Section
10FP, Companies Act, 2013 – Section 429 and Small Industries
Development Bank of India Act, 1989 - Section 39, have enacted similar
provisions empowering CMM/DM, for seeking assistance to take
possession of the property sold or leased.
E
10. It is urged that taking any other view would require re-writing
of Section 14 of the 2002 Act and in the process doing violence to the
legislative intent. That must be eschewed. It is urged that in
contradistinction to the expression used in Section 14 “CMM” and “DM”,
Section 30 of the same Act (2002 Act) refers to the authority as
F “Metropolitan Magistrate” or a “Judicial Magistrate”, as the case may
be for taking cognizance of offences punishable under the Act.
11. To buttress the above submissions, reliance is placed on
Shankarlal Aggarwal and Ors. Vs. Shankarlal Poddar and Ors. 14,
Municipal Corporation of Delhi Vs. Shiv Shanker 15, Ratan Lal
G Adukia Vs. Union of India16, Kishorebhai Khamanchand Goyal Vs.
State of Gujarat and Another17, M/s. Unique Butyle Tube Industries
14 AIR (1965) SC 507
15 (1971) 1 SCC 442
16 (1989) 3 SCC 537
17 (2003) 12 SCC 274
H
THE AUTHORISED OFFICER, INDIAN BANK v. 191
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Pvt. Ltd. Vs. U.P. Financial Corporation and Ors. 18, Delhi Financial A
Corpn. and Another Vs. Rajiv Anand and Others 19, A.N. Roy,
Commissioner of Police and Another Vs. Suresh Sham Singh 20,
Standard Chartered Bank Vs. V. Noble Kumar and Others 21,
Harshad Govardhan Sondagar Vs. International Assets
Reconstruction Company Limited and Others 22, Shree Bhagwati
B
Steel Rolling Mills Vs. Commissioner of Central Excise and
Another.23, Authorized Officer, State Bank of Travancore and Others.
Vs. Mathew K.C. 24, Commissioner of Customs (Import), Mumbai
Vs. Dilip Kumar and Company and Others 25.
12. Per contra, the secured creditors (Banks) and auction
purchasers would commend us with the view taken by the High Courts C
of Kerala, Andhra Pradesh, Allahabad and Karnataka. According to
them, the process under Section 14 of the 2002 Act can be invoked by
the secured creditor only for taking possession of the secured assets.
The application is required to be filed by the secured creditor supported
by an affidavit stating due compliances of the stipulations provided D
therefor. The inquiry envisaged under Section 14 of the 2002 Act, to be
undertaken by the CMM or DM, is minimal and basic in nature. It is only
to satisfy itself about the factual position stated by the secured creditor
in the concerned application including the appended affidavit filed
therewith. It is not an adjudicatory process muchless to decide about the
rights and liabilities of the contesting parties. The nature of inquiry is E
essentially one of exercise of administrative or executive powers. Sub-
Section (1A) enables the DM or CMM to authorise any officer
subordinate to him to take possession.
13. The CMM and CJM are clothed withpowers as per the scheme
of Cr.P.C.. The office of CMM and CJMareinterchangeable and they F
discharge similar functions in their respective jurisdictions namely,
metropolitan and non-metropolitan areas, as the case may be. The recent
enunciation of this Court expounds that the inquiry requires judicious
18
AIR (2003) SC 2103
19
(2004) 11 SCC 625
G
20
(2006) 5 SCC 745
21
(2013) 9 SCC 620
22
(2014) 6 SCC 1
23
(2016) 3 SCC 643
24
(2018) 3 SCC 85
25
(2018) 9 SCC 1 H
192 SUPREME COURT REPORTS [2019] 13 S.C.R.
A approach. Therefore, it could be effectively exercised by CJM in a non-
metropolitan area. There is no express provision in the 2002 Act, so as
to disregard the dispensation under the Cr.P.C., concerning the exercise
of powers by the CMM and CJM respectively. On the other hand, Section
37 of the 2002 Act makes it amply clear that the application of provisions
B of Cr.P.C. is not completely ruled out. Section 37 of the 2002 Act
postulates that the application of other laws in force would continue to
apply and the provisions of 2002 Act or the Rules made thereunder shall
be in addition thereto and not in derogation thereof.
14. It is urged that the 2002 Act does not define the term “CMM”
C or “DM”. Reliance is then placed on Section 2(k) of Cr.P.C. which
defines the expression “metropolitan area” and Section 3 of Cr.P.C.
which defines the expression “CMM” or “DM”. The adjudicatory process
like sifting of evidence, trial etc. is required to be undertaken only by a
Judicial Magistrate. The Executive Magistrate can exercise only executive
powers. Indisputably, the powers of CJM in non-metropolitan area and
D CMM in metropolitan area are equal and those terms are used as
synonymous. Additionally, reliance is placed on Section 12 of Cr.P.C.
concerning the Judicial Magistrate and Additional Judicial Magistrate,
Section 14 concerning local jurisdiction, Section 16 and 17 concerning
courts of Metropolitan Magistrate, CMM and Additional Chief
E Metropolitan Magistrate respectively. Section 20 of Cr.P.C. deals with
the office of Executive Magistrates. Relying on the exposition of this
Court in All India Judges’ Association and Others Vs. Union of India
and Others26, it is urged that incontrovertibly the post of CJM and CMM
must be equated and they have to be placed in the same cadre of Civil
Judge (Senior Division). Reliance is also placed on Standard Chartered
F
Bank (supra), to contend that there is no difference in the jurisdiction or
powers exercisable by the CJM and CMM, except operating in different
territorial area. It is thus urged that expressions “CMM/DM” in Section
14 be construed as also including “CJM” in a non-metropolitan area.
15. Reliance is then placed on Sindhi Education Society and
G
Another Vs. Chief Secretary, Government of NCT of Delhi and
Others27, Rani Kusum (Smt.) Vs. Kanchan Devi (Smt.) and Others 28
26 (2002) 4 SCC 247
27 (2010) 8 SCC 49
28 (2005) 6 SCC 705
H
THE AUTHORISED OFFICER, INDIAN BANK v. 193
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
and Vinay Tyagi Vs. Irshad Ali Alias Deepak and Others 29, to buttress A
the submission that Section 14 of the 2002 Act must receive a construction
which would advance the cause of justice and legislative object sought
to be achieved. A purposive interpretation of Section 14 as including the
office of CJM in a non-metropolitan area would further the legislative
intent as it would enable the secured creditor to approach the CJM to B
take possession of the secured assets thereat.
16. It is urged that the borrowers or the persons claiming through
borrowers, cannot be heard to make any grievance, if the application
filed under Section 14 is dealt with by a judicial mind; and moreso because
the nature of inquiry to be undertaken is circumscribed. In that, it is C
merely verification of compliances by the secured creditor. In any case,
the aggrieved borrower has a statutory remedy of appeal against the
order passed by the CJM as would be available against the order passed
by CMM/DM. Similarly, all contentious issues available to the borrowers
or the persons claiming through them could be raised by them even D
before the CJM, who would be equally competent to deal with the same
as would be done by the CMM/DM, as per law. Considering the fact
that the CMM and CJM both discharge similar functions and are treated
equivalent for all purposes in the respective territorial jurisdictions, it is
not a case of application being processed by someone who is inferior E
and not competent or qualified to do so.
17. To buttress the above submissions reliance is placed on Vishal
N. Kalsaria Vs. Bank of India and Others 30, State of A.P. Vs.
Polamala Raju Alias Rajarao31, Sri Nasiruddin Vs. State Transport
Appellate Tribunal32, Bhudan Singh and Another Vs. Nabi Bux and F
Another33, K.P. Varghese Vs. Income Tax Officer, Ernakulam and
Another34, Atma Ram Mittal Vs. Ishwar Singh Punia 35 and M/s.
Girdhari Lal and Sons Vs. Balbir Nath Mathur and Others 36.
29 (2013) 5 SCC 762
30 (2016) 3 SCC 762
G
31 (2000) 7 SCC 75
32 (1975) 2 SCC 671
33 (1969) 2 SCC 481
34 (1981) 4 SCC 173
35 (1988) 4 SCC 284
36 (1986 2 SCC 237
H
194 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 18. It is also urged that in certain States, the functions of the DM
are discharged by the Deputy Commissioner of the State such as in the
State of Jharkhand. Therefore, the interpretation put forth by the High
Courts that application under Section 14 of the 2002 Act can also be
moved before the CJM in a non-metropolitan area, would sub-serve the
B interests of all concerned and also effectuate the legislative intent of
expeditious resolution of matters under the 2002 Act without intervention
of the Court. Lastly, it is urged that if this Court upholds the view taken
by the concerned High Courts that CJM is not competent to deal with
the action under Section 14 of the 2002 Act, this Court may invoke the
doctrine of prospective overruling and save all the orders passed by the
C CJM’s to this end.
19. We have heard Mr. Dhruv Mehta, Mr. Sudhivasudevan, Mr.
Jaideep Gupta and Mr. Jayanth Muthraj, Senior Advocates, Mr. Kuriakose
Varghese, Mr. A. Karthik, Mr. E. Easwaran, Mr. Sajith P. Warrier Mr.
Govind Manoharan, Ms. Nina Gupta, Mr. Roy Abraham, Mr. Philip K.
D Varghse, Mr. Rakesh K. Sharma, Mr. Radha Shyam Jena, Mr. Himanshu
Munshi, Mr. Ram Swarup Sharma, and Mr. Mudit Sharma, Advocates.
20. We deem it apposite to reproduce Section 14 of the 2002 Act.
The same reads thus:
“14. Chief Metropolitan Magistrate or District
E
Magistrate to assist secured creditor in taking
possession of secured asset.-(1) Where the possession
of any secured asset is required to be taken by the secured
creditor or if any of the secured asset is required to be sold
or transferred by the secured creditor under the provisions
F of this Act, the secured creditor may, for the purpose of
taking possession or control of any such secured asset,
request, in writing, the Chief Metropolitan Magistrate or
the District Magistrate within whose jurisdiction any such
secured asset or other documents relating thereto may be
situated or found, to take possession thereof, and the Chief
G
Metropolitan Magistrate or, as the case may be, the District
Magistrate shall, on such request being made to him—
(a) take possession of such asset and documents relating
thereto; and
H (b) forward such assets and documents to the secured creditor:
THE AUTHORISED OFFICER, INDIAN BANK v. 195
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
1
[Provided that any application by the secured creditor shall be A
accompanied by an affidavit duly affirmed by the authorised officer of
the secured creditor, declaring that—
(i) the aggregate amount of financial assistance granted and the
total claim of the Bank as on the date of filing the application;
(ii) the borrower has created security interest over various B
properties and that the Bank or Financial Institution is holding a
valid and subsisting security interest over such properties and the
claim of the Bank or Financial Institution is within the limitation
period;
(iii) the borrower has created security interest over various C
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;
D
(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 payment
E
of the defaulted financial assistance has been served on the
borrower;
(vii) the objection or representation in reply to the notice received
from the borrower has been considered by the secured creditor
and reasons for non-acceptance of such objection or representation
F
had been communicated to the borrower;
(viii) the borrower has not made any repayment of the financial
assistance in spite of the above notice and the Authorised Officer
is, therefore, entitled to take possession of the secured assets
under the provisions of sub-section (4) of section 13 read with
section 14 of the principal Act; G
(ix) that the provisions of this Act and the rules made thereunder
had been complied with:
Provided further that on receipt of the affidavit from the Authorised
Officer, the District Magistrate or the Chief Metropolitan Magistrate, as H
196 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 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
2
[within a period of thirty days from the date of application]:
3
[Provided 4[also] that if no order is passed by the Chief
Metropolitan Magistrate or District Magistrate within the said period of
B thirty days for reasons beyond his control, he may, after recording reasons
in writing for the same, pass the order within such further period but not
exceeding in aggregate sixty days.]
Provided also that the requirement of filing affidavit stated in the
first proviso shall not apply to proceeding pending before any District
C 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
5
Magistrate may authorise any officer subordinate to him,—
(i) to take possession of such assets and documents relating
D thereto; and
(ii) to forward such assets and documents to the secured
creditor.]
(2) For the purpose of securing compliance with the provisions of
sub-section (1), the Chief Metropolitan Magistrate of the District
E
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
Magistrate6 [any officer authorised by the Chief Metropolitan Magistrate
or District Magistrate] done in pursuance of this section shall be called
F
in question in any court or before any authority.
1. Ins. By Act 1 of 2013, sec. 6(a) (w.e.f. 15-1-2013, vide
S.O. 171 (E), dated 15-1-2013).
2. Subs. By Act 44 of 2016, sec. 12(i) (w.e.f. 1-9-2016, vide
G S.O. 2831(E), dated 1st September, 2016).
3. Ins. By Act 44 of 2016, sec. 12(ii) (w.e.f. 1-9-2016, vide
S.O. 2831(E), dated 1st September, 2016).
4. Corrected by Corrigendum Notification, published in the
Gazette of India, Extra., Pt.II, Sec. 1, No.56, dated 8 th
H September, 2016.
THE AUTHORISED OFFICER, INDIAN BANK v. 197
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
5. Ins. By Act 1 of 2013, sec. 6(b) (w.e.f. 15-1-2013, vide A
S.O. 171(E), dated 15-1-2013).
6. Ins. By Act 1 of 2013, sec. 6(c) (w.e.f. 15-1-2013, vide
S.O. 171(E), dated 15-1-2013).”
The unamended provision as applicable at the relevant time when
the decision was rendered by the High Court of Kerala in Muhammed B
Ashraf (supra), was somewhat different. Sub-section (1A) was not in
vogue.That has come by way of an amendment in 2013. The provision
was amended in 2013 and further amended in 2016, as is reproduced in
the extracted portion hitherto.
21. The Division Bench of the High Court of Kerala in Muhammed C
Ashraf (supra), after adverting to the unamended Section 14 of the
2002 Act had opined that the said provision is a procedural measure
whereby the CMM or DM, as the case may be, is obligated to render
assistance to the secured creditor to take possession of the secured
assets or documents. The said authority is empowered to take such D
steps and use such force, as may be necessary for taking possession of
the secured assets and documents relating thereto. Strikingly, the act of
the authority is protected and its action cannot be questioned in any
Court or before any authority in terms of Section 34 of the 2002 Act. It
also noted that a trial or adjudication of dispute by the authority is not
contemplated under this Section. However, the limited inquiry to be E
undertaken is whether secured property is identifiable and whether 60
days’ notice was issued under Section 13(2) enabling the secured creditor
to resort to Section 13(4) and take possession of the secured assets.
The Court unerringly opined that Section 14 of the 2002 Act is only for
the purpose of executing the power and assisting the secured creditor to F
take possession of the secured assets. The borrower or person affected
by such action has a right of judicial review before the Writ Court as
ordained by this Court in Mardia Chemicals Ltd. and Others v. Union
of India and Others37. The Division Bench then noted that the 2002
Act is a self-contained code, including the powers of the Tribunal to
declare any of the measures taken by the secured creditor invalid and G
consequential restoration of possession to persons from whom the
possession was taken. The Court reiterated that in absence of any
adjudicatory power vested in the authority referred to in Section 14 of
the 2002 Act, it had no powers to exercise the powers vested in the
37 (2004) 4 SCC 311 (paragraph Nos.80 and 81) H
198 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Tribunal. Whereas, it can only facilitate the secured creditor in taking
possession of the secured assets after verification of the basic facts
regarding the entitlement of the secured creditor to get such possession.
The Court then adverted to the exposition of this Court in Transcore
Vs. Union of India and Another38, which had analysed the provisions
of the 2002 Act. It then adverted to the Gujarat High Court decision in
B
Bank of India Vs. Pankaj Dilipbhai Hemnani and Others 39 and
agreed with the dictum therein that the authority referred to under Section
14 of the 2002 Act can only verify whether 60 days’ notice as prescribed
under Section 13(2) was issued or not and whether secured asset is
identifiable. It then noted that after such inquiry the authority before
C taking action is obliged to satisfy itself in that regard. At the same time,
it cannot enter upon adjudication or trial of a dispute while exercising
power under Section 14 of the 2002 Act. The Parliament has invested
power under Section 14 of the 2002 Act, in a senior functionary so as to
avoid an arbitrary and high-handed action at the instance of secured
creditor. The Court then adverted to the decision in Solaris Systems
D
Pvt. Ltd. and Another Vs. Oriental Bank of Commerce and Another 40,
of a Single Judge of the same High Court, which for the first time had
held that CJM for non-metropolitan areas was competent to deal with
the application under Section 14 of the 2002 Act. The Court then noticed
the definition of metropolitan area in Section 2(k) of Cr.P.C., Section 3
E regarding construction of references which equates the CJM to that of
the CMM whilst exercising jurisdiction in the concerned areas.
Considering the legislative scheme in that regard, the Court concluded
that the powers of the CJM in non-metropolitan areas and CMM in
metropolitan areas, are one and the same with only difference being that
the CMM exercises powers in metropolitan areas. The Court then
F
analysed the decision of this Court in Unique Butyle Tube Industries
Pvt. Ltd. (supra) and distinguished the same by holding that in the present
case, the question was whether the term CMM in metropolitan areas
will include CJM in non-metropolitan areas. The Court went on to observe
that the legislation must be understood in a reasonable manner. For that,
G it took support from the dictum in Holmes Vs. Bradfield Rural District
Council41and also in Sri Nasiruddin (supra) wherein this Court adopted
38 (2008) 1 SCC 125 (paragraph No.74)
39 AIR 2007 Guj. 201
40 I.L.R. 2006 Ker 645
41 1949 (1) All ER 381 (Page 384)
H
THE AUTHORISED OFFICER, INDIAN BANK v. 199
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
“just reasonable and sensible” interpretation of the provision. The Court A
then noted the dictum of Denning, L.J. in Seaford Court Estates Ltd.
Vs. Asher42which was quoted with approval by this Court in M. Pentiah
Vs. Muddala Veeramallapa 43 , Bangalore Water Supply and
Sewerage Board Vs. A. Rajappa and Others 44 and NEPC Micon
Ltd. Vs. Magna Leasing Ltd. 45etc.. The Court also adverted to the
B
enunciation of House of Lords in Inco Europe Ltd. and Ors. Vs. First
Choice Distribution (a firm) and Ors. 46 wherein it is observed that
Court can add words in its interpretative process in suitable cases to
give effect to the purpose of legislature. The Court then noted that in
Padmasundara Rao and Others Vs. State of Tamil Nadu and
Others47, a Constitution Bench of this Court had held that “a casus C
omissus cannot be supplied by the Court except in the case of clear
necessity and when reason for it is found in the four corners of the
statute itself…”. Lastly, the Court adverted to the decision in National
Insurance Co. Ltd. Vs. Laxmi Narain Dhut 48 which had considered
the dictum in Reserve Bank of India and Others Vs. Peerless General
D
Finance and Investment Company Ltd. and Another 49; and Kehar
Singh and Others Vs. State (Delhi Admn.) 50 to hold that if the statutory
provision is open to more than one interpretation, then the Court must
adopt the one which represents the true intent of the legislature. However,
the function of the Court is only to expound and not to legislate. At the
same time, the process of construction combines both literal and purposive E
approaches. Finally, the Court went on to observe that in the present
case there was no casus omissus. In that, CJM in metropolitan areas
are designated as CMM and vice versa mutatis-mutandis by implication
and reference by the areas of jurisdiction both stand on the same footing
to denote the authority depending upon where he is situated. On that
F
basis, it concluded that in non-metropolitan areas, apart from the DM,
the powers can be exercised by the CJM also to render assistance to
the secured creditor in taking possession of the secured assets; and in
42 (1949) 2 All ER 155, P. 164(CA)
43 (1961) 2 SCR 295
44 (1978) ILLJ 349 SC
G
45 1999 CriLJ 2883
46 2000 (2) All ER 109
47 (2002) 255ITR 147 (SC)
48 2007 (2) KLT 470 (SC) (paragraph Nos.34 and 35)
49 (1996) 1 SCC 642
50 (1988) 3 SCC 609
H
200 SUPREME COURT REPORTS [2019] 13 S.C.R.
A doing so, the Magistrate can appoint a Commissioner for identification
of the secured assets and taking possession thereof and if there is any
resistance, ask for police assistance and take any effective steps to
have possession of the secured assets taken over.
22. The full Bench of the High Court of Judicature at Hyderabad
B for the State of Telangana and the State of Andhra Pradesh in M/s T.R.
Jewellery (supra) also analysed the provisions of the 2002 Act and noted
that the object of the Act is to achieve speedier recovery of the dues
declared as Non-Performing Assets (NPAs), without the intervention of
the Tribunals or the Courts and for quick resolution of disputes arising
out of the action taken for recovery of such dues apart from making
C better availability of capital liquidity and resources to help in the growth
of economy and welfare of the people. As regards to Section 14 of the
Act, it noted that the purpose underlying is to assist the secured creditor
for taking possession or control of the secured assets by requesting the
authority referred to therein. The Court then went on to analyse the
D scheme of the Cr.P.C. and noted that the executive powers are to be
exercised by the Executive Magistrate, whereas sifting of evidence shall
be exercisable only by a Judicial Magistrate. Further, from the scheme
of the Cr.P.C., it is clear that the CJM, CMM and the DM are separately
referred to in the Code and High Court has been empowered to appoint
CJM and CMM while the State Government appoints one of the
E Executive Magistrate as DM in every District. The Court then adverted
to the decisions of different High Courts which have had the occasion to
deal with the question under consideration in reference to Section 14 of
the 2002 Act, as to whether the CJM in non-metropolitan areas, is equally
competent to entertain or deal with the application moved by the secured
F creditor. It then adverted to Sections 35 and 37 of the 2002 Act and
noted the decision of this Court in Mathew Varghese Vs. M. Amritha
Kumar and Others51to conclude that the application of the provisions
of the Cr.P.C., would be in addition to and not in derogation of the
provisions of 2002 Act and the provisions of the Code cannot be excluded
from consideration while dealing with the 2002 Act. It disagreed with
G the Full Bench of the Madras High Court that Section 35 of the 2002
Act would override the provisions of Cr.P.C.. After analysing the other
decisions, it went on to hold that in terms of Section 14 of the 2002 Act,
the CJM can authorise any officer subordinate to him to take possession
H
51 (2014) 5 SCC 610
THE AUTHORISED OFFICER, INDIAN BANK v. 201
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
of such assets after examining the correctness of the assertion made in A
the affidavit. Thus, it is only a procedural step without any adjudication
of any dispute whatsoever. The action is therefore, only an administrative
order made for taking possession of the secured assets, if all other
conditions are fulfilled. Having already noted that the powers exercised
by the CMM and DM in terms of Section 14 of the 2002 Act are
B
synonymous to each other and that they are not adjudicatory in nature, it
answered the question under consideration in the affirmative. The Court
then noted that there was no casus omissus nor it was reading something
into the provision which the legislature never intended nor trying to interpret
the provision so as to defeat the intention of the legislature. Whereas,
the Court was only resorting to a purposive interpretation to effectuate C
the intention of the legislature for which the enactment was made. Thus,
it concluded that exercise of power by the CJM in non-metropolitan
areas, who exercises the same powers as that of CMM in metropolitan
areas, would not in any way abrogate or contradict the dispensation
predicated in Section 14 of the 2002 Act. Moreso, it would not cause
D
even a tittle of prejudice to any of the parties. Whereas, it would ensure
a just process under the aegis of a judicial mind (CJM) in rendering
assistance to the secured creditors to recover possession of their assets
thereby achieving the object for which the 2002 Act has been enacted.
23. Similarly, the Karnataka High Court at Bangalore in Kaveri
Marketing (supra), opined that the expression CMM be construed as E
inclusive of CJM for non-metropolitan areas, as the powers of CJM and
CMM are identical. Thus, the High Court of Karnataka also opined that
the CJM in non-metropolitan areas would be competent to entertain and
deal with application under Section 14 of the 2002 Act.
24. Similar view has been taken by the Division Bench of the F
High Court of Allahabad in Abhishek Mishra (supra). It is held that
Section 14 of the 2002 Act is a procedural measure enabling the secured
creditor to take possession of the secured assets by making application
to the authority specified therein. Even the Allahabad High Court adverted
to the scheme of the provisions in the Cr.P.C. bestowing executive and G
judicial power in the concerned authority. Besides, it made reference to
the same decisions as noticed by the High Court of Kerala in Muhammed
Ashraf (supra) and concluded as under:
“34. Applying the above well settled principles of interpretation of
Statute, the answer to the issue is nomenclature ‘Chief H
202 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Metropolitan Magistrate’ used by legislature is Section 14 of the
Act includes Chief Judicial Magistrate functioning in non-
metropolitan area and shall have jurisdiction to entertain an
application made under Section 14 of the SARFAESI Act, 2002.
In our considered opinion, there is no casus omissus. The
interpretation given by us does not amount to reading anything in
B
the provision, which the legislature never intended to, nor the
interpretation given by us, in any way, defeats the intention of the
Legislature. It is a purposive interpretation to advance the true
intention of the legislature for enacting the Act, viz. speedy
recovery of bad debts of the banks and financial institutions declared
C as NPAs. On the contrary, adopting the principles of literal
construction in interpretation of the word ‘Chief Metropolitan
Magistrate’ would not only defeat the object and purpose of
legislation but would lead to manifestly anomalous result which
could not have been intended by the legislature. As per Lord Reid
in the case of Luke Vs. IRC, 1966 AC 557, where to apply words
D
would literally defeat the obvious intention of the legislation and
produce a wholly unreasonable result, we must do some violence
to the words and so achieve that obvious intention and produce a
rational construction.
35. The view taken by us finds support from the Full Bench decision
E of Andhra Pradesh High Court in the case of T.R. Jewellery &
Ors. Vs. State Bank of India & Ors. (supra) and a Division Bench
of High Court of Kerala in the case of Muhammed Ashraf, C.
Arifa Vs. Union of India, we are unable to agree with contrary
view taken by Bombay High Court in the case of Indusind Bank
F Ltd. Vs. State of Maharashtra and High Court of Madras in K.
Arockiyaraj Vs. The Chief Judicial Magistrate, Srivilliputhur &
Anr., MANU/TN/1796/2013 : 2013 (4) L.W. 485. The Full Bench
of Madras High Court in the case of K. Arockiyaraj (supra) was
of the view that phraseology used in Section 14 of the Act, 2002
should be given its true meaning without taking any assistance
G from Code of Criminal Procedure in view of Section 35 of Act,
2002, which provides that provisions of the Act will override all
other laws which includes Code of Criminal Procedure. It was
also held that when SARFAESI Act is a complete code, there is
no need to take resort to Section 3 of Cr.P.C.
H
THE AUTHORISED OFFICER, INDIAN BANK v. 203
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
36. With respect to the learned Judges, we have been unable to A
persuade ourselves to agree to the view taken. The Full Bench
failed to take notice of Section 37 of the Act, 2002 which provides
that application of other laws is not barred. The said section reads
as under.
“37. Application of other laws not barred.-The provisions of B
this Act or the rules made thereunder shall be in addition to,
and not in derogation of, the Companies Act, 1956 (1 of 1956),
the Securities Contracts (Regulation) Act, 1956 (42 of 1956),
the Securities and Exchange Board of India Act 1992 (15 of
1992), the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993) or any other law for the C
time being in force.”
37. There can be no manner of doubt that words “any other law
for time being in force” used in Section 37 would also include Code of
Criminal Procedure within its ambit and the application of provisions of
Cr.P.C. cannot be excluded from consideration while dealing with the D
provisions of Act, 2002. Hence, the view taken by Full Bench of Madras
High Court that in view of Section 35 of Act, 2002, the provisions of said
Act would override the provisions of Cr.P.C. and the words ‘Chief
Metropolitan Magistrate’ used in Section 14 should be given literal
interpretation without taking any aid or assistance of Cr.P.C. does not, to E
us, appear to be correct.
38. Fort the aforesaid facts and discussions, we are of the
considered view that nomenclature ‘Chief Metropolitan Magistrate’
used in Section 14 of Act, 2002 is inclusive of ‘Chief Judicial
Magistrate’ functioning in a non-metropolitan area and shall have F
jurisdiction to entertain an application made by a secured creditor
under Section 14 of Act, 2002.”
25. We shall now turn to the other decisions taking the view that
only DM in a non-metropolitan area is competent to deal with the
application filed by the secured creditor under Section 14 of the 2002 G
Act. The Division Bench of the High Court of Bombay in IndusInd
Bank Ltd. (supra) after adverting to the statement of objects and reasons
of the 2002 Act, opined that the secured creditor is not required to obtain
a decree from a competent Court/DRT before being entitled to take
steps for the purpose of enforcement of recovery in relation to the secured
H
204 SUPREME COURT REPORTS [2019] 13 S.C.R.
A assets. While dealing with the specific issue as to whether, the CJM is
competent to deal with the application filed by the secured creditor under
Section 14 of the 2002 Act, the Court went by the plain text of Section
14 of the 2002 Act to hold that the CJM was not competent to do so; and
that only the CMM in metropolitan areas and DM in non-metropolitan
areas is competent to assist the secured creditor in taking possession of
B
the secured assets, in terms of the 2002 Act. It noted that the reference
to expression CJM is conspicuously absent in Section 14 of the 2002 Act
and, therefore, the legislature did not intend to entrust the stated function
to CJM in a non-metropolitan area, although the same is entrusted to
CMM, a judicial officer, in metropolitan area. Yet again, in Arjun Urban
C Co-operative Bank Ltd. (supra), another Division Bench of the High
Court of Bombay reiterated the exposition in IndusInd Bank Ltd. (supra)
after adverting to the dictum in Trade Well and Another Vs. Indian
Bank and Another 52, Transcore (supra) and Unique Butyle Tube
Industries Pvt. Ltd. (supra). It noticed the Kerala High Court decision
in Muhammed Ashraf (supra) and agreed therewith only to the extent
D
that there was no casus omissus in Section 14 of the 2002 Act - as it
refers to two distinct authorities. However, it went on to disagree with
the view taken therein that CJM is also competent to deal with such
applications; because, in its view, when literal construction of Section 14
of the 2002 Act was explicit then there was no need to supplement any
E word(s) thereto. For, the interpretation of Section 14 of the 2002, as it
stands, does not lead to any absurd results. It did notice that the authority
referred to in Section 14 of the 2002 Act has no power to adjudicate
upon any rights of the parties but can only render assistance to the secured
creditor to recover possession. It opined that nothing prevented the
legislature from adding the words CJM in Section 14 of the 2002 Act. It
F
then went on to advert to the dictum of Lord Denning in Seaford Court
Estates Ltd. (supra) and House of Lords in Inco Europe Ltd. (supra)
wherein, it was held that a Court can add words in its interpretative
process in suitable cases, if omission or inadvertence of drafting is noticed
to give effect to the purpose of the legislation, but not otherwise. It held
G that there was no inadvertence in drafting of Section 14 of the 2002 Act,
when it referred to two distinct authorities, namely, CMM and DM. The
High Court of Bombay thus, adopted the route of literal interpretation of
the provision as it stands.
H
52 (2007) Cri. LJ 2544
THE AUTHORISED OFFICER, INDIAN BANK v. 205
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
26. The next decision is of the High Court of Uttarakhand at Nainital A
in Deepak Aggarwal (supra), which adopted the view taken by the
High Court of Bombay in IndusInd Bank Ltd. (supra) and concluded
that only CMM in metropolitan areas and DM in non-metropolitan areas
would be competent to deal with the application moved by the secured
creditor under Section 14 of the 2002 Act for taking possession of the
B
secured assets.
27. The Single Judge of High Court of Calcutta in Dinesh Kumar
Agarwal (supra), while dealing with the question under consideration
relied on his previous decision in Ronit Nirman Pvt. Ltd. Vs. State
Bank of India and Others53, wherein he had agreed with the principle
expounded by the High Court of Bombay in IndusInd Bank Ltd. (supra). C
The Court opined that once an authority has been named for the purpose
of rendering assistance, the Court cannot confer jurisdiction on any other
authority, who has not been named in the statutory provision for exercising
such powers. That would amount to usurping legislative function. It,
thus, disagreed with the view taken by the High Court of Kerala, which D
had held to the contrary that the CJM is equally competent to entertain
application filed by the secured creditor under Section 14 of the 2002
Act. This decision of the Single Judge was carried in appeal before the
Division Bench in Andhra Bank (supra), which in turn upheld the view
taken by the Single Judge that only CMM in metropolitan areas and DM
in non-metropolitan areas were competent to deal with the application E
filed by the secured creditor under Section 14 of the 2002 Act. The
Division Bench disagreed with the view taken by the High Court of
Kerala on the ground that the language of Section 14 of the 2002 Act
was unambiguous and did not warrant construction to empower the CJM
in non-metropolitan areas. F
28. The Full Bench of the High Court of Madras in K. Arockiyaraj
(supra) adverted to the exposition in Mardia Chemicals Ltd. (supra),
K. R. Chandrasekaran Vs. Union of India 54, which had considered
the objects of enactment in question. It noted that the 2002 Act is a self-
contained code and after adverting to the relevant provisions observed G
in paragraph Nos.15 and 16 of its judgment as under:
“15. On perusal of Sections 13(2), 13(4), 14(1) & 14(2), it is evident
that the Secured Creditor can proceed against the Secured Assets,
53 A.S.T. 1337 of 2011 (dated 18 th October, 2011)
54 2012 (2) CWC 115 H
206 SUPREME COURT REPORTS [2019] 13 S.C.R.
A if the borrower makes any default in repayment of secured debts
or any installment thereof. Any person aggrieved against the order
passed under Section 13(4) of the Act is given a right of Appeal
under Section 17 of the Act. The adjudication of the rights of
parties will come only if the action of the Secured Creditor is
challenged in an Appeal filed under Section 17. A further appeal
B
to the Appellate Tribunal (DRAT) is also provided under Section
18 of the Act.
16. Section 14, inserted through the Amendment Act No. 1 of
2013, contemplates delegation of power to assist, by the District
Magistrate/Chief Metropolitan Magistrate, to any officer
C subordinate to him, amplifies the intention of the Parliament to
treat the power of assistance as an executive function and not as
a judicial function. If the power is a judicial function, adjudicatory
in nature, there may not be such delegation to any subordinate
officer. It is well settled in law that the adjudicating authority cannot
D delegate his power as it will run contrary to the Principle ‘Delegata
potestas non potest deligari’.”
It then adverted to the dictionary clause of the 2002 Act and noted
that sub-section 2(2) saved in the Indian Contract Act 1872; Transfer of
Property Act, 1882; the Companies Act, 1956; the Securities and Exchange
E Board of India Act, 1992; and which are not inconsistent with the definition
given in the 2002 Act. It also noted that the authority referred to in
Section 14 is not expected to undertake adjudication of rights of the
concerned parties. It then noted Section 34 and 35 of the 2002 Act and
went on to observe as follows:
F “20. From the perusal of the above Section 35, it is evident that
the provisions of SARFAESI Act, 2002, shall have the effect
notwithstanding anything inconsistent therewith contained in any
other law for the time being in force. Thus, the SARFAESI Act
will override other laws including the provisions of Crl. P.C. Section
36 of the Act deals with limitation. The limitation question can be
G raised after passing an order under Section 13(4), if the claim in
respect of the financial asset is not made within the period of
limitation prescribed under the Limitation Act. Thus, the
applicability of Limitation Act, 1963, is permitted under Section
36, however, as per Section 35, the application of Crl. P.C. is not
H permitted.”
THE AUTHORISED OFFICER, INDIAN BANK v. 207
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
In this backdrop the Full Bench examined the decision of the A
Division Bench of the same High Court in Indian Overseas Bank Vs.
Sree Aravindh Steels Ltd.55,which had relied on Sections 3, 5 and 8 of
the Cr.P.C. concerning the jurisdictions of CJM, CMM and Additional
Chief Metropolitan Magistrate. It then noticed Section 20 of the Cr.P.C.
relating to the Executive Magistrates and their local jurisdictions as
B
specified therein. After analysing these provisions, it went on to observe
thus:
“25. On a perusal of the above referred provisions of the Code of
Criminal Procedure, Chief Metropolitan Magistrate, Chief Judicial
Magistrate and District Magistrate are separately dealt with and
only for the purpose of convenience, the High Court is empowered C
to appoint the Chief Judicial Magistrate to perform the functions
akin to Chief Metropolitan Magistrate in Metropolitan areas, which
includes judicial functions and administrative functions. When Crl.
P.C. itself is dealing with District Magistrates and their jurisdiction,
the phraseology used in Section 14(1) should be given its true D
meaning without any assistance from the Criminal Procedure Code,
particularly in the light of Section 35 read with Section 2(2) of the
SARFAESI Act, 2002.
26. Section 14 of the Act is very clear and unambiguous. It states
that the Chief Metropolitan Magistrate or the District Magistrate E
can assist the Secured Creditors in taking possession of the
Secured Assets. It means, in Metropolitan areas, the Secured
Creditors can approach either the Chief Metropolitan Magistrate
or the District Magistrate and in Non-Metropolitan areas, where
there is no Chief Metropolitan Magistrate, the Secured Creditors
can seek the assistance of the District Magistrate alone, as no F
power is vested on the Chief Judicial Magistrate to give assistance
to the Secured Creditors in Non-Metropolitan areas. There is no
omission in the said section as contended by the learned Senior
Counsel for the respondents. If there is no authority mentioned to
assist the Secured Creditor in Non-Metropolitan areas, the Secured G
Creditors may be justified in contending that in case of omission,
the meaning given in Crl. P.C. can be imported for the effective
implementation of the SARFAESI Act. The said situation being
not there, the learned Senior Counsel for the Respondent is not
55 2009 (1) CTC 341 H
208 SUPREME COURT REPORTS [2019] 13 S.C.R.
A justified in contending that wherever there is no Chief Metropolitan
Magistrate, the Chief Judicial Magistrate will automatically get
the powers to assist the Secured Creditors. If such an interpretation
is accepted, the phraseology used in Section 14 that Chief
Metropolitan Magistrate or District Magistrate will have no
meaning.”
B
29. To buttress the above view, the Full Bench agreed with the
decisions of the High Court of Bombay in IndusInd Bank Ltd. (supra),
Arjun Urban Co-operative Bank Ltd. (supra). It also relied on the
decision of the High Court of Calcutta, which took similar view as
commended to the Full Bench. The Full Bench then noted the decisions
C of this Court in Official Liquidator Uttar Pradesh and Uttarakhand
Vs. Allahabad Bank and Others 56, Sri Nasiruddin (supra), Bhudan
Singh and Another (supra), K.P. Varghese (supra), Atma Ram Mittal
(supra), Indian Administrative Service (S.C.S.) Association, U.P. and
Others Vs. Union of India 57, Nasiruddin and Others Vs. Sita Ram
D Agarwal58, High Court of Gujarat and Another Vs. Gujarat Kishan
Mazdoor Panchayat and Others 59, Prakash Kumar Alias Prakash
Bhutto Vs. State of Gujarat 60and New India Assurance Company
Ltd. Vs. Nusli Neville Wadia and Another 61and also the dictum in
Seaford Court Estates Ltd. (supra), to conclude as follows:
E “35. From the perusal of the above judgments as well as the
statutory provisions contained in Section 14 of the SARFAESI
Act, 2002, in its independent existence, we are of the firm view
that Section 14 does not contemplate the Secured Creditors to
approach the Chief Judicial Magistrates for assistance to secure
their assets and the Secured Creditors can approach the Chief
F Metropolitan Magistrate in Metropolitan areas and in Non-
Metropolitan areas, the Secured Creditors has to approach the
District Magistrate, and not the Chief Judicial Magistrate.”
The Full Bench decision has been followed by the Division Bench
of the same High Court in T.C. Ramadoss (supra). In this decision, the
G
56 (2013) 4 SCC 381
57 (1993) Supp. 1 SCC 730
58 (2003) 2 SCC 577
59 (2003) 4 SCC 712
60 (2005) 2 SCC 409
61 (2008) 3 SCC 279
H
THE AUTHORISED OFFICER, INDIAN BANK v. 209
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Court, additionally, considered the submission regarding prospective A
overruling and went on to observe as follows:
“15. The doctrine of prospective overruling was recognised for
the first time in the American jurisprudence in Great Northern
Railway Co. Vs Sunburst Oil & Refining Co. 287 U.S. 358 (1932)
The said doctrine was for the first time applied in Golak Nath Vs B
State of Punjab MANU/SC/0029/1967 : AIR 1967 SC 1643 in
India and thereafter referred and relied on in various decisions,
and as such, the doctrine of prospective overruling is now an integral
part of the Indian Legal System. It is well settled that the overruling
decision is a new decision, because it has overruled the settled
precedent and it has decided an issue of first impression, where C
at least one earlier case has not foreshadowed the overruling
decision. In the case on hand, the Full Bench in K. Arokiyaraj
MANU/TN/1796/2013 : 2013 (6) MLJ 641: 2013 (4) LW 485
(supra) has not unsettled the settled position of law. The settled
position of law has been interpreted on plain reading of the D
provisions. Thus, the contention of the learned counsel for the
respondent that the decision of the Full Bench would be applicable
prospectively does not merit acceptance and it is accordingly
rejected. The language of the relevant provision is plain and clear
admitting no confusion, which has been interpreted by the Full
Bench in its decision. E
16. It is a well settled principle of law that any order passed by an
authority without jurisdiction is void and non est and as such, any
consequential action taken on the basis of the said order falls to
the ground. (See Chief Justice of A.P. Vs L.V.A. Dixitulu MANU/
SC/0416/1978 : (1979) 2 SCC 34, A. Jithendernath Vs Jubilee F
Hills Cooperative House Building Society MANU/SC/8138/2006
: (2006) 10 SCC 96, Ashok Leyland Ltd. Vs State of Tamil Nadu
MANU/SC/0020/2004 : (2004) 3 SCC 1, Union of India Vs
Pramod Gupta MANU/SC/0549/2005 : (2005) 12 SCC 1, National
Institute of Technology Vs Niraj Kumar Singh MANU/SC/0687/ G
2007 : (2007) 2 SCC 481, Hasham Abbas Sayyad Vs Usman
Abbas Sayyad MANU/SC/5541/2006 : (2007) 2 SCC 355, Deepak
Agro Foods Vs State of Rajasthan MANU/SC/7812/2008 : (2008)
7 SCC 748, Chandrabhai K. Bhoir Vs Krishna Arjun Bhoir
MANU/SC/8230/2008 : (2009) 2 SCC 315 and Union of India Vs
H
210 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Association of Unified Telecom Service Providers of India
MANU/SC/1252/2011 : (2011) 10 SCC 543
17. Resultantly, we set aside the impugned order dated 23.07.2012
passed by the CJM, reserving liberty to the respondent bank to
take recourse to the appropriate jurisdictional forum under the
B provisions of law.”
30. The Single Judge of the Madras High Court in Shyam Sunder
Rohra (supra), adopted the view taken by the Full Bench of High Court
of Madras in K. Arockiyaraj (supra) and concluded that Section 14 of
the 2002 Act does not permit secured creditors to approach the CJM for
C assistance to secure their assets but they must approach only CMM in
Metropolitan area and DM in non-metropolitan area.
31. Going by the literal interpretation of Section 14 of the 2002
Act, it does appear that CMM or the DM within whose jurisdiction the
secured asset is situated in, is bestowed with the authority to entertain
D the request of the secured creditor for possession of such secured asset.
It also appears that remedy is provided before the designated authority,
persona designata. That is the view taken by the High Courts of
Bombay, Calcutta, Madras, Madhya Pradesh and Uttarakhand. At the
same time, the High Courts of Kerala, Karnataka, Allahabad and Andhra
Pradesh have taken a liberal approach and were persuaded to invoke
E purposive interpretation and give expansive meaning to the expression
“CMM”, to include CJM for the non-metropolitan areas. That has been
done in the context of the nature of inquiry required to be conducted by
the concerned authority.
32. Indisputably, the expressions “CMM” and “DM” have not
F been defined in the 2002 Act. That definition can thus, be traced to the
provisions of Cr.P.C.. It is also well established by now that the 2002
Act, is a self-contained code. Concededly, the nature of inquiry to be
conducted by the designated authorities under the 2002 Act, is spelt out
in Section 14 of the 2002 Act. The same is circumscribed and is limited
G to matters specified in Clauses (i) to (ix) of the first proviso in sub-
section (1) of Section 14 of the 2002 Act, inserted in 2013. Prior to the
insertion of that proviso, it was always understood that in such inquiry, it
is not open to adjudicate upon contentious pleas regarding the rights of
the parties in any manner. The stated authorities could only do verification
of the genuineness of the plea and upon being satisfied that it is genuine,
H
THE AUTHORISED OFFICER, INDIAN BANK v. 211
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
the adjudication thereof could then be left to the Court of competent A
jurisdiction.
33. Suffice to observe that an inquiry conducted by the stated
authority under Section 14 of the 2002 Act, is a sui generis inquiry. In
that, majorly it is an administrative or executive function regarding
verification of the affidavit and the relied upon documents filed by the B
parties. That inquiry is required to be concluded within the stipulated
time frame. While undertaking such an inquiry, as is observed by this
Court, the authority must display judicious approach, in considering the
relevant factual position asserted by the parties. That pre-supposes that
it is a quasi-judicial inquiry though, a non-judicial process. The inquiry
does not result in adjudication of inter se rights of the parties in respect C
of the subject property or of the fact that the transaction is a fraudulent
one or otherwise.
34. Notably, the powers and functions of the CMM and the CJM
are equivalent and similar, in relation to matters specified in the Cr.P.C..
These expressions (CMM and CJM) are interchangeable and D
synonymous to each other. Moreover, Section 14 of the 2002 Act does
not explicitly exclude the CJM from dealing with the request of the secured
creditor made thereunder. The power to be exercised under Section 14
of the 2002 Act by the concerned authority is, by its very nature, non-
judicial or State’s coercive power. Furthermore, the borrower or the E
persons claiming through borrower or for that matter likely to be affected
by the proposed action being in possession of the subject property, have
statutory remedy under Section 17 of the 2002 Act and/or judicial review
under Article 226 of the Constitution of India. In that sense, no prejudice
is likely to be caused to the borrower/lessee; nor is it possible to suggest
that they are rendered remediless in law. At the same time, the secured F
creditor who invokes the process under Section 14 of the 2002 Act does
not get any advantage muchless added advantage. Taking totality of all
these aspects, there is nothing wrong in giving expansive meaning to the
expression “CMM”, as inclusive of CJM concerning non-metropolitan
area, who is otherwise competent to discharge administrative as well as G
judicial functions as delineated in the Cr.P.C. on the same terms as CMM.
That interpretation would make the provision more meaningful. Such
interpretation does not militate against the legislative intent nor it would
be a case of allowing an unworthy person or authority to undertake
inquiry which is limited to matters specified in Section 14 of the 2002
Act. H
212 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 35. Such a view has been taken by the High Court of Kerala as
early as in 2006 and on the same lines, are the decisions of the other
High Courts (Karnataka, Allahabad and Andhra Pradesh). Be it noted,
the challenge to the decision of the High Court of Kerala was
unsuccessful before this Court in SLP (C) No.1671 of 2009, which came
to be dismissed on 2nd February, 2009.
B
36. Now we may turn to the decision in Standard Chartered
Bank (supra). The Court was called upon to consider the argument that
secured creditor before invoking the remedy under Section 14 of the
2002 Act, must necessarily make an attempt to take possession of the
secured assets and can take recourse thereto only if he fails in that
C effort and encounters resistance to such an attempt. While considering
that argument, the Court analysed Sections 13, 14 and 15 of the 2002
Act and opined that Section 14 of the 2002 Act enables the secured
creditor who desires to seek the assistance of “State’s coercive power”
for obtaining possession of the secured assets to make a request in writing
D to the authority designated therein, within whose jurisdiction the secured
asset is located. It also noted that the authority after receiving such
request under Section 14 of the 2002 Act, was not expected to do any
further scrutiny of the matter except to verify from the secured creditor
whether notice under Section 13(2) of the Act has already been given or
not and whether the secured asset is located within his jurisdiction. There
E is no adjudication of any kind at this stage. The Court also noticed in
paragraph 23 of the reported judgment that after amendment of Section
14 of the 2002 Act, by inserting first proviso therein, the designated
authority has to satisfy itself only with regard to the matters mentioned
in clauses (i) to (ix). In paragraph 25 of this decision, the Court noted as
F follows:
“25. The satisfaction of the Magistrate contemplated under the
second proviso to Section 14(1) necessarily requires the Magistrate
to examine the factual correctness of the assertions made in such
an affidavit but not the legal niceties of the transaction. It is only
G after recording of his satisfaction the Magistrate can pass
appropriate orders regarding taking of possession of the secured
asset.”
The Court then went on to observe in paragraph Nos.33 and 36
of the reported judgment as follows:
H
THE AUTHORISED OFFICER, INDIAN BANK v. 213
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
“33. We are of the opinion that the High Court clearly erred in A
recording such a conclusion. The language of Rule 8 does not
demand such a construction. On the other hand, a Magistrate
whose functioning is structured by the Code of Criminal Procedure
is required to act in accordance with the provisions of the said
Code unless expressly ordained otherwise by any other law. It is
B
not a case that Cr.P.C. never prescribed for the procedure to be
followed by the Magistrate in a case where the Magistrate is
required to take possession of property. For example, under Section
83 of the Code, a criminal court is authorised to attach the movable
or immovable property or both belonging to a proclaimed offender.
Sub-sections (3) and (4) to Section 83 specifically provide that C
once an order of attachment under sub-section (1) is made by the
criminal court, the property which is the subject-matter of such
attachment shall either be seized or taken possession of as the
case may be depending upon the fact whether the property is
movable or immovable. Both the sub-sections contemplate the
D
appointment of Receiver. It is declared under sub-section (6) that
the powers, duties and liabilities of a Receiver appointed under
Section 83 are the same as those of a Receiver appointed under
the Code of Civil Procedure, 1908.
XXX XXX XXX
E
36. Thus, there will be three methods for the secured creditor to
take possession of the secured assets:
36.1. (i) The first method would be where the secured creditor
gives the requisite notice under Rule 8(1) and where he does not
meet with any resistance. In that case, the authorised officer will F
proceed to take steps as stipulated under Rule 8(2) onwards to
take possession and thereafter for sale of the secured assets to
realise the amounts that are claimed by the secured creditor.
36.2. (ii) The second situation will arise where the secured creditor
meets with resistance from the borrower after the notice under G
Rule 8(1) is given. In that case he will take recourse to the
mechanism provided under Section 14 of the Act viz. making
application to the Magistrate. The Magistrate will scrutinise the
application as provided in Section 14, and then if satisfied, appoint
an officer subordinate to him as provided under Section 14(1-A)
H
214 SUPREME COURT REPORTS [2019] 13 S.C.R.
A to take possession of the assets and documents. For that purpose
the Magistrate may authorise the officer concerned to use such
force as may be necessary. After the possession is taken the
assets and documents will be forwarded to the secured creditor.
36.3. (iii) The third situation will be one where the secured creditor
B approaches the Magistrate concerned directly under Section 14
of the Act. The Magistrate will thereafter scrutinise the application
as provided in Section 14, and then if satisfied, authorise a
subordinate officer to take possession of the assets and documents
and forward them to the secured creditor as under clause 36.2.(ii)
above.
C
36.4. In any of the three situations above, after the possession is
handed over to the secured creditor, the subsequent specified
provisions of Rule 8 concerning the preservation, valuation and
sale of the secured assets, and other subsequent rules from the
Security Interest (Enforcement) Rules, 2002, shall apply.”
D
37. Concededly, the Court was not called upon to consider the
specific issue that arises for our consideration, in this batch of cases. To
wit, whether the CJM is competent to deal with the request made by the
secured creditor under Section 14 of the 2002 Act in the same manner
as can be done by the CMM in metropolitan areas and DM in non-
E metropolitan areas. Nevertheless, what is significant to note is that this
decision clearly delineates the nature of inquiry required to be conducted
by the authority referred to in the Section 14 of the 2002 Act. By its very
nature the inquiry, is an administrative or executive measure and to borrow
the phrase used in the said judgment, “State’s coercive power” - for
F obtaining possession of the secured assets. It is possible to suggest that
as the authority is required to make inquiry and pass an order, it would
partake the colour of being a quasi-judicial inquiry. In any case, the stated
authority is not empowered to adjudicate on any issue(s) that may be
raised regarding the rights of the concerned parties.
G 38. Reliance was also placed on the exposition in Harshad
Govardhan Sondagar(supra), wherein the appellants claimed to be
tenants of a mortgaged premises (secured asset); and as borrowers
(landlord/owner thereof) had committed default, the secured creditor
had invoked provisions of 2002 Act to enforce the secured asset. In that
backdrop, application was moved before the CMM, Mumbai under
H
THE AUTHORISED OFFICER, INDIAN BANK v. 215
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Section 14 of the 2002 Act to take possession of the premises and A
handover the possession thereof to the secured creditor. While dealing
with the challenge to this action of the secured creditor, the Court noticing
Section 14 of the 2002 Act concluded that for the purpose of transferring
the secured asset and for realising the secured asset, the secured creditor
will require the assistance of the CMM or the DM for taking of possession
B
of a secured asset from the lessee, where the lease stands determined
by any of the modes mentioned in Section 111 of the Transfer of Property
Act. The Court then went on to examine the question about the remedies
available to the lessee where he is threatened to be dispossessed by any
action taken by the secured creditor under Section 13 of the 2002 Act.
In that context, the Court noted that Section 34 of the 2002 Act makes it C
amply clear that no injunction can be granted by any Court or other
authority in respect of any action taken or to be take in pursuance of any
power conferred by or under the 2002 Act. Even this decision, if we
may say so, deals with entirely different issue then the question under
consideration in the present cases.
D
39. It is no more res integra that the CJM is equated with the
CMM for the purposes referred to in the Cr.P.C.; and those expressions
are used interchangeably being synonymous of each other. This Court in
All India Judges’ Association (supra), in paragraph 31, opined as under:
“31. As we have already mentioned, the Shetty Commission had E
recommended that the Chief Metropolitan Magistrates should be
in the cadre of District Judges. In our opinion, this is neither proper
nor practical. The appeals from orders passed by the Chief
Metropolitan Magistrates under the provisions of the Code of
Criminal Procedure are required to be heard by the Additional
F
Sessions Judge or the Sessions Judge. If both the Additional
Sessions Judge and the Chief Metropolitan Magistrate belong to
the same cadre, it will be paradoxical that any appeal from one
officer in the cadre should go to another officer in the same cadre.
If they belong to the same cadre, as recommended by the Shetty
Commission, then it would be possible that the junior officer would G
be acting as an Additional Sessions Judge while a senior may be
holding the post of the Chief Metropolitan Magistrate. It cannot
be that against the orders passed by the senior officer it is the
junior officer who hears the appeal. There is no reason given by
the Shetty Commission as to why the post of the Chief Metropolitan H
216 SUPREME COURT REPORTS [2019] 13 S.C.R.
A Magistrate be manned by the District Judge, especially when as
far as the posts of the Chief Judicial Magistrates are concerned,
whose duties are on a par with those of the Chief Metropolitan
Magistrate, the Shetty Commission has recommended, and in our
opinion rightly, that they should be filled from amongst Civil Judges
B (Senior Division). Considering the nature and duties of the Chief
Judicial Magistrates and the Chief Metropolitan Magistrates, the
only difference being their location, the posts of Chief Judicial
Magistrate and Chief Metropolitan Magistrate have to be equated
and they have to be placed in the cadre of Civil Judge (Senior
Division). We order, accordingly.”
C
40. Be it noted that Section 14 of the 2002 Act is not a provision
dealing with the jurisdiction of the Court as such. It is a remedial measure
available to the secured creditor, who intends to take assistance of the
authorised officer for taking possession of the secured asset in furtherance
of enforcement of security furnished by the borrower. The authorised
D officer essentially exercises administrative or executive functions, to
provide assistance to the secured creditor in terms of State’s coercive
power to effectuate the underlying legislative intent of speeding the
recovery of the outstanding dues receivable by the secured creditor. At
best, the exercise of power by the authorised officer may partake the
E colour of quasi-judicial function, which can be discharged even by the
Executive Magistrate. The authorised officer is not expected to adjudicate
the contentious issues raised by the concerned parties but only verify
the compliances referred to in the first proviso of Section 14; and being
satisfied in that behalf, proceed to pass an order to facilitate taking over
possession of the secured assets.
F
41. It is well established that no Civil Court can interdict the action
initiated in respect of any matter, which a Debt Recovery Tribunal or
Debt Recovery Appellate Tribunal is empowered by or under the 2002
Act, to determine and in particular, in respect of any action taken or to
be taken in pursuance of any power conferred by or under the 2002 Act
G
or under the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993. That has been ordained by Section 34 of the 2002 Act.
42. The borrowers or the persons claiming through borrowers
had placed emphasis on Section 35 of the 2002 Act. The same reads
thus:
H
THE AUTHORISED OFFICER, INDIAN BANK v. 217
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
35. The provisions of this Act to override other laws.- The A
provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or any instrument having effect by virtue of any
such law.”
43. The construction of this provision plainly indicates that the B
provisions of the Act will override any other law for the time being in
force. The question is: does the provisions of 2002 Act override the
provisions of the Cr. P.C., whereunder the functions to be discharged by
the CMM are similar to that of the CJM. Further, the expressions “CMM
and CJM” are used interchangeably in Cr.P.C. and are considered as C
synonymous to each other. Section 14, even if read literally, in no manner
denotes that allocation of jurisdictions and powers to CMM and CJM
under the Code of Criminal Procedure are modified by the 2002 Act.
Thus understood, Section 14 of the 2002 Act, stricto sensu, cannot be
construed as being inconsistent with the provisions of the Code of Criminal D
Procedure or vice-versa in that regard. If so, the stipulation in Section
35 of the 2002 Act will have no impact on the expansive construction of
Section 14 of the 2002 Act. Whereas, there is force in the submission
canvassed by the secured creditors (Banks), that Section 37 of the 2002
Act answers the issue under consideration. The same reads thus: E
“37 - Application of other laws not barred.- The provisions of
this Act or the rules made thereunder shall be in addition to, and
not in derogation of, the Companies Act, 1956 (1 of 1956), the
Securities Contracts (Regulation) Act, 1956 (42 of 1956), the
Securities and Exchange Board of India Act 1992 (15 of 1992), F
the Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) or any other law for the time being in
force.”
The bare text of this provision predicates that the provisions of
the 2002 Act or the Rules made thereunder shall be in addition to the G
stated enactments or “any other law for the time being in force”. Having
said that the provisions of the Section 14 of the 2002 Act are in no way
inconsistent with the provisions of Code of Criminal Procedure, it must
then follow that the provisions of the 2002 Act are in addition to, and not
in derogation of the Code. H
218 SUPREME COURT REPORTS [2019] 13 S.C.R.
A 44. Suffice it to observe that keeping in mind the subject and
object of the 2002 Act and the legislative intent and purpose underlying
Section 14 of the 2002 Act, contextual and purposive construction of the
said provision would further the legislative intent. In that, the power
conferred on the authorised officer in Section 14 of the 2002 Act is
circumscribed and is only in the nature of exercise of State’s coercive
B
power to facilitate taking over possession of the secured assets.
45. It would be apposite to now advert to Section 17 of the General
Clauses Act, 1897. The same reads thus:
“17 - Substitution of functionaries.-(1) In any [Central Act] or
C Regulation made after the commencement of this Act, it shall be
sufficient, for the purpose of indicating the application of a law to
every person or number of persons for the time being executing
the functions of an office, to mention the official title of the officer
at present executing the functions, or that of the officer by whom
the functions are commonly executed.
D
(2) This section applies also to all [Central Acts] made after the
third day of January, 1868, and to all Regulations made on or after
the fourteenth day of January, 1887.”
This Court in Janardhan Vs. State of Maharashtra 62 was called
E upon to examine somewhat similar challenge. In that case, the challenge
was to the search warrant issued by the Assistant Commissioner of
Police in respect of offences punishable under Section 6 of the Bombay
Prevention of Gambling Act, 1887. The Court repelled that challenge by
relying on Section 17 of the Bombay General Clauses Act, 1886, which
is pari materia to Section 17 of the General Clauses Act, 1897. The
F Court opined that though Section 6 of the Gambling Act specified the
office of Commissioner of Police as the authorised officer, however,
considering the sweep of Section 2(6) of the Bombay Police Act, 1951,
which mentions that the term “Commissioner of Police” would include
an Assistant Commissioner, went on to hold that the search warrant
G issued by the Assistant Commissioner was valid. The Court, while dealing
with the said challenge observed as follows:
“8. Analysing this definition it would appear that any official
title of the officer mentioned in any Act made after the
62 (1978) 2 SCC 465
H
THE AUTHORISED OFFICER, INDIAN BANK v. 219
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
General Clauses Act would deem by fiction of law to include A
any such official title referred to in any Act passed after the
General Clauses Act.
9. Furthermore, not only the official title but even the
functions executed by the said officer would also be deemed
to have been exercised by the officer designated in the B
subsequent Act. The combined effect, therefore, of Section
6 of the Gambling Act and Section 17(1) of the General
Clauses Act would be that the term “Commissioner of
Police” would include all officers who are executing or
performing the functions of the Commissioner of Police as
defined or authorised under the latter Act, namely, the C
Police Act. It would thus be seen that sub-section (6) of Section
2 of the Police Act clearly mentions that the term “Commissioner
of Police” would include an Assistant Commissioner. Thus sub-
section (6) runs thus:
“2. In this Act, unless there is anything repugnant in the subject or D
context:
* * *
(6) … A Commissioner of Police including an Additional
Commissioner of Police, a Deputy Inspector General of Police E
(including the Director of Police Wireless and Deputy Inspector
General of Police appointed under Section 8-A), a Deputy
Commissioner of Police and Assistant Commissioner of Police...”
Section 11 of the Police Act runs thus:
11. (1) The State Government may appoint for any area for which F
a Commissioner of Police has been appointed under Section 7
such number of Assistant Commissioners of Police as it may think
expedient.
(2) An Assistant Commissioner appointed under sub-section (1)
shall exercise such powers and perform such duties and functions G
as can be exercised or performed under the provisions of this Act
or any other law for the time being in force or as are assigned to
him by the Commissioner under the general or special orders of
the State Government.”
H
220 SUPREME COURT REPORTS [2019] 13 S.C.R.
A A perusal of Section 11 of the Police Act leads to the inescapable
conclusion that an Assistant Commissioner appointed under sub-section
(1) is to perform such duties and functions as can be exercised under
the Act or any other law for the time being in force, which undoubtedly
includes the Gambling Act which was a law in force at the time when
the Police Act was passed. Apart from this the Assistant Commissioner
B
could also perform those functions which could be assigned to him by
the Commissioner under the general or special orders of the State
Government. The provision for assignment of powers by the Government
to the Commissioner are contained in Section 10(2) of the Police Act
which runs thus:
C “10. (2) Every such Deputy Commissioner shall, under the orders
of the Commissioner, exercise and perform any of the powers,
functions and duties of the Commissioner to be exercised or
performed by him under the provisions of this Act or any other
law for the time being in force in accordance with the general or
D special orders of the State Government made in this behalf.”
10. The High Court has found as a fact that there was a notification
by the State Government dated March 10, 1967 by which all the
Assistant Commissioners of Police including that of Nagpur were
conferred powers and functions of the Commissioner of Police.
E Thus, in the instant case at the time when the offence was
committed two things had happened: (1) that in Nagpur where
the offence had taken place there was a Commissioner of Police,
and (2) that the Commissioner of Police had been conferred the
power by the Government notification to assign his functions,
powers and duties to the Assistant Commissioner. In these
F circumstances, therefore, we do not find any difficulty in
accepting the contention of the respondent that having
regard to the combined reading of the provisions of Section
17 of the General Clauses Act and the Police Act the term
“Commissioner of Police” appearing in Section 6 of the
G Gambling Act would include even an Assistant
Commissioner who was legally and validly assigned the
powers, functions and duties of the Commissioner of Police
by the State Government under Section 10(2) of the Police
Act. As the General Clauses Act was a statute which was passed
before the Gambling Act came into force, Section 17 of the General
H
THE AUTHORISED OFFICER, INDIAN BANK v. 221
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Clauses Act could be called into aid to interpret the scope and A
ambit of the term “Commissioner of Police” as used in Section 6
of the Gambling Act.
11. Learned counsel for the appellant, however, submitted that
the power of assignment of functions by the Government given to
the Commissioner of police or the Assistant Commissioner could B
be exercised only in respect of matters covered by the Police Act
and not beyond that. I am however unable to agree with this
contention which completely overlooks the avowed object of
Section 17 of the General Clauses Act which has been passed to
resolve such anomalies and it is not possible to construe the
provisions of the Police Act in complete isolation by ignoring the C
provisions of the General Clauses Act which undoubtedly apply
to the facts and circumstances of the present case. For these
reasons, therefore, the second contention put forward by the
appellant also fails.”
(emphasis supplied) D
In the concurring judgment, additionally, the Court observed thus:
“19. It remains for consideration whether the Assistant
Commissioner of Police could be said to be executing the functions
of the Commissioner of Police under Section 6(1) of the Act at E
the time when he issued the special warrant. Reference in this
connection may be made to Section 11(2) of the Bombay Police
Act, 1951, which provides as follows:
“11. (2) An Assistant Commissioner appointed under sub-section
(1) shall exercise such powers and perform such duties and F
functions as can be exercised or performed under the provisions
of this Act or any other law for the time being in force or as
are assigned to him by the Commissioner under the general or
special orders of the State Government.”
It was therefore permissible for the Assistant Commissioner of
G
Police not only to exercise such powers and perform such duties
and functions as he could, in terms, exercise or perform under the
provisions of the Bombay Police Act, or any other law for the
time being in force, but also the duties and functions assigned to
him by the Commissioner of Police under the general or special
H
222 SUPREME COURT REPORTS [2019] 13 S.C.R.
A orders of the State Government. The High Court has taken note
in this connection of the State Government Order APO-3463-C-
2896-(III)-(E)-V, dated March 10, 1967, which empowered all
Commissioners of Police to assign to the Assistant Commissioners
of Police working under them any of their powers, duties and
functions not only under the provisions of the Bombay Police Act,
B
1951, but also under any other law for the time being in force.
The existence of such an order has not in fact been challenged
before us. The Assistant Commissioner of Police was therefore
the functionary who could, by virtue of Section 17 of the Bombay
General Clauses Act, discharge the functions of the Commissioner
C of Police under Section 6(1) of the Act in the matter of issuing a
special warrant like the one issued in the present case. It is also
not disputed that the Commissioner of Police issued Order 2036,
dated September 19, 1967, authorising all Assistant Commissioners
of Police working under him to issue search warrants under Section
6 of the Act to any Police Officer working under them not below
D
the rank of a Sub-Inspector of Police. As has been shown, this
was legally permissible, and it is futile to contend that the High
Court erred in rejecting the appellant’s contention to the contrary.
46. Applying the principle underlying this decision, it must follow
that substitution of functionaries (CMM as CJM) qua the administrative
E and executive or so to say non-judicial functions discharged by them in
light of the provisions of Cr.P.C., would not be inconsistent with Section
14 of the 2002 Act; nay, it would be a permissible approach in the matter
of interpretation thereof and would further the legislative intent having
regard to the subject and object of the enactment. That would be a
F meaningful, purposive and contextual construction of Section 14 of the
2002 Act, to include CJM as being competent to assist the secured creditor
to take possession of the secured asset.
47. Having said this, we need not to dilate on other decisions
pressed into service regarding the approach to be adopted in the matter
G of interpretation of statutes.
48. To sum up, we hold that the CJM is equally competent to deal
with the application moved by the secured creditor under Section 14 of
the 2002 Act. We accordingly, uphold and approve the view taken by the
High Courts of Kerala, Karnataka, Allahabad and Andhra Pradesh and
H reverse the decisions of the High Courts of Bombay, Calcutta, Madras,
THE AUTHORISED OFFICER, INDIAN BANK v. 223
D. VISALAKSHI AND ANR. [A. M. KHANWILKAR, J.]
Madhya Pradesh and Uttarakhand in that regard. Resultantly, it is A
unnecessary to dilate on the argument of prospective overruling pressed
into service by the secured creditors (Banks).
49. While parting we must note that Civil Appeal arising from
SLP (C) No.7121 of 2019 is directed against an interlocutory order passed
by the High Court in a pending appeal. This appeal is, therefore, disposed B
of with liberty to the parties therein to pursue the appeal pending before
the High Court on any other issue(s), if available as per law. That be
decided in accordance with law.
50. All these appeals are disposed of in the above terms with
liberty to the parties to pursue such other remedies as may be permissible C
in law with regard to other issues, if any. The same shall be considered
on its own merits, in accordance with law. No order as to costs. Pending
applications in the respective appeals are also disposed of in the above
terms.
D
Ankit Gyan Appeals disposed of.
E
F
G
H
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