DRAT upheld the District Magistrate's ministerial role under Section 14 of the SARFAESI Act, ruling that procedural modifications were jurisdictionally valid.
The Debts Recovery Appellate Tribunal (DRAT), Kolkata Bench headed by Justice Anil Kumar Srivastava (Chairperson) addressed an appeal and observed that the District Magistrate's actions under Section 14 of the SARFAESI Act, including substituting officials and modifying enforcement logistics, are ministerial and within jurisdiction, as they do not constitute fresh orders but procedural continuations aimed at facilitating the secured creditor's recovery process in line with the Act's objectives.
The appeal before the DRAT arose from a challenge to an order of the Learned DRT-III, Kolkata, restraining the Appellant Bank from taking coercive steps concerning secured properties under orders issued by the District Magistrate (DM). The dispute originated from the Respondents’ default on an overdraft facility of ₹300.00 lakh extended by the Appellant Bank. Pursuant to proceedings under the SARFAESI Act, 2002, the Bank had obtained orders under Section 14 from the District Magistrate, initially authorizing possession of the secured assets and later substituting officials and police stations due to jurisdictional changes. The Respondents contested these orders under Section 17 of the Act, prompting interim relief from the DRT.
The Appellants contended that the DM’s actions were strictly ministerial and in continuation of the original execution order under Section 14(1). They argued that the substitution of officers and changes to the enforcement police station were procedural adjustments within the DM’s jurisdiction, consistent with the objectives of the SARFAESI Act. In response, the Respondents argued that the DM became functus officio after issuing the initial order and lacked authority to pass fresh or modified orders. They relied on interpretative principles to argue that the term "steps" under Section 14(2) could not justify the issuance of subsequent orders.
Upon review, the DRAT upheld the validity of the DM's actions, emphasizing the ministerial and executory nature of powers under Section 14 of the SARFAESI Act. The Tribunal clarified that substituting officers or modifying logistical details does not constitute the issuance of a new order but aligns with the purpose of aiding the secured creditor in asset recovery. Citing relevant precedents, the DRAT rejected the functus officio argument, holding that such procedural updates are essential to fulfilling the legislative intent of the SARFAESI Act, which aims to ensure efficient debt recovery mechanisms. The judgment reinforced that technical objections delaying the implementation of Section 14 undermine the Act’s objectives, and the DM acted within its jurisdiction to facilitate the recovery process. Accordingly, the appeal was allowed, setting aside the DRT’s restraint on the Bank.
Mr. Arabinda Chatterjee, Senior Advocate, Surajit Auddy, Advocate represented the Appellant.
Mr. Nimish Mishra, Mr. Gaurav Singh and Mr. Sital Chandra Mahato, Advocates appeared for the Respondent.
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