DRAT held that the rectification of typographical errors in Section 14 orders was ministerial in nature and did not render the Magistrate functus officio.
The Debts Recovery Appellate Tribunal (DRAT), Kolkata Bench, headed by Justice Anil Kumar Srivastava (Chairperson), addressed an appeal and held that a Chief Judicial Magistrate retains the authority to rectify typographical errors in an order passed under Section 14 of the SARFAESI Act, 2002. Such corrections are considered ministerial and do not render the Magistrate functus officio. Denying these rectifications would undermine the legislative intent of empowering secured creditors to recover their dues efficiently.
The present appeal before the Debts Recovery Appellate Tribunal (DRAT) arose from the order dated 06.02.2024 passed by the Learned DRT-III, Kolkata, in S.A. No. 723 of 2022 (Cygnus Pharmaceuticals Private Limited vs. Tata Capital Housing Finance Limited), restraining the Financial Institution from taking coercive steps concerning the secured assets pursuant to an order issued by the Learned Chief Judicial Magistrate (CJM), Alipore. The Respondent-Borrower, having availed a loan of Rs. 5 crore against mortgaged immovable properties, defaulted, resulting in the classification of the account as a Non-Performing Asset (NPA) and subsequent initiation of proceedings under the SARFAESI Act, 2002. The Appellant had obtained an order dated 07.07.2022 under Section 14 of the SARFAESI Act from the CJM for taking possession of the secured assets. However, due to a typographical error in the Authorized Officer’s name, a rectification application was filed on 17.08.2022, which was allowed by the CJM under Section 152 of the CrPC. The name "Sri Ankit Kumar" was corrected to "Sri Abhirup Ghosh," the Authorized Officer.
The Respondents challenged the demand notice, possession notice, and the Section 14 order before the DRT under Section 17 of the SARFAESI Act, which initially directed a status quo on 27.09.2022. On appeal, the DRAT remanded the matter to the DRT for expeditious disposal. The Learned DRT subsequently held on 24.07.2023 that the Section 14 order remained valid, and the typographical correction did not affect its enforceability. Thereafter, on 12.12.2023, the CJM, relying on Smt. Mishri Bai v. Shubh Laxmi Mahila Cooperative Bank Limited reaffirmed the validity of the Section 14 order and clarified that the authority was not functus officio as the rectification was ministerial in nature. The CJM further granted liberty for the execution of the original order, observing that it remained valid until the outstanding dues were fully recovered.
The Respondents subsequently filed I.A. 421 of 2024 before the DRT upon issuance of a possession notice dated 01.02.2024. The Learned DRT, on 06.02.2024, restrained the Appellant from proceeding further, which led to the instant appeal before the DRAT. The Appellant contended that the CJM acted within its jurisdiction by rectifying the Authorized Officer’s name, as such corrections are administrative and executory under Section 14 of the SARFAESI Act. The Respondents, however, argued that the CJM lacked jurisdiction to modify or reissue the order, as the authority became functus officio post the initial order.
The DRAT deliberated on whether the substitution of the Authorized Officer’s name by the CJM exceeded the scope of Section 14 of the SARFAESI Act and whether a fresh nine-point affidavit was required under the amended provision. Referring to Kotak Mahindra Bank Limited v. A. Balakrishnan and Another, REEDLAW 2022 SC 05561 and other relevant judgments, the DRAT reiterated that the role of the CJM under Section 14 is limited to facilitating the secured creditor in taking possession of secured assets and ensuring procedural compliance, without unnecessary judicial interference. It was observed that rectifications of typographical errors do not invalidate the original order, as such corrections are ministerial in nature.
The DRAT emphasized that refusing to allow such rectifications would defeat the very purpose of Section 14, which aims to enable secured creditors to realize their dues efficiently. The Tribunal held that the CJM retained jurisdiction to make ministerial corrections and that the Section 14 order remained valid until the dues were recovered. The Learned DRT was found to have erred in restraining the Appellant, as the CJM’s actions were lawful and within the ambit of the statute. The DRAT allowed the appeal, set aside the impugned order, and permitted the Financial Institution to proceed with the possession of the secured assets in accordance with the law. It was clarified that objections, if any, could be raised before the DRT under Section 17 of the SARFAESI Act. The matter was consigned to the record room, with no order as to costs.
Mr. Kumar Mukherjee, Mr. Sayak Ranjan Ganguly and Ms. Benjir Khan, Advocates represented the Appellant.
Mr. Nemani Srinivas, Mr. Nimish Mishra and Mr. Gaurav Singh, Advocates appeared for the Respondent.
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