In a most important clarification pertaining to the status of Additional Chief Metropolitan Magistrate as compared to that of the Chief Metropolitan Magistrate, the Apex Court in an extremely laudable, learned, landmark and latest judgment titled M/s R.D. Jain and Co. vs Capital First Ltd. & Ors. in Civil Appeal No. 175 of 2022 and cited in 2022 LiveLaw (SC) 634 delivered as recently as on July 27, 2022 has minced just no words to observe that Additional Chief Metropolitan Magistrate cannot be said to be subordinate to the Chief Metropolitan Magistrate in so far as exercise of judicial powers are concerned. The Bench comprising of Justice MR Shah and Justice BV Nagarathna observed that, “Chief Metropolitan Magistrate in addition, may have administrative powers. However, for all other purposes and more particularly the powers to be exercised under the CrPC both are at par.” The Apex Court Bench observed so while upholding the view expressed in a Bombay High Court judgment that (i) the District Magistrate, Chief Metropolitan Magistrate is not a persona designate for the purposes of Section 14 of the SARFAESI Act; (ii) the expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act. One of the issues that arose in this case as to whether the Additional Chief Metropolitan Magistrate can be said to be subordinate to the Chief Metropolitan Magistrate thus stood answered.
In short, the key points of this notable judgment as stated in the beginning are as follows: –
1. The District Magistrate, Chief Metropolitan Magistrate is not a persona designata for the purposes of Section 14 of the SARFAESI Act – Additional District Magistrate and Additional Chief Metropolitan Magistrate can exercise powers under Section 14. (Para 9-12).
2. Step to be taken by the CMM/DM under Section 14 is a ministerial step. While disposing of the application under Section 14 of the SARFAESI Act, no element of quasi -judicial function or application of mind would require -The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Therefore, Section 14 does not involve an adjudicatory process qua points raised by the borrower against the secured creditor taking possession of secured assets. (Para 8).
3. Code of Criminal Procedure, 1973; Sections 11, 12, 15, 16, 17, 19 and 35- The Additional Chief Metropolitan Magistrate can be said to be at par with the Chief Metropolitan Magistrate in so far as the powers to be exercised under the Cr.PC are concerned – The Chief Metropolitan Magistrate in addition, may have administrative powers. (Para 10-10.1).
4. It is open to the CMM/DM to appoint an advocate and authorise him/her to take possession of the secured assets and documents relating thereto and to forward the same to the secured creditor under Section 14(1A) of the SARFAESI Act. Referred to NKGSB Cooperative Bank Limited vs. Subir Chakravarty 2022 LiveLaw (SC) 212 (Para 6.2).
At the outset, this brief, brilliant, bold and balanced judgment authored by Justice MR Shah for a Bench of the Apex Court comprising of himself and Justice BV Nagarathna sets the ball rolling by first and foremost putting forth in para 1 that, “Feeling aggrieved and dissatisfied with the impugned judgment and order dated 22.12.2017 passed by the High Court of Judicature at Bombay in Writ Petition No. 1961/2017, by which, the Division Bench of the High Court while interpreting Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 (hereinafter referred to as the “SARFAESI Act”) has held that (i) the District Magistrate, Chief Metropolitan Magistrate is not a persona designata for the purposes of Section 14 of the SARFAESI Act; (ii) the expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act, the borrower has preferred the present appeal.”
To put things in perspective, the Bench then envisages in para 2 while elaborating on the facts that, “The facts leading to the present appeal in a nutshell are as under: –
2.1 That respondent No. 1 herein – Financial Institution – Capital First Limited is the secured creditor (hereinafter referred to as the “secured creditor”) within the meaning of Section 2(1)(zd) of the SARFAESI Act. That the secured creditor instituted proceedings under the SARFAESI Act for recovery of the amount due and payable by the appellant herein – borrower. The said proceedings initiated under Section 13(4) of the SARFAESI Act, the secured creditor proceeded to take possession of the secured asset. However, the borrowers refused to handover the physical possession of the secured asset. The secured creditor took symbolic possession of the secured asset on 21.01.2017 and affixed the possession notice at the said secured asset. That on 17.03.2017, the secured creditor filed an application under Section 14 of the SARFAESI Act with the learned Chief Metropolitan Magistrate Court, Esplanade, Mumbai, interalia, praying for assistance from the learned Chief Metropolitan Magistrate in taking physical possession of the secured asset. The matter was adjourned from time to time and lastly, it was adjourned to 29.07.2017. As mandated by second proviso to sub-section (1) of Section 14 of the SARFAESI Act, the application was required to be disposed of within a period of 30 days and as the application was not decided within the period mandated by the statute, the secured creditor moved an application for advancement. The said application came to be dismissed by the learned Chief Metropolitan Magistrate, inter-alia, on the ground that the said application is a fresh application and many old applications are pending. Therefore, the secured creditor approached the High Court by way of the present writ petition for an appropriate direction and order directing the learned Chief Metropolitan Magistrate to dispose of their cases/applications under Section 14 of the SARFAESI Act in a time bound manner.
2.2 That the Division Bench of the High Court issued directions to the learned Chief Metropolitan Magistrate to make an endeavour to dispose of the pending applications as expeditiously as possible and preferably within a period of thirty days from the date of receipt of writ along with the order. The learned Chief Metropolitan Magistrate vide communication dated 14.08.2017 brought to the notice of the High Court that, “Even though, the SARFAESI Act, 2002 provides for expeditious disposal of the applications filed under Section 14 of the said Act, there are as many as 924 cases pending under the said Act as on 09.08.2017 on the file of the Court of the Chief Metropolitan Magistrate, Esplanade, Mumbai. Out of 924 cases, 509 cases are filed in the year 2017. However, there are 27 cases of the year 2014, 96 cases of the year 2015 and 291 cases of the year 2016, still pending for disposal. As per the direction of the Hon’ble High Court, preference should be given to the old pending cases for disposing of the same. Therefore, the preference is being given to the pending old cases rather than fresh new cases.”
2.3 On receiving the aforesaid report, the High Court was of the opinion that considering the volume of applications filed under Section 14 of the SARFAESI Act and pendency of such applications, the learned Chief Metropolitan Magistrate, who is an authority under Section 14 of the SARFAESI Act cannot decide such applications within a time bound period in terms of the first and second proviso to Section 14(1) of the SARFAESI Act. After opining so, the High Court proceeded to consider the issue as to how to minimize the pendency. In this context, after considering the relevant provisions of the SARFAESI Act as well as Section 17(2) and Section 19 of the Code of Criminal Procedure, the High Court has observed that the Additional Chief Metropolitan Magistrate (for short “ACMM”), being invested with all the judicial powers of the Chief Metropolitan Magistrate, can be considered at par with the Chief Metropolitan Magistrate. The High Court has also observed that so far as the exercise of judicial powers are concerned, the Chief Metropolitan Magistrate and the Additional Chief Metropolitan Magistrate stand on the same footing and one cannot be said to be either inferior or subordinate to the other. It is further observed and held that as the status of Chief Metropolitan Magistrate and Additional Chief Metropolitan Magistrate is same and identical, the Additional Chief Metropolitan Magistrate can exercise the powers under Section 14 of the SARFAESI Act. While holding so, the Division Bench of the High Court has heavily relied upon the decisions of the Division Bench of the High Court in the case of State of Maharashtra Vs. Shanti Prasad Jain in Criminal Reference No. 9 of 1977 decided on 29.09.1977 by which, on a reference the Division Bench of the High Court held and concluded that the Chief Metropolitan Magistrate and the Additional Chief Metropolitan Magistrate are courts of the same status having the same or identical jurisdiction so far as the trial of criminal cases is concerned. Further, by taking into consideration the fact that the powers of the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act being purely executionary in nature and having no element of quasi-judicial functions ultimately it is observed and held by the High Court as under: –
“(I) The District Magistrate, Chief Metropolitan Magistrate is not a persona designata for the purposes of Section 14 of the SARFAESI Act.
(II) The expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act.”
2.4 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court holding that the District Magistrate, Chief Metropolitan Magistrate is not by persona designata for the purposes of Section 14 of the SARFAESI Act and that the expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act, the borrower has preferred the present appeal.”
Most significantly, the Bench then observes in para 10.1 that, “From the aforesaid provisions, it can be seen that any Metropolitan Magistrate can be appointed by the High Court to be the Chief Metropolitan Magistrate. The High Court may appoint any Metropolitan Magistrate to be an Additional Chief Metropolitan Magistrate, and such Magistrate shall have all or any of the powers of a Chief Metropolitan Magistrate under Cr.PC or under any other law for the time being in force as the High Court may direct. The Chief Metropolitan Magistrate and every Additional Chief Metropolitan Magistrate shall be subordinate to the Sessions Judge; and every other Metropolitan Magistrate shall, subject to the general control of the Sessions Judge, be subordinate to the Chief Metropolitan Magistrate. Thus the judicial powers and the powers, under the Cr.PC which may be exercised by the Chief Metropolitan Magistrate, can be exercised by the Additional Chief Metropolitan Magistrate also. Thus, the Additional Chief Metropolitan Magistrate can be said to be at par with the Chief Metropolitan Magistrate in so far as the powers to be exercised under the Cr.PC are concerned. The Chief Metropolitan Magistrate in addition, may have administrative powers. However, for all other purposes and more particularly the powers to be exercised under the Cr.PC both are at par. Therefore, the Additional Chief Metropolitan Magistrate cannot be said to be subordinate to the Chief Metropolitan Magistrate in so far as exercise of judicial powers are concerned.”
Equally significant is what is then laid down in para 10.2 and para 10.3 that, “10.2 In view of the above discussion and as observed hereinabove when the powers to be exercised by the Additional Chief Metropolitan Magistrate are at par with the powers to be exercised by the Chief Metropolitan Magistrate [Section 17(2) of Cr.PC] and the Chief Metropolitan Magistrate and Additional Chief Metropolitan Magistrate shall be subordinate to the Sessions Judge (Section 19 of the Cr.PC) and the steps to be taken by the Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act as observed hereinabove are ministerial in nature and does not involve any adjudicatory process and there is no element of any quasi-judicial function, we see no reason to take a different view than the view taken by the Bombay High Court in the impugned judgment. We hold that the expression “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act.
10.3 Similarly, when the Additional District Magistrates are conferred with the powers to be exercised by the District Magistrates either by delegation and/or by special orders and the Additional District Magistrates are exercising the same powers which are being exercised by the District Magistrates, the same analogy can be applied, more particularly, when the powers exercisable under Section 14 of the SARFAESI Act, are ministerial steps.”
No less significant is what is then enunciated in para 11 that, “The issue/question may also be considered from another angle. It cannot be disputed and even judicial notice can be taken of the fact that the CMMs and/or even the DMs are required to perform so many other duties under different statutes. They have to perform many administrative duties also. District Magisters are in overall administrative control of their jurisdiction/district. Similarly, CMMs are also required to perform administrative duties and they have also to deal with the other cases/criminal trials and many trials under special statutes also. It cannot be disputed that the litigations under the SARFAESI Act and proceedings and/or applications under Section 14 of the SARFAESI Act are increasing. Even as noticed by the High Court in the impugned judgment and order, as on 09.08.2017, 926 cases were pending under Section 14 of the SARFAESI Act before only one CMM. Therefore, a number of applications under Section 14 are pending. It also cannot be disputed that the SARFAESI Act provides for expeditious disposal of the applications filed under Section 14 of the SARFAESI Act. As per, second proviso to Section 14, suitable orders for the purpose of taking possession of the secured assets are required to be passed within a maximum period of sixty days from the date of the application. Therefore, if the submission on behalf of the appellants that only the concerned CMM/DM alone would have jurisdiction to decide the applications under Section 14 of the SARFAESI Act is accepted, in that case, it will be practically impossible for the concerned CMM/DM to decide the application under Section 14 of the SARFAESI Act expeditiously and within the time stipulated under second proviso to Section 14 of the SARFAESI Act. If the interpretation which we propose that, the District Magistrate/Chief Metropolitan Magistrate under Section 14 of the SARFAESI Act includes the Additional District Magistrate/Additional Chief Metropolitan Magistrate, the same can be said to be a purposive interpretation to achieve the object and purpose of proceedings under the SARFAESI Act, more particularly when as observed hereinabove, the orders to be passed under Section 14 of the SARFAESI Act are ministerial steps and to assist the secured creditor in getting/obtaining the possession of the secured property. Thus, there is no element of exercise of adjudicatory powers under Section 14 of the SARFAESI Act. All these aspects have been considered in detail by the High Court in the impugned judgment and order.”
Most forthrightly, the Bench then minces no words to unequivocally hold in para 12 that, “We are in complete agreement with the view taken by the High Court that (i) the District Magistrate, Chief Metropolitan Magistrate is not a persona designata for the purposes of Section 14 of the SARFAESI Act; (ii) the expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act.”
It is worth noting that the Bench then specifically points out in para 13 that, “The contrary view taken by the other High Courts, namely, Gujarat High Court in the case of Pushpa Devi B Jain W/o Bhawarlal M Jain Vs. Indian Overseas Bank in Special Civil Application No. 19102/2015; Calcutta High Court in the case of Shri Chellaperumal & Anr. Vs. The Authorised Officer & Ors. in M.A. No. 26/2014 and Kerala High Court in the case of Aseena Vs. Sub-Divisional Magistrate and Ors. in W.P. (C) No. 3331/2007, is not a good law and are specifically overruled.”
Finally and as a corollary, the bench then concludes by directing in para 14 that, “In view of the above and for the reasons stated above, the present appeal fails and the same deserves to be dismissed and is accordingly dismissed. We hold that the powers under Section 14 of the SARFAESI Act can be exercised by the concerned Additional Chief Metropolitan Magistrates of the area having jurisdiction and also by the Additional District Magistrates, who otherwise are exercising the powers at par with the concerned District Magistrates either by delegation and/or special order. The present appeal is accordingly dismissed. No costs.”
In essence, we thus see that this extremely commendable, cogent, composed and convincing judgment by the Apex Court makes it indubitably clear that the Additional Chief Metropolitan Magistrate is not subordinate to the Chief Metropolitan Magistrate in exercise of its judicial powers. It therefore merits no reiteration that all the Courts must abide and pay heed to what the Apex Court has laid down so very ostensibly in this leading case! No denying it!
