Madras High Court
K. Arockiyaraj vs The Chief Judicial Magistrate on 27
August, 2013
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 27/8/2013 CORAM
The Hon'ble Mr.Justice N.
PAUL VASANTHKUMAR
The Hon'ble Mr.Justice
T.MATHIVANAN
and
The Hon'ble Mr.Justice P.DEVADASS W.P(MD)No.11078 of 2011
W.P(MD)No.7155 of 2012 and 4525, 9833 of 2013 and
Connected Miscellaneous Petitions
W.P.(MD)NO.11078 of 2011
K. Arockiyaraj ... Petitioner
Vs
1.
The Chief
Judicial Magistrate,
Srivi!!iputhur,
Virudhunagar District.
2.
The Housing
Development Finance Corporation Limited,
2nd Floor, ITC Centre,
760, Anna Salai,
Chennai - 2. ... Respondents
Writ petition
filed under Article 226 of the Constitution of India, praying this Court to
issue a writ of Certiorarified Mandamus calling for the records relating to the
order made by the first respondent in CrI.M.P.No.1850 of 2011 dated 12.9.2011
and quash the same as illegal and consequently direct the respondents not to
take possession or auction the petitioner's property in Plot No.5, S.No.786/2C,
Lakshmi Nagar, Thevarkulam, Thiruthanga! Village, Sivakasi Taluk, Virudhunagar
District.
W.P.(MD)No.7155 of 2012
D. Visa!akshi ... Petitioner
Vs.
1.
The
Authorized Officer,
Indian Bank, Sivagangai Branch,
Sivagangai.
2.
Rahini
Ammal ... Respondents
Writ petition
filed under Article 226 of the Constitution of India, praying for issuance of a
writ of Certiorarified Mandamus calling for the records relating to the order
made in Crl.M.P.No.532 of 2012 dated 17.4.2012 on the file of the Chief
Judicial Magistrate, Sivagangai, and quash the same as illegal and consequently
forbear the respondents from in any way dispossessing the petitioner from her
property in Survey No.157/35, Bharathi Nagar, Singampunari, Sivagangai
District, except following the due process of law.
W.P.(MD)No.4525 of 2013
1.
G.S.S.Latha,
2.
D.S.Bright
Singh ... Petitioners
Vs
The Authorized Officer,
Housing Development Finance
Corporation Ltd.,
2nd Floor, ITC Centre,
No.760 Anna Salai,
Chennai - 2. ... Respondent
Writ petition filed
under Article 226 of Constitution of India, praying this Court to issue a writ
of Certiorari calling for the records pertaining to the impugned order in
Crl.M.P.No.1851 of 2011 dated 12.9.2011 passed by the Chief Judicial
Magistrate, Virudhunagar under Section 14 of the SARFAESI Act, 2002, and quash
the same.
W.P.(MD)No.9833 of 2013
1.
Shanthi
2.
R. Sakthi
Devi ... Petitioner
Vs.
1. The Authorised Officer,
Indo Pacific Housing Finance Ltd.,
AIG Home Finance (I) Ltd.,
Originally known as AIG Homes Ltd.,
II Floor, City Towers,
No.117, Sri Thyagaraya Road,
T.Nagar, Chennai.
2.
The Branch
Manager,
Indo Pacific Housing Finance Ltd.,
AIG Home Finance (I) Ltd.,
Originally known as AIG Homes Ltd.,
Trichy
Road, Dindigul District.
3.
G. Subasri ... Respondents
 |
Writ petition filed under Article 226 of Constitution of India, praying this Court to issue a writ of Certiorarified mandamus calling for the records pertaining to the impugned order in Crl.M.P.No.1211 of 2011 dated 23.4.2013 on the file of the Chief Judicial Magistrate, Dindigul and quash the same as illegal and consequently forbear the respondents from anyway dispossessing the petitioners from the properties in Door No.162 and land measuring 95 cents in old survey No.762/3 (Old Patta No.134) in New Survey No.762/5A (New Patta No.75) in Siluvarpatti Village, Dindigul Taluk and District together with all buildings and fixtures therein.
:COMMON JUDGMENT
N.PAUL VASANTHAKUMAR, J.
These writ petitions are filed challenging the order passed in
Crl.M.P.No.1850 of 2011 dated
12.9.2011
on the file of Chief Judicial
Magistrate, Virudhunagar; Crl.M.P.No.532 of 2012 dated
17.4.2012
on the file of the Chief
Judicial Magistrate, Sivagangai; Crl.M.P.No.1851 of 2011 dated 12.9.2011 passed
by the Chief Judicial Magistrate, Virudhunagar; and Crl.M.P.No.1211 of 2011
dated
23.4.2013
on the file of the Chief
Judicial Magistrate, Dindigul, respectively, contending that the Chief Judicial
Magistrates have no jurisdiction to pass orders under Section 14 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (hereinafter referred to as 'SARFAESI Act'), as the
provision empowers only the Chief Metropolitan Magistrate
and the District Magistrate to
exercise the powers under the provision and therefore the orders passed by the
Chief Judicial Magistrates are void ab-initio.
2.
When W.P.(MD)No.7155 of 2012
was heard by the Division Bench of this Court, (consisting the Hon'ble
Mr.Justice R.K.Agrawal, A.C.J. and Hon'ble Mrs.Justice Chitra Venkataraman) on
5.3.2013, the Division Bench, taking note of the conflicting decisions,
rendered by this Court in (2009) 1 MLJ (Crl) 416 (Indian Overseas Bank v. Sree Aravindh
Steels Ltd.); the Aurangabad Bench of Bombay
High Court, reported in CDJ 2008 BHC 520 (IndusInd Bank Ltd. v. State of
Maharashtra); and Bombay High Court in the decision reported in 2009 (2) DRTC
431 (Bom) (Arjun Urban Co-Operative Bank Ltd., Solapur v. C.J.M., Solapur),
thought fit to refer the matter to the larger Bench. The said reference reads
as follows:
"The Writ petition herein challenges the order
dated 17.04.2012 passed by the Chief Judicial Magistrate, Sivagangai, in the
application filed by the bank 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 ("SARFAESI Act" in short).
2.
Learned Senior Counsel appearing
for the petitioner referred to the decision of this Court reported in (2009) 1
MLJ (Crl) 416 in Indian Overseas Bank v. Sree Aravindh Steels Ltd., wherein this Court has taken the view that reference to 'Chief
Metropolitan Magistrate' under Section 14 of the SARFAESI Act would include the
jurisdiction of Chief Judicial Magistrate in a non- metropolitan area, for the
purpose of Section 14 of the SARFAESI Act.
3.
Placing reliance on the
decision of the Bombay High Court in Criminal Writ Petition No.214 of 2008 with
Criminal Writ Petition No.215 of 2008, reported in CDJ 2008 BHC 520 in the case
of IndusInd Bank Ltd. v. The State of Maharashtra, as well as another decision
of the Bombay High Court reported in 2009 (2) D.R.T.C. 431 (Bom) in Arjun Urban
Co-Operative Bank Ltd., Solapur v. C.J.M., Solapur, taking a contra view that
an application under Section 14 of the SARFAESI Act has to be filed only before
the Chief Metropolitan Magistrate or the District Magistrate, as the case may
be, learned senior counsel submitted that by reason of the clear statutory
provision under Section 14, the Chief Judicial Magistrate has no jurisdiction
to entertain the petition under Section 14. He pointed out that the Bombay High
Court specifically viewed that the provision of Cr.P.C., particularly Section
3(2), cannot be read with Section 14 of the SARFAESI Act, for the purpose of
understanding as to whether the reference to 'Chief Metropolitan Magistrate'
under Section 14 of the SARFAESI Act would include Chief Judicial Magistrate in
a non-metropolitan area. Referring to Section 30 of the SARFAESI Act, he
submitted that the proceedings under the Act being one for recovery and hence
civil in nature, Cr.P.C. has no relevance.
4.
We have perused the judgment of
this Court and the judgments of the Bombay High Court. Seen in the context of
the object of Central Legislation, viz., the SARFAESI Act, and that of the
contra decisions pronounced by the Bombay High Court stated supra, this Court
feels that the decision of this Court requires reconsideration, particularly in
the context of relevance of Cr.P.C. to SARFAESI Act, which is also a procedural
enactment, for the purpose of understanding the clear words of Section 14.
Learned Senior Counsel pointed out that given the fact that the Act has its
provisions on
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
offences and prosecution before a Magistrate Court,
by no stretch of interpretation, the Chief Metropolitan Magistrate could be
read as inclusive of and referrable to Chief Judicial Magistrate too.
5.
Under the circumstances, the
issue as to the correctness of the decision rendered by this Court in (2009) 1
MLJ (Crl) 416 has to be tested before a larger Bench. It may also be noted that
Section 30 of the SARFAESI Act specifically refers to cognizance of offence,
which provides that no Court inferior to that of a Metropolitan Magistrate or a
Judicial Magistrate of the First Class shall try an offence punishable under
the Act. Section 29 of the SARFAESI Act states that if any person contravenes
or attempts to contravene or abets the contravention of the provisions of the
Act or of any rules made thereunder, he shall be punishable with imprisonment
for a term which may extend to one year, or with fine, or with both.
6.
In the circumstances, the
matter be placed before a larger Bench to decide whether the reference to Chief
Metropolitan Magistrate under section 14 of the SARFAESI Act would include the
Chief Judicial Magistrate in a non- metropolitan area to entertain the petition
filed under Section 14, by the secured creditor."
3.
Pursuant to the said reference
made, this Full Bench was constituted and by consent of both sides, date was
fixed for final hearing of the issue and on 31.7.2013, we have heard the
arguments of the parties at length.
4.
For easy understanding of the
issue involved, it is necessary to refer to the facts of the case in anyone of
the writ petition. The case of the petitioner in W.P.(MD)No.7155 of 2012 are as
follows:
(a)
Petitioner, who is having the
business of processing dry fruits in the name and style of "M/s.Alagappan
Manufacturing and Traders” in Sivagangai, in need of financial assistance,
borrowed loan from the Indian Bank, Sivagangai Branch and also from Indian
Bank, Thallakulam Branch, Madurai. Securing the said loans, the petitioner
deposited title deeds of the properties comprised in S.Nos.157/35, 157/2B, 3A,
4A and 156/1 and of a dwelling house comprised in new
5.
No.157/35, both situate in
Singampunari Town, Tiruppathur Taluk in Sivagangai District. Besides the above,
the petitioner's husband also stood as a guarantor.
(b)
According to the petitioner,
due to the sudden recession in the business, there was heavy loss and the
proprietorship became defunct. Unable to bear the pressure, petitioner's
husband left the business and the loan was classified as Non-Performing Asset
(NPA) on 31.3.1994. According to bank, as on 30.9.2004, the total due from the
petitioner and her husband rose to Rs.5,59,24,992/-.
(c)
Notice under section 13(2) of
the SARFAESI Act, 2002, was issued on 29.9.2004 as the said amount was not
repaid. A notice under section 13(4) of the Act was issued on 6.7.2005 and the
property was brought to sale on 3.3.2008. The second respondent offered
Rs.30,03,000/- and the sale was confirmed in her favour and she was issued with
sale certificate on 19.5.2008.
(d)
The second respondent
thereafter entered into an agreement with the petitioner with regard to the
house property on 9.5.2008, agreeing to reconvey the house to the petitioner on
her payment of Rs.7 lakhs, being the auction amount, with 2% interest per month
within 1+ years from the date of the agreement. Petitioner paid the said dues
without default. However, the second respondent attempted to dispose of the
property in favour of her brother by way of an agreement dated 9.5.2008.
(e)
Petitioner filed a civil suit
in O.S.No.6 of 2011 in the Court of District Judge, Sivagangai, for specific
performance. The said suit is still pending and the petitioner was allowed to
deposit Rs.11,40,444/- on 25.2.2011 and Rs.14,000/- on 26.6.2008 in second
respondent's account.
(f)
After four years of issuance of
sale certificate in favour of the second respondent, that was on 9.5.2008, the
second respondent approached the learned Chief Judicial Magistrate, Sivagangai,
filing an application under section 14 of the SARFAESI Act, 2002, for taking
possession of petitioner's dwelling house. The learned Chief Judicial
Magistrate, Sivagangai, in Crl.M.P.No.532 of 2012 order dated 17.4.2012,
appointed a Commissioner to take possession and hand over the same to the
second respondent.
(g)
The said order of the Chief
Judicial Magistrate, Sivagangai, dated 17.4.2012 is challenged in this writ
petition contending that the Chief Judicial Magistrate has no jurisdiction to
pass orders under section 14 of the SARFAESI Act, as the section contemplates
only the Chief Metropolitan Magistrate, or the District Magistrate to exercise
power and the Chief Judicial Magistrate having not been vested with the power,
the order passed on 17.4.2012 is illegal and forbear the respondents from
dispossessing the petitioner from her property comprised in S.No.157/35 situate
in Bharathi Nagar, Singampunari Town, except following due process of law.
5.
As jurisdictional issue alone
is raised in the writ petitions, the respondents have not filed counter
affidavit and on 23.7.2013 the respective counsels agreed to argue the case on
31.7.2013 and accordingly submitted their respective submissions on 31.7.2013.
6.
(i) Mr.M.Ajmal Khan, learned
Senior Counsel appearing for the petitioners in W.P.(MD)Nos.11078/2011 and
7155/2012 submitted that Section 14 of the SARFAESI Act, 2002, empowers the
Chief Metropolitan Magistrate and the District Magistrate to assist the secured
creditors in taking possession of the secured assets and the Chief Judicial
Magistrate, is not empowered to pass any order to assist the secured creditor
in taking possession.
(ii)
The learned Senior Counsel
submitted that the Division Bench of this Court in the decision reported in
(2009) 1 MLJ (Crl) 416 has not laid down the correct law as the Division Bench
had taken assistance from the Criminal Procedure Code to render its judgment,
which has no application to the SARFAESI Act, 2002. The Division Bench
construed Section 14 of the Act by getting aid from Section 3(1)(d) of the
Crl.P.C. and the SARFAESI Act, being an independent enactment passed in the
year 2002, long after the enactment of Crl.P.C., ought not to have borrowed the
provisions from Crl.P.C., as applicability of other provisions of the
enactments are excluded under section 35 of the SARFAESI Act, which states that
the provisions of the SARFAESI Act is to override other laws,
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
notwithstanding anything contained inconsistent with
any other law for the time being in force.
(iii)
The learned Senior Counsel
further submitted that the Civil Court's jurisdiction also has been ousted
under Section 34 of the Act. When Civil Court's jurisdiction is ousted, the
Chief Judicial Magistrate, who is discharging the functions of a Criminal
Court, does not have jurisdiction to entertain any application filed under
Section 14 of the Act, and as per Section 14, Chief Metropolitan Magistrate in
Metropolitan Areas and in other areas (non- metropolitan areas) the District
Magistrate, who is also the District collector, alone has got jurisdiction to
give assistance to the secured creditors in taking possession of the secured
assets. When the section is very clear and unambiguous, the interpretation given
by the Division Bench in the above referred judgment may not be a good law. In
support of his contentions the learned Senior Counsel relied on the judgment of
the Aurangabad Bench of the Bombay High Court judgment reported in CDJ 2008 BHC
520. In the said judgment it was held that as per Section 14 of the Act, the
District Magistrate, wherever there is no Chief Metropolitan Magistrate, alone
can render assistance to the secured creditors.
(iv)
The learned Senior Counsel
further submitted that the Securitisation Act is a special enactment, which
contains procedures for realisation of the loan amount by the Financial
Institutions from the borrowers and the first step is to issue notice under
Section 13(2), giving time to the borrower and if the borrower has any
objection, he can file it and after considering the same, an order should be
passed under section 13(4) of the Act and if the borrower is not satisfied, he
can very well approach the Debt Recovery Tribunal (DRT) under section 17 of the
Act and the secured Creditor can get assistance from the Chief Metropolitan
Magistrate or the District Magistrate and it is only an executive action, not
involving exercise of any judicial power.
(v)
The learned Senior Counsel
again relied on the judgment of the Bombay High Court reported in 2009 (2)
D.R.T.C. 431 wherein also the Division bench of the Bombay High Court held that
the Chief Judicial Magistrate is not the competent authority to give such
assistance and the District Magistrate in non-metropolitan area alone is
empowered to give such assistance. In the said judgment the decision of this
Court in (2009) 1 MLJ (Crl) 416 and the Division Bench of the Kerala High Court
reported in AIR 2009 Kerala 14 were not followed and the decision of the
Aurangabad Bench reported in CDJ 2008 BHC 520 was reiterated and the Division
Bench quashed the order passed by the Chief Judicial Magistrate granting
liberty to the secured creditor to make fresh application under section 14 of
the SARFAESI Act, before the proper forum.
(vi)
The learned Senior Counsel also
relied on the judgment of the Calcutta High Court rendered in MAT No.389 of
2013 with CAN No.3023 of 2013 dated 23.4.2013, wherein also it was held that
section 14 of the Act being clear and unambiguous, thus, no contra
interpretation could be made and the judgments of this Court and the Kerala
High Court cannot be followed. The learned Senior Counsel also submitted that
when the validity of the Securitisation Act was challenged before the
Honourable Supreme Court, the Hon'ble Apex Court in the decision reported in
(2004) 4 SCC 311 (Mardia Chemicals Ltd. v. Union of India), upheld the validity of the Act, except section 17(2), which was
held to be unreasonable and arbitrary. The learned Senior Counsel also submitted
that the Division Bench of this Court in the decision reported in 2012 (2) CWC
115 (K.R.Chandrasekaran
v. Union of India) upheld section 14, when a
specific challenge was made to it, and therefore the
phraseology employed in section 14(1) has to be given
its plain meaning and no manner of interpretation is permissible and submitted
that the orders passed by the Chief Judicial Magistrates under section 14 of
the SARFAESI Act, 2002, are illegal and without jurisdiction.
7.
Mr.S.Parthasarathy, learned Senior
Counsel appearing for the Bank on the other hand heavily relied on the Division
Bench judgment of this Court reported in (2009) 1 MLJ (Crl) 416 and the
judgment of the Kerala High Court reported in AIR 2009 Kerala 14 and contended
that the Chief Metropolitan Magistrate will have jurisdiction in metropolitan
areas and in non-metropolitan areas, besides the District Magistrate, the power
can also be exercised by the Chief Judicial Magistrate. He further contended
that if the Chief Judicial Magistrate in non-metropolitan areas are not vested
with the power to assist the secured creditors, anomalous situation will arise
since only in metropolitan areas the secured creditors will be in a position to
approach the Chief Metropolitan Magistrate and District Magistrate and in
non-metropolitan areas secured creditors will be in a position to approach the
District Magistrate alone, which will be discriminatory, and that may not be
the intention of the Parliament in incorporating section 14 in the Act. The
learned Senior Counsel also submitted that a proviso was added to section 14 by
Amendment Act No.1 of 2013, as per that, the Chief Metropolitan Magistrate or
the District Magistrate, shall on a request being made to him by the secured
creditors, are required to go through the affidavit filed along with the
application seeking assistance declaring the aggregate amount of financial
assistance granted and the total claim of the bank as on the date of filing of
the application, the borrower has created security interest to offer various
properties and the Bank or Financial Institution is holding a valid subsisting
security interest over such properties and the claim of the Bank or Financial
Institution is within the limitation period, the borrower has created security
interest over various properties, who has committed default in repayment of
specified amount and the account of the borrower has to be classified as a
Non-Performing Asset and by virtue of the said amendment, a judicial mind
should be there to consider various aspects stated in the affidavit. According
to the learned Senior Counsel, the Chief Judicial Magistrates in
non-metropolitan areas alone will be in a position to apply their judicial mind
to satisfy as to whether assistance sought for by the secured creditors can be
ordered or not and the District Magistrate may not be in a position to decide
the said issues stated in the affidavit. The learned senior Counsel also relied
on certain decisions in support of his contentions and argued that the judgment
of the Division Bench of this Court in (2009) 1 MLJ (Crl) 416 and the decision
of the Kerala in AIR 2009 Kerala 14 are valid and the said decisions are to be
approved by this Full Bench.
8.
Mr.S.Sethuraman, learned
counsel appearing for the private respondent supported the submissions made by
the learned Senior Counsel for the Bank and contended that the Chief
Metropolitan Magistrate in Metropolitan area having been vested with the power
to assist the secured creditor wherever no Chief Metropolitan Magistrate is available,
the Chief Judicial Magistrate, who is equivalent to Chief Metropolitan
Magistrate under the Tamil Nadu state Judicial service, will automatically get
power to discharge the duties of the Chief Metropolitan Magistrate in terms of
Section 3 of Crl.P.C., which was rightly followed by the Division Bench of this
Court in its Judgment reported in (2009) 1 MLJ (Crl) 416 and thus argued for
approving the said judgment.
9.
We have anxiously considered
the rival submissions.
10.
For deciding the specific issue
before us, it is just and proper to refer to the object and purpose for which
the SARFAESI Act, 2002 was enacted. In the Statement of Objects and Reasons
appended to the Act it is stated that the said Act was enacted to facilitate
easy transfer of financial asset by the Securitisation Company or
Reconstruction Company to acquire financial assets of the Banks and Financial
Institutions empowering the Banks and Financial Institutions to take possession
of securities given for financial assistance or sale or lease out the same or
take over management in the event of default i.e, classification of borrowers
account as non-performing asset in accordance with the directions given or
under guidelines issued by RBI from time to time, the rights of the secured
creditors to be exercised by one or more of its officers authorised in this
behalf in accordance with the rules made by the Central Government. Appeal
against the action of any Bank or Financial Institution to the concerned Debt
Recovery Tribunal and second appeal to the Appellate Debts Recovery Tribunal,
etc.
11.
The said SARFAESI Act, 2002,
was challenged in Mardia Chemicals case ((2004) 4 SCC 311) and the Hon'ble
Supreme Court considered the objects of the enactment, which means speedy
recovery of debts by secured creditors, and noting the safeguards given to the
borrowers to approach Debt Recovery Tribunal (DRT) under section 17 of the Act,
and under section 18 before the DRAT, upheld the enactment, except section
17(2), which mandates deposit of 75% of the debts before filing appeal before
the Debt Recovery Tribunal. In the said judgment the Hon'ble Supreme Curt in
paragraph 81
observed as follows: "81.......... the borrowers would get a
reasonably fair deal and opportunity to
get the matter adjudicated upon before the Debts
Recovery Tribunal. The effect of some of the provisions may be a bit harsh for
some of the borrowers but on that ground the impugned provisions of the Act
cannot be said to be unconstitutional in view of the fact that the object of
the Act is to achieve speedier recovery of the dues declared as NPAs and better
availability of capital liquidity and resources to help in growth of the
economy of the country and welfare of the people in general which would
subserve the public interest."
Section 14 of the Act was not specifically challenged
before the Hon'ble Supreme Court.
12.
In the decision of this Court
reported in 2012 (2) CWC 115 (K.R.Chandrasekaran v. Union of India) the validity of Section 14 of the SARFAESI Act, 2002 was challenged and
this Court upheld the said provision by following the decision of the Supreme
Court in Mardia Chemicals Case (supra) and held that the Supreme Court having
upheld the entire Act, this Court cannot re- examine one of the provision of
the Act.
13.
The SARFAESI Act, 2002, is a
self-contained enactment. Sections 13 and 14 deal with enforcement of security
interest. Section 13(2) contemplates issuance of notice to the borrowers on
account of default in repayment of debt or installment thereof. Section 13(2),
(3) and (4) of the SARFAESI Act, 2002, reads as follows:
"13. Enforcement of security interest.-
(1)
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
(2)
Where any borrower, who is
under a liability to a secured creditor under a security agreement, makes any
default in repayment of secured debt or any instalment thereof, and his account
in respect of such debt is classified by the secured creditor as non-performing
asset, then, the secured creditor may require the borrower by notice in writing
to discharge in full his liabilities to the secured creditor within sixty days
from the date of notice failing which the secured creditor shall be entitled to
exercise all or any of the rights under sub-section (4).
(3)
The notice referred to in
sub-section (2) shall give details of the amount payable by the borrower and
the secured assets intended to be enforced by the secured creditor in the event
of non-payment of secured debts by the borrower.
(3-A) If, on receipt of the notice under sub-section
(2), the borrower makes any representation or raises any objection, the secured
creditor shall consider such representation or objection and if the secured
creditor comes to the conclusion that such representation or objection is not
acceptable or tenable, he shall communicate within one week of receipt of such
representation or objection the reasons for non-acceptance of the
representation or objection to the borrower:
Provided that the reasons so communicated or the likely action of
the secured creditor at the stage of communication of reasons shall not confer
any right upon the borrower to prefer an application to the Debts Recovery
Tribunal under Section 17 or the Court of District Judge under Section 17-A.]
(4) In case the borrower fails to discharge his liability in full within the
period specified in sub-section
(2)
, the secured creditor may take
recourse to one or more of the following measures to recover his secured debt,
namely:-
(a)
take possession of the secured
assets of the borrower including the right to transfer by way of lease,
assignment or sale for realising the secured asset;
(b)
take over the management of the
business of the borrower including the right to transfer by way of lease, assignment
or sale for realising the secured asset:
Provided that the right to transfer by way of lease,
assignment or sale shall be exercised only where the substantial part of the
business of the borrower is held as security for the debt:
Provided further that where the management of whole
of the business or part of the business is severable, the secured creditor
shall take over the management of such business of the borrower which is
relatable to the security for the debt;
(c)
appoint any person (hereafter referred
to as the manager), to manage the secured assets the possession of which has
been taken over by the secured creditor;
(d)
require at any time by notice
in writing, any person who has acquired any of the secured assets from the
borrower and from whom any money is due or may become due to the borrower, to
pay the secured creditor, so much of the money as is sufficient to pay the
secured debt.”
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
14.
Section 14 of the Act is an
enabling provision to the secured creditors in taking possession of secured
assets. Section 14 of the Act as amended by Act 1 of 2013, reads as follows:
"14. Chief Metropolitan Magistrate or District
Magistrate to assist secured creditor in taking possession of secured asset.-
(1) Where the possession of any secured assets is 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 of this Act, the
secured creditor may, for the purpose of taking possession or control of any
such secured assets, request, in writing, the Chief Metropolitan Magistrate or
the District Magistrate within whose jurisdiction any such secured asset or
other documents relating thereto may be situated or found, to take possession
thereof, and the Chief Metropolitan Magistrate or, as the case may be, the
District Magistrate shall, on such request being made to him-
(a)
take possession of such asset
and documents relating thereto; and
(b)
forward such asset and documents
to the secured creditor:
Provided that any application by the secured creditor
shall be accompanied by an affidavit duly affirmed by the authorised officer of
the secured creditor, declaring that-
(i)
the aggregate amount of
financial assistance granted and the total claim of the Bank as on the date of
filing the application;
(ii)
the borrower has created
security interest over various properties and that the Bank or Financial
Institution is holding a valid and subsisting security interest over such properties
and the claim of the Bank or Financial Institution is within the limitation
period;
(iii)
the borrower has created
security interest over various 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;
(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 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 had been communicated to the borrower;
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
(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;
(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 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: Provided also that the requirement of filing affidavit stated
in the first proviso shall not apply to proceeding pending before any District
Magistrate or the Chief Metropolitan Magistrate, as the case may be, on the
date of commencement of this Act.
(1-A) The District Magistrate or the Chief Metropolitan Magistrate
may authorise any officer subordinate to him,-
(1) to take possession of such assets and documents relating 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 or the District Magistrate may take or cause to be taken such steps
and use, or cause to be used, such force, as may, in his opinion, be necessary.
(3)
No act of the Chief
Metropolitan Magistrate or the District Magistrate, any officer authorised by
the Chief Metropolitan Magistrate or District Magistrate, done in pursuance of
this section shall be called in question in any court or before any authority.”
15.
On perusal of Sections 13(2),
13(4), 14(1) and 14(2), it is evident that the secured creditor can proceed
against the secured assets, 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 to the Appellate Tribunal (DRAT) is also provided
under section 18 of the Act.
16.
Section 14(1-A), 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 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 delegate his power as it will run
contrary to the principle 'Delegata potestas non potest deligari'.
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
17.
Section 2 of the SARFAESI Act,
2002, deals with definitions. Sub- section (2) of section 2 saved the
definitions contained in the Indian Contract Act, 1872; Transfer of Property
Act, 1882; the Companies Act, 1956; the Securities and Exchange Board of India
Act, 1992; which are not inconsistent with the definition given in the SARFAESI
Act, 2002. The said section reads as follows:
"2(2) Words and expressions used and not defined
in this Act but defined in the Indian Contract Act, 1872 (9 of 1872) or the
Transfer of Property Act, 1882 (4 of 1882) or the Companies Act, 1956 (1 of
1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992)
shall have the same meaning respectively assigned to them in those Acts.”
18.
Thus, it is beyond any shadow
of doubt that no adjudication of rights are involved while getting assistance
from the Chief Metropolitan Magistrate or the District Magistrate by the
Financial Institution/secured creditor under section 14 of the Act.
19.
At this juncture, it is
relevant to note, Section 34 of the Act, ousts the jurisdiction of the Civil
Court in respect of any matter, which the Debt Recovery Tribunal or Appellate
Tribunal is empowered to deal with. The said Section 34 of the Act reads as
follows:
"34. Civil court not to have jurisdiction.- No
civil court shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal
is empowered by or under this Act to determine and no injunction shall be
granted by any court or other authority in respect of any action taken or to be
taken in pursuance of any power conferred by or under this Act or under the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)."
Section 35 of the Act states that the provisions of
the SARFAESI Act, 2002, should override other laws, which reads as follows:
"35. The provisions of this Act to override
other laws.-The 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."
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 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 permitted.
21.
In this context, we have to
consider the Division Bench Judgment of this Court reported in (2009) 1 MLJ
(Crl) 416 (Supra). The said Division Bench relied on section 3 of Crl.P.C to
come to its conclusion. Section 3 of Crl.P.C. reads as follows:
K. Arockiyaraj vs The Chief Judicial Magistrate on 27
August, 2013
"3. Construction of references.- (1) In this
Code,-
(a)
any reference, without any
qualifying words, to a Magistrate, shall be construed, unless the context
otherwise requires,-
(i)
in relation to an area outside
a metropolitan area, as a reference to a Judicial Magistrate;
(ii)
in relation to a metropolitan
area, as a reference to a Metropolitan Magistrate;
(b)
any reference to a Magistrate
of the second class shall, in relation to an area outside a metropolitan area,
be construed as a reference to a Judicial Magistrate of the second class, and,
in relation to a metropolitan area, as a reference to a Metropolitan
Magistrate;
(c)
any reference to a Magistrate
of the first class shall,-
(1)
in relation to a metropolitan
area, be construed as a reference to a Metropolitan Magistrate exercising
jurisdiction in that area;
(ii) in relation to any other area, be construed as a
reference to a Judicial Magistrate of the first class exercising jurisdiction
in that area;
(d)
any reference to the Chief
Judicial Magistrate shall, in relation to a metropolitan area, be construed as
a reference to the Chief Metropolitan Magistrate exercising jurisdiction in
that area.
(2)
In this Code, unless the
context otherwise requires, any reference to the Court of a Judicial Magistrate
shall, in relation to a metropolitan area, be construed as a reference to the
Court of the Metropolitan Magistrate for that area.
(3)
Unless the context otherwise
requires, any reference in any enactment passed before the commencement of this
Code,-
(a)
to a Magistrate of the first
class, shall be construed as a reference to a Judicial Magistrate of the first
class;
(b)
to a Magistrate of the second
class or of the third class, shall be construed as a reference to a Judicial
Magistrate of the second class;
(c)
to a Presidency Magistrate or
Chief Presidency Magistrate, shall be construed as a reference, respectively,
to a Metropolitan Magistrate or the Chief Metropolitan Magistrate;
(d)
to any area which is included
in a metropolitan area, as a reference to such metropolitan area, and any
reference to a Magistrate of the first class or of the second class in relation
to such area,
K. Arockiyaraj vs The Chief
Judicial Magistrate on 27 August, 2013
shall be construed as a reference to the Metropolitan
Magistrate exercising jurisdiction in such area.
(4)
Where, under any law, other
than this Code, the functions exercisable by a Magistrate relate to matters-
(a)
which involve the appreciation
or shifting of evidence or the formulation of any decision which exposes any
person to any punishment or penalty or detention in custody pending
investigation, inquiry or trial or would have the effect of sending him for
trial before any Court, they shall, subject to the provisions of this Code, be
exercisable by a Judicial Magistrate; or
(b)
which are administrative or
executive in nature, such as, the granting of a licence, the suspension or
cancellation of a licence, sanctioning a prosecution or withdrawing from a
prosecution, they shall, subject as aforesaid, be exercisable by an Executive
Magistrate.”
22.
Section 5 of Crl.P.C. Provides
a saving clause, which reads as follows:
"5. Saving.- Nothing contained in this Code
shall, in the absence of a specific provision to the contrary, affect any
special or local law for the time being in force, or any special jurisdiction
or power conferred, or any special form of procedure prescribed, by any other
law for the time being in force."
23.
'Metropolitan area' is stated
in Section 8 of Crl.P.C. 'Chief Judicial Magistrate' and 'Additional Chief
Judicial Magistrate' are dealt with under section 12 of Crl.P.C. The local
jurisdiction of Chief Judicial Magistrate is mentioned in Section 14. 'Chief
Metropolitan Magistrate' and 'Additional Chief Metropolitan Magistrate' are
stated in section 17.
24.
'The Executive Magistrate' is
mentioned in Section 20, which reads as follows:
"20. Executive Magistrates.-
(1)
In every district and in every
metropolitan area, the State Government may appoint as many persons as it
thinks fit to be Executive Magistrates and shall appoint one of them to be the
District Magistrate.
(2)
The State Government may
appoint any Executive Magistrate to be an Additional District Magistrate, and
such Magistrate shall have such of the powers of a District Magistrate under
this Code or under any other law for the time being in force, as may be directed
by the State Government.
(3)
Whenever, in consequence of the
office of a District Magistrate becoming vacant, any officer succeeds
temporarily to the executive administration of the district, such officer
shall, pending the orders of the State Government, exercise all the powers and
perform all the duties respectively conferred and imposed by this Code on the
District Magistrate.
(4)
The State Government may place
an Executive Magistrate in charge of a sub-division and may relieve him of the
charge as occasion requires; and the Magistrate so placed in charge of a
sub-division shall be called the Sub- Divisional Magistrate.
(4-A) The State Government may, by general or special
order and subject to such control and directions as it may deem fit to impose,
delegate its powers under sub-section (4) to the District Magistrate.
(5)
Nothing in this section shall
preclude the State Government from conferring, under any law for the time being
in force, on a Commissioner of Police, all or any of the powers of an Executive
Magistrate in relation to a metropolitan area."
The local jurisdiction of the Executive Magistrate is
mentioned in Section 22.
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
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 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 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 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 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 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.
27.
It is a well settled principle
of law that while interpreting the words used in a legislation or parliamentary
enactment, the intention of the legislature is to be borne-in-mind. The Act was
enacted in the year 2002. The legislature was aware of the fact that in
non-metropolitan areas, the Chief Judicial Magistrates function like Chief
Metropolitan Magistrates in Metropolitan areas. If the intention of the
Parliament is to confer power to the Chief Judicial Magistrate in
non-metropolitan areas also, the same should have been specifically stated in
section 14 itself. The legislature purposely not included the Chief Judicial
Magistrate in section 14 to give assistance to the secured creditors in
non-metropolitan areas. The said view was taken by the Aurangabad Bench of the
Bombay High Court in the decision reported in CDJ 2008 BHC 520. Section 14(1)
clearly states that Chief Metropolitan Magistrate or District Magistrate may on
such request being made to assist taking of possession of such assets and documents
to the secured creditors, which the secured creditor is entitled to take
possession, referable to section 13(4). In the said judgment it is held that
the legislature does not seem to have entrusted the functions to the Chief
Judicial Magistrate in non-Metropolitan Areas, although such function has been
entrusted to the Chief Metropolitan Magistrate, a Judicial Officer in
metropolitan areas.
28.
The Bombay High Court in the
decision reported in 2009 (2) D.R.T.C. 431 (supra) also interpreted section 14
to the effect that in non-metropolitan areas the District Magistrate alone can
be approached for getting assistance by the secured creditor as section 14 do
not contemplate adjudication of any issue and is intended only to render
assistance to recover possession including the support of force. The judgment
of the Kerala High Court in AIR 2009 Kerala 14 (supra) was also rendered on the
basis of the wordings used in Crl.P.C. As we have already held that the
SARFAESI Act being a complete Act by itself, the provisions of the Crl.P.C.
cannot be imported viz., section 3. There is no Casus omissus in the enactment.
Therefore, giving interpretation in the context of the definition given in
Crl.P.C. does not arise.
29.
The Hon'ble Supreme Court in
the decision reported in (2013) 4 SCC 381 (Official Liquidator v. Allahabad Bank) considered the question of law as to whether the Company Judge
under the Companies Act, 1956, has jurisdiction at the instance of the Official
Liquidator to set aside the auction or sale held by the Recovery Officer under
the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in
short RDB Act), or whether the Official Liquidator is required to follow the
route as engrafted under the RDB Act by filing an appeal assailing the auction and
the resultant confirmation of sale. The Supreme Court held that the RDB Act,
which was enacted for speedy and summary remedy for recovery of the amount,
which was due to the Banks and Financial Institutions and special procedures
having been stated therein must be given preference, which will override the
provisions of the Companies Act, 1956, to the extent if there is anomalies,
inconsistency between the Acts.
30.
Applying the said principles to
the facts of this case, the SARFAESI Act, 2002, being a special enactment,
intended for the benefit of the secured creditors for speedy recovery of NPA
amount, will have preference over any other Act.
31.
In the decision reported in AIR
1976 SC 331 (Nasiruddin v. State Transport Appellate Tribunal) the Supreme Court held that the Court has to adopt 'just, reasonable and sensible'
interpretation, by referring the observations of Lord Justice Denning.M.R. in
Seaford Court Estates Ltd. v. Ashar, reported in (1949) 2 All ER 155, wherein
the learned Lord observed:
"When a defect appears a Judge cannot simply
fold his hands and blame the draftsman. He must set to work on the constructive
task of finding the intention of Parliament and then he must supplement the
written words so as to give 'force and life' to the intention of the
Legislature. A judge should ask himself the question how, if the makers of the
Act had themselves come across this ruck in the texture of it, they would have
straightened it out ? He must then do as they would have done. A Judge must not
alter the material of which the Act is woven, but he can and should iron out
the creases."
32.
From the above referred
observations of Lord Denning, it is clear that a Judge must not alter the
material of which the Act is woven, but he can and should iron out the creases,
which means, if the intention of the legislature is clear and unambiguous, the
Judge is expected not to give any different interpretation as the language used
is clear and unambiguous.
33.
The Calcutta High Court in its
judgment dated 23.4.2013 in M.A.T.No.389 of 2013 with CAN 3023 of 2013,
considered the decisions of this Court, Kerala High Court as well as the
decisions of Aurangabad Bench and the Bombay Principal Bench. In the said
judgment it is clearly stated as
follows, "........ the legislature did not intend
to bring the Court of law at the stage of Section 13 or
14. Hence it entrusted the Chief Executive of the
District to exercise the power under Section 14. Only exception was made in
case of Metropolis that was entrusted to the Chief Metropolitan Magistrate. We do
not support the logic of the Madras High Court or the Kerala High Court to the
extent, District Magistrate should be seen as Chief Judicial Magistrate. The
learned single Judge of the Madras High Court considered the relevant
provisions of the Criminal Procedure Code where the Chief Metropolitan
Magistrate was authorized to use the power that was vested on the Chief
Judicial Magistrate. It was not otherway round. Had it been only Chief
Metropolitan Magistrate, we would have supported the logic. Once the District
Magistrate was clearly mentioned in Section 14, the intent was clear and
unambiguous. We cannot interpret otherwise. We fully agree, in a case of
Metropolis, the Chief Metropolitan Magistrate having the expertise to examine
the provisions of law, would judiciously exercise such power whereas in case of
other cities or towns the District Magistrate being an Executive without having
the legal expertise would not be so competent like Chief Metropolitan
Magistrate. It is for the legislature to amend the law if they intend to do so.
So long it is not done, we are unable to support the learned single Judge on
the proposition of law."
34.
The literal interpretation is
to be given if the words in the statute are clear and unambiguous and the
object of the enactment should be borne-in-mind while interpreting the statute.
This was emphasised by the Hon'ble Supreme Court in its following decisions:
(a) In Bhudan Singh v. Nabi Bux, ((1969) 2 SCC 481), the Hon'ble
Supreme Court held thus, "The object of every legislation is to advance
public welfare. In other words as observed by Crawford in his book on
"Statutory Constructions" that the entire legislative process is
influenced by considerations of justice and reason. Justice and reason
constitute the great general legislative intent in every peace of legislation.
Consequently where the suggested construction operates harshly, ridiculously or
in any other manner contrary to prevailing conceptions of justice and reason,
in most instance, it would seem that the apparent or suggested meaning of the
statute, was not the one intended by the law makers. In the absence of some
other indication that the harsh or ridiculous effect was actually intended by
the legislature, there is little reason to believe that it represents the
legislative intent."
(b) In K.P.Varghese v.
Income Tax Officer. Ernakulam. ((1981) 4 SCC
173) it is held thus, " The
task of interpretation of a statutory enactment is
not a mechanical task. It is more than a mere reading of mathematical formulae
because few words possess the precision of mathematical symbols. It is an
attempt to discover the intent of the legislature from the language used by it
and it must always be remembered that language is at best an imperfect
instrument for the expression of human thought and as pointed out by Lord
Denning. it would be idle to expect every statutory provision to be
"drafted with divine prescience and perfect clarity”. We can do no better
than repeat the famous words of Judge Learned Hand when he laid:
".... it is true that the words used. even in their literal
sense. are the primary and ordinarily the most
reliable. source of interpreting the meaning of any
writing: be it a statute. a contract or anything else. But it is one of the
surest indexes of a mature and developed jurisprudence not to make a fortress
out of the dictionary; but to remember that statutes always have some purpose
or object to accomplish. whose sympathetic and imaginative discovery is the
surest guide to their meaning."
".... the meaning of a sentence may be more than that of the
separate words. as a melody is more
than the notes. and no degree of particularity can
ever obviate recourse to the setting in which all appear. and which all
collectively create."
(c)
In Atma Ram Mittal v. Ishwar Singh Punia ((1988) 4 SCC 284) in paragraph 9 the Supreme Court held thus.
"9. Judicial time and energy is more often than not consumed in finding
what is the intention of Parliament or in other words. the will of the people.
Blackstone tells us that the fairest and most rational method to interpret the
will of the legislator is by exploring his intentions at the time when the law
was made. by signs most natural and probable. And these signs are either the
words. the context. the subject-matter. the effects and consequence. or the
spirit and reason of the law."
(d)
In 1993 Supp (1) SCC 730 (Indian
Administrative Service (S.C.S.) Association v. Union of
India)the Apex Court in
paragraph 9 held thus. "9................ where
the intention of statutory
amendment is clear and
expressive. words cannot be interpolated. In the first place they are not. in
the case. needed. If they should be added. the statute would more than likely
fail to carry out the legislative intent. The words are the skin of the
language which the Legislature intended to convey. Where the meaning of the
statute is clear and sensible. either with or without omitting the words or
adding one. interpolation is improper. since the primary purpose of the
legislative intent is what the statute says to be so. If the language is plain.
clear and explicit. it must be given effect and the question of interpretation
does not arise. If found ambiguous or unintended. the court can at best iron
out the creases. Any wrong order or defective legislation cannot be righted
merely because it is wrong. At best the court can quash it. if it violates the
fundamental rights or is ultra vires the power or manifestly illegal vitiated
by fundamental laws or gross miscarriage of justice............................................................................ "
(e)
In the case of Nasiruddin v. Sita
Ram Agarwal. ((2003) 2 SCC 577). in paragraphs
35 and 37. the Apex Court held as follows:
K. Arockiyaraj vs The Chief
Judicial Magistrate on 27 August, 2013
"35. In a case where the statutory provision is
plain and unambiguous, the court shall not interpret the same in a different
manner, only because of harsh consequences arising therefrom."
"37. The Court's
jurisdiction to interpret a statute can be invoked when the same is ambiguous.
It is well known that in a given case the court can iron out the fabric but it
cannot change the texture of the fabric. It cannot enlarge the scope of
legislation or intention when the language of the provision is plain and
unambiguous. It cannot add or subtract words to a statute or read something
into it which is not there. It cannot rewrite or recast legislation. It is also
necessary to determine that there exists a presumption that the legislature has
not used any superfluos words. It is well settled that the real intention of
the legislation must be gathered from the language used................................................. "
(f)
In High Court of Gujarat v. Gujarat Kishan Mazdoor
Panchayat ((2003) 4 SCC 712) in paragraphs 33
and 38 the Supreme Court held as follows: "33. In United Bank of
India v. Abhijit Tea Co.(P) Ltd., this Court
noticed: (SCC p.366, paras 25-26) "25. In regard to purposive
interpretation, Justice Frankfurter observed as follows:
'Legislation has an aim, it seeks to obviate some
mischief, to supply an inadequacy, to effect a change of policy, to formulate a
plan of Government. That aim, that policy is not drawn, like nitrogen, out of
the air; it is evidenced in the language of the statute, as read in the light
of other external manifestations of purpose.' ***
38. In the Interpretation and Application of Statutes
by Reed Dickerson, the author at p.135 has discussed the subject while dealing
with the importance of context of the statute in the following terms:
"... The essence of the language is to reflect,
express, and perhaps even affect the conceptual matrix of established ideas and
values that identifies the culture to which it belongs. For this reason,
language has been called 'conceptual map of human experience'."
(g)
In Prakash Kumar v. State of
Gujarat, ((2005) 5 SCC 409), in paragraphs 14 and 20 the Apex Court held thus,
"14. The more stringent the law, the less is the discretion of the court.
Stringent laws are made for the purpose of achieving its objectives. This being
the intendment of the
legislature the duty of the court
is to see that the intention of the legislature is not frustrated. "
"20..... The court cannot enlarge the scope of legislation or
intention when the language of the
statute is plain and
unambiguous. Narrow and pedantic construction may not always be given effect
to. Courts should avoid a construction which would reduce the legislation to
futility. It is also well settled that every statute is to be interpreted
without any violence to its language.............. "
(h)
In the case of New India Assurance
Company Ltd. v. Nusli Neville Wadia, ((2008) 3 SCC
279), in paragraph 52 the Supreme Court held as follows: "52. Barak in his
exhaustive work on "Purposive Construction" explains various meanings
attributed to the terms "purpose". It would be in the fitness of
discussion to refer to Purposive Construction in Barak's words: "Hart and
Sachs also appear to treat 'purpose' as a subjective concept. I say 'appear'
because, although Hart and Sachs claim that the interpreter should imagine
himself or herself in the legislator's shoes, they introduce
K.
Arockiyaraj vs The Chief Judicial Magistrate on 27 August, 2013
two elements of objectivity: First, the interpreter
should assume that the legislature is composed of reasonable people seeking to
achieve reasonable goals in a reasonable manner; and second, the interpreter
should accept the non- rebuttable presumption that members of the legislative
body sought to fulfil their constitutional duties in good faith. This
formulation allows the interpreter to inquire not into the subjective intent of
the author, but rather the intent the author would have had, had he or she
acted reasonably."
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 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.
36.
In fine, the reference is
answered by holding that the decision of the Division Bench of this Court
reported in (2009) 1 MLJ (Crl) 416 does not laid down the correct proposition
of law, and thus it is overruled. The reference is answered accordingly.
37.
As we are called upon to answer
only the reference made to us, as to 'whether the reference to the Chief
Metropolitan Magistrate under Section 14 of the SARFAESI Act, 2002, would
include Chief Judicial Magistrate in non- metropolitan areas', we are not
dealing with the rights of the petitioners as well as respondents in this
judgment. For deciding the other issues, we are inclined to post the writ petitions
before the appropriate Bench.
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