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2019 DIGILAW 388 (CAL)

MD HAKIMUDDIN PARWANA v. SYNDICATE BANK

2019-03-19

DEBANGSU BASAK

body2019
JUDGMENT : DEBANGSU BASAK, J. 1. An order of the Debts Recovery Appellate Tribunal (in short DRAT) dated January 10, 2019 passed in Appeal No. 203 of 2018 (Syndicate Bank Vs. Md. Hakimuddin parwana) is under challenge in the present writ petition. 2. Learned advocate for the petitioner submits that, the Bank invoked the provisions of Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act of 2002). Initially, the petitioner was faced with an order dated April 3, 2018. The same was passed by the Additional District Magistrate (ADM). The same was challenged under Section 17 of the Act of 2002 and was set aside. However, in course of hearing of the application under Section 17 of the Act of 2002, the Bank produced a copy of an order dated May 7, 2018 passed by the District Magistrate (DM). He submits that, the initial order dated April 3, 2018 was numbered as 4' by the ADM. There is no material made available on record that, the Bank made two applications under Section 14 of the Act of 2002. The subsequent order dated May 7, 2018 is numbered as 'Order No. 30'. In a span of about 26 days between the orders dated April 3, 2018 and May 7, 2018 apparently, 26 orders were passed by the DM. He then draws the attention of the Court to the order dated May 7, 2018 of the DM and submits that, it is signed on April 17, 2018. In any event, he submits that, the DM authorised the ADM (General), Jalpaiguri to depute one Executive Magistrate to take possession of the secured assets. He submits that, the DM exceeded his powers under Section 14(1-A) of the Act of 2002 in doing so. The DM under Section 14(1- A) of the Act of 2002 is authorised to direct any officer subordinate to him to take possession of the secured assets and to forward such assets to the secured creditor. In the present case, the DM proceeded to authorise the ADM (General) to depute one Executive Magistrate to take possession of the secured assets. The same is not permissible. He relies upon an unreported judgment and order dated July 4, 2014 passed by the Division Bench in M.A. No. 26 of 2014 (Chellaperumal Vs. The Authorised Officer). In the present case, the DM proceeded to authorise the ADM (General) to depute one Executive Magistrate to take possession of the secured assets. The same is not permissible. He relies upon an unreported judgment and order dated July 4, 2014 passed by the Division Bench in M.A. No. 26 of 2014 (Chellaperumal Vs. The Authorised Officer). Therefore, according to him, the impugned order of the DRAT being perverse should be quashed. 3. Learned advocate for the Bank submits that, the DM did not exceed the jurisdiction under Section 14 (1-A) of the Act of 2002 in directing the ADM (General), Jalpaiguri to depute the Executive Magistrate to take possession of the secured assets. Moreover, in the present case, the borrower is in debt of an amount in excess of Rs.90 lakhs. Therefore, according to him, no interference is called for. 4. A secured creditor is entitled to invoke the provisions of the Act of 2002 to recover its claim. Section 14 of the Act of 2002 allows a secured creditor to obtain assistance from the Chief Metropolitan Magistrate (CMM) or the DM, as the case may be, to take possession of the secured assets. Section 14 of the Act of 2002 contemplates that the secured creditor will apply before the CMM or the DM, as the case may be, for assistance, to take possession of the secured assets. Upon such application, the CMM or the DM, as the case may be, will pass an order in terms of Section 14(1-A) of the Act of 2002. Section 14(1-A) of the Act of 2002 is as follows: “14(1-A) The District Magistrate or the Chief Metropolitan Magistrate may authorise any officer subordinate to him,- (i) to take possession of such assets and documents relating thereto; and (ii) to forward such assets and documents to the secured creditor.” 5. Section 14(1-A) of the Act of 2002 allows the DM or the CMM, as the case may be, to authorise any officer subordinate to him, to take possession of such assets and forward the same to the secured creditor. 6. In the present case, the secured creditor applied under Section 14 of the Act of 2002. Initially, an order dated April 3, 2018 was passed by the ADM (General), Jalpaiguri. The same was challenged by the petitioner under Section 17 of the Act of 2002. 6. In the present case, the secured creditor applied under Section 14 of the Act of 2002. Initially, an order dated April 3, 2018 was passed by the ADM (General), Jalpaiguri. The same was challenged by the petitioner under Section 17 of the Act of 2002. On such challenge being made, the Debts Recovery Tribunal by its order dated May 29, 2018 quashed the order dated April 3, 2018 of the ADM as being without jurisdiction. However, such order of the Debts Recovery Tribunal records the production of the order dated May 7, 2018 passed by the DM, Jalpaiguri under Section 14 of the Act of 2002, at the hearing on behalf of the Bank. There is some substance in the contention of the petitioner that, there are anomalies in the order dated May 7, 2018 passed by the DM. The anomalies are largely two folds. One is with regard to the dating of the order. It appears that, the signature of the DM is dated April 17, 2018 while the order bears the date as May 7, 2018. In any event, there is a recording in the impugned order of the DRAT that the DM subsequently clarified the position by an order stating that, the order was actually prepared on April 17, 2018 and it was subsequently dated on May 7, 2018. Be that as it may, apart from the aspect of date of such order, there is a more fundamental aspect of such order which requires consideration. The DM authorised the ADM (General), Jalpaiguri to depute one Executive Magistrate to take possession of the secured assets and forward the same to the secured creditor by the order dated May 7, 2018. In my view, the same is not permissible. The DM acting under Section 14 of the Act of 2002 is empowered to authorise any officer subordinate to him, to take possession of the secured assets and to forward the same to the secured creditor. It does not authorise the DM to ask a subordinate officer to depute another person to take possession of the secured assets and make the same over to the secured creditor. An authority is required to act in terms of the statute empowering it to act or not at all. It does not authorise the DM to ask a subordinate officer to depute another person to take possession of the secured assets and make the same over to the secured creditor. An authority is required to act in terms of the statute empowering it to act or not at all. In the facts of the present case, therefore, the impugned order of the DM is beyond the powers granted to the DM under Section 14(1-A) of the Act of 2002. Such impugned order is quashed. The order of the DRAT under challenge is set aside. 7. Chellaperumal (supra) considers the provisions of Section 14 of the Act of 2002 and is of the view that, the ADM was not specifically empowered by the State Government to exercise powers exercisable by the DM under Section 14 of the Act of 2002. 8. WP No. 4894(W) of 2019 is allowed accordingly. This order will, however, not prevent the secured creditor from approaching the District Magistrate, in accordance with law or the District Magistrate in hearing and disposing of the application under Section 14 of the Act of 2002 in accordance with law or the Bank from making a fresh application to the DM under Section 14 of the Act of 2002. No order as to costs. 9. Urgent certified website copies of this judgment and order, if applied for, be made available to the parties upon compliance of the requisite formalities.