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2025 DIGILAW 844 (AP)

Yarramilli Mangamani, wife of Ganesh Tulasi Ram Gupta v. Union Government of India, Rep. by its Finance Secretary, the Government of India, New Delhi

2025-07-09

DHIRAJ SINGH THAKUR, RAVI CHEEMALAPATI

body2025
ORDER : Ravi Cheemalapati, J. Challenging the order passed in Crl.M.P.No.60 of 2025 by Chief Judicial Magistrate, Rajahmundry, that the same was passed in contravention of Section 14(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the Act, 2002) and without jurisdiction, since the. property situate in Kakinada city, this writ petition has been filed. 2. The contents of the writ petition, in brief, are that consequent to classification of petitioner's loan account as Non Performing Asset; proceedings under SARFAESI Act, 2002 were initiated and notice under Section 13(2) demanding the petitioner to repay the amount was issued followed by possession notice and notice for E-auction. That thereafter the petitioner was informed by respondent no.4 that the property was sold in public auction, which was found to be false upon the enquiries made by her and immediately she filed writ petition vide W.P.No.2157 of 2024 and this Court allowed the said writ petition directing the respondents therein that the petitioner shall not be dispossessed except in accordance with the procedure prescribed by law. That the petitioner filed caveat petitions before the Junior, Senior and District Courts at Kakinada, within whose jurisdiction her property is situated, by duly serving copies of the caveats to respondent nos. 2 to 4. It is further stated in the writ petition that respondent nos. 2 to 4 filed petition under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate, Rajamahendravaram, East Godavari and by suppressing the truth of location of property at Kakinada, obtained orders of appointment of an Advocate Commissioner for taking symbolic possession of the property. That though the petitioner had cleared the due amount under the loan account, the Advocate Commissioner without serving any notice on her, took symbolic possession of the property by affixing a notice on wall of the property: That the Chief Judicial Magistrate, Rajamahendravaram, East Godavari has no jurisdiction to pass orders under Section 14 ,of the SARFAESI Act, since the property is situated in Kakinada and therefore, the order passed in Crl.M.P.No.60 of 2025 is liable to be set aside. Hence the writ petition. 3. Heard Sr/ Basheer Ahmed, learned counsel for the petitioner, and Sri Posani Ven/cateswar/u, learned senior counsel for Sri P.Sai Surya Teja, learned counsel for respondent nos.2 to 4. 4. Hence the writ petition. 3. Heard Sr/ Basheer Ahmed, learned counsel for the petitioner, and Sri Posani Ven/cateswar/u, learned senior counsel for Sri P.Sai Surya Teja, learned counsel for respondent nos.2 to 4. 4. Sri Basheer Ahmed, learned counsel for the petitioner, in elaboration would contend that since the subject property is situated in Kakinada; the III Additional District & Sessions Judge, Kakinada is competent to exercise jurisdiction under Section 14 of the SARFAESI Act, however, since the caveat petition filed by petitioner was pending therein, with a view to avoid issuance of notice to the petitioner, the respondent nos. 2 to 4, by suppressing truth of location of the property, filed petition under Section 14 of the Act before the Chief Judicial Magistrate, Rajamahendravaram, East Godavari and obtained orders. Therefore, the order passed in Crl.M.P.No.60 of 2025 is uitra vires hence the same is unsustainable as also the symbolic possession taken by the Advocate Commissioner. Accordingly, prayed to allow the writ petition with a direction to respondent nos.2 to 4 to follow the procedure contemplated under section 14(1) of the SARFAESI Act. 5. Per contra, Sri Posani Venkateswarlu, learned senior counsel, representing learned counsel for the respondent/bank, would contend that as per Section 14 of the SARFAESI Act, the Chief Metropolitan Magistrate or District Magistrate within whose jurisdiction any secured asset is situated, on the request being made, shall assist in taking possession of such asset. By placing reliance on the decision of Hon'ble Supreme Court in Indian Bank v. D.Visaiakshmt, (2019) 20 Supreme Court Cases 47 the learned senior counsel would further contend that the functions of Chief Metropolitan Magistrate and Chief Judicial Magistrate are equivalent and similar in nature and therefore the Chief Judicial Magistrate is equally competent to deal with the application moved by the secured creditor under Section 14 of the SARFAESI Act. The learned senior counsel would further contend the Principal Senior Civil Judge-cum-Assistant Sessions Judge, Rajahmundry has been appointed as the Chief Judicial Magistrate, East Godavari by High Court of Andhra Pradesh in exercise of powers conferred by Sub Section (1) of Section 12 of the Code of Criminal Procedure, 1973 as per Andhra Pradesh Gazette, dated 05.07.2002. The learned senior counsel would further contend the Principal Senior Civil Judge-cum-Assistant Sessions Judge, Rajahmundry has been appointed as the Chief Judicial Magistrate, East Godavari by High Court of Andhra Pradesh in exercise of powers conferred by Sub Section (1) of Section 12 of the Code of Criminal Procedure, 1973 as per Andhra Pradesh Gazette, dated 05.07.2002. Therefore, since the property is situated in East Godavari District, a non-metropolitan area, the said Court alone can exercise jurisdiction under section 14 of the SARFAESI Act and as such the bank had rightly filed petition and the same was accordingly disposed of by the Chief Judicial Magistrate. The writ petition being meritless deserves dismissal. Accordingly, prayed to dismiss the writ petition. 6. Perused the material available on record and considered the submissions made by learned counsel for the parties. 7. Whatever may be the reason, the petitioner did not choose to file any documents in proof of the contents pleaded in the petition including the orders stated to have been passed by this Court in the earlier writ petition filed by the petitioner vide W.P.No.2157 of 2024. 8. According to the petitioner, the writ petition filed by him earlier vide W.P.No.2157 of 2024 was allowed by this Court with a direction that the petitioner be not dispossessed from the subject property except under due procedure contemplated under law. 9. Section 14 of the SARFAESI Act specifies the procedure for obtaining possession of the secured asset, which obligates the Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset. 10. Secured creditor/respondent nos.2 to 4 filed a petition vide Crl.M.P.No.60 of 2025 under section 14 of the SARFAESI Act for appointment of Advocate Commissioner and for issuance of warrant for taking physical possession of the property of the petitioner before the Chief Judicial Magistrate, Rajamahendravaram, East Godavari and accordingly an Advocate Commissioner was appointed and he took symbolic possession of the property on 22.02.2025. 11. The main thrust of contention of the petitioner is that since the subject property situates at Kakinada, the Chief Judicial Magistrate, Rajamahendravaram has no jurisdiction to exercise powers under section 14 of the SARFAESI Act. 12. 11. The main thrust of contention of the petitioner is that since the subject property situates at Kakinada, the Chief Judicial Magistrate, Rajamahendravaram has no jurisdiction to exercise powers under section 14 of the SARFAESI Act. 12. In Indian Bank v. D. Visaiakshi, the Hon'ble Supreme Court while dealing with' the issue as to whether Chief Judicial Magistrate is competent to deal with the application moved by the secured creditor under Section 14 of the SARFAESI Act, held as follows : "35. Indisputably, the expressions "CMM"and "DM"have not been defined in the 2002 Act That definition can thus, be traced to the provisions of CrPC. It is also well established by now that the 2002 Act, is a self-contained code. Concededly, the nature of inquiry to be conducted by the designated authorities under the 2002 Act, is spelt out in Section 14 of the 2002 Act The same is circumscribed and is limited to matters specified in clauses (i) to (ix) of the first proviso in sub-section (1) of Section 14 of the 2002 Act, inserted in 2013. Prior to the insertion of that proviso, it was always understood that in such inquiry, it is not open to adjudicate upon contentious pleas regarding the rights of the parties in any manner. The stated authorities could only do verification of the genuineness of the plea and upon being satisfied that it is genuine, the adjudication thereof could then be left to the court of competent jurisdiction. 36. Suffice it to observe that an inquiry conducted by the stated authority under Section 14 of the 2002 Act, is a sui generis inquiry. In that, majoriy it is an administrative or executive function regarding verification of the affidavit and the relied upon documents filed by the parties. That inquiry is required to be concluded within the stipulated time-frame. While undertaking such an inquiry, as is observed by this Court, the authority must display judicious approach, in considering the relevant factual position asserted by the parties. That presupposes that it is a quasi-judicial inquiry though, a non-judicial process. The inquiry does not result in adjudication of inter se rights of the parties in respect of the subject property or of the fact that the transaction is a fraudulent one or otherwise. 37. Notably, the powers and functions of CMM and OM are equivalent and similar, in relation to matters specified in CrPC. The inquiry does not result in adjudication of inter se rights of the parties in respect of the subject property or of the fact that the transaction is a fraudulent one or otherwise. 37. Notably, the powers and functions of CMM and OM are equivalent and similar, in relation to matters specified in CrPC. These expressions (CMM and OM) are interchangeable and synonymous to each other. Moreover, Section 14 of the 2002 Act does not explicitly exclude ON from dealing with the request of the secured creditor made thereunder. The power to be exercised under Section 14 of the 2002 Act by the authority concerned is, by its very nature, non-judiciai or States coercive power. Furthermore, the borrower or the persons claiming through borrower or for that matter likely to be affected by the proposed action being in possession of the subject property, have statutory remedy under Section 17 of the 2002 Act and/or judicial review under Article 226 of the Constitution of India. In that sense, no prejudice is likely to be caused to the borrower/lessee; nor is it possible to suggest that they are rendered remediless in law. At the same time, the secured creditor who invokes the process under Section 14 of the 2002 Act does not get any advantage much less added advantage. Taking totality of all these aspects, there is nothing wrong in giving expansive meaning to the expression "CMM" as inclusive of OM concerning non-metropoiitan area who is otherwise competent to discharge administrative as well as judicial functions as delineated m CrPCon the same terms as CMM. Thatinterpretation wouldmake the provision more meaningful. Such interpretation does not militate against the legislative intent nor it would be a case of allowing an unworthy person or authority to undertake inquiry which is limited to matters specified in Section 14 of the 2002 Act." 13. The above observations would make it clear that the expression Chief Metropolitan Magistrate used in SARFAESI Act is inclusive of Chief Judicial Magistrate in non-metropolitan area, who is otherwise competent to discharge administrative as well as judicial functions as delineated in Code of Criminal Procedure on the same terms as Chief Metropolitan Magistrate, Therefore, in non-metropolitan areas, the Chief Judicial Magistrate is competent to discharge the functions of Chief Metropolitan Magistrate under the provisions of SARFAESI Act. 14. 14. Copy of the Andhra Pradesh Gazette dated 05.07.2002 placed on record by learned senior counsel would indicate that the Principal Senior Civil Judge-cum-Assistant Sessions Judge, Rajahmundry was appointed as Chief Judicial Magistrate, East Godavari. Therefore, the Chief Judicial Magistrate, East Godavari can exercise jurisdiction under SARFAESI Act over East Godavari District of which Kakinada city is a part wherein the subject property is situated. 15. In view of the above, there is no lack of competence or jurisdiction for the Chief Judicial Magistrate, Rajahmundry, East Godavari District in appointing Advocate Commissioner and entrusting warrant for taking possession of the property situate in Kakinada City under the provisions of the SARFAESI Act. 16. Therefore, the ground urged by the petitioner is unsustainable. Hence, the writ petition is meritless and the same deserves dismissal. 17. Accordingly, the writ petition is dismissed. Interim order dated 17.03.2025 shall stand vacated. There shall be no order as to costs. Pending miscellaneous petitions, if any, shall stand closed.