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Whether Executive Magistrate can be delegated the powers of the District Magistrate under section 14 of the SARFAESI Act, 2002, to take possession of secured assets of the Borrower – Calcutta High Court

  • In a recent judgment of the division bench of the Hon’ble Calcutta High Court in Joy Kali Oil Industries Pvt. Ltd. v. Union Of India and Ors., the Appellant filed an appeal on the grounds that the Executive Magistrate is not the District Magistrate as contemplated under Section 14 of the SARFAESI Act and the order of the District Magistrate (“DM”) delegating his powers to the Executive Magistrate for taking possession of the assets of the Appellant was illegal and ought to be quashed.​
  • The Hon’ble Bench discussed and relied on the decisions of the Hon’ble Supreme Court whereby it was held that Section 14 of the SARFAESI Act is not a provision dealing with the jurisdiction of the Court as such. It is a remedial measure available to the secured creditor, who intends to take assistance of the authorized officer for taking possession of the secured asset for enforcement of security furnished by the borrower. The authorized officer essentially exercises administrative or executive functions, to provide assistance to the secured creditor and this may take the color of quasi-judicial function, which can be discharged even by the Executive Magistrate. The authorized officer is not required to adjudicate the contentious issues raised by the concerned parties but only verify the compliances referred to in the first proviso of Section 14 of SARFAESI Act and being satisfied in that behalf proceed to pass an order(s) to facilitate the taking over of the possession of the secured assets.​
  • In view of the above facts and circumstances, the Hon’ble Bench held that the step taken by the Chief Metropolitan Magistrate (“CMM”)/DM while taking possession of the secured assets and documents relating thereto is a ministerial step. It could be taken by the CMM/DM himself or through any officer subordinate to him. Section 14 does not oblige the CMM/DM to go personally and take possession of the secured assets which can be discharged even by the Executive Magistrate as was done in this case. Thereby, upheld the decision of the Single Judge and refused to interfere with his order rejecting the submissions of the Appellants.​

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