Axis Bank Limited Vs Authorized Officer (DART Kolkata)
The appeal before the Debts Recovery Appellate Tribunal, Kolkata arose from an order dated 19 February 2025 passed by the Debts Recovery Tribunal-III, Kolkata in S.A. No. 1041 of 2025. By the impugned order, the DRT restrained the appellant bank from taking any coercive steps in respect of the secured assets, despite an order dated 4 November 2024 having been passed by the Chief Judicial Magistrate, Alipore under Section 14 of the SARFAESI Act, 2002. Aggrieved by this restraint, the secured creditor preferred the present appeal.
At the outset, the Appellate Tribunal noted the procedural history of the case and the conduct of the respondents. The matter had been heard earlier on 13 August 2025, when arguments were concluded and judgment was reserved. During that hearing, multiple requests for adjournment were made by different counsels appearing for the respondents after the hearing had already commenced, all of which were declined. Subsequently, on a mention made by the respondents, an opportunity to argue was granted on 18 August 2025. Even thereafter, when the matter was listed again on 10 December 2025, no submissions were advanced on behalf of the respondents. The Tribunal observed that the conduct indicated an attempt to delay the proceedings and accordingly declined further adjournment.
On merits, the Tribunal examined the pleadings and records. The securitisation application had been filed by the respondents challenging the notices issued under Sections 13(2) and 13(4) of the SARFAESI Act. After the bank obtained an order under Section 14 of the Act from the Chief Judicial Magistrate, the respondents challenged that order before the DRT by filing I.A. No. 4838 of 2024. The challenge was on the ground that the magistrate’s order was not in accordance with law, that the nine-point affidavit filed by the authorised officer was not properly considered, and that there was an incorrect recording of the sanctioned loan amounts. According to the respondents, the actual sanctioned amounts were ₹1,08,77,030 and ₹30,00,000, aggregating to ₹1,38,77,030, whereas the magistrate recorded ₹1,08,82,857 and ₹29,18,712, aggregating to ₹1,38,01,569. They also raised an issue regarding the delay between filing of the affidavit and passing of the order.
The bank opposed the application before the DRT, contending that an amount of ₹1,38,01,569 had been disbursed, that the account was classified as a non-performing asset on 9 July 2023, and that the nine-point affidavit was duly filed and considered. It was submitted that, after being satisfied with the contents of the affidavit, the Chief Judicial Magistrate passed the order dated 4 November 2024 under Section 14 of the Act.
The DRT, however, held that the magistrate had not recorded the total claim of the bank as incorporated in the notice under Section 13(2) or in the affidavit, which it considered violative of Section 14. The DRT also noted that the magistrate had not recorded reasons for the delay in passing the order and, on these grounds, restrained the bank from taking coercive steps without leave of the Tribunal.
In appeal, the secured creditor argued that the DRT erred in law. It was submitted that the nine-point affidavit fully complied with statutory requirements and contained the relevant amounts, and that the statutory time limit for passing an order under Section 14 was directory and not mandatory.
Upon examining the records, the Appellate Tribunal found that the affidavit filed by the authorised officer showed the sanctioned amount as ₹1,38,01,569 and the total claim amount as ₹1,15,53,347, which corresponded with the figures recorded by the Chief Judicial Magistrate. Although the magistrate did not separately record the total claim in express terms, the order revealed that the affidavit and records were considered in detail before passing the Section 14 order. The Tribunal observed that no specific format is prescribed for an order under Section 14 and that such an order is in the nature of an executing order. As long as the magistrate applies his mind to an affidavit containing all statutory requirements, the order cannot be held to be faulty.
With regard to the delay, the Tribunal noted that judicial authorities have clarified that the time limits under Section 14 are intended to ensure expeditious action and to instil confidence in creditors, but do not render the magistrate functus officio if the order is passed beyond the prescribed period. The Tribunal also observed that the respondents had not specifically pleaded that the magistrate lost jurisdiction due to the delay.
In view of these findings, the Appellate Tribunal held that the DRT failed to exercise its jurisdiction in accordance with law and recorded findings contrary to settled legal principles. Consequently, the appeal was allowed, the impugned order dated 19 February 2025 was set aside, and no order as to costs was made.
FULL TEXT OF THE ORDER OF DRAT KOLKATA
1. Instant appeal has arisen against the order dated 19.2.2025 passed by Learned DRT-III, Kolkata in S.A. 1041 of 2025 (Raghav Kedia & Another -vs- Axis Bank) whereby Learned DRT restrained the Appellant Bank not to take any coercive steps in respect of the secured assets in compliance of the order dated 4.11.2024 passed by Learned CJM, Alipore under Section 14 of the SARFAESI Act, 2002 (hereinafter referred to as the ‘Act).
2. Feeling aggrieved by the impugned order, Appellant/Secured Creditor preferred the appeal.
3. At the very outset, it is observed that this matter was listed for hearing on 10.12.2025 wherein in the first-round pass over was sought for by the Learned Counsel for Respondent which was allowed but in the revised list an adjournment was sought for by the Respondent which was declined. It would be appropriate to observe here that this matter was heard on 13.8.2025 and the judgment was reserved and the following order was passed:
“Heard the Learned Counsel for Appellant Mr. Pankaj Kumar Mukherjee and Learned Counsel for Respondent, Ms. Ashmita Lohia.
It is to be observed that Mr. Nimish Mishra appears virtually when the hearing has already begun and the Learned Counsel for Appellant is arguing the matter. He sought for some time for making the submission. He was told that hearing has already begun and he may argue the matter by the time hearing is concluded. But despite this fact, since he was busy in some other proceedings, a request is made by Mr. Rajeev Malty, although he is not a Counsel in this matter, for granting some time which is declined. Thereafter, Ms. Rituparna Sanyal virtually appears and again makes a similar request which has already been declined. Her request is also declined since Ms. Ashmita Lohia, Learned Counsel for Respondent, has already argued the matter.
Judgment reserved.”
4. Thereafter on mention made by the Learned Counsel for Respondent he was allowed to argue the matter vide order dated 18.8.2025. Despite granting opportunity on 10.12.2025 no submissions are made on behalf of the Respondents. Accordingly, it is apparent that only purpose of the Respondents is to drag the proceedings; hence request for adjournment was declined and the matter was reserved for judgment.
5. I have heard the Learned Counsel for Appellant at length and perused the record.
6. As per the pleadings, S.A. was filed by the Respondents herein challenging the notice under Section 13 (2) and 13 (4) of the Act issued by the Appellants herein. Subsequently, an order under Section 14 of the Act was obtained by the Appellants herein which was again challenged by the Respondents before the Learned DRT by moving an I.A. No. 4838 of 2024 wherein it was submitted that the order, passed by the Learned Chief Judicial Magistrate, is not in accordance with law. Nine-point affidavit, filed by the Authorised Officer, was not duly considered. An amount of Rs.1,08,82,857.00 and Rs.29,18,712.00 total Rs.1,38,01,569.00 was sanctioned by the Bank, as recorded by the Learned Chief Judicial Magistrate. But in fact, an amount of Rs.1,38,77,030.00 was sanctioned by the Bank. Learned Chief Judicial Magistrate failed to record the same.
7. Opposition was filed by the Bank before the Learned DRT stating that an amount of Rs.1,38,01,569.00 was disbursed by the Bank. Account was classified as N.P.A. on 9.7.2023. Nine-point affidavit was filed before the Learned Chief Judicial Magistrate. After being satisfied from the statement, as made out in the affidavit, Learned Chief Judicial Magistrate passed the order dated 4.11.2024.
8. Learned DRT recorded a finding that the Learned Chief Judicial Magistrate has not recorded the total claim of the Bank, as incorporated in the notice under Section 13 (2) of the Act or in the affidavit; which is violative of the provisions of Section 14 of the Act. As far as classification of the account as N.P.A. is concerned, it is recorded by the Learned DRT that it is not within the jurisdiction of the Learned Chief Judicial Magistrate to adjudicate regarding classification of the account as N.P.A.
9. Further, Learned Chief Judicial Magistrate did not record any reason for the delay in passing the order as the affidavit was filed on 22nd February, 2024 and the order was passed on 4.11.2024. Consequently, Learned DRT disposed of the I.A. 4838 of 2024 with a direction to the Bank not to take any coercive steps without the leave of the Tribunal.
10. Learned Counsel for Appellant would submit that the Learned DRT erred in recording the finding that the amount required to be shown in the affidavit was not mentioned in the order of the Learned Chief Judicial Magistrate. Nine-point affidavit was submitted in accordance with the provisions of law wherein the amount was duly mentioned. It is further submitted that the provisions of passing the order within the stipulated period of sixty days is directory and not mandatory.
11. I have gone through the records. I.A. was filed by the Respondents challenging the order under Section 14 of the Act passed by Learned Chief Judicial Magistrate on the ground that the amount sanctioned was Rs.1,08,77,030.00 and Rs.30,00,000.00 total Rs.1,38,77,030.00 vide sanction letters dated 8.3.2018 and 9.3.2018. But Learned Chief Judicial Magistrate has wrongly recorded the amount as Rs.1,08,82,857.00 and Rs.29,18,712.00 total Rs.1,38,01,569.00.
12. In the affidavit filed by the Authorised Officer, the sanctioned amount was shown as Rs.1,38,01,569.00 and the total claim amount was shown as Rs.1,15,53,347.00. The same amount is mentioned by the Learned Chief Judicial Magistrate in his order under Section 14 of the Act. This amount, as mentioned by the Authorised Officer, co-relates with the amount mentioned in the order. The amount, mentioned in the affidavit, co-relates with the application filed by the Bank. Learned Chief Judicial Magistrate although specifically has not recorded the total claim of the Bank but reading of the order under Section 14 of the Act reveals that the Learned Chief Judicial Magistrate has considered the contents of the affidavit as well as the record in detail and after being satisfied with the contents of the affidavit, Learned Chief Judicial Magistrate passed the order under Section 14 of the Act. It is well established law that no specific format is prescribed for passing an order by the Learned Chief Judicial Magistrate under Section 14 of the Act rather, it is an order in the nature of an executing order. Hon’ble Calcutta High Court in Jaldhaka Cold Storage Private Limited -vs- UCO Bank (2024 SCC On Line Cal 262) has placed reliance upon a judgment of Division Bench in Syndicate Bank -vs- ICaliji Engineering Works (2015 SCC OnLine Cal 875) wherein it was held that:
“In the absence of any format or mandate envisaged under the Act requiring Learned Magistrate to pass an order how and in what format, as long as it reflects that he had applied mind to the contents of the affidavit and if the affidavit contained all the requirements envisaged under Section 14 of the Act, the order passed by the Learned District Magistrate cannot be said to be a faulty.”
13. In the facts of the present case, above case laws squarely apply. In the present case, Learned Chief Judicial Magistrate has categorically, in detail, considered the affidavit and after being satisfied with the contents has passed the impugned order hence, I find no illegality in the impugned order.
14. Learned DRT has taken another ground that the Learned Chief Judicial Magistrate has not recorded any reasons for delay in passing the order as the affidavit was filed on 22nd February, 2024 and the order was passed on 4.11.2024. In Bright -vs- District Collector & Others ((2021) 2 SCC 392J Hon’ble Supreme Court in paragraph 21 held that:
“The time limit is to instil a confidence in creditors that The District Magistrate will make an attempt to deliver possession as well as to impose a duty on the District Magistrate to make an earnest effort to comply with the mandate of the statute to deliver the possession within thirty days and for reasons to be recorded within sixty days. In this light, the remedy under Section 14 of the Act is not rendered redundant if the District Magistrate is unable to handover the possession. The District Magistrate will still be enjoined upon, the duty to facilitate delivery of possession at the earliest.”
In the State Bank of India -vs- Union Bank of India (2025 SCC OnLine Cal 1947) Hon’ble High Court held that the District Magistrate does not become functus officio if the steps under Section 14 of the Act cannot be conclusively taken within the stipulated period of thirty days or the extended time period of sixty days. The aforesaid authorities will still have the jurisdiction to take steps under Section 14 of the Act. Accordingly, even if the Learned Chief Judicial Magistrate could not pass the order within the extended period of sixty days, it does not render him functus officio. Moreover, perusal of the I.A. reveals that no plea is taken by the Respondents that the Learned Chief Judicial Magistrate becomes functus officio by passing the order after sixty days.
15. Accordingly, I am of the view that the Learned DRT has failed to exercise its jurisdiction in accordance with law by passing the impugned order. Learned DRT erred in recording the findings which are against law.
16. Accordingly, appeal deserves to be allowed.
ORDER
Appeal is allowed. Impugned order, dated 19.2.2025 passed by Learned DRT-III, Kolkata in S.A. 1041 of 2025 (Raghav Kedia & Another -vs- Axis Bank), is set aside.
No order as to costs.
File be consigned to Record room.
Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.
Order signed, dated and pronounced in open Court.
