Case Law Details
Bajaj Finance Ltd. Vs LD. District Collector (Gujarat High Court)
On perusal of the section 26E and Section 14 of the SARFAESI Act, it is clear that the District Magistrate has to discharge the ministerial act of providing assistance to the secured creditor to take physical possession of the secured assets when the secured creditor has initiated the proceedings under section 13 of the SARFAESI Act.
As per the provisions of section 26E of the SARFAESI Act, the secured creditor has first claim/charge over the sale proceeds of the secured assets towards the recovery of the outstanding dues. Therefore, it is the mandatory for the District Magistrate to pass an order to provide police assistance to the secured creditors to take the possession of the secured assets as per provision of section 14 of the SARFAESI Act. Merely because there was an attachment of the property by the State Government under the provisions of Act of 1978, the possession of the property cannot be continued with the borrower and as such physical possession of the property ought to have been taken over by the petitioner – secured creditor as per the provisions of the SARFAESI Act.
In Gruh Finance Limited Vs District Magistrate, Surat being Special Civil Application No.18551 of 2015 decided on 25.11.2016, this Court held and observed in respect of scope of powers under Section 14 of the SARFAESI Act as under,
”The powers and the jurisdiction under Section 14 of the Act exercisable by the District Magistrate is not adjudicatory in nature. What are the rights of the parties in the civil realm, are not required to be gone into by the District Magistrate, nor the District Magistrate has powers to pronounce upon the rights of the parties in the context of any other law while entertaining the application under Section 14 of the Act. The function is anything but adjudicatory. The claims in respect of rights over the property cannot be considered at all. The powers are executory nature. What the Magistrate is supposed to see is whether ingredients of Section 14 of the Act are satisfied or not. The power is described as ministerial where the District Magistrate would turn line his adjudicatory eye. No rights are determined for the parties in Section 14 proceedings, as for that the Legislature has provided a special remedy before the Debt Recovery Tribunal who exercises the adjudicatory powers in respect of the disputes which may arise between the Bank and borrower and other aggrieved persons in course of the steps under the SARFAESI Act, 2002.” (Para 6.1)
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