Allahabad Bank Vs District Magistrate (Punjab & Haryana High Court)
Summary: The Punjab & Haryana High Court held that a Civil Court cannot negate the rights of a secured creditor under the SARFAESI Act in matters falling within the jurisdiction of the Debts Recovery Tribunal. The Court considered two civil proceedings concerning the secured asset—one involving a tenant’s injunction and another involving attachment before judgment—and held that neither could restrain Allahabad Bank because the Bank was not a party to those proceedings and its prior secured interest remained unaffected. The Court reiterated that a person aggrieved by measures under Section 13(4), including a tenant or third party, has the statutory remedy under Section 17 before the DRT. The Court further explained the scope of the District Magistrate’s power under Section 14.
The function is administrative and executory, not adjudicatory. The Magistrate’s satisfaction is confined to the factual correctness of the statutory affidavit and does not extend to deciding legal disputes between parties. It also held that the officer deputed under Section 14(1A) should complete execution within 60 days from receipt of the order; if execution is not possible, the matter should be reported back to the District Magistrate. Although there is no statutory requirement of advance notice before taking possession, the Court considered it desirable that at least 15 days’ notice be given to the occupant. The State’s modification application was dismissed. Respondent Nos. 1 and 3 were directed to hand over actual physical possession of the secured asset to the petitioner Bank within four weeks, after giving 15 days’ advance notice to the occupants/borrowers.
