/2022 INSC 0865/
REPORTABLE
IN THE SUPREME COURT OF INDIA
EXTRA ORDINARY APPELLATE JURISDICTION
SPECIAL LEAVE PETITION NO.  16013 OF 2022
Balkrishna Rama Tarle Dead Thr LRS & Anr.           ...Petitioner(s)
Versus
Phoenix ARC Private Limited & Ors.    …Respondent(s)
O R D E R
M.R. SHAH, J.
1. Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment and order dated 03.08.2022 passed by the High
Court   of   Judicature   at   Bombay   in   Writ   Petition   No.
9749/2021, by which the Division Bench of the High Court
has   allowed   the   said   writ   petition   preferred   by   the
respondent   No.   1   herein   –   secured   creditor   and   has   set
aside   order   dated   27.08.2021   passed   by   the   designated
authority   under   Section   14   of   the   Securitisation   and
Reconstruction   of   Financial   Assets   and   Enforcement   of
Security   Interest   Act,   2002   (hereinafter   referred   to   as   the
SARFAESI   Act,   2002)   and   directed   the   designated
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authority under Section 14 of the SARFAESI Act to dispose
of   the   application   under   Section   14   of   the   SARFAESI   Act
afresh, legal heirs of original respondent No. 2 claiming to
be   the   tenant   of   the   mortgaged   property,   have   preferred
the present Special Leave Petition. 
  
2. The   Religare   Finvest   Ltd.   (hereinafter   referred   to   as   the
Religare) sanctioned a loan of Rs. 6 crores in favour of the
borrowers.   The   said   loan   was   secured   by   a   registered
mortgage   created   by   borrowers   in   favour   of   Religare   in
respect   of   the   property   ­   secured   assets.   The   borrowers
committed   defaults   in   repayment   of   the   said   loan   which
led   to   Religare   classifying   borrowers’   account   as   a   Non­
Performing   Asset   (NPA).   The   Religare   thereafter,   issued   a
notice   dated   13.04.2018   under   Section   13(2)   of   the
SARFAESI   Act   calling   upon   borrowers   to   pay   the   amount
then   outstanding   under   the   said   facility.   That   thereafter,
by   a   Deed   of   Assignment   dated   29.09.2018,   Religare
assigned all  its right,  title, interest, and  benefit under  the
said loan  agreement  to  respondent  No.  1 herein –  original
petitioner   No.   1   before   the   High   Court.   Thus,   respondent
No.  1   –  original  petitioner   No.  1  stepped  into   the   shoes   of
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Religare   and   became   the   secured   creditor   and   in   that
capacity   issued   a   notice   dated   21.05.2019   under   Section
13(2)   of   the   SARFAESI   Act   to   borrowers   calling   upon
borrowers to make payment of a sum of Rs. 5,83,22,866/­.
That   thereafter,   the   secured   creditor   took   symbolic
possession of the secured assets under Section 13(4) of the
SARFAESI Act. On 21.09.2019, the same was intimated to
the   borrowers  vide  their   letter  dated  21.09.2019.  A  public
notice   was   also   issued   by   the   secured   creditor   in   two
newspapers   in   compliance   with   the   provisions   of   the
Security   Interest   (Enforcement)   Rules,   2002.   That
thereafter,   the   secured   creditor   filed   an   application   under
Section   14   of   the   SARFAESI   Act   seeking   assistance   of
designated   authority   –   respondent   No.   3   herein   –   District
Magistrate,   Nashik,   for   taking   physical   possession   of   the
secured assets. The petitioner herein – original respondent
No. 2 claiming to be a tenant in respect of the ground floor
plus   first   floor   showroom   along   with   service   station   on   a
part   of   the   secured   assets   bearing   Nos.   465   and   463
sought   to   intervene   in   the   said   proceedings   filed   under
Section   14   of   the   SARFAESI   Act.   The   petitioner   placed
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reliance   upon   an   order   dated   20.04.2018   passed   in
Regular Civil Suit No. 58/2018 filed by him against one of
the   borrowers,   whereby   one   of   the   borrowers   was
restrained   from   dis­possessing   him   from   the   said
premises.   At   this   stage,   it   is   required   to   be   noted   that
neither  the  borrower(s) nor  the petitioner(s) instituted any
proceedings   before   the   Debt   Recovery   Tribunal   (DRT)
under   Section   17   of   the   SARFAESI   Act   against   the   steps
taken   under   Section   13   of   the   SARFAESI   Act.   That
thereafter,   the   designated   authority   passed   the   following
order dated 27.08.2021 and declined to assist the secured
creditor   in   taking   possession   of   the   secured   assets   and
kept   the   said   application   pending   by   observing   that   after
termination   of   the   tenancy   rights   of   the   petitioner   by   the
Finance   Company   by   following   due   procedure   of   law   the
further   orders   regarding   possession   of   the   mortgage
property will be decided. The order dated 27.08.2021 is as
under: ­ 
1. In   consideration   of   the   reasons   recorded   in   the
above   referred   issues   and   conclusions,   the
Application   of   the   Finance   Company   is   kept   for
decision.
2. After   termination   of   the   tenancy   rights   of   the
third­person   Complainant   Shri.   Balkrishna
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Rama   Tarle   by   the   Finance   Company   by
following due procedure of law the further orders
regarding   possession   of   the   mortgage   property
will be decided.
3. If any party feel aggrieved due to this order, then
they   may   file   an   appeal   under  section   17   of   the
Securitisation   Act,   2002   before   Hon’ble   Debts
Recovery Tribunal, Mumbai.
4. No order as to cost.”
2.1 Feeling   aggrieved   and   dissatisfied   with   the   order   dated
27.08.2021   passed   by   the   designated   authority   –
Additional   District   Magistrate,   Nashik   in   not   passing   any
order of assisting the secured creditor in taking possession
of   the   secured   assets   in   exercise   of   powers   under   Section
14   of   the   SARFAESI   Act,   the   secured   creditor   preferred
writ   petition   before   the   High   Court.   By   the   impugned
judgment and order, the Division Bench of the High Court
has   set   aside   order   dated   27.08.2021   passed   by   the
designated   authority/Additional   District   Magistrate   by
observing   that   such   an   order   is   beyond   the   scope   and
ambit   of   the   powers   to   be   exercised   under   Section   14   of
the   SARFAESI   Act.   That   thereafter,   the   Division   Bench   of
the   High   Court   has   directed   the   designated
authority/Additional   District   Magistrate   to   hear   and
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dispose   of   the   application   under   Section   14   of   the
SARFAESI Act in accordance with the provisions of Section
14 of the SARFAESI Act.
       
2.2 Feeling   aggrieved   and   dissatisfied   with   the   impugned
judgment   and   order   passed   by   the   High   Court,   the   third
party – petitioner(s) claiming to be a tenant in some of the
secured   assets   have   preferred   the   present   Special   Leave
Petition. 
 
3. Shri Vinay  Navare, learned Senior  Advocate, appearing on
behalf of the petitioners has vehemently submitted that in
the   facts   and   circumstances   of   the   case   and   when   the
petitioners claimed to be the tenant of the original landlord
with   respect   to   some   of   the   secured   assets   of   which   the
possession   was   sought   and   when   the   original   writ
petitioner stepped into the shoes of the original landlord as
rightly   observed   by   the   designated   authority   –   Additional
District   Magistrate   unless   the   secured   creditor   who
stepped into the shoes of the original landlord initiates the
legal  proceedings   for   eviction   of  the   tenant  cannot   get  the
possession   in   an   application   under   Section   14   of   the
SARFAESI Act. 
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3.1 It is vehemently submitted by Shri Navare, learned Senior
Advocate,   appearing   on   behalf   of   the   petitioners   that   the
High Court ought to have appreciated that the tenancy was
subsisting   and   continuing   since   prior   to   the   mortgage   of
the property and therefore, their rights are to be protected
and   unless   and   until   the   proceedings   are   initiated   for
eviction   of   the   tenant,   the   secured   creditor   who   will   be   in
the   shoes   of   the   original   landlord,   cannot   get   the
possession   in   an   application   under   Section   14   of   the
SARFAESI   Act.   Reliance   is   placed   upon   the   decisions   of
this   Court   in   the   cases   of   Harshad   Govardhan   Sondagar
Vs.   International   Assets   Reconstruction   Company
Limited and Ors.; (2014) 6 SCC 1  and  Vishal N. Kalsaria
Vs. Bank of India and Ors.; (2016) 3 SCC 762.
4. We have heard learned counsel appearing on behalf of the
petitioners   at   length.   At   the   outset,   it   is   required   to   be
noted   that   after   initiation   of   the   proceedings   and   taking
steps under  Section 13(2) and 13(4) of the SARFAESI  Act,
thereafter,   the   secured   creditor   has   approached   the
District   Magistrate   by   submitting   an   application   under
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Section   14   of   the   SARFAESI   Act   and   has   requested   the
District Magistrate/Additional District Magistrate to assist
the   secured   creditor   in   obtaining   the   possession   of   the
secured   assets.  It  is   required  to   be  noted   that   neither   the
original   borrowers   nor   even   the   petitioners   who   are
claiming to be a tenant of the secured assets have initiated
any   proceedings   before   Debt   Recovery   Tribunal   under
Section   17   of   the   SARFAESI   Act.   The   proceedings   before
the   District   Magistrate   were   under   Section   14   of   the
SARFAESI Act. In the said application under Section 14 of
the   SARFAESI   Act   instead   of   passing   any   final   order   to
assist the secured creditor in getting the possession of the
secured assets and while keeping the said application, the
Additional   District   Magistrate   has   passed   an   order   that
only   after   the   termination   of   the   tenancy   rights   of   the
petitioner   by   the   finance   company   (secured   creditor)   by
following due procedure of law the further orders regarding
possession   of   the   mortgage   property,   the   said   application
shall   be   decided.     The   aforesaid   order   passed   by   the
Additional   District   Magistrate   has   been   set   aside   by   the
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High   Court   which   is   the   subject   matter   of   the   present
Special Leave Petition. 
5. Therefore,   the   short   question   which   is   posed   for
consideration of this Court is whether while exercising the
powers under Section 14 of the SARFAESI Act, the District
Magistrate/designated   authority   could   have   passed   such
an   order   that   unless   and   until   the   secured   creditor
terminates   the   tenancy   rights   of   the   third   person   by
following   due   procedure   of   law   and   further   orders
regarding   possession   of   the   mortgaged   property   then   and
then   only   an   application   under   Section   14   of   the
SARFAESI Act will be decided?
5.1 While considering the aforesaid question/issue, the scope,
ambit,   and   jurisdiction   of   the   District
Magistrate/designated   authority   under   Section   14   of   the
SARFAESI Act are required to be considered. Section 14 of
the SARFAESI Act reads as under: ­
“ 14. Chief Metropolitan Magistrate or District Magistrate
to assist secured creditor in taking possession of secured
asset. —(1)   Where   the   possession   of   any   secured   assets   is
required to be taken by the secured creditor or if any of the
secured   assets   is   required   to   be   sold   or   transferred   by   the
secured creditor under the provisions of this Act, the secured
creditor may, for the purpose of taking possession or control
of   any   such   secured   assets,   request,   in   writing,   the   Chief
Metropolitan   Magistrate   or   the   District   Magistrate   within
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whose   jurisdiction   any   such   secured   asset   or   other
documents relating thereto may be situated or found, to take
possession thereof, and the Chief Metropolitan Magistrate or
as   the   case   may   be,   the   District   Magistrate   shall,   on   such
request being made to him—
(a) take possession of such asset  and documents relating
thereto; and 
(b)   forward   such   asset   and   documents   to   the   secured
creditor: 
[Provided   that   any   application   by   the   secured   creditor   shall
be   accompanied   by   an   affidavit   duly   affirmed   by   the
authorised officer of the secured creditor, declaring that— 
(i) the aggregate amount of financial assistance granted and
the   total   claim   of   the   Bank   as   on   the   date   of   filing   the
application; 
(ii)the   borrower   has   created   security   interest   over   various
properties   and   that   the   Bank   or   Financial   Institution   is
holding   a   valid   and   subsisting   security   interest   over   such
properties and the claim of the Bank or Financial Institution
is within the limitation period; 
(iii)the   borrower   has   created   security   interest   over   various
properties giving the details of properties referred to in sub­
clause (ii)above; 
(iv)  the  borrower  has committed default  in repayment  of  the
financial   assistance   granted   aggregating   the   specified
amount; 
(v)   consequent   upon   such   default   in   repayment   of   the
financial   assistance   the   account   of   the   borrower   has   been
classified as a non­performing asset; 
(vi) affirming that the period of sixty days notice as required
by the provisions of sub­section (2) of section 13, demanding
payment   of   the   defaulted   financial   assistance   has   been
served on the borrower; 
(vii)   the   objection   or   representation   in   reply   to   the   notice
received   from   the   borrower   has   been   considered   by   the
secured   creditor   and   reasons   for   non­acceptance   of   such
objection   or   representation   had   been   communicated   to   the
borrower; 
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(viii)   the   borrower   has   not   made   any   repayment   of   the
financial   assistance   in   spite   of   the   above   notice   and   the
Authorised Officer is, therefore, entitled to take possession of
the secured assets under the provisions of sub­section (4) of
section 13 read with section 14 of the principal Act; 
(ix)   that   the   provisions   of   this   Act   and   the   rules   made
thereunder had been complied with:
Provided   further   that   on   receipt   of   the   affidavit   from
the   Authorised   Officer,   the   District   Magistrate   or   the   Chief
Metropolitan   Magistrate,   as   the   case   may   be,   shall   after
satisfying   the   contents   of   the   affidavit   pass   suitable   orders
for   the   purpose   of   taking   possession   of   the   secured   assets
[within a period of thirty days from the date of application]
[Provided   also   that   if   no   order   is   passed   by   the   Chief
Metropolitan   Magistrate   or   District   Magistrate   within   the
said period of thirty days for reasons beyond his control, he
may,   after   recording   reasons   in   writing   for   the   same,   pass
the   order   within   such   further   period   but   not   exceeding   in
aggregate sixty days.] 
Provided   also   that   the   requirement   of   filing   affidavit
stated   in   the   first   proviso   shall   not   apply   to   proceeding
pending   before   any   District   Magistrate   or   the   Chief
Metropolitan  Magistrate,  as  the  case  may  be,  on the  date of
commencement of this Act.]
[(1A) The District Magistrate or  the Chief Metropolitan
Magistrate   may   authorise   any   officer   subordinate   to   him,—
(i)to   take   possession   of   such   assets   and   documents   relating
thereto; and (ii) to forward such assets and documents to the
secured creditor.]
(2)   For   the   purpose   of   securing   compliance   with   the
provisions   of   sub­section   (1),   the   Chief   Metropolitan
Magistrate or the District Magistrate may take or cause to be
taken   such   steps   and   use,   or   cause   to  be   used,   such   force,
as may, in his opinion, be necessary. 
(3)   No   act   of   the   Chief   Metropolitan   Magistrate   or   the
District   Magistrate   [any   officer   authorised   by   the   Chief
Metropolitan   Magistrate   or   District   Magistrate]   done   in
pursuance   of   this   section   shall   be   called   in   question   in  any
court or before any authority.”
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5.2 On   a   fair   reading   of   Section   14   of   the   SARFAESI   Act,   it
appears that for taking possession of the secured assets in
terms   of   Section   14(1)   of   the   SARFAESI   Act,   the   secured
creditor   is   obliged   to   approach   the   District
Magistrate/Chief   Metropolitan   Magistrate   by   way   of   a
written application requesting for taking possession of the
secured   assets   and   documents   relating   thereto   and   for
being forwarded to it (secured creditor) for further action.
The   statutory   obligation   enjoined   upon   the   CMM/DM
is to immediately move into action after receipt of a written
application under Section 14(1) of the SARFAESI Act from
the secured creditor for that purpose. As soon as such an
application   is   received,   the   CMM/DM   is   expected   to   pass
an   order   after   verification   of   compliance   of   all   formalities
by the secured creditor referred to in the proviso in Section
14(1) of the SARFAESI Act and after being satisfied in that
regard,   to   take   possession   of   the   secured   assets   and
documents relating thereto and to forward the same to the
secured   creditor   at   the   earliest   opportunity.   As   observed
and held by this Court in the case of  NKGSB Cooperative
Bank Limited Vs. Subir Chakravarty & Ors.  (Civil Appeal
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No.   1637/2022)   decided   on   25.02.2022,   the   aforesaid   act
is   a   ministerial   act.   It   cannot   brook   delay.   Time   is   of   the
essence  and  this  is  the  spirit  of  the   special  enactment.  In
the  recent decision in the  case of   M/s  R.D.   Jain  and  Co.
Vs. Capital First Ltd. & Ors.   (Civil Appeal No. 175/2022)
decided   on   27.07.2022,   this   Court   had   an   occasion   to
consider   the   powers   exercisable   by   District
Magistrate/Chief   Metropolitan   Magistrate   under   Section
14   of   the   SARFAESI   Act.   After   considering   the   object   and
purpose   of   Section   14   of   the   SARFAESI   Act   and   the
Scheme   of   the   Act   under   Section   14,   it   is   observed   and
held in paragraphs 7 to 9 as under: ­ 
“7.   Now   so   far   as   the   powers   exercisable   by   DM   and   CMM
under   Section   14   of   the   SARFAESI   Act   are   concerned,
statement   of   objects   and   reasons   for   which   SARFAESI   Act
has been enacted reads as under: ­
“STATEMENT OF OBJECTS AND REASONS 
The financial sector has been one of the key drivers in India's
efforts to achieve success in rapidly developing  its economy.
While   the   banking   industry   in   India   is   progressively
complying   with   the   international   prudential   norms   and
accounting   practices   there   are   certain   areas   in   which   the
banking and financial sector do not have a level playing field
as compared to other participants in the financial markets in
the   world.   There   is   no   legal   provision   for   facilitating
securitisation   of   financial   assets   of   banks   and   financial
institutions.   Further,   unlike   international   banks,   the   banks
and financial institutions in India do not have power to take
possession   of   securities   and   sell   them.   Our   existing   legal
framework relating  to commercial  transactions  has  not kept
pace   with   the   changing   commercial   practices   and   financial
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sector reforms. This has resulted in slow pace of recovery of
defaulting   loans   and   mounting   levels   of   non­performing
assets   of   banks   and   financial   institutions.   Narasimham
Committee I and II and Andhyarujina Committee constituted
by   the   Central   Government   for   the   purpose   of   examining
banking sector reforms have considered the need for changes
in   the   legal   system   in   respect   of   these   areas.   These
Committees,   inter   alia,   have   suggested   enactment   of   a   new
legislation   for   securitisation   and   empowering   banks   and
financial institutions to take possession of the securities and
to sell them  without the intervention of the court. Acting on
these   suggestions,   the   Securitisation   and   Reconstruction   of
Financial   Assets   and   Enforcement   of   Security   Interest
Ordinance, 2002 was promulgated on the 21st June, 2002 to
regulate securitisation and reconstruction of financial assets
and   enforcement   of   security   interest   and   for   matters
connected   therewith   or   incidental   thereto.   The   provisions   of
the Ordinance would enable banks and financial institutions
to   realise   long­term   assets,   manage   problem   of   liquidity,
asset   liability   mismatches   and   improve   recovery   by
exercising powers to take possession of securities, sell them
and   reduce   nonperforming   assets   by   adopting   measures   for
recovery or reconstruction.”   
Thus,   the   underlying   purpose   of   the   SARFAESI   Act   is
to empower the financial institutions in India to have similar
powers   as   enjoyed   by   their   counterparts,   namely,
international   banks   in   other   countries.   One   such   feature   is
to   empower   the   financial   institutions   to   take   possession   of
securities and sell them. The same has been translated into
provisions   falling   under   Chapter   III   of   the   SARFAESI   Act.
Section 13 deals with enforcement of security interest. Sub­
Section   (4)   thereof   envisages   that   in   the   event   a   default   is
committed by the borrower in discharging his liability in full
within   the   period   specified   in   sub­section   (2),   the   secured
creditor   may   take   recourse   to   one   or   more   of   the   measures
provided   in   sub­section   (4).   One   of   the   measures   is   to   take
possession   of   the   secured   assets   of   the   borrower   including
the   right   to   transfer   by   way   of   lease,   assignment   or   sale  for
realising   the   secured   asset.   That,   they   could   do   through
their   “authorised   officer”   as   defined   in   Rule   2(a)   of   the
Security Interest (Enforcement) Rules, 2002.
7.1   After   taking   over   possession   of   the   secured   assets,
further steps to lease, assign or sale the same could also be
taken   by   the   secured   creditor.   However,   Section   14   of   the
SARFAESI Act predicates that if the secured creditor intends
to take possession of the secured assets, must approach the
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CMM/DM by way of an application in writing, and on receipt
of   such   request,   the   CMM/DM   must   move   into   action   in
right   earnest.   After   passing   an   order   thereon,   he/she
(CMM/DM)   must   proceed   to   take   possession   of   the   secured
assets and documents relating thereto for being forwarded to
the   secured   creditor   in   terms   of   Section   14(1)   read   with
Section 14(2) of the SARFAESI Act. As noted earlier, Section
14(2)  is   an enabling   provision  and   permits  the  CMM/DM  to
take   such   steps   and   use   force,   as   may,   in   his   opinion,   be
necessary.
7.2   At   this   stage,   it   is   required   to   be   noted   that   along   with
insertion   of   sub­section   (1A),   a   proviso   has   also   been
inserted in sub­section (1) of Section 14 of the SARFAESI Act
whereby   the   secured   creditor   is   now   required   to   comply
certain   conditions   and   to   disclose   that   by   way   of   an
application   accompanied   by   affidavit   duly   affirmed   by   its
authorised   officer   in   that   regard.   Sub­Section   (1A)   is   in   the
nature of an explanatory provision and it merely restates the
implicit   power   of   the   CMM/DM   in   taking   services   of   any
officer   subordinate   to   him.   As   observed   and   held   by   this
Court in the case of  NKGSB Cooperative Bank Ltd.  (supra),
the insertion of sub­section (1A) is not to invest a new power
for the first time in the CMM/DM as such. 
8.   Thus,   considering   the   scheme   of   the   SARFAESI   Act,   it   is
explicit   and   crystal   clear   that   possession   of   the   secured
assets   can   be   taken   by   the   secured   creditor   before
confirmation   of   sale   of   the   secured   assets   as   well   as   post­
confirmation   of   sale.   For   taking   possession   of   the   secured
assets,   it   could   be   done   by   the   “authorised   officer”   of   the
Bank   as   noted   in   Rule   8   of   the   Security   Interest
(Enforcement) Rules, 2002. 
8.1   However,   for   taking   physical   possession   of   the   secured
assets   in   terms   of   Section   14(1)   of   the   SARFAESI   Act,   the
secured creditor is obliged to approach the CMM/DM by way
of   a   written   application   requesting   for   taking   possession   of
the   secured   assets   and   documents   relating   thereto   and   for
being   forwarded   to   it   (secured   creditor)   for   further   action.
The   statutory   obligation   enjoined   upon   the   CMM/DM   is   to
immediately   move   into   action   after   receipt   of   a   written
application   under   Section   14(1)   of   the   SARFAESI   Act   from
the   secured   creditor   for   that   purpose.   As   soon   as   such   an
application is received, the CMM/DM is expected to pass an
order after verification of compliance of all formalities by the
secured creditor referred to in the proviso in Section 14(1) of
the SARFAESI Act and after being satisfied in that regard, to
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take   possession   of   the   secured   assets   and   documents
relating   thereto   and   to   forward   the   same   to   the   secured
creditor at the earliest opportunity. As mandated by Section
14 of the SARFAESI Act, the CMM/DM has to act within the
stipulated   time   limit   and   pass   a   suitable   order   for   the
purpose  of  taking  possession  of   the  secured  assets  within   a
period of 30 days from the date of application which can be
extended   for   such   further   period   but   not   exceeding   in   the
aggregate,   sixty   days.   Thus,   the   powers   exercised   by   the
CMM/DM   is   a   ministerial  act.   He   cannot   brook   delay.   Time
is of the essence. This is the spirit of the special enactment.
As   observed   and   held   by   this   Court   in   the   case   of   NKGSB
Cooperative   Bank   Ltd.   (supra),   the   step   taken   by   the
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/herself   or   through   any
officer   subordinate   to   him/her,   including   the   advocate
commissioner   who   is   considered   as   an   officer   of   his/her
court.   Section   14   does   not   oblige   the   CMM/DM   to   go
personally   and   take   possession   of   the   secured   assets   and
documents relating  thereto. Thus, we reiterate that  the step
to   be   taken   by   the   CMM/DM   under   Section   14   of   the
SARFAESI   Act,   is   a   ministerial   step.   While   disposing   of   the
application   under   Section   14   of   the   SARFAESI   Act,   no
element   of   quasi­judicial   function   or   application   of   mind
would require.   The Magistrate has to adjudicate and decide
the   correctness   of   the   information   given   in   the   application
and nothing more. Therefore, Section 14 does not involve an
adjudicatory   process   qua   points   raised   by   the   borrower
against   the   secured   creditor   taking   possession   of   secured
assets.    
9.   Thus,   in   view   of   the   scheme   of   the   SARFAESI   Act,   more
particularly, Section 14 of the SARFAESI Act and the nature
of   the   powers   to   be   exercised   by   learned   Chief   Metropolitan
Magistrate/learned District Magistrate, the High Court in the
impugned judgment and order has rightly observed and held
that   the   power   vested   in   the   learned   Chief   Metropolitan
Magistrate/learned   District   Magistrate   is   not   by   way   of
persona designata.”   
   
Thus,   the   powers   exercisable   by   CMM/DM   under
Section   14   of   the   SARFAESI   Act   are   ministerial   step   and
Section   14   does   not   involve   any   adjudicatory   process   qua
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points raised by the borrowers against the secured creditor
taking possession of the secured assets. In that view of the
matter   once   all   the   requirements   under   Section   14   of   the
SARFAESI   Act   are   complied   with/satisfied   by   the   secured
creditor,   it   is   the   duty   cast   upon   the   CMM/DM   to   assist
the secured creditor in obtaining the possession as well as
the documents related to the secured assets even with the
help of any officer subordinate to him and/or with the help
of   an   advocate   appointed   as   Advocate   Commissioner.   At
that stage, the CMM/DM is not required to adjudicate the
dispute   between   the   borrower   and   the   secured   creditor
and/or   between   any   other   third   party   and   the   secured
creditor   with   respect   to   the   secured   assets   and   the
aggrieved   party   to   be   relegated   to   raise   objections   in   the
proceedings under Section 17 of the SARFAESI Act, before
Debts   Recovery   Tribunal.   Under   the   circumstances   in   the
present   case   no   error   has   been   committed   by   the   High
Court   in   setting   aside   the   order   dated   27.08.2021   passed
by   the   designated   authority   keeping   the   application
pending   till   the   secured   creditor   initiates   the   legal
proceedings   for   eviction   of   the   tenant   cannot   get   the
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possession   in   an   application   under   Section   14   of   the
SARFAESI   Act.   The   High   Court   has   rightly   directed   the
designated   authority   to   proceed   further   with   the
application under Section 14 of the SARFAESI Act, and to
dispose   of   the   same   in   accordance   with   the   provisions   of
Section 14 of the SARFAESI Act. 
6. Now so far as the reliance placed upon the decision of this
Court   in   the   case   of   Harshad   Govardhan   Sondagar
(supra)   by   the   learned   counsel   appearing   on   behalf  of   the
petitioner is concerned, the same shall not be applicable to
the   facts   of   the   case   on   hand,   what   is   observed   by   this
Court  in the  aforesaid case is the  DM/CMM has  to  give  a
notice   and   opportunity   of   hearing   to   the   person   in
possession of the secured assets claiming to be a “Class (1)
or (2)” lessee of mortgagor/borrower, as well as to secured
creditor,   consistent   with   principles   of   natural   justice,   and
then   take   a   decision.   In   the   said   decision,   it   is   not
observed   that   the   DM/CMM   has   to   adjudicate   the   rights
between the parties.
7. Now so far as the reliance placed upon the decision of this
Court   in   the   case   of   Vishal   N.   Kalsaria   (supra)   by   the
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learned   counsel   appearing   on   behalf   of   the   petitioner   is
concerned, the said decision shall also not be applicable to
the   facts   of   the   case   on   hand.   In   the   said   decision,   the
question   before   this   Court   was   of   conflict   of   claim   under
the   Maharashtra   Rent   Control   Act,   1999   and   the
provisions   of   the   SARFAESI   Act,   and   which   law   will
prevail. The scope and ambit of the powers to be exercised
under Section 14 of the SARFAESI Act were not directly in
question   before  this   Court.  Even  as   observed  and   held  by
this Court in the aforesaid decision, a judgment cannot be
interpreted and applied to fact situations by reading it as a
statute.   One   cannot   pick   up   a   word   or   sentence   from   a
judgment   to   construe   that   it   is   the   ratio   decidendi   on   the
relevant aspects of the case (para 33). 
  
8. In  view  of  the  above  and  for  the  reasons  stated  above,  we
are of the opinion  that the  High Court has not committed
any error in passing the judgment and order and directing
the   designated   authority   to   dispose   of   the   application
under Section 14 of the SARFAESI Act. We are in complete
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agreement   with   the   view   taken   by   the   High   Court.   The
Special Leave Petition stands dismissed. 
   
………………………………….J.
[M.R. SHAH]
NEW DELHI; ………………………………….J.
SEPTEMBER 26, 2022 [KRISHNA MURARI]
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