Bombay High Court
M/S Shubham Flour Mill A Proprietorship … vs State Of Maharashtra Through Police … on 4 March, 2026
2026:BHC-NAG:3635
Judgment
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR
CRIMINAL APPLICATION APL NO.1523/2025
1. M/s.Shubham Flour Mill,
A proprietorship concern through
its proprietor Shri Rahul s/o
Purushottam Tapdiya,
aged about 32 years, occupation: business,
r/o plot No.B-6, MIDC Mini Industry
Lohari Road, Akot, district,
Akola - 444 101.
2. Shri Rahul s/o Purushottam Tapdiya
aged about 32 years, occupation : business,
r/o Gajanan Nagar, Near Hanuman
Mandir, Akola,
district - Akola - 440 013. ..... Applicants.
:: V E R S U S ::
1. State of Maharashtra,
through Police Station Officer,
Police Station, Akola.
2. Indian Bank,
through its Chief Manager/Authorized
Officer Shri Jaisheel Sharma,
Zonal Officer at Palm Road,
Civil Lines, Nagpur-440 001.
3. Shri Shubham s/o Purshottam Tapdiya,
aged about 28 years, occupation : business,
r/o plot No.93, Veer Chakra Colony,
.....2/-
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Nr.Sai Mandir, Katol Road,
Nagpur - 440 030.
4. Shri Purshottam Mohanlal Tapdiya,
aged about 60 years, occupation : business,
r/o Gajanan Nagar, Hanuman Mandir,
Akot, district Akola. ..... Non-applicants.
================================
Shri S.M.Pande, Counsel for Applicants.
Shri A.M.Kadukar, APP for the NA No.1/State.
Shri Karan Sachdev, Counsel for NA No.2.
Shri D.A.Sonwane, Counsel for NA No.3.
Ms Sunita Paul, Counsel for NA No.4
================================
CORAM : URMILA JOSHI-PHALKE, J.
RESERVED ON : 26/02/2026
PRONOUNCED ON : 04/03/2026
JUDGMENT
1. Heard learned counsel appearing for respective parties.
Admit. Heard finally by consent.
2. The present application is preferred by applicants for
quashing and setting aside the impugned order dated
26.9.2025 passed below Exh.5 in Criminal Revision
No.113/2025 passed by learned Additional Sessions Judge,
Akola and order dated 30.8.2025 passed by learned
…..3/-
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Additional Chief Judicial Magistrate, Akola in Criminal Case
No.326/2025.
3. The applicants are proprietary concern and doing its
business at Akola. Non-applicant No.2 is a financial
institution (the bank). The applicants have obtained financial
assistance from the bank in the nature of Term Loan-1 of
Rs.14,28,521.60; Term Loan-2 of Rs.56,45,974.25; CECLS-1
of Rs.25,00,000/-; CECLS-3 of Rs.52,50,000/-, and OCC of
Rs.7,50,00,000/-. Against the said loans, towards security for
repayments of these loans equitable mortgage in 4 immovable
properties was executed in favour of the bank. Three
properties, which are subject-matter of the instant
proceedings, include one residential plot at Akola and one
property which includes three plots at Akot and one industrial
plot with constructed factory at Akot. Whereas, fourth
property is located at Nagpur. The bank has subsequently
sanctioned ad-hoc cash credit limit of Rs.1,30,00,000/- to the
applicants on 31.5.2024. As the applicants failed to repay the
…..4/-
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said loan amounts, it was classified as “Non Performing
Assets” (NPA) and the bank has issued a Demand Notice in
view of Section 13(2) of The Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (the SARFAESI Act).
4. The applicants on 23.1.2025, in response to the notice
dated 26.11.2024 made representation as per Section 13(3-A)
of the SARFAESI Act. On 31.1.2025, the bank rejected
representation made by applicants and on 11.2.2025
preferred an application under Section 14 of the SARFAESI
Act before learned Additional Chief Judicial Magistrate at
Akola for taking possession of the properties at Akot vide
Criminal Case No.326/2025. Learned Chief Judicial
Magistrate allowed the application and appointed Advocate
Shri Mohd.Zaheeruddin Kabiruddin as Court Commissioner to
take possession of the secured assets mentioned in the
application by directing that the Court Commissioner to take
such steps and use such force including breaking open the
…..5/-
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lock or any hurdle thereof by taking assistance of police if
required at the expenses of the applicants and if any
articles/documents found in the secured asset, deliver its
possession to the authorized officer of the applicants after
preparing panchanama and taking inventory. It was further
directed to the bank to pay amount of Rs.10,000/- as fees to
the Court Commissioner and directed the Court
Commissioner to submit a report regarding taking and
delivering possession of the secured assets to the authorized
officer of the bank.
5. Being aggrieved and dissatisfied with the same,
applicants preferred a revision bearing Criminal Revision
No.113/2025 which came to be dismissed on 26.9.2025 and
hence, the present application.
6. Learned counsel for applicants submitted that learned
Additional Chief Judicial Magistrate at Akola was incompetent
in view of unambiguous language of Section 14 of the
…..6/-
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SARFAESI Act and Section 10 of the BNSS 2023 which
substituted CrPC 1974 containing pari materia provisions. It
is submitted that Section 10 of the BNSS and Section 12 of
the CrPC empower the High Court to appoint Judicial
Magistrate First Class to the Chief Judicial Magistrate and
Additional Chief Judicial Magistrate. However, sub-clause (2)
of those Sections specifically stipulates that Additional Chief
Judicial Magistrate shall have all or any of the powers of a
Chief Judicial Magistrate under this Sanhita or the CrPC or
under any other law for the time being in force as the High
Court may direct. He submitted that the Additional Chief
Judicial Magistrate thus gets only such powers of the Chief
Judicial Magistrate as the High Court may direct that as a
matter of fact the High court issued two Notifications dated
27.12.2010 and 26.10.2016 under Section 12(2) of the Code
and appointed Joint CJSD in Judicial Districts and Taluka
Places as Additional Chief Judicial Magistrate. However, there
is no direction about confer of powers of the Chief Judicial
…..7/-
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Magistrate on Additional Chief Judicial Magistrate in those
Notifications. Thus, these Notifications are not covered under
Section 10(2) of the BNSS till this date and, therefore, the
order passed by learned Additional Chief Judicial Magistrate
is without jurisdiction and, therefore, it vitiates the entire
proceeding. It is submitted by him that learned Additional
Sessions Judge, Akola has not considered this aspect and
committed a serious error in rejecting the application for
grant of stay by ignoring mandatory provisions contained in
Section 10 of the BNSS 2023. He submitted that the main
revision filed by the applicants is still pending before learned
Additional Sessions Judge. He further submitted that this
application is maintainable under Section 482 of the CrPC in
view of inherent powers given to this court and prayed for
quashing and setting aside the order passed by learned
Additional Chief Judicial Magistrate as well as learned
Additional Sessions Judge.
…..8/-
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7. Learned counsel for applicants placed reliance on
following decisions:
1. Capital First Ltd., Mumbai vs. State of
Maharashtra and anr, reported in AIR 2018
Bombay 76;
2. Standard Chartered Bank and ors vs. V.Noble
Kumar and ors, reported in ALL SCR 3025;
3. Ramchandra keshav Adke (dead) by Lrs vs.
Govind Joti Chavare and ors, reported in 1975
AIR (SC) 915; and
4. M/s.R.D.Jain and Co. vs. Capital First Ltd.,
reported in AIR 2022 SC 4820.
8. The application is strongly opposed by the bank on the
ground that the instant application as framed and filed itself
is not maintainable. There is no dispute that the bank has
initiated the proceeding under the provisions of the SARFAESI
Act against borrower. There is no dispute that the cash credit
facility as well as the loan facilities are availed by applicants.
Till date, amount Rs.9,87,73,574/- is due against the
applicants. There is no dispute that the loan account was
…..9/-
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classified as NPA and the Demand Notice under Section 13(2)
of the SARFAESI Act is already given to the applicants. Being
his representation was not satisfactory one, it was rejected
and application under Section 14 of the SARFAESI Act was
filed. He submitted that learned Additional Chief Judicial
Magistrate gets all powers which the Chief Judicial Magistrate
is having. The Chief Judicial Magistrate is superior only for
the administrative purpose and as far as judicial powers is
concerned, Additional Chief Judicial Magistrate is not
subordinate to the Chief Judicial Magistrate. He submitted
that the application itself is not maintainable and, therefore, it
deserves to rejected.
9. Learned counsel for the bank has placed reliance on
following decisions:
1. M/s.Phoenix Arc Private Limited vs. V.Ganesh
Murthy and anr, reported in 2023(3) PLR 329;
2. Sarojben d/o Raghuvir Yadav vs. State of Gujarat
and ors, reported in Law Finder doc ID 1382606;
…..10/-
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3. Kanaiyalal Lalchand Sachdev and ors vs. State of
Maharashtra and ors, reported in (2011)2 SCR 602,
and
4. M/s.R.D.Jain and Co. vs. Capital First Ltd., reported
in AIR 2022 SC 4820.
10. I have given considerable thought to the submissions
made by learned counsel for applicants and learned counsel
for the bank and gone through the records carefully.
11. Before entering into the merits of the case, it is
necessary to refer relevant provisions.
Section 12 of the CrPC deals with Chief Judicial
Magistrate and Additional Chief Judicial Magistrate, etc. The
said Section is reproduced below for reference as under:
“12. Chief Judicial Magistrate and Additional Chief
Judicial Magistrate, etc.
(1) In every district (not being a metropolitan area),
the High Court shall appoint a Judicial Magistrate of
the first class to the Chief Judicial Magistrate.
(2) The High Court may appoint any Judicial
Magistrate of the first class to be an Additional Chief
…..11/-
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Judicial Magistrate, and such Magistrate shall have all
or any of the powers of a Chief Judicial Magistrate
under this Code or under any other law for the time
being in force as the High Court may direct.
(3) –
(a) The High Court may designate any Judicial
Magistrate of the first class in any sub-division as the
Sub-divisional Judicial Magistrate and relieve him of
the responsibilities specified in this section as occasion
requires.
(b) Subject to the general control of the Chief Judicial
Magistrate, every Sub-divisional Judicial Magistrate
shall also have and exercise, such powers of
supervision and control over the work of the Judicial
Magistrates (other than Additional Chief Judicial
Magistrates) in the sub-division as the High Court may,
by general or special order, specify in this behalf.”
12. The pari materia provisions are in newly Amended Act
i.e. Section 10 of the BNSS 2023. The said Section is
reproduced below for reference as under:
“10. (1) In every district, the High Court shall appoint
a Judicial Magistrate of the first class to be the Chief
Judicial Magistrate.
…..12/-
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(2) The High Court may appoint any Judicial
Magistrate of the first class to be an Additional Chief
Judicial Magistrate, and such Magistrate shall have all
or any of the powers of a Chief Judicial Magistrate
under this Sanhita or under any other law for the time
being in force as the High Court may direct.(3) The High Court may designate any Judicial
Magistrate of the first class in any sub-division as the
Sub-divisional Judicial Magistrate and relieve him of
the responsibilities specified in this section as occasion
requires.
(4) Subject to the general control of the Chief Judicial
Magistrate, every Sub-divisional Judicial Magistrate
shall also have and exercise, such powers of
supervision and control over the work of the Judicial
Magistrates (other than Additional Chief Judicial
Magistrates) in the sub-division as the High Court may,
by general or special order, specify in this behalf.”
13. Issue raised by applicants is that the Additional Chief
Judicial Magistrate is incompetent to deal with application
filed under Section 14 of the SARFAESI Act as the
Notification issued by this High Court not confers powers on
him of the Chief Judicial Magistrate.
…..13/-
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14. The Notification issued by the High Court is
reproduced as under:
“(For insertion in the Maharashtra Government Gazette, Part-1, Central
Section)
NOTIFICATION BY THE HIGH COURT OF
JUDICATURE APPELLATE SIDE AT BOMBAY.
NO.A-3902/2016
Dated: 26 October 2016By virtue of powers conferred under section 12(2) of
the Code of Criminal Procedure, 1973 the High Court
hereby appoints Joint Civil Judges, Senior Division
and Judicial Magistrate, First Class working at the
Taluka Places in the Judicial District as Additional
Chief Judicial Magistrate.
Hereinafter the Joint Civil Judges, Senior Division and
Judicial Magistrate, First Class posted at the Taluka
Places in the Judicial District shall carry designation as
Joint Civil Judge, Senior Division and Additional Chief
Judicial Magistrate.
This Notification shall come into force with immediate
effect.
High Court, Bombay ) S/d
Date 26 October, 2016 ) (Mangesh S.Patil)
Registrar General"
.....14/-
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15. Section 15 of the CrPC deals with subordination of
Judicial Magistrate, which states that every Chief Judicial
Magistrate shall be subordinate to the Sessions Judge and
every other Judicial Magistrate shall, subject to the general
control of the Sessions Judge, be subordinate to the Chief
Judicial Magistrate.
16. Section 17 of the CrPC deals with Chief Metropolitan
Magistrate and Additional Chief Metropolitan Magistrate,
which reads as (1) the High Court shall, in relation to every
metropolitan area within its local jurisdiction, appoint a
Metropolitan Magistrate to be the Chief Metropolitan
Magistrate for such metropolitan area, and (2) the High Court
may appoint any Metropolitan Magistrate to be an Additional
Chief Metropolitan Magistrate, and such Magistrate shall have
all or any of the powers of a Chief Metropolitan Magistrate
under this Code or under any other law for the time being in
force as the High Court may direct.
…..15/-
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17. Before proceeding further, it is also necessary to refer
the powers to be exercised by the Additional Chief Judicial
Magistrate.
18. It is pertinent to mention here that Section 10(2) of
the BNSS and old Section 12(2) of the CrPC provide that the
High Court may appoint any Judicial Magistrate of the First
Class to be an Additional Chief Judicial Magistrate, and as
such Magistrate shall have all or any of the powers of a Chief
Judicial Magistrate under this Sanhita or under any other law
for the time being in force as the High Court may direct.
19. Thus, in this regard, the High Court in its
administrative side is required to pass an order under Section
10(2) of the BNSS 2023 as to the extent of powers of the
Additional Chief Judicial Magistrate.
20. Section 13(2) of the BNSS 2023 also makes it clear
that the Chief Judicial Magistrate has been authorized as to
…..16/-
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the distribution of business among the judicial Magistrate
subordinate to him.
21. Thus, the Legislature though has not conferred this
power on the Additional Chief Judicial Magistrate, the Chief
Judicial Magistrate has made empowered as to the
distribution of business.
22. Thus, it is pertinent to note that the subordination of
the Additional Chief Judicial Magistrate is only in regard to
administrative functions. In regard to the judicial functions,
Section 10(2) of the BNSS 2023 specifically provides that the
Addition Chief Judicial Magistrate shall have all the powers of
the Chief Judicial Magistrate.
23. This aspect is considered by the Hon’ble Apex Court in
the case of M/s.R.D.Jain and Co. supra, relied upon by
learned counsel for the applicant and learned counsel for the
bank, wherein it is held that the judicial powers and the
powers, under the CrPC which may be exercised by the Chief
…..17/-
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Metropolitan Magistrate, can be exercised by the Additional
Chief Metropolitan Magistrate.
It is pertinent to note that it was further inter alia held
that the Additional Chief Metropolitan Magistrate can be said
to be at par with the Chief Metropolitan Magistrate in so far
as the powers to be exercised under the CrPC are concerned.
The Hon’ble Apex Court further stated that the Chief
Metropolitan Magistrate in addition, may have administrative
powers. However, for all other purposes and more particularly
the powers to be exercised under the CrPC both are at par.
Therefore, the Additional Chief Metropolitan Magistrate
cannot be said to be subordinate to the Chief Metropolitan
magistrate insofar as the exercise of judicial powers are
concerned.
24. Thus, it is no more res integra that as far as judicial
powers are concerned, the Additional Chief Judicial
…..18/-
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Magistrate is not subordinate to the Chief Metropolitan
Magistrate.
25. In relation to the administrative functions to be
exercised by the Chief Judicial Magistrate under the BNSS,
2023, the same can be exercised by the Additional Chief
Judicial Magistrate only to the extent, an order to this effect is
passed by the High Court. In this regard reference may again
be made to Section 10(2) of the BNSS, 2023 which inter alia
provides that an Additional Chief Judicial Magistrate “shall
have all or any of the powers of a Chief Judicial Magistrate”,
“as the High Court may direct”. Therefore, an order of the
High Court in its administrative side is required to be passed
regarding “all or any of the powers” to be exercised by the
Additional Chief Judicial Magistrate.
26. The Notification issued by the High Court in the
present case specifically shows that “by virtue of powers
conferred under Section 12(2) of the Code of Criminal
…..19/-
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Procedure, 1973 the High Court hereby appoints Joint Civil
Judges, Senior Division and Judicial Magistrate, First Class
working at the Taluka Places in the Judicial District as
Additional Chief Judicial Magistrate.
27. Thus, the powers of the Chief Judicial Magistrate are
already conferred on the Additional Chief Judicial Magistrate.
28. Thus, the contention of learned counsel for the
applicants that the Additional Chief Judicial Magistrate is
incompetent to deal with the application filed under Section
14 of the SARFAESI Act is not sustainable.
29. The provisions of Section 13 of he SARFAESI Act
enable the secured creditors, such as banks and financial
institutions, not only to take possession of the secured assets
of the borrower but also to take over the management of the
business of the borrower, including the right to transfer by
way of lease, assignment or sale for realizing secured assets,
subject to the conditions indicated in the two provisos to
…..20/-
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clause (b) of sub-section (4) of Section 13. In order to
prevent misuse of such wide powers and to prevent prejudice
being caused to a borrower on account of an error on the part
of the banks or financial institutions, certain checks and
balances have been introduced in Section 17 which allow any
person, including the borrower, aggrieved by any of the
measures referred to in sub-section (4) of Section 13 taken by
the secured creditor, to make an application to the DRT
having jurisdiction in the matter within 45 days from the date
of such measures having taken for the reliefs indicated in sub-
section (3) thereof.
30. The intention of the legislature is, therefore, clear that
while the banks and financial institutions have been vested
with stringent powers for the recovery of their dues,
safeguards have also been provided for rectifying any error or
wrongful use of such powers by vesting the DRT with
authority after conducting an adjudication into the matter to
declare any such action invalid and also to restore possession
…..21/-
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even though possession may have been made over to the
transferee.
31. Therefore, it is apparent that the remedy of the
applicants was before the Debt Recovery Tribunal under the
SARFAESI Act and not before this Court.
32. It is submitted by learned counsel for the applicants
that in view of Section 14 of the SARFAESI Act only the Chief
Metropolitan Magistrate or the District Magistrate within
whose jurisdiction may such secured assets or other
documents relating thereto may be situated or found to take
possession thereof and the Chief Metropolitan Magistrate or
the District Magistrate shall on such request being made to
him take possession of such assets and documents relating
thereto and forward such assets to the secured creditor,
provided that any application by the secured creditor shall be
accompanied by an affidavit duly affirmed by the authorized
officer of the secured creditor.
…..22/-
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33. For the purpose of reference, Section 14 of the
SARFAESI Act is reproduced 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 asset is
required to be taken by the secured creditor or if
any of the secured asset 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 asset, request, in writing, the Chief
Metropolitan Magistrate or the District Magistrate
within 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 authorized officer
of the secured creditor, declaring that-
…..23/-
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(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 sub-
section (2) of section 13, demanding
…..24/-
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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 non-acceptance of such objection
or representation had been communicated to
the borrower;
(viii) the borrower has not made any
repayment of the financial assistance in spite
of the above notice and the Authorized
Officer is, therefore, entitled to take
possession of the secl1red assets under the
provisions of sub-section (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 Authorized 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] [Inserted
by Act No. 1 of 2013]:-
…..25/-
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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.] [Substituted by Act No. 44 of 2016.][Provided further 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.] [Inserted by Act No. 44 of 2016.]
(1A) (The District Magistrate or the Chief
Metropolitan Magistrate may authorize 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 sub-section (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.
…..26/-
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(3) No act of the Chief Metropolitan Magistrate or
the District Magistrate [any officer authorized by
the Chief Metropolitan Magistrate or District
Magistrate] [Inserted by Act No. 1 of 2013] done in
pursuance of this section shall be called in question
in any Court or before any authority.
34. Thus, perusal of Section 14 of the SARFAESI Act shows
that 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 (the 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 with all formalities by
the secured creditor referred to in the proviso in Section
…..27/-
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14(1) of the SARFAESI Act and after being satisfied in that
regard, to take possession of the secured assets and
documents relating thereto.
35. Thus, the underlying purpose of the SARFAESI is to
empower the financial institutions to have similar powers as
enjoyed by their counterparts, namely, international banks in
other countries. One such feature is to empower financial
institutions to take possession of securities and sell them.
After taking over possession of the secured assets, further
steps to lease, assign or sell the same could also be taken by
the secured creditor. However, Section 14 of the SARFAESI
Act indicates that if the secured creditor intends to take
possession of the secured assets, it must approach the
CMM/DM by way of an application in writing, and on receipt
of such request, the CMM/DM must move into action. After
passing an order thereon, they must proceed to take
possession of the secured assets and documents relating
thereto for being forwarded to the secured creditor in terms
…..28/-
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of Section 14(1) read with Section 14(2) of the SARFAESI
Act.
36. Thus, considering the scheme of the SARFAESI, it is
explicit and crystal clear that possession of the secured assets
can be taken by the secured creditor before confirmation of
the sale of the secured assets as well as post-confirmation of
the sale. For taking possession of the secured assets, it could
be done by the “authorized officer” of the bank as noted in
Rule 8 of the Security Interest (Enforcement) Rules, 2002.
37. Learned counsel for the bank submitted that the
application before this court itself is not maintainable.
38. The Hon’ble Apex Court in the case of M/s.Phoenix
Arc Private Limited supra, held that remedies against orders
under the SARFAESI Act should be sought under the
provisions of Act itself rather than invoking Section 428 of the
CrPC and action under Section 14 of the SARFAESI Act
constitutes an action taken after the stage of Section 13(4) of
…..29/-
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the SARFAESI Act and, therefore, the same would fall within
the ambit of Section 17(1) of the Act.
39. Thus, the SARFAESI Act itself contemplates an
efficacious remedy for the borrower or the any person
affected by an action under Section 13(4) of the SARFAESI
Act by providing for an appeal before the DRT.
40. The SARFAESI Act is a complete code in itself which
provides the procedure to be followed by the secured creditor
and also the remedy to the aggrieved parties including the
borrower. In such circumstances, as already taken note of if
there is any discrepancy in the manner of classifying the
account of the appellants as NPA or the action taken under
Section 13(2) or Section 14 of the SARFAESI Act, DRT is
vested with the power to set aside such auction or the order
passed under Section 14 of the SARFAESI Act at the stage
after the secured creditor invokes the power under Section 13
of the SARFAESI Act.
…..30/-
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41. The said view is fortified by the Hon’ble Apex Court in
the case of Indian Overseas Bank and anr vs. M/s. Ashok Saw,
reported in AIR 2009 SC 2420 wherein it is observed, as
under:
“34. The provisions of Section 13 enable the
secured creditors, such as banks and financial
institutions, not only to take possession of the
secured assets of the borrower but also to take
over the management of the business of the
borrower, including the right to transfer by way of
lease, assignment or sale for realizing secured
assets, subject to the conditions indicated in the
two provisos to clause (b) of sub-section (4)
of Section 13.
35. In order to prevent misuse of such wide
powers and to prevent prejudice being caused to a
borrower on account of an error on the part of the
banks or financial institutions, certain checks and
balances have been introduced in Section 17
which allow any person, including the borrower,
aggrieved by any of the measures referred to in
sub-section (4) of Section 13 taken by the secured
creditor, to make an application to the DRT having
jurisdiction in the matter within 45 days from the
date of such measures having taken for the reliefs
indicated in sub-section (3) thereof.
…..31/-
Judgment
apl1523.25
31
36. The intention of the legislature is, therefore,
clear that while the banks and financial
institutions have been vested with stringent
powers for the recovery of their dues, safeguards
have also been provided for rectifying any error or
wrongful use of such powers by vesting the DRT
with authority after conducting an adjudication
into the matter to declare any such action invalid
and also to restore possession even though
possession may have been made over to the
transferee.
37. The consequences of the authority vested in
the DRT under sub-section (3) of Section
17necessarily implies that the DRT is entitled to
question the action taken by the secured creditor
and the transactions entered into by virtue
of Section 13(4) of the Act. The legislature by
including sub-section (3) in Section 17 has gone
to the extent of vesting the DRT with authority to
even set aside a transaction including sale and to
restore possession to the borrower in appropriate
cases. Resultantly, the submissions advanced by
Mr Gopalan and Mr Altaf Ahmed that the DRT has
no jurisdiction to deal with a post-Section 13(4)
situation, cannot be accepted.”
…..32/-
Judgment
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42. In view of the above discussion, the contentions of
learned counsel for the applicants that the Additional Chief
Judicial Magistrate is incompetent is not sustainable.
43. The present application is also not maintainable in
view of efficacious remedy is already available to the
applicants.
44. In this view of the matter, the application fails and
deserves to rejected and the same is rejected.
Application stands disposed of.
45. At this stage, learned counsel for the applicants seeks
stay to the impugned order. In fact criminal application under
Section 482 of the Code itself is not maintainable.
46. Appropriate remedy is not sought by the present
applicant.
47. At this stage, no case is made out for staying of the
impugned order. The order for taking possession is passed by
…..33/-
Judgment
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learned Additional Chief Judicial Magistrate. In view of the
provisions of the SARFAESI Act, against the said order,
efficacious remedy is not sought.
48. In view of that, oral prayer of present applicants to
stay the further proceeding is hereby rejected.
(URMILA JOSHI-PHALKE, J.)
!! BrWankhede/manisha !!
Signed by: Mr. B. R. Wankhede
Designation: PS To Honourable Judge …../-
Date: 05/03/2026 11:31:29