Calcutta High Court (Appellete Side)
Mr. Binay Chaudhary & Ors vs Au Small Finance Bank Ltd. & Ors on 17 March, 2026
Author: Shampa Sarkar
Bench: Shampa Sarkar
17.03.2026
SL No.1
Court No.12
(gc)
MAT 6 of 2026
CAN 1 of 2026
CAN 3 of 2026
Mr. Binay Chaudhary & Ors.
Vs.
AU Small Finance Bank Ltd. & Ors.
Mr. Arabinda Chatterjee, Sr. Adv.
Mr. Rajan Nagelia,
Ms. Moumita Roy
.....for the Appellants.
Mr. Subhankar Nag,
Mr. Sayak Ranjan Ganguly,
Ms. Srijani Ghosh,
Ms. Ankita Jha,
Ms. Kripa Kami
...for the Respondent Nos.1 & 2.
Mr. Swapan Kr. Datta, Ld. G.P.,
Mr. Rajat Dutta
…for the State.
1. Instead of taking up the applications individually, we
propose to take up the appeal.
2. Mr. Chatterjee, learned Senior Advocate for the
appellants assails an order dated December 17, 2025
passed by the learned Single Judge in WPA 28319 of
2025. By the order impugned, the learned Judge held
that the decision under challenge was rendered by the
Chief Judicial Magistrate, Alipore (CJM) in discharging
ministerial functions under Section 14 of the
Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002
(hereinafter referred to as the “SARFAESI Act“). The
decision was not rendered by a Civil Court, but by an
2
executive, and the CJM could not stay the
implementation of his own order on the ground that an
order of injunction had been passed by a civil court.
3. The bank was aggrieved by an order dated November
18, 2025, passed by the CJM while exercising his power
under Section 14 of the SARFAESI Act. By the order
dated November 18, 2025, the CJM accepted the
explanations given by the police authorities, as to why
possession of the mortgaged property could not be
taken over and directed the bank/secured creditor to
take steps in respect of the order of injunction that was
passed by the Civil Court in Title Suit No.1523 of 2024.
By an order dated November 22, 2024, the Civil Court
passed an order of status quo. Both the plaintiff and
the defendants were directed to maintain status quo on
material points as on the date of the order till January
22, 2025.
4. When the order of status quo was pointed out to the
CJM, who had initially passed the order under Section
14 allowing the bank/secured creditor to take over
possession of the mortgaged property with the
assistance of the seal bailiff and the police authorities,
restrained himself from proceeding any further in order
to implement the order under Section 14 of the said Act.
This order was under challenge in the writ petition.
3
5. The scope of the writ petition was narrow, that is,
whether the authority exercising powers under Section
14 could have stayed his own order or stayed the
proceeding, thereby, denying the implementation of the
order passed under Section 14 of the SARFAESI Act,
and relegating the secured creditor to avail of its reliefs
in the suit in which the secured creditor was not a
party. The suit was between the appellants and the
third party, for specific performance of an agreement
allegedly entered into between the appellants and the
third party.
6. His Lordship considered the provisions of Section 14 of
the SARFAESI Act and the decisions of the Hon’ble Apex
Court to arrive at a finding that the CJM was
discharging a ministerial function and not a judicial
function. The Hon’ble Apex Court had held time and
again that the proceeding under Section 14 either
before the District Magistrate or the CJM or the CMM,
as the case may be, was not akin to a judicial or quasi-
judicial proceeding. A ministerial function can be
exercised in order to aid the secured creditor to take
possession of the mortgaged property in the manner
prescribed. All that the CJM was required to ascertain
was whether the nine points as stated under the first
proviso to Section 14(1) were covered in the affidavit of
the bank. Being satisfied that those nine points were
4
covered and the application was in order, the CJM
initially passed an order directing the police authorities
to assist the secured creditor to take over possession of
the mortgaged property. A suit was filed by the third
party against the appellants for specific performance of
contract and an order of status quo was passed on
November 22, 2024 which is still subsisting. The bank
was not aware of such proceeding. The bank was not a
party to the proceeding. The bank had approached the
CJM by filing an application under Section 14 of the
said Act and on January 21, 2025, the CJM passed the
following order:-
“Hence based on the above facts and
circumstances and upon satisfaction as to the
fulfillment of the statutory requirements, the
application filed u/s. 14 of the Securitisation and
Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (herein
after referred to as SARFAESI Act), which has
since been amended vide the Enforcement of
Security Interest and Recovery of Debts Laws and
Miscellaneous Provisions (Amendment) Act, 2016
is allowed.
On relying the judgment dt. 06/11/2019
passed by the Hon’ble Bombay High Court in case
of Mr. Subir Chakravarty & Anr. V/s. Kotak
Mahindra Bank Ltd. & Anr. delivered in Writ
Petition (L) No. 28480 of 2019, an officer
subordinate to this court has to be appointed to
take possession of the secured assets.
5
Hence it is
ORDERED
that the seal bailiff of this court is hereby
appointed as court commissioner to take
possession of the secured assets situated as
mentioned above.
➤ Appointed commissioner shall give
possession notice to the Authorized Officer
of the secured creditor and the borrowers,
to be served personally/speed post at least
seven days in advance. A copy of such
seven-days’ advance notice shall also be
affixed on the main door or other
conspicuous part of the said property. A
copy of this order be also affixed along with
such notice.
➤ After expiry of the notice, the seal
bailiff shall take possession of the aforesaid
property and handover it to the aforesaid
authorized officer namely Anil Kumar
Agarwalla of creditor under proper receipts
to that effect. The entire proceedings shall
be photographed or video-recorded as per
the demand of the situation.
➤ The court commissioner to take
such steps and use such force including
breaking open the lock or any hurdle
thereof by taking assistance of police if
required at the expenses of the applicant
and if any articles/documents found in the
secured asset, then deliver its possession to
the authorized officer of the creditor after
preparing list of articles and making
inventory. Photographs be also taken as
6proof of the same. Copies of the inventory
shall be handed over to the borrowers if
present at the site under acknowledgment
and also to the Authorized Officer of the
Cholamandalam Investment and Finance
Company Limited V/s. Rajeev Chawla &
Anr. Dated 22/10/2021.
It is requirement of Section 14 of
SARFAESI Act that authorized officer of
creditor has to file affidavit containing
therein facts mentioned in Section
14(1)(b)(1) to 14(1)(b)(ix) of the SARFAESI
Act. Accordingly, authorized officer had
filed the affidavit. In addition to affidavit,
copies of certain documents were also filed
with the petition.
On the date of hearing i.e., today,
authorized officer has also tendered original
documents before this court, for verification
with copies on record. Such documents are
loan sanction order, loan agreement,
memorandum of deposit of title deed, title
deed of mortgage property, notice given
u/s. 13(2) of SARFAESI Act to the
borrowers, proof of delivery of notice, paper
publication and letters issued by the
borrowers etc.I have perused the same and those
are in conformity with the facts affirmed in
the affidavit by the authorized
representative of the creditor as required by
the first proviso to Section 14(1) of
SARFAESI Act.
7
From the petition as well as the
affidavit submitted as per requirement of
the SARFAESI Act the property (secured
asset) is an Immovable properties described
as above.
The description is same in security
agreement and the title documents
submitted by the opposite parties. It is also
within territorial jurisdiction of this court. It
is stated to be in the name of borrowers.
The original title documents in respect of
said property are with the creditor thereby
creating equitable mortgage. The amount
due is not less than twenty percent of the
principal amount and interest as per clause
(j) and the property is not the one hit by
other clauses of Section 31 of SARFAESI
Act.
Sixty-days’ notice given u/s. 13(2) of
SARFAESI Act has been seen, giving details
of outstanding amount and details of
secured asset, along with postal documents
and the newspaper publication. The creditor
has stated that no objections have been
received from anyone and that the
borrowers has failed to repay the
outstanding amount in full.
As all such requirements being
fulfilled, it becomes mandatory for the
undersigned being the Chief Judicial
Magistrate under whom the property is
situated to order taking possession of the
assets mortgaged with the creditor and the
documents related thereto, and forward the
8
same to the secured creditor. As per Section
14 of the SARFAESI Act, the court may take
or cause to be taken such steps as use of
cause to be used such force as may be
necessary.”
7. It appears from the order that, the CJM considered the
requirements of Section 14 of the SARFAESI Act and
found the application to be in order from the affidavit
filed by the authorized officer. Those documents filed
with the affidavit were considered. All requirements of
the law being fulfilled, the CJM held that it was
mandatory that the CJM would take steps in
accordance with the provisions of Section 14. The seal
bailiff from the Court was appointed as the Court
Commissioner to take possession of the secured assets,
namely:-
“all that piece and parcel of the property flat/unit
No.C – 8D, measuring about 1584 sq. ft. on the
western side of the 8th floor of the block – “C”,
together with one store room being no. 11 on the
ground floor of the said block having a covered
area of 98 sq. ft., together with one covered car
parking space bearing no. 103 on the ground floor
and open car parking space bearing no. 85 in the
said block along with proportionate undivided
share and interest on the same premises upon
which the said building known as “Ideal Towers”
lying and situated at premises no. 57, Diamond
Harbour Road, PS – Ekbalpore, Ward No. 78,
under KMC, Kolkata, West Bengal – 700023.”
9
8. The CJM thereafter refused to proceed to implement the
order when the police informed the CJM of the order of
status quo.
9. November 18, 2025 was fixed for necessary orders. On
perusal of the report of the Officer-in-Charge of
Ekbalpore Police Station, the CJM took notice of the
order of injunction passed by the Civil Court and the
fact that the police station was in a dilemma whether
they should obey the order of the Civil Court or the
order of the CJM passed under Section 14. After
considering the submissions of the police and the fact
that there was an order of status quo with regard to the
property in question, the CJM held as follows:-
“In this score, it appears that an injunction order
has been passed in respect of the property and
though at the time of hearing it was the
submission of the Ld. Advocate for the petitioner
that in the said civil suit the petitioner was not a
party and so, the said order will not be applicable
or affect the petitioner. In this respect this Court
is of the view that it is the principle of law that
existence of injunction order is not over the
parties, but over the property concerned and
admittedly, there is an order of injunction over the
suit property regarding possession and thus, the
order dt. 21.01.2025, directing for delivery of
possession certainly gets hindered on the ground
of the existence of order of injunction. Moreover,
on the basis of the report so submitted by the
concerned police station, the existence of the order
10of the injunction has come to the knowledge of the
petitioner and thus, it is the duty of the petitioner
to take necessary steps in respect of the said
order of Injunction “to get the delivery of
possession executed as per law”.
So, in such a situation, this Court is of the
view that the written explanation so submitted by
the Officer-in-charge of Ekbalpore P.S. is hereby
accepted and the petitioner of this case is hereby
directed to take appropriate steps in respect of the
order of injunction which is in existence in respect
of the property in question.
It is to be borne in mind that this Court
acting u/s 14 of the SARFARSI Act is not in a
capacity to determine the question of title or
possession which is certainly within the ambit of
the civil court. Merely having authority to cause
execution of delivery of possession is being
crumbled due to the existence of an order of the
civil court.
The petitioner is directed to take
appropriate steps in this regard keeping in mind
the mandate of the Hon’ble High Court at Calcutta
to complete the procedure within the time frame so
prescribed by the Hon’ble Court.
Fix 05.12.25 for taking appropriate steps by the
petitioner.”
10. This order was under challenge in the writ court on the
ground that the CJM did not have the jurisdiction
under the law to decide whether the order of injunction
by the Civil Court would operate as a bar to the
implementation of the order under Section 14 through
11
the Court Commissioner, with the assistance of the
police. The CJM erred in holding that once the order of
injunction had come to the knowledge of the bank, the
proper course of action would be for the secured
creditor to approach the Civil Court and take necessary
steps to “get the delivery of possession executed as per
law”. We are in agreement with the learned Single
Judge. The learned Judge rightly held that the order of
injunction would not bind the secured creditor. The
SARFAESI Act has a specific provision which permits
the secured creditor to take over possession of the
secured asset. Section 14 of the said Act provides that
the Chief Metropolitan Magistrate or the District
Magistrate shall assist the secured creditor in taking
possession of the secured asset. The provisions of
Section 14 of the SARFAESI Act are quoted below:-
“S.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
12thereof, 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
13the 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 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
Authorised 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 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
14period 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 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.
(3) No act of the Chief Metropolitan
Magistrate or the District Magistrate [any
15officer 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.”
11. The section mandates that any application by the
secured creditor shall be accompanied by an affidavit
duly affirmed by the authorized officer of the secured
creditor with certain declarations enumerated under
Clauses (i) to (ix) to the proviso under Section 14(1)
which have been quoted above. Section 14(1A) permits
the District Magistrate or the Chief Metropolitan
Magistrate to authorize any officer subordinate to him,
to take possession of the assets and documents relating
thereto and to forward such assets and documents to
the secured creditor. The appellants had a right of
appeal from the initial order passed under Section 14.
They filed an I.A. in the pending S.A. An S.A. had been
filed by the appellants challenging the proceedings
initiated by the bank under the SARFAESI Act. An
interim stay was granted in the I.A. by the Debts
Recovery Tribunal – III, but the said order was
challenged by the bank before the Debts Recovery
Appellate Tribunal and the appeal was allowed. From
such appeal, a civil revision is pending.
12. Mr. Chatterjee submits that unless the fate of the civil
revision is decided, the bank cannot proceed with the
16
auction as the auction notice was issued by the bank
immediately after possession was taken, on the strength
of the order impugned before us.
13. The scope of Section 14 of the SARFAESI Act was
discussed by the Hon’ble Apex Court in Standard
Chartered Bank vs V. Noble Kumar and Ors.
reported in (2013) 9 SCC 620, the Hon’ble Apex Court
held as follows:-
“21. Under the scheme of Section 14, a secured
creditor who desires to seek the assistance of the
State’s coercive power for obtaining possession of
the secured asset is required to make a request in
writing to the Chief Metropolitan Magistrate or
District Magistrate within whose jurisdiction, the
secured asset is located praying that the secured
asset and other documents relating thereto may be
taken possession thereof. The language of Section
14 originally enacted purportedly obliged the
Magistrate receiving a request under Section 14 to
take possession of the secured asset and
documents, if any, related thereto in terms of the
request received by him without any further
scrutiny of the matter.
22. However, the Bombay High Court in Trade
Well v. Indian Bank [2007 Cri LJ 2544 (Bom)]
opined:
“2. … CMM/DM acting under Section 14 of the
NPA Act is not required to give notice either to the
borrower or to the third party.
3. He has to only verify from the bank or financial
institution whether notice under Section 13(2) of
the NPA Act is given or not and whether the
secured assets fall within his jurisdiction. There is
no adjudication of any kind at this stage.
4. It is only if the above conditions are not fulfilled
that the CMM/DM can refuse to pass an order
under Section 14 of the NPA Act by recording that
the above conditions are not fulfilled. If these two
conditions are fulfilled, he cannot refuse to pass
an order under Section 14.”
(emphasis supplied)
The said judgment was followed by the Madras
High Court in Indian Overseas Bank v. Sree
17
Aravindh Steels Ltd. [AIR 2009 Mad 10]
Subsequently, Parliament inserted a proviso to
Section 14(1) [ “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 non-
performing asset;(vi) affirming that the period of
sixty days’ notice as required by the provisions of
sub-section (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 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
authorised officer is, therefore, entitled to take
possession of the secured 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
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: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.”] and also
sub-section (1-A) [ “14. (1-A) The District
Magistrate or the Chief Metropolitan Magistrate
18
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 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.(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.”] by
Act 1 of 2013.
23. We must make it clear that these provisions
were not in existence on the date of the order
impugned [V. Noble Kumar v. Standard Chartered
Bank, (2010) 8 MLJ 282 : (2011) 1 CTC 513] in the
instant proceedings. These amendments are made
to provide safeguards to the interest of the
borrower. These provisions stipulate that a
secured creditor who is seeking the intervention of
the Magistrate under Section 14 is required to file
an affidavit furnishing the information
contemplated under various sub-clauses (i) to (ix)
of the proviso and obligates the Magistrate to pass
suitable orders regarding taking of the possession
of the secured assets only after being satisfied with
the contents of the affidavits.
24. An analysis of the nine sub-clauses of the
proviso which deal with the information that is
required to be furnished in the affidavit filed by
the secured creditor indicates in substance that:
24.1. (i) there was a loan transaction under which
a borrower is liable to repay the loan amount with
interest,
24.2. (ii) there is a security interest created in a
secured asset belonging to the borrower,
24.3. (iii) that the borrower committed default in
the repayment,
24.4. (iv) that a notice contemplated under Section
13(2) was in fact issued,
24.5. (v) in spite of such a notice, the borrower did
not make the repayment,
24.6. (vi) the objections of the borrower had in fact
been considered and rejected,
24.7. (vii) the reasons for such rejection had been
communicated to the borrower, etc.
19
25. The satisfaction of the Magistrate
contemplated under the second proviso to Section
14(1) necessarily requires the Magistrate to
examine the factual correctness of the assertions
made in such an affidavit but not the legal niceties
of the transaction. It is only after recording of his
satisfaction the Magistrate can pass appropriate
orders regarding taking of possession of the
secured asset.
26. It is in the abovementioned background of the
legal frame of Sections 13 and 14, we are required
to examine the correctness of the conclusions
recorded by the High Court. Having regard to the
scheme of Sections 13 and 14 and the object of
the enactment, we do not see any warrant to
record the conclusion that it is only after making
an unsuccessful attempt to take possession of the
secured asset, a secured creditor can approach
the Magistrate. No doubt that a secured creditor
may initially resort to the procedure under Section
13(4) and on facing resistance, he may still
approach the Magistrate under Section 14. But, it
is not mandatory for the secured creditor to make
attempt to obtain possession on his own before
approaching the Magistrate under Section 14. The
submission that such a construction would
deprive the borrower of a remedy under Section 17
is rooted in a misconception of the scope of
Section 17.
27. The “appeal” under Section 17 [ “17. Right to
appeal.–(1) 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 or his authorised
officer under this Chapter, may make an
application along with such fee, as may be
prescribed, to the Debts Recovery Tribunal having
jurisdiction in the matter within forty-five days
from the date on which such measure had been
taken:Provided that different fees may be
prescribed for making the application by the
borrower and the person other than the
borrower.”(emphasis supplied)] is available to the
borrower against any measure taken under
Section 13(4). Taking possession of the secured
asset is only one of the measures that can be
taken by the secured creditor. Depending upon the
nature of the secured asset and the terms and
conditions of the security agreement, measures
other than taking the possession of the secured
asset are possible under Section 13(4). Alienating
the asset either by lease or sale, etc. and
20appointing a person to manage the secured asset
are some of those possible measures. On the other
hand, Section 14 authorises the Magistrate only to
take possession of the property and forward the
asset along with the connected documents to the
borrower (sic the secured creditor). Therefore, the
borrower is always entitled to prefer an “appeal”
[Mardia Chemicals Ltd. v. Union of India, (2004) 4
SCC 311. The expression “appeal” as originally
existed in Section 17 is substituted by the word
“representation” in view of the judgment of this
Court in Mardia Chemicals case.”59. We may like
to observe that proceedings under Section 17 of
the Act, in fact, are not appellate proceedings. It
seems to be a misnomer. In fact it is the initial
action which is brought before a forum as
prescribed under the Act, raising grievance against
the action or measures taken by one of the parties
to the contract. It is the stage of initial proceeding
like filing a suit in civil court. As a matter of fact
proceedings under Section 17 of the Act are in lieu
of a civil suit which remedy is ordinarily available
but for the bar under Section 34 of the Act in the
present case.” (Mardia Chemicals case, SCC p.
352, para 59)] under Section 17 after the
possession of the secured asset is handed over to
the secured creditor. Section 13(4)(a) declares that
the secured creditor may take possession of the
secured assets. It does not specify whether such a
possession is to be obtained directly by the
secured creditor or by resorting to the procedure
under Section 14. We are of the opinion that by
whatever manner the secured creditor obtains
possession either through the process
contemplated under Section 14 or without
resorting to such a process obtaining of the
possession of a secured asset is always a measure
against which a remedy under Section 17 is
available.”
14. In the matter of R.D. Jain & Co. v. Capital First
Ltd., reported in (2023) 1 SCC 675, the Hon’ble Apex
Court held as follows:-
“29. In view of the above discussion and as
observed hereinabove when the powers to be
exercised by the Additional Chief Metropolitan
Magistrate are on a par with the powers to be
exercised by the Chief Metropolitan Magistrate
21[Section 17(2)CrPC] and the Chief Metropolitan
Magistrate and Additional Chief Metropolitan
Magistrate shall be subordinate to the Sessions
Judge (Section 19 CrPC) and the steps to be
taken by the Chief Metropolitan Magistrate
under Section 14 of the SARFAESI Act as observed
hereinabove are ministerial in nature and does
not involve any adjudicatory process and there is
no element of any quasi-judicial function, we see
no reason to take a different view than the view
taken by the Bombay High Court in the
impugned judgment [Capital First Ltd. v. State of
Maharashtra, 2017 SCC OnLine Bom 9425] . We
hold that the expression “Chief Metropolitan
Magistrate” as appearing in Section 14 of
the SARFAESI Act shall deem to mean and include
Additional Chief Metropolitan Magistrate for the
purposes of Section 14 of the SARFAESI Act.”
15. The SARFAESI proceeding is admittedly under
challenge. It is an admitted position that if the bank
proceeds with the auction, the same shall abide by the
result of the S.A. Section 17(3) of the SARFAESI Act
provides so. Also, the result of the civil revision will be
binding on any steps that are taken by the bank. Our
jurisdiction is to decide whether the learned Single
Judge erred in holding that the CJM did not have any
authority under the law to refuse to proceed with the
matter by not taking over of possession of the secured
asset, as per his order dated January 21, 2025. We do
not find any error in exercise of jurisdiction by the
learned writ court, while holding that the CJM only
performed a ministerial function and not a judicial
function. Thus, the finding of the CJM that in view of
the injunction order passed by the Civil Judge, the CJM
could not proceed further with the delivery of
22
possession, and the order granting delivery of
possession must be obtained from the civil court by the
bank, is a wrongful exercise of jurisdiction. The bank
who was not a party to the suit. The bank was wrongly
directed to approach the suit court and obtain
necessary orders. It appears that the suit was filed
after the SARFAESI proceeding had been initiated.
Notice under Section 13(2) of the said Act was issued on
July 6, 2024 and the notice under Section 13(4) was
issued on October 21, 2024. Section 13(13) of the
SARFAESI Act provides that no borrower shall, after
receipt of notice referred to in sub-section (2), transfer
by way of sale, lease or otherwise, any of the secured
assets referred to in the notice, without prior written
consent of the secured creditor, which means that, once
a notice under Section 13(2) is received by the borrower,
there is an injunction on all properties. The order of
injunction passed by the learned Single Judge was
subsequent to the notice under Section 13(2).
16. In any event, Mr. Chatterjee’s contention that the
borrower was wrongly described, and that, Partha
Pratim Das was not connected with the transaction
between the appellants and the bank, and all other
alleged irregularities in the SARFAESI proceeding as
well as in the order passed under Section 14, shall be
decided in the appropriate proceeding. These issues are
23
subject to challenge in the S.A. as also in the civil
revision, and can be urged by the appellants.
17. Under such circumstances, we are not inclined to
express any opinion on the merits of the SARFAESI
proceeding. This appeal is restricted to the decision of
the learned Trial Judge, which, in our opinion, is
correct. The CJM should have assisted the secured
creditor to take over possession of the property. The
fate of such property even if sold would be subject to
the provision of law and the pending proceedings. If the
appellants are successful in the S.A. or in the civil
revision, the consequences will follow.
18. Under such circumstances, we are not inclined to
interfere with the order impugned.
19. The appeal and connected applications are disposed of
without interference with the order of the learned Single
Judge. However, as the appellants have expressed a
bona fide desire to settle the matter, we allow the
appellants to approach the bank with the proposal and
the bank will consider the same, as they deem proper.
The offer will be made within a week and the bank shall
not finalize the sale up to 25th April, 2026, in the event
the auction is held. The auction if held will be subject to
the S.A. and the civil revision.
20. The police report is taken on record.
21. There shall be no order as to costs.
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22. Parties are to act on the server copy of this order.
(Shampa Sarkar, J.)
(Ajay Kumar Gupta, J.)
