Balkrishna Rama Tarle Dead Thr Lrs & Anr. vs Phoenix Arc Private Limited & Ors.

Court

Supreme Court of India

Date

26 September 2022

Case No.

Special Leave Petition No. 16013 of 2022

Result

Dismissed

Bench

M.R. Shah, Krishna Murari

Citation

[2022] 13 S.C.R. 437 : 2022 INSC 1022

Headnote

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: s. 14 – Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset – Scope, ambit, and jurisdiction of the District Magistrate/designated authority u/s. 14 – On facts, application u/s 14 by the secured creditor seeking assistance of designated authority for taking physical possession of the secured assets – Petitioner claiming to be a tenant in respect of the part of the secured assets sought to intervene in the said proceedings – Thereafter, the designated authority declined to assist the secured creditor in taking possession of the secured assets holding that after the secured creditor terminates the tenancy rights of the third person by following due procedure of law the further orders regarding possession of the mortgaged property would be decided – Aggreived, secured creditor filed writ petition – High Court set aside the order passed by the designated authority holding that the order was beyond the scope and ambit of the powers to be exercised u/s 14, and directed the designated authority to dispose of the application in accordance with the provisions of s.14 – On appeal, held: Power exercisable by the Chief Metropolitan Magistrate or District Magistrate u/s. 14 are ministerial step and does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor taking possession of the secured creditor – Once all the requirements u/s.14 are complied with by the secured creditor, the duty is cast upon the designated authority to assist the secured creditor in obtaining the possession as well as the documents related to the secured assets – At that stage, designated authority is not required to adjudicate the dispute between the borrower and secured creditor and/or between any other third party and aggrieved party to be relegated to raise objections in the proceedings before DRT u/s. 17 – On facts, the High Court did not commit any error in setting aside the order passed by the designated authority, and directing the designated authority to dispose of the application in accordance with the provisions of s.14 – Thus, the order passed by the High Court, upheld.

The Order of the Court was passed by 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

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