Chief Judicial Magistrates’ right to take possession of secured assets questioned

Can the court insert into an Act what the Legislature had omitted to include? Can Chief Judicial Magistrates be allowed to take possession of secured assets though such power had been conferred only upon Chief Metropolitan Magistrates and District Magistrates (Collectors) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002?

These questions would now be answered by a Larger Bench of the Madras High Court Bench here as the First Bench comprising Acting Chief Justice Rajesh Kumar Agrawal and Justice Chitra Venkataraman referred the issue to it after finding that there was inconsistency in the decisions taken on the matter by different Division Benches of various High Courts.

The reference was made during the hearing of a writ petition filed by a destitute woman challenging an order passed by Sivaganga Chief Judicial Magistrate to take possession of her house at Singampuneri.

Appearing on behalf of her, senior counsel M. Ajmal Khan contended that the possession order passed by a CJM was not legally tenable as such order ought to have been passed only by the Collector.

He pointed out that the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, had conferred the power on Chief Metropolitan Magistrates in case of properties situated in metros such as Chennai and on the District Magistrates with respect to properties situated in other places.

Doubt

A single judge of the Madras High Court had raised a doubt over the role of Chief Judicial Magistrates in such issues in 2008 and referred the matter to a Division Bench.

Answering the reference, the Division Bench held that CJMs were equivalent to CMMs and therefore the former could not be denied of exercising the power just because their designation does not find a place in the Act.

To substantiate its conclusion, the Bench relied upon Section 3 of the Code of Criminal Procedure wherein it was stated that a Magistrate would mean Metropolitan Magistrate in relation to a metropolitan area and judicial magistrate in relation to other areas.

However, distinguishing the Cr.P.C. from SARFAESI Act, the senior counsel contended that the explanation provided under the Cr.P.C. would apply only to cases connected with that code. He also pointed out that a Division Bench of the Bombay High Court had taken a diametrically opposite view than the one taken by the Division Bench of the Madras High Court.

Convinced with his arguments, the First Bench referred the matter to a Larger Bench for an authoritative pronouncement on the issue.

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