“A District Magistrate, After Passing An Order Under S.14 Of The SARFAESI Act Does Not Have Any Jurisdiction To Review, Recall Or Modify It”: Punjab and Haryana HC
[17 March 2022] The Divison Bench comprising Justice Ramachandra Rao and Justice H.S. Madaan held that a District Magistrate, after passing an order under Section 14 of the SARFAESI Act, 2002 has no jurisdiction to review or recall it.
Discussing the nature and scope of Section 14 of the SARFAESI Act, the court held that the motive behind the act is to provide machinery to the financial institutions to take possession of secured assets of borrowers/guarantors and sell them in case of default and Section 14 has been enacted to give effect to this intent of taking possession of the Secured Asset.
The court relied on the judgment of Asset Reconstruction Company (India) Limited v. State of Haryana, wherein it was held that there is no provision under the SARFAESI Act that empowers the District Magistrate or the Chief Metropolitan Magistrate to review, recall or modify his order.
The Court observed,
“The powers exercisable by a District Magistrate under Section 14 are the creation of a Statute. Those powers are required to be exercised within the four corners of the said provision. In the case in hand, the then-District Magistrate, Sonepat rightly exercised such power and passed the order dated 8 February, 2016 thereby directing his subordinate officer, namely, Naib Tehsildar-cum-Executive Magistrate to take possession of the secured assets and hand over the same to ARCIL. It could not be disputed by the learned State counsel or senior counsel for the borrowers that there is no provision under the SARFAESI Act under which the District Magistrate or the Chief Metropolitan Magistrate, as the case may be, can review, recall or modify his order.”