Whether Magistrate must heard borrower before Allowing Possession Of Assets U/S 14 of SARFAESI Act?

The SARFAESI Act is intended to facilitate quick recovery of secured debts without extending any opportunity of hearing to a borrower and without judicial/quasi-judicial intervention till such time possession of the secured asset is taken by the secured creditor after serving the requisite notices and responding to the objection/representation that may be lodged/preferred by the borrower under section 13(3A). 

8. Pertinently, section 14 of the SARFAESI Act was amended twice, once in 2013 and then again in 2016. If it were the intention of the legislature to extend opportunity of hearing to a borrower before the District Magistrate/Chief Metropolitan Magistrate, as the case may be, it was free to do so. Advisedly, the legislature did not do so, for, it would have militated against the scheme of the SARFAESI Act and more particularly section 13 thereof. It is implicit in the scheme of the SARFAESI Act that natural justice, only to a limited extent, is available and not beyond what is expressly provided. There seems to be little merit in the argument advanced by Mr. Nedumpara and we hold that the language of section 14 is too clear and unambiguous, and does not admit of any requirement of complying with natural justice by putting the borrower on notice while an application thereunder is under consideration.

 IN THE HIGH COURT OF BOMBAY

Writ Petition (L) No. 8418 of 2022

Decided On: 23.03.2022

 C.A. Manisha Mehta and Ors. Vs. The Board of Directors and Ors.

Hon'ble Judges/Coram:

Dipankar Datta, C.J. and M.S. Karnik, J.

Citation:-MANU/MH/1377/2022

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Whether the Court of Additional Sessions Judge is Empowered To Try Offences Under Insolvency and Bankruptcy code?

 It may also be noted that Section 236(3) of the I.B. Code creates a deeming fiction that the Special Court trying offences under I.B. Code shall be "deemed to be Court of Sessions". If the intention of the legislature was that offences under I.B. Code are to be tried by the Sessions Court, then this subsection would have been unnecessary. According to the Petitioners, this is an indication as to the true and proper interpretation of Section 435 of the Companies Act, 2013 and Section 436 of I.B. Code. Thus for all the above reasons, the impugned proceedings have been instituted by the Respondents (Complainant) in the Court of Additional Sessions Judge, were not sustainable for want of jurisdiction. As a consequence order, 'issue process' passed by the learned Additional Sessions Judge against the Petitioners, in a complaint by the Respondents/Board was without jurisdiction and therefore not sustainable equally. It is therefore to be held that Special Court "which is to try offences under the I.B. Code is the Special Court established under Section 435(2) (b) of the Companies Act, 2013 which consists of Metropolitan Magistrate or Judicial Magistrate First Class. The Petition is therefore allowed in terms of prayer clause (a). {Para 14}

 IN THE HIGH COURT OF BOMBAY

Writ Petition No. 2592 of 2021

Decided On: 14.02.2022

Satyanarayan Bankatlal Malu and Ors. Vs. Insolvency and Bankruptcy Board of India and Ors.

Hon'ble Judges/Coram:

Sandeep K. Shinde, J.

Citation:- MANU/MH/0453/2022

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Whether Magistrate should commit cases under Drugs and Cosmetics Act after amendment of said Act effective from 10-8-2009?

  In this case, on 10.8.2009, the sample was taken by the respondent,

who is a Drug Inspector of the State and on 22.3.2005 the case was instituted against the petitioners herein. They appeared on 29.8.2007 and the amendment to Section 32 of the Drugs and Cosmetics Act, 1940 came into effect from 10.8.2009 according to which the offences under the said Act would only be tried by a Court, not inferior to that of a Court of Sessions. However, in ignorance of the said amendment, the learned Court of J.M.F.C. framed charges on 8.12.2009 for offences U/s.18(a)(i) read with Section 17 and 27 of the Drugs and Cosmetic Act, 1940. In this case, the question involved is not the retrospective application of the amendment, but the continuation of the case before the Court of learned Judicial Magistrate First Class after the amendment came into force at which point of time, even the charges were not framed by the Court of the Ld. JMFC. The framing of the charge by the Court of learned J.M.F.C. on 8.12.2009 itself was rendered illegal on account of the amendment having come into force on 10.8.2009 itself. Therefore, all the proceedings before the Ld. JMFC after 10.8.2009, on which date even the charges were not framed by the Court of learned J.M.F.C., were rendered bad in the eyes of law.

Under the circumstances, the impugned order cannot be faulted, as all proceedings from the stage of framing charges onwards had no sanction under the law. Therefore, this petition is disposed of by sustaining the impugned order of committal of the case to the Court of Sessions but as the evidence taken before the Court of learned J.M.F.C. was done much after the amendment came into force and the charges were framed after the coming into force of the amendment, all proceedings before the Court below commencing from the framing of charges are struck down and the trial will commence denovo before the learned Court of Sessions from the stage of framing charges after giving an opportunity to both the petitioners and the prosecution to address the Court on the issue of framing charges.

Madhya Pradesh High Court

M/S Jayram Pharmaceauticals Pvt. ... vs The State Of Madhya Pradesh on 20 July, 2017

                            MCRC-7419-2017
   

         The present petition has been filed invoking the jurisdiction of this

Court under Section 482 of Cr.P.C. by the petitioners being aggrieved by the

impugned order dated 17.1.2017 (Annex.A/3) passed by the learned Judicial

Magistrate First Class, Bhopal in R.T. No.2307/2005 whereby he is stated to

have erroneously committed the case to the learned Court of Sessions on the

basis of a retrospective application of the amendment to Section 32 of the

Drugs and Cosmetics Act, 1940, which was done 12 years after the institution

of the case and also after recording the evidence of all the material

prosecution witnesses who are 4 in number.

         Learned counsel for the petitioners has relied upon the judgment

passed by this Court in Dwarka Prasad Vs. State of M.P., decided on

30.3.2016 in M.Cr.C. No.11246/2014 by which this Court has held in para 24

that the trial of the case may be said to be in advanced stage where a material

witness/ witnesses have been examined on behalf of the prosecution. This

Court further held that it is not so much the number of the witnesses examined

by the prosecution, but the nature of the evidence given by such

witness/witnesses which would have to be seen. It also held that in a given

case where witnesses examined on behalf of the prosecution may not have

deposed to the essential part of the prosecution case or where such evidence

may be formal in character, the case may not be said to be at the advanced

stage of trial. Learned counsel for the petitioners has relied heavily upon this

judgment. This judgment was passed while examining the amendment in the

Cr.P.C. whereby offences U/s.467, 468 inter-alia, which were earlier triable by
 the Court of Magistrate, were made triable after the amendment by the Court

of Sessions. In the case examined in Dwarka Prasad (supra), the Court was

concerned with the stage at which the case was after the amendment came

into force. However, in the instant case, on factual aspects, there is a

difference.

         In this case, on 10.8.2009, the sample was taken by the respondent,

who is a Drug Inspector of the State and on 22.3.2005 the case was instituted against the petitioners herein. They appeared on 29.8.2007 and the amendment to Section 32 of the Drugs and Cosmetics Act, 1940 came into effect from 10.8.2009 according to which the offences under the said Act would only be tried by a Court, not inferior to that of a Court of Sessions. However, in ignorance of the said amendment, the learned Court of J.M.F.C. framed charges on 8.12.2009 for offences U/s.18(a)(i) read with Section 17 and 27 of the Drugs and Cosmetic Act, 1940. In this case, the question involved is not the retrospective application of the amendment, but the continuation of the case before the Court of learned Judicial Magistrate First Class after the amendment came into force at which point of time, even the charges were not framed by the Court of the Ld. JMFC. The framing of the charge by the Court of learned J.M.F.C. on 8.12.2009 itself was rendered illegal on account of the amendment having come into force on 10.8.2009 itself. Therefore, all the proceedings before the Ld. JMFC after 10.8.2009, on which date even the charges were not framed by the Court of learned J.M.F.C., were rendered bad in the eyes of law.

Under the circumstances, the impugned order cannot be faulted, as all proceedings from the stage of framing charges onwards had no sanction under the law. Therefore, this petition is disposed of by sustaining the impugned order of committal of the case to the Court of Sessions but as the evidence taken before the Court of learned J.M.F.C. was done much after the amendment came into force and the charges were framed after the coming into force of the amendment, all proceedings before the Court below commencing from the framing of charges are struck down and the trial will commence denovo before the learned Court of Sessions from the stage of framing charges after giving an opportunity to both the petitioners and the prosecution to address the Court on the issue of framing charges.

With these directions, the petition is disposed of. C.C. as per rules.

(ATUL SREEDHARAN) JUDGE a

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Whether Additional Chief Judicial Magistrate can pass order U/S 14 of SARFAESI Act?

We are in complete agreement with the view taken by the High Court that (i) the District Magistrate, Chief Metropolitan Magistrate is not a persona designata for the purposes of Section 14 of the SARFAESI Act; (ii) the expression “District Magistrate” and the “Chief Metropolitan Magistrate” as appearing in Section 14 of the SARFAESI Act shall deem to mean and include Additional District Magistrate and Additional Chief Metropolitan Magistrate for the purposes of Section 14 of the SARFAESI Act. {Para 12}

We hold that the powers under Section 14 of the SARFAESI Act can be exercised by the concerned Additional Chief Metropolitan Magistrates of the area having jurisdiction and also by the Additional District Magistrates, who otherwise are exercising the powers at par with the concerned District Magistrates either by delegation and/or special order. 

IN THE SUPREME COURT OF INDIA 

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 175 OF 2022;

M/s R.D. Jain and Co. Vs Capital First Ltd. & Ors.

Coram:  M.R. SHAH; J., B.V. NAGARATHNA; J. 

Author: M.R. SHAH, J.

Dated:  July 27, 2022 

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Whether CJM can tender pardon to accused after commitment of case to session court?

In view of the rival submissions, the first question that arises for consideration is whether the approver's evidence can at all be relied upon to bring home the charge against the accused persons? It is no doubt true that the very object of granting pardon to an accused is to unfold the truth in grave offence so that other accused persons involved in the offence could be brought home with the aid of the evidence of the approver. But all the same the legislative mandate as well as the safeguards enshrined in the provisions of the Code for the accused cannot be given a go by merely because of gravity of the offence. With this background in mind it would be necessary to examine the provisions of the Code for testing the correctness of the rival submissions. Coming now to the question as to whether the Chief Judicial Magistrate could have at all granted pardon to the accused even after the committal of the proceedings to the Court of Sessions, the same would depend upon the interpretation of Sections 306 and 307 of the Code. A combined reading of the aforesaid two provisions would indicate that under Section 306 power has been conferred upon the Chief Judicial Magistrate or a Metropolitan Magistrate as well as the Magistrate of the First Class to tender pardon to a person on condition of his making a full and true disclosure of whole of the circumstances within his knowledge relating to the offence. The only distinction between the two sets of Magistrates for exercise of their power lies at the stage when the power can be exercised. While a Magistrate of the First Class can exercise the power while enquiring into or trying the offence in question, the Chief Judicial Magistrate or a Metropolitan Magistrate can exercise the power at any stage of investigation or enquiry into or trial of the offence which they themselves may not be trying. But under Section 307 the power has been conferred upon the Court to which the commitment is made to grant pardon. In other words once a proceeding is committed to a Court of Sessions then only the said Court can exercise power to tender pardon to an accused. Section 307 of the Code corresponds to Section 338 of Criminal Procedure Code, 1898, If the two provisions are examined in juxtaposition it would be clear that while under Section 338 of the old Code after commitment is made the Court to which the commitment was made could himself tender pardon to an accused or could order the committing Magistrate or the District Magistrate to tender pardon, but under Section 307 of the Code of 1973 the Court to whom commitment is made, no longer retains the power to order the committing Magistrate or the District Magistrate to tender pardon. In other words underSection 307 of the present Code after commitment of a case the only Court which can tender pardon is the Court to which the commitment has been made. It would be appropriate at this stage to extract Section 338 of the old Code and the corresponding provisions of Section 307 of the new Code:

338. Power to direct tender of pardon. - At any time after commitment, but before judgment is passed the Court to which the commitment is made may, with the view of obtaining on the trial the evidence of any person supposed to have been directly or indirectly concerned in, or privy, to any, any such offence, tender, or order the committing Magistrate or the District Magistrate to tender, a pardon on the same condition to such person.

307. Power to direct tender of pardon.- At any time after commitment of a case but before judgment is passed, the Court to which the commitment is made may, with a view to obtaining at the trial the evidence of any person supposed to have been directly or indirectly concerned in, or privy to, any such offence, tender a pardon on the same condition to such person.

7. In view of the aforesaid change in the provisions it is difficult for us to accept the contention of the learned Counsel appearing for the State that even under Section 307 after commitment of a case a Chief Judicial Magistrate retains the power to grant pardon. It may not be out of place to notice the recommendations of the Law Commission in its 41st Report in paragraph 24.23;

24.23. Under Section 338, the Court of Session may at any time after commitment of the case, but before passing judgment, either tender pardon itself, or may "order the committing Magistrate or the District Magistrate" to tender pardon. Though this power is rarely resorted to by a Court of Session, it will be useful to retain the Section. But in view of the abolition of the commitment proceedings the Court of Session need not be authorised to direct "the committing Magistrate" or any other Magistrate to tender pardon. The section may be revised to read as follows:

338. At any time after commitment of a case but before judgment is passed, the Court of Session may, with the view to obtaining at the trial the evidence of any person supposed to have been directly or indirectly concerned in or privy to, any such offence, tender a pardon on the same condition to such person.

8. The aforesaid Section has now taken the place of Section 307 in the new Code. This indicates that in the changed circumstances the legislature thought it necessary to delete the expression "or order the committing Magistrate or the District Magistrate to tender a Pardon" from Section 307 of the present Code which was there in Section 338 of the previous Code. On a plain reading of the provisions contained in Sections 306 and 307 of the Code and on examining the changes that have been brought about by the legislature from the corresponding provisions of the old Code, the conclusion is irresistible that under the new Procedure Code of 1973 once a case is committed to the Court of Sessions then it is only that Court to which the proceedings have been committed can tender pardon to a person and the Chief Judicial Magistrate cannot be said to have concurrent jurisdiction for tendering pardon.

Supreme Court of India

A. Deivendran vs State Of T.N. on 21 October, 1997

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Whether Chief Judicial Magistrate in non-metropolitan area can entertain an application U/S 14 of SARFAESI Act 2002?

 According to us, there is no casus omissus. We are not reading something into the provision which the Legislature never intended to nor are we trying to interpret the provision so as to defeat the intention of the Legislature. We are only resorting to a purposive interpretation to arrive at the intention of the Legislature depending on the objects for which the enactment was made. As stated earlier, the intention of the Legislature was to achieve speedier recovery of the dues without the intervention of Tribunals or the Courts and for quick resolution of disputes arising out of the action taken for recovery of such dues. Ergo, by conferring jurisdiction on an authority to exercise the power of assistance, which, his counterpart in a Metropolitan area, is exercising, the Court is not interpreting the provision in a different manner so as to negate the intent of the Legislature. Giving jurisdiction to Chief Judicial Magistrates in non-metropolitan area, who are exercising the same functions as that of Chief Metropolitan Magistrates in metropolitan areas, would not in anyway abrogate or contradict the words used in Section 14 of the SARFAESI Act, thereby causing prejudice to any of the parties. On the other hand, it would hasten the process of rendering assistance to the secured creditors to recover possession of their assets thereby achieving the object for which the SARFAESI Act has been introduced.

39. For the aforesaid reasons, we answer the reference holding that the nomenclature Chief Metropolitan Magistrate referred to in Section 14 is inclusive of Chief Judicial Magistrate in non-metropolitan area and as such the Chief Judicial Magistrate in a non-metropolitan area gets jurisdiction to entertain an application under Section 14 of the SARFAESI Act, 2002.

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH

Writ Petition Nos. 17589 and 17625 of 2014

Decided On: 27.11.2015

Appellants: T.R. Jewellery and Ors. 
Vs.
Respondent: State Bank of India and Ors.

Hon'ble Judges/Coram:D.B. Bhosale, Actg. C.J., C. Praveen Kumar and M.S.K. Jaiswal, JJ.

Citation:AIR 2016 Hyd125

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Whether chief judicial Magistrate can grant stay to proceeding in the court of JMFC during hearing on transfer application?

The above principle is applicable in the, instant case. If during the pendency of the application for withdrawal, the case itself is disposed of by the Court, the application itself would be infructuous. It is, therefore, necessary for the Court to stay the trial of the case by the concerned Magistrate till the Chief Judicial Magistrate decides whether the case should be withdrawn to his file or should be made over to some other court. There was nothing improper in the order of stay issued and it does not call for interference by this Court. 

Kerala High Court

Thottuvarambath Velayudhan vs Pottayil Aboobacker Haji And Anr. on 12 January, 1979

Equivalent citations: 1980 CriLJ 181

Bench: K P Amma

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Chief Metropolitan Magistrate or Chief Judicial Magistrate shall record confession of accused under Mocca Act

18. Certain confessions made to police officer to be taken into consideration.

(1) Notwithstanding anything in the Code or in the Indian Evidence Act 1872, but subject to the provisions of this section, a confession made by a person before a police officer not below the rank of the Superintendent of Police and recorded by such police officer either in writing or on any mechanical devices like cassettes, tapes or sound tracks from which sounds or images can be reproduced, shall be admissible in the trial of such person or co-accused, abettor or conspirator:

Provided that, the co-accused, abettor or conspirator is charged and tried in the same case together with the accused.

(2) The confession shall be recorded in a free atmosphere in the same language in which the person is examined and as narrated by him.

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