State Bank Of India vs Chief Judicial Magistrate

Anu Sivaraman, J

This writ petition is filed challenging Exhibits P9 and P11 orders issued by the Chief Judicial Magistrate, Thiruvananthapuram.

Heard the learned counsel for the petitioner, the learned counsel for respondents 2 to 6 and the learned counsel appearing for respondents 7 and 8.

It is submitted that the 2nd respondent had availed multiple credit facilities from the petitioner's bank and on default in repayment, recovery proceedings were initiated under the SARFAESI Act. The secured asset was taken possession of by the Advocate Commissioner on 27.7.2022 consequent to Exhibit P1 order. The 2nd respondent filed Exhibit P8 interlocutory application seeking release of machinery mentioned in Exhibit P8(a). The advocate for the bank did not object to the release of the machineries and accordingly Exhibit P9 order was passed directing the release. The petitioner filed Exhibit P10 interlocutory application to recall Exhibit P9 order, which was dismissed by Exhibit P11 stating that the order was passed after hearing all sides and that a criminal court cannot review its own order due to the embargo under Section 362 of the Cr.P.C. It is submitted that pursuant to an interim order passed by this Court in these proceedings, the 7th respondent had deputed competent officers to conduct inspection with regard to the finished and semi-finished products belonging to them and an inventory had been prepared and is submitted before this Court along with Exhibit R7(a) which is the list of the materials/items to be retrieved from the 2nd respondent's premises.

It is submitted by the learned counsel for the petitioner relying on the decisions of the Apex Court in Harshad Govardhan Sondagar v. International Assets Reconstruction Company Limited and others [(2014) 6 SCC 1] that the decision of the Magistrate of the First Class under sub-section 3 of Section 14 of the SARFAESI Act can be challenged before the High Court under Article 226 and 227 of the Constitution of India by any aggrieved party, since the power of judicial review cannot be foreclosed by statutory provisions. Reliance is also placed on the decision reported in Grindlays Bank Ltd. v. Central Government Industrial Tribunal and others [1980 (Supp) SCC 420] to contend that all courts, tribunals and adjudicatory bodies must be considered to have ancillary and incidental powers and the power to correct a mistake is one such incidental power. Relying on a decision of a Division Bench of this Court in Deepthi T.S and others v. Chairman, Al-Azar Medical College & Super Specialty Hospital, Thodupuzha and others [2017 (5) KHC 460] it is contended that there are two types of reviews, that is, substantive review and procedural review and even in a case where there is no substantive review available, a procedural review would be possible at the hands of an authority or tribunal. It is further contended that Section 362 of the Cr.P.C only bars the altering of an order by a criminal court and that the Magistrate while exercising his powers under the SARFAESI Act is only a statutory authority and is not functioning as a criminal court and therefore the provisions of Section 362 would have no application.

The learned counsel for respondents 2 and 3 submits that the earlier order of the Chief Judicial Magistrate was an order on merit, after considering the contentions of all concerned. It is submitted that, apart from the secured assets, assets belonging to the Brahmos and VSSE had also been taken possession of by the bank and that the entire proceedings were, therefore, flawed. It is submitted that other writ petitions have been filed challenging the recovery proceedings and that the validity of the present orders have also to be considered along with those proceedings. Contentions are raised relying on Rules 6, 7 and 8 of the SARFAESI Rules. However, it is specifically submitted by the learned counsel appearing for respondents 2 and 3 that the said respondents had absolutely no objection in releasing the materials which belong to the 7th and 8th respondents to them and the other contentions with regard to the validity of the recovery proceedings may be left open.

Having considered the contentions advanced, I notice that the legal questions raised in the writ petition do not have to be gone into in the instant case in view of the subsequent developments which have taken place. The 7th respondent has placed on record an affidavit seeking the benefit extended to the 8th respondent as per interim order dated 09.02.2023, along with the list of materials to be retrieved from the 2nd respondent. The learned counsel for the petitioner submits that the bank has absolutely no objection to the materials being taken out of the secured asset by respondents 7 and 8. The learned counsel appearing for respondents 2 and 3 also submits that those respondents also do not object to the release of the articles included in the respective lists to respondents 7 and 8.

In the above view of the matter, the ownership of the articles belonging to the 7th respondent now having been settled by the affidavit and the list of such materials placed along with the same, I am of the opinion that the other questions of law do not require to be considered. The respondents also do not have a case that a challenge to Exhibit P9 and P 11 orders is not maintainable before this Court.

In the above factual situation, I am of the opinion that this writ petition can be disposed of with a direction that respondents 7 and 8 shall be permitted to take possession of those articles which are specifically mentioned in the list appended to the affidavit filed by the 7th respondent as Exhibit R7(a), as also the list of articles as verified by the 8th respondent. Exhibits P9 and P11 are, therefore, set aside to permit the above exercise as stated above. All other contentions of the parties are left open to be decided in appropriate proceedings.

The writ petition is ordered accordingly.