High Court quashes police inquiry order under Act 2002, directs magistrate to consider bank's petition.

The High Court allowed the writ petition, quashed the order of the 1st Additional Chief Metropolitan Magistrate directing a police inquiry under section 14 of the Act 2002, and directed the magistrate to consider the petitioner-bank's petition in accordance with the statutory provisions.

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Issues:
Petitioner aggrieved by orders of 1st Additional Chief Metropolitan Magistrate directing police inquiry under section 14 of the Act 2002.

Analysis:
The petitioner, a banking company, sought relief under section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, due to default by respondents on loan repayments. The Chief Metropolitan Magistrate assigned the case to the 1st Additional Chief Metropolitan Magistrate for disposal. However, the 1st Additional Chief Metropolitan Magistrate's order directing police inquiry instead of taking possession of secured assets was challenged by the petitioner.

The relevant provision, section 14 of the Act 2002, empowers the Chief Metropolitan Magistrate or District Magistrate to assist secured creditors in taking possession of secured assets. The magistrate is required to take possession of the assets and documents and forward them to the secured creditor. Any action taken by the magistrate in this regard is not subject to challenge in court.

In this case, the 1st Additional Chief Metropolitan Magistrate's decision to refer the matter to the police for inquiry deviated from the statutory provisions of section 14. The magistrate should have taken necessary steps to possess the assets as mandated by the law. Therefore, the High Court found the magistrate's order to be contrary to the Act and quashed it.

As a result of the analysis, the High Court allowed the writ petition, made the rule absolute, quashed the impugned order of the 1st Additional Chief Metropolitan Magistrate, and directed the magistrate to consider the petition filed by the petitioner-bank in accordance with the provisions of sub-section (2) of section 14 of the Act 2002.

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