SARFAESI Section 14 procedure permits Chief Judicial Magistrates in non-metropolitan areas to process secured creditor requests

Section 14 of the SARFAESI Act was construed as a remedial, administrative mechanism limited to verification of the creditor's affidavit and statutory compliance, not an adjudication of rival rights. On that basis, the Court held that in a non-metropolitan area the Chief Judicial Magistrate is competent to process a secured creditor's request, because the Act does not expressly exclude that functionary and the Chief Metropolitan Magistrate reference can be read purposively to include the corresponding magistrate. Sections 35 and 37 did not bar recourse to the Code of Criminal Procedure where no inconsistency exists, and the General Clauses Act supported substitution of the functionary.

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Issues: Whether the Chief Judicial Magistrate in a non-metropolitan area is competent to process a secured creditor's request under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: Section 14 was analysed as a remedial provision intended to assist the secured creditor in taking possession of the secured asset. The inquiry under the section was held to be limited to verification of the affidavit and the statutory conditions, and not an adjudication of inter se rights. The Court noted that the Chief Metropolitan Magistrate and the Chief Judicial Magistrate are synonymous functionaries under the scheme of the Code of Criminal Procedure, 1973, and that the 2002 Act does not expressly exclude the Chief Judicial Magistrate. It also held that Sections 35 and 37 of the 2002 Act do not preclude the application of the Code of Criminal Procedure, 1973, where there is no inconsistency, and relied on the principle of substitution of functionaries under Section 17 of the General Clauses Act, 1897 to adopt a meaningful and purposive construction of Section 14.

Conclusion: The Chief Judicial Magistrate is equally competent to deal with an application under Section 14 of the 2002 Act in a non-metropolitan area.

Ratio Decidendi: Where a statutory function under the 2002 Act is administrative and limited to verification of compliance, and the statute does not expressly exclude the corresponding judicial magistrate in a non-metropolitan area, the reference to the Chief Metropolitan Magistrate may be construed as including the Chief Judicial Magistrate.

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