BALKRISHNA RAMA TARLE DEAD THR LRS & ANRversusPHOENIX ARC PRIVATE LIMITED & ORS

                        [2022] 13 S.C.R. 437                              437


    BALKRISHNA RAMA TARLE DEAD THR LRS & ANR.                             A
                                  v.
           PHOENIX ARC PRIVATE LIMITED & ORS.
             (Special Leave Petition No. 16013 of 2022)
                       SEPTEMBER 26, 2022                                 B
         [M. R. SHAH AND KRISHNA MURARI, JJ.]
       Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002: s. 14 – Chief
Metropolitan Magistrate or District Magistrate to assist secured
                                                                          C
creditor in taking possession of secured asset – Scope, ambit, and
jurisdiction of the District Magistrate/designated authority u/s. 14
– On facts, application u/s 14 by the secured creditor seeking
assistance of designated authority for taking physical possession
of the secured assets – Petitioner claiming to be a tenant in respect
of the part of the secured assets sought to intervene in the said         D
proceedings – Thereafter, the designated authority declined to assist
the secured creditor in taking possession of the secured assets holding
that after the secured creditor terminates the tenancy rights of the
third person by following due procedure of law the further orders
regarding possession of the mortgaged property would be decided
                                                                          E
– Aggreived, secured creditor filed writ petition – High Court set
aside the order passed by the designated authority holding that the
order was beyond the scope and ambit of the powers to be exercised
u/s 14, and directed the designated authority to dispose of the
application in accordance with the provisions of s.14 – On appeal,
held: Power exercisable by the Chief Metropolitan Magistrate or           F
District Magistrate u/s. 14 are ministerial step and does not involve
any adjudicatory process qua points raised by the borrowers against
the secured creditor taking possession of the secured creditor –
Once all the requirements u/s.14 are complied with by the secured
creditor, the duty is cast upon the designated authority to assist the
                                                                          G
secured creditor in obtaining the possession as well as the documents
related to the secured assets – At that stage, designated authority is
not required to adjudicate the dispute between the borrower and
secured creditor and/or between any other third party and aggrieved
party to be relegated to raise objections in the proceedings before
DRT u/s. 17 – On facts, the High Court did not commit any error in        H
                                  437
438            SUPREME COURT REPORTS                      [2022] 13 S.C.R.


A     setting aside the order passed by the designated authority, and
      directing the designated authority to dispose of the application in
      accordance with the provisions of s.14 – Thus, the order passed by
      the High Court, upheld.
            Harshad Govardhan Sondagar v. International Assets
B           Reconstruction Company Limited and Ors.; (2014) 6
            SCC 1 : [2014] 11 SCR 605; Vishal N. Kalsaria v. Bank
            of India and Ors.; (2016) 3 SCC 762 : [2016] 1 SCR
            419 – held inapplicable.
            NKGSB Cooperative Bank Limited v. Subir Chakravarty
C           & Ors. Civil Appeal No. 1637/2022 decided on
            25.02.2022; M/s R.D. Jain and Co. v. Capital First Ltd.
            & Ors. Civil Appeal No. 175/2022 decided on
            27.07.2022 – referred to.
                             Case Law Reference
D     [2014] 11 SCR 605               held inapplicable       Para 6
      [2016] 1 SCR 419                held inapplicable       Para 7
            EXTRA ORDINARY APPELLATE JURISDICTION: Special
      Leave Petition No. 16013 of 2022.
E           From the Judgment and Order dated 03.08.2022 of the High Court
      of Judicature at Bombay in Writ Petition No. 9749 of 2021.
            Vinay Navare, Sr. Adv., Shashibhushan P. Adgaonkar, Omkar
      Jayant Deshpande, Advs. for the Petitioners.
            The Order of the Court was passed by
F
            M. R. SHAH, J.
            1. Feeling aggrieved and dissatisfied with the impugned judgment
      and order dated 03.08.2022 passed by the High Court of Judicature at
      Bombay in Writ Petition No. 9749/2021, by which the Division Bench of
G     the High Court has allowed the said writ petition preferred by the
      respondent No. 1 herein – secured creditor and has set aside order
      dated 27.08.2021 passed by the designated authority under Section 14
      of the Securitisation and Reconstruction of Financial Assets and
      Enforcement of Security Interest Act, 2002 (hereinafter referred to as
      the SARFAESI Act, 2002) and directed the designated authority under
H
         BALKRISHNA RAMA TARLE DEAD THR LRS                                     439
     v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

Section 14 of the SARFAESI Act to dispose of the application under              A
Section 14 of the SARFAESI Act afresh, legal heirs of original respondent
No. 2 claiming to be the tenant of the mortgaged property, have preferred
the present Special Leave Petition.
        2. The Religare Finvest Ltd. (hereinafter referred to as the
Religare) sanctioned a loan of Rs. 6 crores in favour of the borrowers.         B
The said loan was secured by a registered mortgage created by borrowers
in favour of Religare in respect of the property - secured assets. The
borrowers committed defaults in repayment of the said loan which led to
Religare classifying borrowers’ account as a Non-Performing Asset
(NPA). The Religare thereafter, issued a notice dated 13.04.2018 under
Section 13(2) of the SARFAESI Act calling upon borrowers to pay the             C
amount then outstanding under the said facility. That thereafter, by a
Deed of Assignment dated 29.09.2018, Religare assigned all its right,
title, interest, and benefit under the said loan agreement to respondent
No. 1 herein – original petitioner No. 1 before the High Court. Thus,
respondent No. 1 – original petitioner No. 1 stepped into the shoes of          D
Religare and became the secured creditor and in that capacity issued a
notice dated 21.05.2019 under Section 13(2) of the SARFAESI Act to
borrowers calling upon borrowers to make payment of a sum of Rs.
5,83,22,866/-. That thereafter, the secured creditor took symbolic
possession of the secured assets under Section 13(4) of the SARFAESI
Act. On 21.09.2019, the same was intimated to the borrowers vide their          E
letter dated 21.09.2019. A public notice was also issued by the secured
creditor in two newspapers in compliance with the provisions of the
Security Interest (Enforcement) Rules, 2002. That thereafter, the secured
creditor filed an application under Section 14 of the SARFAESI Act
seeking assistance of designated authority – respondent No. 3 herein –          F
District Magistrate, Nashik, for taking physical possession of the secured
assets. The petitioner herein – original respondent No. 2 claiming to be
a tenant in respect of the ground floor plus first floor showroom along
with service station on a part of the secured assets bearing Nos. 465
and 463 sought to intervene in the said proceedings filed under Section
14 of the SARFAESI Act. The petitioner placed reliance upon an order            G
dated 20.04.2018 passed in Regular Civil Suit No. 58/2018 filed by him
against one of the borrowers, whereby one of the borrowers was
restrained from dis-possessing him from the said premises. At this stage,
it is required to be noted that neither the borrower(s) nor the petitioner(s)
instituted any proceedings before the Debt Recovery Tribunal (DRT)              H
440             SUPREME COURT REPORTS                          [2022] 13 S.C.R.


A     under Section 17 of the SARFAESI Act against the steps taken under
      Section 13 of the SARFAESI Act. That thereafter, the designated
      authority passed the following order dated 27.08.2021 and declined to
      assist the secured creditor in taking possession of the secured assets
      and kept the said application pending by observing that after termination
      of the tenancy rights of the petitioner by the Finance Company by
B
      following due procedure of law the further orders regarding possession
      of the mortgage property will be decided. The order dated 27.08.2021 is
      as under: -
            1. In consideration of the reasons recorded in the above referred
               issues and conclusions, the Application of the Finance Company
C              is kept for decision.
            2. After termination of the tenancy rights of the third-person
               Complainant Shri. Balkrishna Rama Tarle by the Finance
               Company by following due procedure of law the further orders
               regarding possession of the mortgage property will be decided.
D
            3. If any party feel aggrieved due to this order, then they may file
               an appeal under section 17 of the Securitisation Act, 2002 before
               Hon’ble Debts Recovery Tribunal, Mumbai.
            4. No order as to cost.”
E            2.1 Feeling aggrieved and dissatisfied with the order dated
      27.08.2021 passed by the designated authority – Additional District
      Magistrate, Nashik in not passing any order of assisting the secured
      creditor in taking possession of the secured assets in exercise of powers
      under Section 14 of the SARFAESI Act, the secured creditor preferred
F     writ petition before the High Court. By the impugned judgment and order,
      the Division Bench of the High Court has set aside order dated 27.08.2021
      passed by the designated authority/Additional District Magistrate by
      observing that such an order is beyond the scope and ambit of the powers
      to be exercised under Section 14 of the SARFAESI Act. That thereafter,
      the Division Bench of the High Court has directed the designated authority/
G     Additional District Magistrate to hear and dispose of the application under
      Section 14 of the SARFAESI Act in accordance with the provisions of
      Section 14 of the SARFAESI Act.
            2.2 Feeling aggrieved and dissatisfied with the impugned judgment
      and order passed by the High Court, the third party – petitioner(s) claiming
H
         BALKRISHNA RAMA TARLE DEAD THR LRS                                   441
     v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

to be a tenant in some of the secured assets have preferred the present       A
Special Leave Petition.
       3. Shri Vinay Navare, learned Senior Advocate, appearing on
behalf of the petitioners has vehemently submitted that in the facts and
circumstances of the case and when the petitioners claimed to be the
tenant of the original landlord with respect to some of the secured assets    B
of which the possession was sought and when the original writ petitioner
stepped into the shoes of the original landlord as rightly observed by the
designated authority – Additional District Magistrate unless the secured
creditor who stepped into the shoes of the original landlord initiates the
legal proceedings for eviction of the tenant cannot get the possession in
an application under Section 14 of the SARFAESI Act.                          C

       3.1 It is vehemently submitted by Shri Navare, learned Senior
Advocate, appearing on behalf of the petitioners that the High Court
ought to have appreciated that the tenancy was subsisting and continuing
since prior to the mortgage of the property and therefore, their rights are
to be protected and unless and until the proceedings are initiated for        D
eviction of the tenant, the secured creditor who will be in the shoes of
the original landlord, cannot get the possession in an application under
Section 14 of the SARFAESI Act. Reliance is placed upon the decisions
of this Court in the cases of Harshad Govardhan Sondagar Vs.
International Assets Reconstruction Company Limited and Ors.;                 E
(2014) 6 SCC 1 and Vishal N. Kalsaria Vs. Bank of India and
Ors.; (2016) 3 SCC 762.
        4. We have heard learned counsel appearing on behalf of the
petitioners at length. At the outset, it is required to be noted that after
initiation of the proceedings and taking steps under Section 13(2) and        F
13(4) of the SARFAESI Act, thereafter, the secured creditor has
approached the District Magistrate by submitting an application under
Section 14 of the SARFAESI Act and has requested the District
Magistrate/Additional District Magistrate to assist the secured creditor
in obtaining the possession of the secured assets. It is required to be
noted that neither the original borrowers nor even the petitioners who        G
are claiming to be a tenant of the secured assets have initiated any
proceedings before Debt Recovery Tribunal under Section 17 of the
SARFAESI Act. The proceedings before the District Magistrate were
under Section 14 of the SARFAESI Act. In the said application under
Section 14 of the SARFAESI Act instead of passing any final order to          H
442             SUPREME COURT REPORTS                          [2022] 13 S.C.R.


A     assist the secured creditor in getting the possession of the secured assets
      and while keeping the said application, the Additional District Magistrate
      has passed an order that only after the termination of the tenancy rights
      of the petitioner by the finance company (secured creditor) by following
      due procedure of law the further orders regarding possession of the
      mortgage property, the said application shall be decided. The aforesaid
B
      order passed by the Additional District Magistrate has been set aside by
      the High Court which is the subject matter of the present Special Leave
      Petition.
              5. Therefore, the short question which is posed for consideration
      of this Court is whether while exercising the powers under Section 14 of
C     the SARFAESI Act, the District Magistrate/designated authority could
      have passed such an order that unless and until the secured creditor
      terminates the tenancy rights of the third person by following due
      procedure of law and further orders regarding possession of the
      mortgaged property then and then only an application under Section 14
D     of the SARFAESI Act will be decided?
             5.1 While considering the aforesaid question/issue, the scope, ambit,
      and jurisdiction of the District Magistrate/designated authority under
      Section 14 of the SARFAESI Act are required to be considered. Section
      14 of the SARFAESI Act reads as under: -
E           “14. Chief Metropolitan Magistrate or District Magistrate
            to assist secured creditor in taking possession of secured
            asset.—(1) Where the possession of any secured assets is
            required to be taken by the secured creditor or if any of the secured
            assets is required to be sold or transferred by the secured creditor
F           under the provisions of this Act, the secured creditor may, for the
            purpose of taking possession or control of any such secured assets,
            request, in writing, the Chief Metropolitan Magistrate or the District
            Magistrate within whose jurisdiction any such secured asset or
            other documents relating thereto may be situated or found, to take
            possession thereof, and the Chief Metropolitan Magistrate or as
G           the case may be, the District Magistrate shall, on such request
            being made to him—
            (a) take possession of such asset and documents relating thereto;
            and
            (b) forward such asset and documents to the secured creditor:
H
    BALKRISHNA RAMA TARLE DEAD THR LRS                                   443
v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

 [Provided that any application by the secured creditor shall be         A
 accompanied by an affidavit duly affirmed by the authorised officer
 of the secured creditor, declaring that—
 (i) the aggregate amount of financial assistance granted and the
 total claim of the Bank as on the date of filing the application;
 (ii) the borrower has created security interest over various            B
 properties and that the Bank or Financial Institution is holding a
 valid and subsisting security interest over such properties and the
 claim of the Bank or Financial Institution is within the limitation
 period;
 (iii) the borrower has created security interest over various           C
 properties giving the details of properties referred to in sub-clause
 (ii)above;
 (iv) the borrower has committed default in repayment of the
 financial assistance granted aggregating the specified amount;
                                                                         D
 (v) consequent upon such default in repayment of the financial
 assistance the account of the borrower has been classified as a
 non-performing asset;
 (vi) affirming that the period of sixty days notice as required by
 the provisions of sub-section (2) of section 13, demanding payment
                                                                         E
 of the defaulted financial assistance has been served on the
 borrower;
 (vii) the objection or representation in reply to the notice received
 from the borrower has been considered by the secured creditor
 and reasons for non-acceptance of such objection or representation
                                                                         F
 had been communicated to the borrower;
 (viii) the borrower has not made any repayment of the financial
 assistance in spite of the above notice and the Authorised Officer
 is, therefore, entitled to take possession of the secured assets
 under the provisions of sub-section (4) of section 13 read with
 section 14 of the principal Act;                                        G

 (ix) that the provisions of this Act and the rules made thereunder
 had been complied with:
      Provided further that on receipt of the affidavit from the
 Authorised Officer, the District Magistrate or the Chief                H
444            SUPREME COURT REPORTS                         [2022] 13 S.C.R.


A           Metropolitan Magistrate, as the case may be, shall after satisfying
            the contents of the affidavit pass suitable orders for the purpose
            of taking possession of the secured assets [within a period of
            thirty days from the date of application]
                  [Provided also that if no order is passed by the Chief
B           Metropolitan Magistrate or District Magistrate within the said
            period of thirty days for reasons beyond his control, he may, after
            recording reasons in writing for the same, pass the order within
            such further period but not exceeding in aggregate sixty days.]
                   Provided also that the requirement of filing affidavit stated
C           in the first proviso shall not apply to proceeding pending before
            any District Magistrate or the Chief Metropolitan Magistrate, as
            the case may be, on the date of commencement of this Act.]
                   [(1A) The District Magistrate or the Chief Metropolitan
            Magistrate may authorise any officer subordinate to him,— (i)to
D           take possession of such assets and documents relating thereto;
            and (ii) to forward such assets and documents to the secured
            creditor.]
                  (2) For the purpose of securing compliance with the
            provisions of sub-section (1), the Chief Metropolitan Magistrate
E           or the District Magistrate may take or cause to be taken such
            steps and use, or cause to be used, such force, as may, in his
            opinion, be necessary.
                   (3) No act of the Chief Metropolitan Magistrate or the
            District Magistrate [any officer authorised by the Chief
F           Metropolitan Magistrate or District Magistrate] done in pursuance
            of this section shall be called in question in any court or before
            any authority.”
             5.2 On a fair reading of Section 14 of the SARFAESI Act, it
      appears that for taking possession of the secured assets in terms of
      Section 14(1) of the SARFAESI Act, the secured creditor is obliged to
G
      approach the District Magistrate/Chief Metropolitan Magistrate by way
      of a written application requesting for taking possession of the secured
      assets and documents relating thereto and for being forwarded to it
      (secured creditor) for further action.

H
         BALKRISHNA RAMA TARLE DEAD THR LRS                                     445
     v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

       The statutory obligation enjoined upon the CMM/DM is to                  A
immediately move into action after receipt of a written application under
Section 14(1) of the SARFAESI Act from the secured creditor for that
purpose. As soon as such an application is received, the CMM/DM is
expected to pass an order after verification of compliance of all formalities
by the secured creditor referred to in the proviso in Section 14(1) of the
                                                                                B
SARFAESI Act and after being satisfied in that regard, to take possession
of the secured assets and documents relating thereto and to forward the
same to the secured creditor at the earliest opportunity. As observed
and held by this Court in the case of NKGSB Cooperative Bank
Limited Vs. Subir Chakravarty & Ors. (Civil Appeal No. 1637/2022)
decided on 25.02.2022, the aforesaid act is a ministerial act. It cannot        C
brook delay. Time is of the essence and this is the spirit of the special
enactment. In the recent decision in the case of M/s R.D. Jain and
Co. Vs. Capital First Ltd. & Ors. (Civil Appeal No. 175/2022) decided
on 27.07.2022, this Court had an occasion to consider the powers
exercisable by District Magistrate/Chief Metropolitan Magistrate under
                                                                                D
Section 14 of the SARFAESI Act. After considering the object and
purpose of Section 14 of the SARFAESI Act and the Scheme of the Act
under Section 14, it is observed and held in paragraphs 7 to 9 as under: -
      “7. Now so far as the powers exercisable by DM and CMM
      under Section 14 of the SARFAESI Act are concerned, statement
      of objects and reasons for which SARFAESI Act has been                    E
      enacted reads as under: -
           “STATEMENT OF OBJECTS AND REASONS
      The financial sector has been one of the key drivers in India’s
      efforts to achieve success in rapidly developing its economy. While       F
      the banking industry in India is progressively complying with the
      international prudential norms and accounting practices there are
      certain areas in which the banking and financial sector do not
      have a level playing field as compared to other participants in the
      financial markets in the world. There is no legal provision for
      facilitating securitisation of financial assets of banks and financial    G
      institutions. Further, unlike international banks, the banks and
      financial institutions in India do not have power to take possession
      of securities and sell them. Our existing legal framework relating
      to commercial transactions has not kept pace with the changing
      commercial practices and financial sector reforms. This has               H
446      SUPREME COURT REPORTS                           [2022] 13 S.C.R.


A     resulted in slow pace of recovery of defaulting loans and mounting
      levels of non-performing assets of banks and financial institutions.
      Narasimham Committee I and II and Andhyarujina Committee
      constituted by the Central Government for the purpose of
      examining banking sector reforms have considered the need for
      changes in the legal system in respect of these areas. These
B
      Committees, inter alia, have suggested enactment of a new
      legislation for securitisation and empowering banks and financial
      institutions to take possession of the securities and to sell them
      without the intervention of the court. Acting on these suggestions,
      the Securitisation and Reconstruction of Financial Assets and
C     Enforcement of Security Interest Ordinance, 2002 was
      promulgated on the 21st June, 2002 to regulate securitisation and
      reconstruction of financial assets and enforcement of security
      interest and for matters connected therewith or incidental thereto.
      The provisions of the Ordinance would enable banks and financial
      institutions to realise long-term assets, manage problem of liquidity,
D
      asset liability mismatches and improve recovery by exercising
      powers to take possession of securities, sell them and reduce
      nonperforming assets by adopting measures for recovery or
      reconstruction.”
              Thus, the underlying purpose of the SARFAESI Act is to
E     empower the financial institutions in India to have similar powers
      as enjoyed by their counterparts, namely, international banks in
      other countries. One such feature is to empower the financial
      institutions to take possession of securities and sell them. The
      same has been translated into provisions falling under Chapter III
F     of the SARFAESI Act. Section 13 deals with enforcement of
      security interest. Sub-Section (4) thereof envisages that in the
      event a default is committed by the borrower in discharging his
      liability in full within the period specified in sub-section (2), the
      secured creditor may take recourse to one or more of the
      measures provided in sub-section (4). One of the measures is to
G     take possession of the secured assets of the borrower including
      the right to transfer by way of lease, assignment or sale for realising
      the secured asset. That, they could do through their “authorised
      officer” as defined in Rule 2(a) of the Security Interest
      (Enforcement) Rules, 2002.
H
    BALKRISHNA RAMA TARLE DEAD THR LRS                                     447
v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

 7.1 After taking over possession of the secured assets, further           A
 steps to lease, assign or sale the same could also be taken by the
 secured creditor. However, Section 14 of the SARFAESI Act
 predicates that if the secured creditor intends to take possession
 of the secured assets, must approach the CMM/DM by way of
 an application in writing, and on receipt of such request, the CMM/
                                                                           B
 DM must move into action in right earnest. After passing an order
 thereon, he/she (CMM/DM) must proceed to take possession of
 the secured assets and documents relating thereto for being
 forwarded to the secured creditor in terms of Section 14(1) read
 with Section 14(2) of the SARFAESI Act. As noted earlier, Section
 14(2) is an enabling provision and permits the CMM/DM to take             C
 such steps and use force, as may, in his opinion, be necessary.
 7.2 At this stage, it is required to be noted that along with insertion
 of sub-section (1A), a proviso has also been inserted in sub-section
 (1) of Section 14 of the SARFAESI Act whereby the secured
 creditor is now required to comply certain conditions and to disclose     D
 that by way of an application accompanied by affidavit duly
 affirmed by its authorised officer in that regard. Sub-Section (1A)
 is in the nature of an explanatory provision and it merely restates
 the implicit power of the CMM/DM in taking services of any
 officer subordinate to him. As observed and held by this Court in
 the case of NKGSB Cooperative Bank Ltd. (supra), the                      E
 insertion of sub-section (1A) is not to invest a new power for the
 first time in the CMM/DM as such.
 8. Thus, considering the scheme of the SARFAESI Act, it is explicit
 and crystal clear that possession of the secured assets can be
 taken by the secured creditor before confirmation of sale of the          F
 secured assets as well as post-confirmation of sale. For taking
 possession of the secured assets, it could be done by the “authorised
 officer” of the Bank as noted in Rule 8 of the Security Interest
 (Enforcement) Rules, 2002.
 8.1 However, for taking physical possession of the secured assets         G
 in terms of Section 14(1) of the SARFAESI Act, the secured
 creditor is obliged to approach the CMM/DM by way of a written
 application requesting for taking possession of the secured assets
 and documents relating thereto and for being forwarded to it
 (secured creditor) for further action. The statutory obligation           H
448      SUPREME COURT REPORTS                           [2022] 13 S.C.R.


A     enjoined upon the CMM/DM is to immediately move into action
      after receipt of a written application under Section 14(1) of the
      SARFAESI Act from the secured creditor for that purpose. As
      soon as such an application is received, the CMM/DM is expected
      to pass an order after verification of compliance of all formalities
      by the secured creditor referred to in the proviso in Section 14(1)
B
      of the SARFAESI Act and after being satisfied in that regard, to
      take possession of the secured assets and documents relating
      thereto and to forward the same to the secured creditor at the
      earliest opportunity. As mandated by Section 14 of the SARFAESI
      Act, the CMM/DM has to act within the stipulated time limit and
C     pass a suitable order for the purpose of taking possession of the
      secured assets within a period of 30 days from the date of
      application which can be extended for such further period but not
      exceeding in the aggregate, sixty days. Thus, the powers exercised
      by the CMM/DM is a ministerial act. He cannot brook delay.
      Time is of the essence. This is the spirit of the special enactment.
D
      As observed and held by this Court in the case of NKGSB
      Cooperative Bank Ltd. (supra), the step taken by the CMM/
      DM while taking possession of the secured assets and documents
      relating thereto is a ministerial step. It could be taken by the CMM/
      DM himself/herself or through any officer subordinate to him/her,
E     including the advocate commissioner who is considered as an
      officer of his/her court. Section 14 does not oblige the CMM/DM
      to go personally and take possession of the secured assets and
      documents relating thereto. Thus, we reiterate that the step to be
      taken by the CMM/DM under Section 14 of the SARFAESI Act,
      is a ministerial step. While disposing of the application under Section
F
      14 of the SARFAESI Act, no element of quasi-judicial function or
      application of mind would require. The Magistrate has to adjudicate
      and decide the correctness of the information given in the
      application and nothing more. Therefore, Section 14 does not
      involve an adjudicatory process qua points raised by the borrower
G     against the secured creditor taking possession of secured assets.
      9. Thus, in view of the scheme of the SARFAESI Act, more
      particularly, Section 14 of the SARFAESI Act and the nature of
      the powers to be exercised by learned Chief Metropolitan
      Magistrate/learned District Magistrate, the High Court in the
H
         BALKRISHNA RAMA TARLE DEAD THR LRS                                   449
     v. PHOENIX ARC PRIVATE LIMITED [M. R. SHAH, J.]

      impugned judgment and order has rightly observed and held that          A
      the power vested in the learned Chief Metropolitan Magistrate/
      learned District Magistrate is not by way of persona designata.”
       Thus, the powers exercisable by CMM/DM under Section 14 of
the SARFAESI Act are ministerial step and Section 14 does not involve
any adjudicatory process qua points raised by the borrowers against the       B
secured creditor taking possession of the secured assets. In that view of
the matter once all the requirements under Section 14 of the SARFAESI
Act are complied with/satisfied by the secured creditor, it is the duty
cast upon the CMM/DM to assist the secured creditor in obtaining the
possession as well as the documents related to the secured assets even
with the help of any officer subordinate to him and/or with the help of an    C
advocate appointed as Advocate Commissioner. At that stage, the CMM/
DM is not required to adjudicate the dispute between the borrower and
the secured creditor and/or between any other third party and the secured
creditor with respect to the secured assets and the aggrieved party to be
relegated to raise objections in the proceedings under Section 17 of the      D
SARFAESI Act, before Debts Recovery Tribunal. Under the
circumstances in the present case no error has been committed by the
High Court in setting aside the order dated 27.08.2021 passed by the
designated authority keeping the application pending till the secured
creditor initiates the legal proceedings for eviction of the tenant cannot
get the possession in an application under Section 14 of the SARFAESI         E
Act. The High Court has rightly directed the designated authority to
proceed further with the application under Section 14 of the SARFAESI
Act, and to dispose of the same in accordance with the provisions of
Section 14 of the SARFAESI Act.
       6. Now so far as the reliance placed upon the decision of this         F
Court in the case of Harshad Govardhan Sondagar (supra) by the
learned counsel appearing on behalf of the petitioner is concerned, the
same shall not be applicable to the facts of the case on hand, what is
observed by this Court in the aforesaid case is the DM/CMM has to
give a notice and opportunity of hearing to the person in possession of       G
the secured assets claiming to be a “Class (1) or (2)” lessee of mortgagor/
borrower, as well as to secured creditor, consistent with principles of
natural justice, and then take a decision. In the said decision, it is not
observed that the DM/CMM has to adjudicate the rights between the
parties.
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450              SUPREME COURT REPORTS                          [2022] 13 S.C.R.


A            7. Now so far as the reliance placed upon the decision of this
      Court in the case of Vishal N. Kalsaria (supra) by the learned counsel
      appearing on behalf of the petitioner is concerned, the said decision shall
      also not be applicable to the facts of the case on hand. In the said decision,
      the question before this Court was of conflict of claim under the
      Maharashtra Rent Control Act, 1999 and the provisions of the SARFAESI
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      Act, and which law will prevail. The scope and ambit of the powers to
      be exercised under Section 14 of the SARFAESI Act were not directly
      in question before this Court. Even as observed and held by this Court in
      the aforesaid decision, a judgment cannot be interpreted and applied to
      fact situations by reading it as a statute. One cannot pick up a word or
C     sentence from a judgment to construe that it is the ratio decidendi on the
      relevant aspects of the case (para 33).
             8. In view of the above and for the reasons stated above, we are
      of the opinion that the High Court has not committed any error in passing
      the judgment and order and directing the designated authority to dispose
D     of the application under Section 14 of the SARFAESI Act. We are in
      complete agreement with the view taken by the High Court. The Special
      Leave Petition stands dismissed.

      Nidhi Jain                                                       SLP dismissed.
      (Assisted by : Shashwat Jain, LCRA)
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