Dismissed

Ahamed Kunhi K., v. Union of India

Kerala HC4 Feb 2019WP(C)/2544/2019

Case brief

AI extract

What is this about?

Petitioners challenged orders by an Additional Chief Judicial Magistrate granting banks physical possession of mortgaged property under the SARFAESI Act. The Court held that a High Court directive is sufficient for jurisdiction, even without Gazette notification. Writ petitions dismissed with liberty to seek loan regularization. Quality is thin as only administrative orders were addressed.

What did the court decide?

Writ petitions dismissed; liberty granted to petitioner in WP(C) 2544/2019 to approach banks or Asset Reconstruction Company for loan settlement within one week.

Ahamed Kunhi K., Vs Union of India — Constitutional and Fundamental Rights | Kerala HC (2019)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

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MONDAY ,THE 04TH DAY OF FEBRUARY 2019 / 15TH MAGHA, 1940

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WP(C).No. 41394 of 2018

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PETITIONER:

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DR. K.P SHIYAS AGED 40 YEARS SON MR.K.M.PAREETH,GENERAL SECRETARY,INDIRAGANDHI MEMORAIL TRUST, INDIA NAGAR, NELLIKUZHI (PO), KOTHAMANGALAM, ERNAKULAM DISTRICT,PIN-686 691

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BY ADVS. SRI.SHAJI CHIRAYATH SMT.G.SAVITHA SMT.JIJI M. VARKEY SRI.M.M.SHAJAHAN

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RESPONDENTS:

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1 UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES, 3RD FLOOR, JEEVAN DEPP BUILDING, SANSAD MARG, NEW DELHI, PIN-110 001, REPRESENTED BY ITS FINANCE SECRETARY

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2 CATHOLIC SYRIAN BANK LIMITED CSB BHAVAN,HEAD OFFICE AT.MARY'S COLLEGE ROAD, THRISUR-680 020, REPRESENTED BY ITS MANAGING DIRECTOR

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3 MANAGER

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CATHOLIC SYRIAN BANK LIMITED, THODUPUZHA BRANCH, PETERS 9 IDUKKI ROAD, THODUPUZHA (PO) IDUKKI DITRICT ,PIN-685 584

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4 AUTHORISED OFFICER, CATHOLIC SYRIAN BAMK LIMITED, DJM BUILDING, MARKET ROAD, ERNAKULAM DISTRICT,PIN-682 011 REPRESENTED BY MS KAVITHA RAMAMCHANDRAN, AGED 40YEARS DAUGHTER OF MR, RAMACHANDRAN

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BY ADV. SRI.S.EASWARAN

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SRI.P.VIJAYAKUMAR-ASG

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.02.2019, ALONG WITH WP(C).41751/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

¶23

MONDAY ,THE 04TH DAY OF FEBRUARY 2019 / 15TH MAGHA, 1940

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WP(C).No. 41751 of 2018

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PETITIONER:

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N.M.NABEESA AGED 64 YEARS WIFE MR.K.M.PAREETH,KOTTAKUNNEL HOUSE, ADOOPARAMBU, MUVATTUPUZHA (PO) ,ERNAKULAM DISTRICT,PIN-686 66

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BY ADVS. SRI.SHAJI CHIRAYATH SMT.G.SAVITHA SMT.JIJI M. VARKEY SRI.M.M.SHAJAHAN

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RESPONDENTS:

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1 UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES, 3RD FLOOR, JEEVAN DEEP BUILDING, SANSAD MARG, NEW DELHI,PIN-110 001,REPRESENTED BY ITS FINANCE SECRETARY

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2 TATA CAPITAL FINANCIAL SERVICES LIMITED, REGISTERED OFFICE ONE FORBES, DR.V.B.GANDHI MARGE,FORT MUMBAI 400001,REPRESENTED BY TIS MANAGING DIRECTOR

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3 AUTHROISED OFFICER TATA CAPITAL FINANCIAL SERVICES LIMITED, PULIKEEL BUILDING,NEAR ERNKULAM MEDICAL CENTER, VENNALA (PO), ERNKULAM DISTRICT, PIN-682 028,REPRESENTED BY MR.SAJAN ROY

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4 K.DHANANJAYA REDDY AGED 42 YEARS SON OF MR.K.RAJA REDDY, AUTHORISED OFFICER,TATA CAPITAL FINANCIAL SERVICES LIMITED,FIRST FLOOR, PLOT NO.3 TO 6 AUTO PLAZA NO.3,BANJARA HILS, HYDERABAD PIN-500034

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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BY ADVS. SRI.K.THYAGARAJESWARAN, CGC SRI.R.RENJITH SMT.ANJU MOHAN SRI.MANSOOR.B.H.

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SRI.P. VIJAYAKUMAR, ASG

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.02.2019, ALONG WITH WP(C).41394/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶41

PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN

¶43

MONDAY ,THE 04TH DAY OF FEBRUARY 2019 / 15TH MAGHA, 1940

¶44

WP(C).No. 2544 of 2019

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PETITIONER:

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AHAMED KUNHI K., AGED 70 YEARS S/O. MOHAMMED MASTER, KESVATHUPARAMBIL HOUSE, VATTEKUNNAM, EDAPPALLY NORTH P.O, ERNAKULAM-682 024

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BY ADVS. SRI.PEEYUS A.KOTTAM SRI.ANSU VARGHESE

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RESPONDENTS:

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1 UNION OF INDIA, MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES, 3RD FLOOR, JEEVAN DEEP BUILDING, SANSAD MARG, NEW DELHI, PIN-110 001, REPRESENTED BY ITS FINANCE SECRETARY.

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2 INDIABULLS ASSET RECONSTRUCTION COMPANY LTD. INDIABULLS FINANCE CENTRE, 9TH FLOOR, TOWER-1, ELPHISTONE ROAD MUMBAI, PIN CODE 400 013

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3 THE AUTHORISED OFFICER INDUSIND BANK, M.G. ROAD BRANCH, ERNAKULAM-682 035

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4 ADV. SHEMEER S.J, ADVOCATE COMMISSIONER, DISTRICT COURT, ERNAKULAM682 011

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BY ADVS. SRI.LAL K.JOSEPH SRI.A.A.ZIYAD RAHMAN SRI.V.S.SHIRAZ BAVA

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SRI.P. VIJAYAKUMAR-ASG

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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JUDGMENT

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[ WP(C) 41394/2018 ,WP(C).41751/2018 & WP(C).No. 2544 of 2019] The jurisdictional competence (or the lack of it) of the Court of an Additional Chief Judicial Magistrate, to issue orders under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act ('the SARFAESI Act' for brevity) has been spot lighted in these writ petitions.

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These three writ petitions call attention to a singular issue as to whether the Additional Chief Judicial Magistrate, Ernakulam, could have exercised jurisdiction or powers under Section 14 of the SARFAESI Act; and the petitioners impugn the orders, passed by the said Magistrate under this section, offering assistance to the respondent-Banks to take physical possession of certain properties, admittedly equitably mortgaged by them to the said Banks, as being without jurisdiction and hence null and void.

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The petitioners contend, edificed on the afore said section, that it is either the Chief Metropolitan Magistrate or the District Magistrate, who alone are empowered to exercise jurisdiction or to

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019] 6

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issue orders under it and therefore, that the Additional Chief Judicial Magistrate, without an express notification being issued by the High Court under Section 12(2) of the Code of Criminal Procedure (CrPC for short), could not have assumed jurisdiction nor have issued the impugned orders, providing assistance to the respondent-Banks to take physical possession of the secured assets in question.

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I have heard Sri. Shaji Chirayath, learned counsel appearing for the petitioners in WP(C) No. 41751/2018 and WP(C) No. 41394/2018; Sri. Peeyus A. Kottam, the learned counsel appearing for the petitioner in WP(C) No. 2544/2019 and Sri. S. Easwaran, learned counsel for the respondent-Bank in WP(C) No. 41394/2018; Sri. B.H. Mansoor, the learned counsel for the respondent-Bank in WP(C) No. 41751/2018; Sri. Lal K. Joseph, the learned counsel appearing for respondent-Bank in WP(C) No. 2544/2019; as also the learned Assistant Solicitor General appearing for the Union of India in these matters.

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As I have prefatorily noticed above, the thrust of the petitioners' contentions, as voiced by their learned counsel Sri. Shaji 14.Chirayath and Sri. Peeyus A. Kottam, is that an Additional Chief Judicial Magistrate cannot automatically exercise all the powers of a

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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Chief Judicial Magistrate, going by the mandate of the Code of Criminal Procedure. They draw my attention to Section 12 of the CrPC, the applicable provisions of which are extracted as under for ease of reference:

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“ 12. Chief Judicial Magistrate and Additional Chief Judicial Magistrate, etc.

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(1) In every district (not being a metropolitan area), the High Court shall appoint a Judicial Magistrate of the first class to be the Chief Judicial Magistrate.

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(2) The High Court may appoint any Judicial Magistrate of the first class to be an Additional Chief Judicial Magistrate, and such Magistrate shall have all or any of the powers of a Chief Judicial Magistrate under this Code or under any other law for the time being in force as the High Court may direct.”

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The learned counsel, drawing support from the afore Section, submit that it is only if the High Court specifically authorizes an Additional Chief Judicial Magistrate and notifies it in the Official Gazette, can such Magistrate exercise powers under Section 14 of the

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SARFAESI Act. According to them, in the absence of such a notification, even though an Additional Chief Judicial Magistrate may obtain the powers of the Chief Judicial Magistrate under the Code of Criminal

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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Procedure, it will not obtain the competence to act under any other statute. They predicate that, as is clear from Ext.R4(a) notification produced along with the counter affidavit filed by the respondent-Bank in WP(C) No. 41394/2018, the Additional Chief Judicial Magistrate, who has passed the impugned orders, is one designated by this Court only for the trial of criminal cases against MPs/MLAs, without in any manner, directing or authorizing the said Magistrate, to act under the SARFAESI Act. They thus conclude by asserting that the impugned orders are null, void and non est, they having been issued by the Court of the Additional Chief Judicial Magistrate without jurisdiction; and consequently, that they are justified in approaching this Court without invoking their alternative statutory remedies under the SARFAESI Act.

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In answer to these submissions, Sri. S. Easwaran, Sri.B.H. Mansoor and Sri. Lal K. Joseph, the learned counsel appearing for the various Banks, submit that though Section 12 of the Code of Criminal Procedure certainly prescribes that the High Court must specifically direct the Additional Chief Judicial Magistrate to act under any other law or statutte, a specific gazette notification for this purpose is not necessary; it being not so mandated under Section 12 of the Cr.P.C.

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019] 9

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They vehemently say that Section 12 of the Cr.P.C only postulates a direction from this Court to the Additional Chief Judicial Magistrate, to enable the said Officer to act under a particular statute, without prescribing any further requirement of a notification being carried in the Official Gazette. They assert that they have been reliably informed that an Official Memorandum, dated 13/06/2018, has been issued by this Court to the Chief Judicial Magistrate, Ernakulam, directing it to transfer cases under Section 14 of the SARFAESI Act to the Court of the Additional Chief Judicial Magistrate, by invoking powers under Section 410(1) of the Code of Criminal Procedure; and hence that the Chief Judicial Magistrate was fully justified in transferring the cases at hand to the Court of the Additional Chief Judicial Magistrate and that the latter Court thus obtained full jurisdiction to issue the impugned orders. They thus vehemently refute the contentions of the petitioners that because a gazette notification, publishing the afore directive of this Court, has not made, the Additional Chief Judicial Magistrate is incapacitated to exercise powers under the SARFAESI Act, as being untenable and being without any statutory backing.

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As I evaluate the submissions made on behalf of the parties

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019] 10

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as afore, the inexorable question that seizes my attention is whether the Additional Chief Judicial Magistrate in question, who has issued the impugned orders, has acted without or in excess of jurisdiction, as is alleged by the petitioners. This issue is vital because if the said Magistrate has acted within jurisdiction, then the petitioners will have to challenge the orders issued by it before the alternative statutory forum under the SARFAESI Act.

¶83

As has been rightly submitted by Sri. S. Easwaran, Sri. B.H. Mansoor and Sri. Lal K. Joseph, Section 12(2) of the Code of Criminal Procedure provides that the High Court may appoint any Judicial Magistrate of the First Class to be an Additional Chief Judicial Magistrate, and that such Court will have all the powers of a Chief Judicial Magistrate under the Code of Criminal Procedure or under any other law for the time being in force, as the High Court may direct. Hence, it is perspicuous that an Additional Chief Judicial Magistrate can exercise all powers under any other statute if the High Court directs so. However, there is no mandatory stipulation in the said Section that this direction of the High Court must be notified in an Official Gazette, as contended by the petitioners. Ineluctably, therefore, solely because

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019] 11

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such a directive is not published, an Additional Chief Judicial Magistrate does not become incapacitated to act under a particular statute, as is expressly authorized by the High Court.

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The above said, in the case at hand, this Court is cognizant, as rightly pointed out by the learned counsel for the Banks, that an Official Memorandum, bearing No. D3(B)-45189/2010/D8/D7A(2) dated 13/06/2018, had been issued by this Court to the Chief Judicial Magistrate, Ernakulam, directing the said Officer to transfer sufficient number of cases filed under Section 14 of the SARFAESI Act to the Special Court of Judicial Magistrate of the First Class (Special Additional CJM Court) designated for the trial of Criminal Cases against MPs/MLAs, Ernakulam, ensuring that trial of cases against them is not disturbed. This certainly was a direction given by this Court to the Chief Judicial Magistrate to transfer certain cases, to the specified Additional Chief Judicial Magistrate's Court, under the provisions of Section 410(1) of the Code of Criminal Procedure. Thus, going by the afore mentioned Office Memorandum, what was directed by this Court was in the nature of a work-distribution, so as to reduce the burden of

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the Court of the Chief Judicial Magistrate and consequentially

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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authorizing it to transfer some cases under the SARFAESI Act to the concerned Additional Chief Judicial Magistrate under Section 410(1) of the Code of Criminal Procedure. Since the Additional Chief Judicial Magistrate in question dealt with these transferred matters only as per such directive of this Court and since the filing of fresh matters under the SARFAESI Act continue to be only in the Court of the Chief Judicial Magistrate, a notification under Section 12(2) of the Cr.P.C is irrelevant since, there would arise no cause for concern or prejudice to any litigant or Advocate on account of such a work distribution.

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When I hold as afore, I am certainly not oblivious of the petitioners' contention that even if the Chief Judicial Magistrate is authorized by this Court to transfer the cases to the Additional Chief Judicial Magistrate as per the afore mentioned Office Memorandum, the latter cannot still exercise powers under Section 14 of the SARFAESI Act, since it is not competent to hear such cases. This submission, I am aware, is hinged on the provisions of Section 410(1) of the Code of Criminal Procedure which enables a Chief Judicial Magistrate to transfer cases only to a Competent Magistrate under it and the petitioners assert that the Court of the Additional Chief Judicial

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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Magistrate Court in question is not so 'competent'. This submission, however, indubitably can obtain no force at all because, through the very same Office Memorandum, the Additional Chief Judicial Magistrate in question has also been empowered to dispose of the transferred cases and it would thus axiomatically be inevitable that this Court has empowered the said Magistrate to act under Section 14 of the SARFAESI Act and consequently their contentions are repelled as being without merit.

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In the afore circumstances, I have little doubt that the orders impugned in these cases do not suffer or are vitiated on account of lack of jurisdiction; and I resultantly, hold that the action of the Chief Judicial Magistrate in transferring the cases to the concerned Additional Chief Judicial Magistrate and the exercise of powers by the latter, consequent to which the impugned orders have been issued, are both within the circumscribed limits of jurisdiction, as sanctioned by the directions issued by this Court under Section 12(2) of the Code of Criminal Procedure.

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In such view of the matter, it is certain that all the afore Writ Petitions must fail; but as regards WP(C) No. 2544/2019, there is

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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an additional prayer made that the respondent-Bank be directed to allow the petitioner to regularize the loan account. Sri.Peeyus Kottam pleads that the Bank be directed to do so since his client is now in a financial crisis and therefore, unable to pay off the whole outstanding.

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In response to the above request, Sri. Lal K Joseph, learned counsel appearing for the Bank, submits that the account is now a NonPerforming Asset and that it has been assigned to the Asset Reconstruction Company, namely, respondent no. 2; and therefore that, the prayer for regularization of the loan account is now not possible to be acceded to by his client. He says that the petitioner may, however, approach the said Asset Reconstruction Company for a full settlement of the loan account, which they may consider as per the extant and applicable guidelines for such purpose.

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Sri. Peeyus A. Kottam, on hearing Sri. Lal K. Joseph as afore, submitted that his client will approach the Asset Reconstruction Company within a period of one week and prays that they be directed to consider it immediately, since the proceedings under Section 14 of the SARFAESI Act, initiated by them, is now posted on 28/02/2019 before the Court of the Additional Chief Judicial Magistrate.

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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In summation, WP(C) Nos. 41751/2018, 41394/2018 and 2544/2019

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are dismissed; however, leaving liberty to the petitioner in WP(C) 2544/2019 to approach the respondent-Banks, or the Asset Reconstruction Company, or both, for settlement of the loan account, within a period of one week from the date of receipt of a copy of this judgment; in which event, the said respondents will consider such request in terms of law and will communicate the resultant order to the petitioner without any avoidable delay and in any event before 28/02/2019.

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Sd/-

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DEVAN RAMACHANDRAN

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JUDGE

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Ns //True copy// PA to Judge

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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APPENDIX OF WP(C) 41394/2018

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 COPY OF THE ORIGINAL APPLICATION NO251 OF 2018 ON THE FILES OF DEBT RECOVERY TRIBUNAL-I ERNKAULAM EXHIBIT P2 COPY OF THE WRITTEN STATEMENT IN EXHIBIT P1 ORIGINAL APPLICATION EXHIBIT P3 COPY OF THE DEMAND NOTICE TO THE PRINCIPAL BORROWERS PURPORTEDLY UNDER SECTION 13(20 OF THE SERFAESI ACT EXHIBIT P4 COPY OF THE ORDER IN CRIMINAL MISCELLANEOUS CASE NO.320 OF 2018 ON THE FILES OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE ( FOR TRIAL CRIMINAL CASES AGAINST MPS/MLAS OF KERALA),ERNAKULAM

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[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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APPENDIX OF WP(C) 41751/2018

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 COPY OF THE SALE DEED NO.2428 OF 1996 ON THE FILES OF SUB REGISTRY OFFICE MUVATTUPUZHA

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EXHIBIT P2 COPY OF THE NOTICE ISSUED BY THE ADVOCATE COMMISSIONER MR.JOSEPH MARY DAS, DEMANDING VACATE POSSESSION

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EXHIBIT P3 COPY OF HE ORDER IN CRIMINAL MISCELLANEOUS CASE NO.397 OF 2018 ON THE FILES OF ADDITIONAL CHIEF JUDICIAL MAGISTRATE (FOR TRIAL OF CRIMINAL CASES AGAINST MPS/MLAS OF KERALA) ERNKULAM

¶122

[ WP(C) 41394/2018,WP(C).41751/2018 & WP(C).No. 2544 of 2019]

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PETITIONER'S EXHIBITS:

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EXHIBIT P1 TRUE COPY OF THE STATEMENT OF ACCOUNTS FROM THE COMMENCEMENT OF THE LOAN TILL 28.02.2018 EXHIBIT P2 TRUE COPY OF THE NOTICE DATED 09.02.2018 ISSUED BY THE 1ST RESPONDENT BANK TO THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE PROCEEDINGS OF THE SPECIAL ADDITIONAL CHIEF JUDICIAL MAGISTRATE COURT (FOR TRIAL OF CRIMINAL CASES AGAINST MPS/MLAS OF KERALA) ERNAKULAM IN M.C. NO. 230/2018

Ahamed Kunhi K., v. Union of India

Case brief

What is this about?

What did the court decide?

Ahamed Kunhi K., v. Union of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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Case details

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