BALKRISHNA RAMA TARLE DEAD THR LRS & Anr. v. PHOENIX ARC PRIVATE LIMITED & Ors.

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 [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 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 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 – 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 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 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 437 B C D E F G H 438 SUPREME COURT REPORTS [2022] 13 S.C.R. A B C 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.