I fully agree with the opinion of Sri Narendra S.P.
For interest of every one I would like to add this para containing complete information on all points in your query.
This is Ministerial function. Section 14(3) of the Act provides for immunity. Section 34 of the Act bars civil court’s jurisdiction in order to avoid adjudication of claim (as it is time consuming process) and the power of determination of legality of the dispute whatsoever of any person is conferred to the tribunal after the stage of action under Sec.13(4). For this reason Sec.14 does not confer power to CMM/DM for deciding any dispute of any person. The CMM/DM exercise only judicial function which is ministerial in nature. There is difference between judicial function and adjudication. Hence service of any notice to the borrower is not contemplated in Sec. 14 of the Act as no adjudication of dispute takes place before the CMM/DM. Supreme Court upheld the constitutional validity of Sec.14 of the Act in Mardia Chemical’s case on touch-stone of Art. 14 of the Constitution of India. Hence Sec 14 is only ministerial function which cannot be called in question in any court or before any authority. Sec 14 is procedural in nature and merely empowers the CMM or DM to assist the secured creditor in taking possession of the secured assets and it does not clothe the DM with the power to adjudicate in respect of any dispute pertaining to secured assets:(Union Bank of India Vs State of Maharashtra: 2010 TLMHH 633; Kotak Mahindra Bank Limited Vs District Magistrate 2009 TLGJ 2799(GUJ.). A mere request to the Magistrate is sufficient under Sec.14 in taking possession (Sosamma Abraham Vs. The Chief Manager S.B.T. & Ors.: AIR 2008 Ker 136).
Chief Judicial First Class Magistrate in Non Metropolitan areas can also assist the secured creditor under Sec.14:(Muhammed Ashraf and Anr. Vs. Union of India and Ors. : AIR 2009 Kerala 14); Solaris System (P) Ltd.Vs.Oriental Bank of Commerce IV(2006) BC536 (Kerala High Court)=ILR 2006(2)Kerala 645 Dhanalakshmi Bank Ltd. Vs. Kovai Foods & Beverages III(2007)BC 612(Madras High Court)
Symbolic possession not a condition precedent to invoke Sec.14:Taking symbolic possession under Sec.13(4) r/w Rule 8(1) is not a condition precedent for invoking Sec 14 of SARFAESI Act. Distinguishing with the view taken by one Division Bench in Noble Kumar Vs. Standard Chartered Bank & Ors. CD 2010 MCH 4621, another Division Bench of Madras High Court in Hemabhushan Vs. ICICI Bank Ltd. Ors. : CDJ 2010 MHC 3378 held that, right to invoke Sec.14 of the Act is independent of the provisions of Sec.13(4) and powers of the Magistrate under Sec 14 are only ministerial, non-adjudicatory in nature, final and cannot be called in question in any Court or before any Authority. The Magistrate is required only to verify from the Bank / FI whether notice under Sec 13(2) of the Act is given or not whether the secured assets fall within the jurisdiction of the Magistrate. It is also held that, before invoking Sec.14 it is not necessary to issue notice under Sec.13(4) of the Act. Referring to the judgement of the Supreme Court in United Bank of India Vs. Satyavati Tondon & Ors.: III (2010) Banking Cases 495(SC) the High Court observed that, Supreme Court considered the case where Sec.14 was invoked even before issuance of notice under Sec.13(4). In the said case, demand notice was issued under Sec.13(2) for recovery of Rs. 23,22,972/-. The party offered to pay 18,00,000/-against the claim amount. The bank not satisfied with the offer of the borrower, invoked Sec.14 and had taken physical possession. Thereafter the bank issued notice under Sec 13(4) to the borrower. Therefore it is clear from the above that, issuance of notice under Sec.13(4) is not a condition precedent to invoke Sec. 14 of the SARFAESI Act. It has been further held by the Supreme Court that, when alternative remedy is available the High Court cannot assume writ jurisdiction.
Taking possession of the secured assets with the assistance of Magistrate amounts to taking measures in terms of Sec. 13(4) and such action gives raise a chance to invoke Sec. 17 of the Act. Though the order of the Magistrate cannot be called in question before any Court or Authority in view of Sub-Sec.(3) of Sec.14 one can raise the legality and propriety of the measures of taking possession under Sec.14, in proceedings under Sec.17 of the Act if such measure is against the provisions of SARFAESI Act and the Rules framed thereunder (Bharatbhai Ramaniklal sata Vs.Collector and Dist Magistrate & Another : AIR 2010 Gujarat 72).
No prior notice to borrower before taking possession u/s 13(4) after service of 60 days demand notice or even prior to invocation of Sec.14 of the Act : CDJ 2006 MHC 2702 (In re Sundaram Home Finance Ltd.). No notice to the borrower by Magistrate is contemplated under Sec.14 : C.R.Sindhu Vs. State o Kerala & Ors. :AIR 2008 Ker 65; Indian Overseas Bank Vs. Sri Aravind Steels Ltd. 2009 (1) CTC 341=AIR 2009 Mad.10; The Industrial Investment Corporation Ltd Vs. M/s. Sudarshanam Industries & Ors.: AIR 2009 Mad. 15. No trial / enquiry / adjudication of dispute by Magistrate is contemplated (Muhammed Ashraf and Anr. Vs. Union of India and Ors. : AIR 2009 Kerala 14); Union Bank Of India Vs. State of Maharashtra & Others:2010 (2) DRTC 487 (Bom.). No hearing of borrower or guarantor by the Magistrate is contemplated in the Act (Tensile Steel Ltd. & Anr. Vs. Punjab & Sindh Bank & Ors. AIR 2007Guj 126). Metropolitan Magistrate while considering an application under section 14 need not issue any notice to borrower or any person A. Aboobacker Vs. PNB & others 2005 (127) CC 519(Kerala); Mrs. Sunanda Kumari and another Vs Standard Chartered Bank (2007) 135Comp. Cas.604(Kar.); Vijaya Bank Vs Shameem Transport: 2007(1)D.R.T.C. 494(Kar.); State Bank of India Vs Kathikkal Tea Plantations, Melur : AIR 2009 Mad.152. It is very much clear that absolutely no power, jurisdiction, competence or expertise is intended or vested with the Magistrate to deal with any claim as to the nature of the property in question or as to the merits or demerits with regard to other aspects involved in connection with loan transaction, but for considering whether the property in question in respect of which assistance is sought is a secured asset or not. For similar proposition refer Ayishumma Vs. Hassan :2009 (3) Kerala Law Times 399; Vaishnavi Pulvarising Mills Ltd Vs. SBI, Stressed Assets Management Branch, Chennai 2010 (1) Mad LJ(Cri) 31. Where the Additional Collector has similar power as of Collector under Sec 14 A of the UP Land Revenue Act, 1901, the Order passed by the Additional Collector cannot be said to be without jurisdiction (Irshad Hussain Vs District Magistrate, Moradabad: AIR 2009 Allahabad 125). Section 20 of Cr.P.C. empowers State Government to appoint an Executive Magistrate as Additional District Magistrate can exercise powers under Sec.14 of the SARFAESI Act. (Harunali Mallik Vs. State of West Bengal: 2011 (2)D.R.T.C. 20(Cal.)
No notice to the borrower or Auction Purchaser is necessary: In case the Magistrate declines to assist and if the secured creditor wishes to challenge the same, in revision under Art. 227 or under Sec.482 of Cr.P.C., it is not necessary to issue notice to the borrower or the auction purchaser (Vijaya Bank Vs. Shameem Transport & Ors. : AIR 2007( NOC) 310 (Kar.). There is no statutory requirement to issue any notice prior to issuance of notice under sec.13(4) or before invoking assistance under Sec. 14 of the Act.: Sundaram Home Finance Ltd. Vs. 1.The Tahsildar, Hosur 2. V and the Dist. Collector : CDJ 2006 MHC 2702. Issuing notice to the borrower is alien to the special statute viz. SARFAESI Act since no adjudication nor roving enquiry is contemplated under Sec.14 of SARFAESI Act. (State Bank of India Vs. Kathikkai Tea Plantations & Ors. 2009 (2) DRTC 738 Mad.) It is well settled law that at the stage of Sec 14, there is no adjudication of any issues. The authorities have to only render assistance to the secured creditor to recover possession (Arjun Urban Co-operative Bank Ltd, Sholapur Vs Chief Judicial Magistrate, Solapur 2009(5)MHLJ 380 (Bom)
Taking assistance of Chief Metropolitan or District Magistrate under Sec. 14 of the Act is not compulsory: “Invocation of Sec. 14 is not mandatory”. Aboobacker Vs. Punjab National Bank III (2005) BC 390 Kerala High Court. But purpose of taking assistance of the Magistrate is to ensure that, no breach of peace takes place.
Prior issuance of sale certificate does not operate as bar for taking assistance of the Magistrate under Sec.14(2) of the Act. Borrower is not entitled to any notice on issuing sale certificate and the bank does not cease to be secured creditor. [Shakthi Industries & Others Vs. Indian Overseas Bank 2010(2)DRTC 725 (Mad.)]
The Magistrate can appoint Advocate-Commissioner for identification and taking possession of the secured assets if necessary by taking help of police [Indian Overseas Bank Vs. Sri Aravind Steels Ltd. 2009 (1) CTC 341=AIR 2009 Mad.10.]
Delegation of statutory power is impermissible. Dist. Magistrate being repository of power under Sec. 14 of the Act cannot delegate his power to Tahsildar or his subordinate. Debtor is not entitled to any notice as no issues of fact or law are required to be decided by the Magistrate. Sundaram BNP Paribas Home Finance Ltd. Vs. State of Kerala & Others : [2009(1)D.R.T.C. 358 (Ker)].The nature of the powers that are exercised by the DM or CMM are purely executory in nature and particularly when no element of quasi-judicial functions or application of mind is required while exercising the said powers, it cannot be said that the DM is a persona designate and that he cannot delegate the powers to other officer (Puran Maharashtra Automobiles Vs Sub Divisional Magistrate 2009 TLMHH 226).
The DM has to verify the record to the extent that the condition precedent for exercise of the power by the Bank are satisfied (Authorised Officer Canara Bank Vs Sulay Traders thro Bipin Kantilal Vakta 2010 TLGJ 407).
The employment of any physical power to dispossess even in terms of a statute or enforceable order could be only had in exercise of the police power of the State. Even a Court does not have the power to dispossess by force through its officer, but has the power to secure it only through the police machinery of the State. That power cannot be conceded to any individual or institution empowered to take possession, except in cases where the power to physically dispossess is also expressly conferred. That such power has not been conferred by Parliament on a secured creditor under the Act. The DM has to exercise the power by himself and cause the relief to be worked out under his control. That cannot be delegated: Sundaram BNP Paribas Home Finance Ltd Vs State of Kerala AIR 2009 Ker 85.
Kerala High Court in Sami Vs. Bank of India: 2011 (3) Bankers' Journal 293 held that, approaching Magistrate under Section 14 itself would constitute a measure under Section 13(4), which would give rise to an aggrieved person to approach DRT. It is not necessary for an aggrieved person to wait till actual or symbolic possession is taken before resorting to the remedy as provided under Section 17 of the Act.
In Pushpangadan Vs. Federal Bank 2011 (4) KLT 134 : 2011 (4) KLJ 93) High Court of Kerala held that, the Securitisation Act has no overriding effect over the provisions of the Kerala Buildings (Lease and Rent Control) Act, 1965. A tenant inducted in the premises before creation of the security interest cannot be summarily evicted under Sections 13 (4) and 14 of the Securitisation Act. Such a tenant, whose right, title, interest or possession is affected by a measure taken under Section 13(4) of the Securitisation Act, would be entitled to make an application to the Debts Recovery Tribunal under Section 17 of the Securitisation Act. Judgment in Sami Vs. Bank of India: 2011 (3) Bankers' Journal 293 is approved.
