Chief Judicial Magistrate Can’t Grant Time For Payment Of Debt Due To Secured Creditor: Kerala HC [Read Judgment]

‘Merely for the reason that the power under Section 14 is exercised by the Chief Judicial Magistrate, it cannot be argued that the power is judicial as it is now settled that the fact that the power is entrusted or wielded by a person who functions as a court is not decisive of the question whether the act or decision is administrative or judicial.’

The Kerala High Court, in Canara Bank v. Stephen John, has held that the Chief Judicial Magistrate exercising power under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has no jurisdiction to grant time for payment of the debt due to the secured creditor.

In this case, the bank had assailed an order of the Chief Judicial Magistrate, who granted 45 days’ time to debtors to pay Rs. 45 lakh to the secured creditor.

Justice PB Suresh Kumar observed that merely for the reason that the power under Section 14 is exercised by the Chief Judicial Magistrate, it cannot be argued that the power is judicial as it is now settled that the fact that the power is entrusted or wielded by a person who functions as a court is not decisive of the question whether the act or decision is administrative or judicial.

The court said: “There is no discretion whatsoever for the Chief Judicial Magistrate exercising power under Section 14 and the power is conferred only for the regulation of matter as distinguished from a power to decide the rights of parties. If the scope of the jurisdiction of the Chief Judicial Magistrate under Section 14 is understood in this fashion, there is no difficulty in   arriving at the conclusion that the power is only administrative and not judicial.”

The court also took note of the amendment brought in which mandates that before rendering assistance to the secured creditor, it is obligatory for the Chief Judicial Magistrate exercising power under Section 14 of the Act to satisfy that the secured creditor has made a declaration in the form of an affidavit as regards matters specifically mentioned in the first proviso to sub section (1) of Section 14.

On this aspect, the court observed that if the secured creditor does not file an affidavit declaring all the facts required to be declared in terms of the first proviso, the Chief Judicial Magistrate is not obliged to render assistance to them. “The correctness, if any, of the declaration made by the secured creditor for the purpose of availing assistance under Section 14 of the Act is a matter for the Debts Recovery Tribunal exercising power under Section 17 of the Act to adjudicate upon, if raised,” the court added.

Read The Judgment Here: