Magistrate's Order Under Section 14 SARFAESI Act Cannot Be Quashed By High Court U/S 482 CrPC : Supreme Court

Sheryl Sebastian

7 July 2023 4:22 PM IST

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Magistrates Order Under Section 14 SARFAESI Act Cannot Be Quashed By High Court U/S 482 CrPC : Supreme Court

The Supreme Court on Thursday held that a High Court cannot quash an order passed by a Magistrate under Section 14 of the SARFAESI Act, in exercise of its powers under Section 482 CrPC.A division bench of Justice AS Bopanna and MM Sundresh was considering a challenge to an order of the Madras High Court that had quashed an order under Section 14 of the Securitisation and Reconstruction...

The Supreme Court on Thursday held that a High Court cannot quash an order passed by a Magistrate under Section 14 of the SARFAESI Act, in exercise of its powers under Section 482 CrPC.

A division bench of Justice AS Bopanna and MM Sundresh was considering a challenge to an order of the Madras High Court that had quashed an order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) under Section 482 of the Cr.P.C. Setting aside the order of the High Court the Apex Court held that an order under Section 14 of the SARFAESI Act cannot be quashed under Section 482 of the Cr.PC when there is a remedy under the SARFAESI Act:

“The contention put forth in the instant petition is that a petition filed under Section 482 of the Criminal Procedure Code (Cr.P.C.) to quash an order passed under the provisions of the SARFAESI Act was not sustainable. We note that the said contention has sufficient force as any remedy against such order can be availed only under the SARFAESI ACT’, 2002.” The Court stated in its order.

In this case, the Madras High Court allowed a petition filed under Section 482 CrPC challenging an orders passed by Chief Metropolitan Magistrate Court, Egmore, Chennai under Section 14 SARFAESI Act (to assist secured creditor in taking possession of secured asset). The court agreed with the contention of the petitioner that this order was passed by the Magistrate without affording an opportunity of hearing to the Petitioner

Before the Apex Court, the contention raised was that against the order passed by the District Magistrate under of the SARFAESI Act, proceedings under Section 482 of Cr.P.C., was not maintainable.

There are conflicting views expressed by Madras High Court on this issue. For instance, in an order passed in the year 2020, another single bench of the High Court had held that the Chief Metropolitan Magistrate is a persona designata under the SARFAESI Act and his orders cannot be challenged under Section 482 Cr.P.C. Very recently, another single judge observed that order under Section 14 of SARFAESI Act 'can be very well challenged' before the High Court under Section 482 CrPC.

The Petitioner was represented by Adv. Vikas Kumar, Adv. Parul Manral, Adv. Mr. Sangam Panghal, Adv. Pranjal Shrivastava, M/S Corporate Legal Partners

Case Title: Phoenix Arc Private Limited vs V. Ganesh Murthy | Special Leave to Appeal (C) No(s). 22093-22094/2022

Citation : 2023 LiveLaw (SC) 513

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Magistrate's Order Under Section 14 SARFAESI Act Cannot Be Quashed By High Court U/S 482 CrPC : Supreme Court

Sheryl Sebastian

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