IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 3RD AUGUST 2011 / 12TH SRAVANA 1933 OP (DRT).No. 2457 of 2011(O) -------------------------------------------- CMP.NO. 1170/2011 of CHIEF JUDICIAL MAGISTRATE COURT, PALAKKAD .................... PETITIONER -------------------- M.P.ABDUL RAHMAN, S/O.MOHAMMED,AGED 48 YEARS, PERUMPULLIYIL HOUSE, PERUMBIDARI P.O, PROPRIETOR, TREE TOP RESORTS, CHINDEKKI, MUKKALI, ATTAPADI VIA, PALAKAKD DISTRICT 678 582. BY ADV. SRI.BIJU ABRAHAM RESPONDENT(S): -------------------------- 1. THE FEDERAL BANK LTD, REPRESENTED BY ITS AUTHORIZED OFFICER, REGISTERED OFFICE AT ALUVA.PIN- 683 101. 2. THE BRANCH MANAGER, FEDERAL BANK LTD, PALAKKAD BRANCH, SANJO TOWERS, OPP.K.S.R.T.C STAND PALAKKAD.PIN- 678 001. 3. THE DEBT RECOVERY TRIBUNAL, ERNAKULAM (KERALA AND LAKSHADWEEP) 5TH FLOOR, K.S.H.B BUILDING, PANAMPILLY NAGAR, KOCHI 36, REPRESENTED BY ITS REGISTRAR- 682 036. R2 BY ADV. SRI.MOHAN JACOB GEORGE SMT.P.V.PARVATHI SMT.REENA THOMAS SRI.L.RAM MOHAN THIS OP (DEBT RECOVERY TRIBUNAL) HAVING BEEN FINALLY HEARD ON 03/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts OP(DRT)2457/2011 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE CERTIFICATE ISSUED BY THE CIRCLE INSPECTOR OF POLICE DATED 22/10/2009. P2 COPY OF THE APPROVAL GRANTED BY TOURISM DEPARTMENT THROUGH THEIR SOUTHERN REGIONAL OFFICE AT CHENNAI DATED 12/04/2010. P3 COPY OF THE PART-1 ACKNOWLEDGMENT GIVEN BY THE DEPARTMENT OF INDUSTRIES OF STATE GOVERNMENT DATED 17/07/2009. P4 COPY OF THE NOTICE DATED 19/04/2010 ISSUED BY THE TAHSILDAR ON BEHALF OF THE DISTRICT COLLECTOR. P5 COPY OF THE LETTER DATED 01/10/10 OF THE AGALI GRAMA PANCHAYATH TO THE DISTRICT COLLECTOR, PALAKAKD. P6 COPY OF THE STOP MEMO DATED 02/11/2010 OF THE RDO TO THE PETITIONER. P7 COPY OF THE LETTER SENT BY THE PALAKKADU DISTRICT COLLECTOR DATED 23/10/2010 TO THE PANCHAYATH. P8 COPY OF THE COMMUNICATION DATED 02/12/2010 OF THE PANCHAYATH TO THE PETITIONER. P9 COPY OF THE ORDER DATED 30/11/2010 OF THE RDO OTTAPALAM. P10 COPY OF THE LICENSE ISSUED BY THE AGALI GRAMA PANCHAYATH DATED 28/01/2011. P11 COPY OF THE NOTICE DATED 02/11/2010 OF THE RESPONDENT BANK TO THE PETITIONER. P12 COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER ON 17/01/2011 TO THE 2ND RESPONDENT. P13 COPY OF THE NOTICE DATED 24/05/2011 GIVEN BY THE ADVOCATE COMMISSIONER DEPUTEDBY CHIEF JUDICIAL MAGISTRATE COURT, PALAKAKD TO THE PETITIONER. P14 COPY OF THE APPLICATION DATED 30/04/2011 AS CMP.1170/2011 BEFORE THE CHIEF JUDICIAL MAGISTRATE COURT, PALAKAKD. P15 COPY OF THE ORDER DATED 11/05/2011 OF THE CHIEF JUDICIAL MAGISTRATE COURT, PALAKAKD. P16 COPY OF THE MEMORANDUM OF SECURITIZATION APPLICATION FILED BY THE PETITIONER DATED 09/07/2011 FILED ON 11/07/2011 BEFORE THE DEBT RECOVERY TRIBUNAL, ERNAKULAM. P17 COPY OF THE ORDER DATED 20/07/2011 IN THE SECURITIZATION APPLICATION FILED BY THE PETITIONER AS I.D.NO.7596 OF THE DEBT RECOVERY TRIBUNAL, ERNAKULAM. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ sts P.A.TO.JUDGE S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P (DRT) No. 2457 of 2011 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 3rd day of August, 2011. J U D G M E N T The petitioner is a defaulter in repayment of loan amounts due from him to respondents 1 and 2. Respondents 1 and 2 initiated proceedings under the Securitisation & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recovery of the amounts due from the petitioner. They filed an application before the Chief Judicial Magistrate under Section 14 of the Act seeking assistance to take over possession. The Advocate Commissioner appointed by the Chief Judicial Magistrate to take over possession, issued notice to the petitioner. The petitioner filed an application under Section 17 of the Act before the 3rd respondent Debt Recovery Tribunal, who passed Ext.P17 order refusing to entertain the said application on the ground that it is premature. The finding of the Tribunal is that an application under Section 17 would lie only if the bank takes symbolic or actual possession of the secured asset and in this case that stage has not arisen. It is also held that no application would lie against an order of the Chief Judicial Magistrate under Section 14 of the Act. 2. I have heard the counsel for the bank also. He would submit that no appeal would lie against an order under Section 14 by the Chief Judicial Magistrate and if the petitioner files an application under Section 17, that would amount to challenging the order of the Chief Judicial Magistrate. According to him, the Debt Recovery Tribunal has no jurisdiction over the Chief Judicial Magistrate and therefore, if this Court permits the petitioner to file an application under Section 17 before the 3rd respondent, that would be permitting the petitioner to challenge the order of the Chief Judicial Magistrate before the Debt Recovery Tribunal over whose orders the Debt Recovery Tribunal has no jurisdiction . 3. I have considered the rival contentions in detail. 4. I have, in W.P(C) No. 17843/2011 and connected cases, already held that the act of the financial institution in approaching the Chief Judicial Magistrate under Section 14 of the Act itself would constitute a measure under Section 13(4) of the Act and therefore an application under Section 17 would lie before the Debt Recovery Tribunal against the said action. That being so, Ext.P17 is clearly unsustainable. In fact, I had rendered that judgment on the basis of Supreme Court decisions on the subject. In the above circumstances, Ext.P17 order is quashed. If the petitioner re-submits the application, it would be entertained by the 3rd respondent and disposed of under Section 17 of the Act. 5. I am of opinion that the apprehension expressed by the counsel for respondents 1 and 2 is misconceived. Certainly, in view of the Division Bench decision of this Court in Muhammed Ashraf v. Union of India, 2008(4) KLT 1, no appeal would lie before the Debt Recovery Tribunal against an order of the Chief Judicial Magistrate under Section 14 of the Act, which is the settled law. But the borrower can certainly file an application under Section 17 against the measures initiated by the bank under Section 13(4) of the Act. The application under Section 17 is not an appeal against the order of the Chief Judicial Magistrate under Section 14, but an application against a measure under Section 13(4) of the Act, which the action of respondents 1 and 2 in approaching the Chief Judicial Magistrate under Section 14 is. My judgment also is only to the effect that the very act of the bank in approaching the Magistrate under Section 14 of the Act is a measure under Section 13(4) and therefore against that action of the bank, an application under Section 17 of the Act would lie before the Debt Recovery Tribunal. It doesn't mean that the application filed under Section 17 of the Act by the borrower is an appeal or proceedings against the order of the Chief Judicial Magistrate. The order of the Chief Judicial Magistrate is only one granting assistance to the bank to take possession of the secured asset. In that order, the Chief Judicial Magistrate does not decide any aspect of the proceedings under the Act, but only gives assistance to the financial institution to take measures under Section 13(4) of the Act. Although that order cannot be challenged under Section 17, the borrower can challenge the act of the bank in approaching the Chief Judicial Magistrate in seeking assistance to take possession of the secured asset. That does not mean that the borrower is challenging the order of the Chief Judicial Magistrate in granting assistance to the bank for taking possession. The learned counsel for the bank points out that in one case, the Debt Recovery Tribunal in fact stayed the order of the Chief Judicial Magistrate. If that is so, it is certainly unsustainable. What the Debt Recovery Tribunal is to consider is whether the act of the bank in attempting to take possession is correct and it would be open to the Debt Recovery Tribunal, if the Debt Recovery Tribunal is satisfied, to stay the act of attempting to take possession by the bank and not the order of the Chief Judicial Magistrate in giving assistance to the bank in taking possession. Once the very act of the bank in trying to take possession is stayed, that is stay of further proceedings in the securitisation proceedings and not the stay of the order of the Chief Judicial Magistrate. The writ petition is disposed of as above. Sd/- S. Siri Jagan, Judge. Tds/