New Delhi, Feb 25 (PTI) The Supreme Court Friday said it would be open to the chief metropolitan magistrate or the district magistrate to appoint an advocate commissioner to assist in execution of order passed under section 14 (1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002

Section 14 of theRFAESI Act deals with the aspect related to chief metropolitan magistrate (CMM) or district magistrate (DM) to assist the secured creditor in taking possession of a secured asset.

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A bench of Justices A M Khanwilkar and C T Ravikumar said the underlying purpose of the 2002 Act is to empower the financial institutions in India to have similar powers as enjoyed by their counterparts, that is international banks in other countries, and one such feature is to empower them to take possession of securities and sell them.

“We hold that it would be open to the CMM/DM to appoint an advocate commissioner to assist him/her in execution of the order passed under Section 14(1) of the 2002 Act,” said the bench in its 48-page judgement.

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The top court delivered the verdict on a batch of pleas which involved the question whether it is open to the DM or the CMM to appoint an advocate and authorise him or her to take possession of the secured assets and documents relating thereto and to forward the same to secured creditor within the meaning of section 14(1A) of 2002 Act.

The bench noted that advocate commissioner is not a “new concept” and lawyers are appointed as court commissioner to perform diverse administrative and ministerial work as per the provisions of the Code of Civil Procedure and Code of Criminal Procedure.

“It is well established that an advocate is a guardian of constitutional morality and justice equally with the judge. He has an important duty as that of a judge. He bears responsibility towards the society and is expected to act with utmost sincerity and commitment to the cause of justice. He has a duty to the court first,” it said.

“Pertinently, no such rule has been framed by the Central government in reference to sub-section (1A) of section 14 of the 2002 Act much less to expressly or by necessary implication prohibiting the CMM/DM to engage an advocate commissioner for taking possession of the secured assets. In absence thereof, exclusion of engagement of an advocate as commissioner cannot be countenanced,” it added.

The bench noted that Section 14 of the Act predicates that if the secured creditor intends to take possession of the secured assets, he must approach the CMM/DM by way of an application in writing and on receipt of such request, the magistrate must move into action in right earnest.

As soon as such an application is received, the CMM/DM is expected to pass an order after verification of compliance of all formalities by the secured creditor referred to in the proviso in section 14(1) of the 2002 Act and after being satisfied, to take possession of secured assets and documents relating thereto and to forward them to secured creditor at the earliest opportunity, it said.

“The latter is a ministerial act. It cannot brook delay. Time is of the essence. This is the spirit of the special enactment. However, it is common knowledge that the CMM/DM are provided with limited resources,” it said.

The apex court said that inevitably makes it difficult, if not impossible, for the CMM/DM to fulfil his or her obligations with utmost dispatch to uphold the spirit of the special legislation.

“It is common knowledge that in the respective jurisdictions, there is only one CMM/DM. If he is expected to reach at every location himself for taking possession, in some jurisdictions it would be impracticable, if not impossible, for him to do so owing to large number of applications in the given jurisdiction being a commercial city,” it said.

“However, we are persuaded to take the view that an advocate is and must be regarded as an officer of the court and subordinate to the CMM/DM for the purposes of section 14(1A) of the 2002 Act,” the apex court said.

The bench further observed that there is no reason to assume that the advocate so appointed by the CMM/DM would misuse the task entrusted to him or her and that will not be carried out strictly as per law or it would be a case of abuse of power.

“Rather, going by the institutional faith or trust reposed on advocates being officers of the court, there must be a presumption that if an advocate is appointed as commissioner for execution of the orders passed by the CMM/DM under section 14(1) of the 2002 Act, that responsibility and duty will be discharged honestly and in accordance with rules of law,” it said.

“In our view, in law, an advocate is an officer of the court and, thus, subordinate to the CMM/DM. Further, there is no indication in the 2002 Act or the Rules made thereunder to exclude such interpretation,” it said.

The bench was dealing with pleas, including those arising out of the Bombay High Court judgement of November 2019 which had opined that the advocate, not being a subordinate officer to the CMM or DM, such appointment would be illegal.

The top court was also dealing with pleas filed against the Madras High Court verdict of March 2020 which had taken a contrary view while following earlier decision of the same high court on the reasoning that advocate is regarded as an officer of the court and, thus, subordinate to the CMM or the DM.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)