Keywords: SARFESI Act, Supreme Court, CrPC
In a significant ruling, the Supreme Court has unequivocally stated that High Courts do not possess the authority to quash a Magistrate’s order under Section 14 of the SARFESI Act by invoking Section 482 of the CrPC. The Court emphasized that remedies under SARFESI Act must be sought to challenge such orders.
The division bench of Justice AS Bopanna and MM Sundresh delivered the judgement while hearing an appeal that contested the Madras High Court’s decision to quash an order issued under Section 14 of the SARFESI Act through the exercise of inherent powers under Section 482 CrPC.[1]
The argument raised in the present petition challenges the viability of invoking Section 482 of the Criminal Procedure Code to nullify an order issued under the provisions of the SARFAESI Act. It is notable that this contention carries substantial weight, as it is explicit that any recourse against such an order can only be sought under the SARFAESI Act of 2002.[2]
Section 14 of the SARFESI Act grants magistrates the authority to assist creditors in taking possession of secured property from defaulting debtors. On the other hand, Section 482 of the CrPC empowers High Courts with inherent powers to ensure the implementation of CrPC provisions, prevent abuse and uphold justice.[3]
In the present case, the Madras High Court quashed the order of the Chief Metropolitan Magistrate Court, Egmore, Chennai under section 14 of the SARFESI Act utilizing its powers under section 482. The High Court took the measure after noticing that the measure was taken without allowing the debtor to be heard. Consequently, the High Court directed the magistrate to issue a fresh order after hearing the debtor. However, the Supreme Court overturned the High Court’s ruling, asserting that SARFESI Act provides specific remedies for addressing such situations. The Court further clarified that the affected parties remain entitled to avail themselves of their appropriate remedies following the law.
The judgement provides clarity to the jurisdiction of High Courts in dealing with magistrate’s orders under Section 14 of the SARFESI Act and underscores the importance of resorting to the remedies available under the Act rather than Section 482 of CrPC.
Written by- Ananya Upadhye, College name – ILS Law College, Pune, Semester- 6th an intern under Legal Vidhiya
[2] Phoenix Arc Pvt Ltd v Ganesh Murthy & anr
