Chief Judicial Magistrate not competent to seize properties under SARFAESI Act.

CJM is not an authority competent to pass orders under section 14 of the SARFAESI Act. The lenders must approach the Chief Metropolitan Magistrate,  and where Chief Metropolitan Magistrate is not there, then the District Magistrate.

Section 14 of the SARFAESI Act empowers the secured creditor to approach to local Chief Metropolitan Magistrate (CMM) or District Magistrate (DM) and seek assistance for taking possession of the secured assets. The Act provides that on receipt of such request the CMM/DM shall provide assistance.

A point of argument arose as to whether the CMM and Chief Judicial Magistrate (CJM) are interchangeable words, or whether one is exclusive of other and whether CJM is an authority competent under the SARFAESI Act to pass orders under Section 14 of the Act.

The conflict between CMM and CJM became all the more pronounced as some High Courts held that CJM can pass orders under the Section and some other held that CJM is not competent authority under the Section.

The matter reached before full Madurai bench of the Madras High Court.  After examining all the previous judgement  and also the provisions of the the SARFAESI Act  it was held that CJM is not an authority competent to pass orders under section 14 of the SARFAESI Act. The lenders must approach the Chief Metropolitan Magistrate,  and where Chief Metropolitan Magistrate is not there, then the District Magistrate.

[Read full text of the judgment.]