No Adjudicatory Role of District Magistrate Under SARFAESI; Functions Purely Ministerial
- REEDLAW
- Sep 13
- 3 min read
REEDLAW Legal News Network reports: In a pivotal ruling, the Rajasthan High Court clarified that the role of the District Magistrate under Section 14 of the SARFAESI Act is purely ministerial, confined to verifying statutory compliance and assisting secured creditors in taking possession. The Court emphasised that the Magistrate cannot impose additional conditions or adjudicate disputes relating to title or possession.
The Rajasthan High Court Single-Judge Bench of Justice Anoop Kumar Dhand, while adjudicating a S.B. Civil Writ Petition, held that the statutory role of the District Magistrate is restricted to facilitating possession upon satisfaction of compliance under Section 14. It was further observed that the District Magistrate has no adjudicatory powers to determine ownership rights or introduce conditions beyond the mandate of the SARFAESI Act, thereby reinforcing the ministerial nature of the function.
The Appellant had approached the High Court by way of a writ petition challenging the order dated 21.05.2025 passed by the District Magistrate, Kota. By the said order, the Magistrate had allowed the application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, but issued an additional conditional direction that possession should not be delivered if any dispute relating to title or possession of the secured asset arose, and in such a case, the matter should be remitted to the Magistrate’s Court.
The Appellant contended that the Magistrate had exceeded his jurisdiction by incorporating an adjudicatory condition, although his role under Section 14 of the Act was purely ministerial and executory. It was argued that the Magistrate was required only to verify compliance with statutory formalities and assist the secured creditor in obtaining possession, and not to adjudicate disputes of title or possession. Reliance was placed on judgments of the Supreme Court in NKGSB Cooperative Bank Limited v. Subir Chakravarty and Others, REEDLAW 2022 SC 02206; R.D. Jain and Company v. Capital First Limited and Others, REEDLAW 2022 SC 07201; and Standard Chartered Bank v. V. Noble Kumar, where it was consistently held that the function of the District Magistrate or Chief Metropolitan Magistrate under Section 14 was ministerial in nature.
The Court observed that Section 14 obligated the Magistrate to act promptly upon receipt of an application from the secured creditor, and his function was confined to verifying compliance with the statutory requirements and facilitating possession. It held that the insertion of a condition barring execution in case of disputes over title or possession amounted to an adjudicatory exercise, which lay outside the scope of Section 14. The Court referred to its earlier order in Jammu and Kashmir Bank Ltd. v. Trunks and Roots, wherein it had reiterated that the District Magistrate could not assume adjudicatory powers under Section 14.
Consequently, the Court quashed the impugned condition imposed by the District Magistrate in the last paragraph of the order dated 21.05.2025. The writ petition was partly allowed, with a clear direction that Magistrates across the State were expected to act in accordance with the mandate of Section 14 and the binding precedents of the Supreme Court and High Court, without embarking upon their own interpretation. A copy of the order was directed to be circulated to the concerned authorities to ensure compliance in future.
Mr. Pramod Kumar, Advocate, represented the Petitioner.
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