CJMs not empowered to issue orders in secured creditors' cases

The Full bench was constituted pursuant to a reference made by a Division Bench to decide on whether the reference made in the SARFAESI Act to Chief Metropolitan Magistrate under Section 14 would include Chief Judicial Magistrates in the non-metropolitan areas.

Originally, a batch of petitions challenged the orders passed by Chief Judicial Magistrates of Sivaganga and Dindigul districts allowing banks to take possession of certain properties of secured creditors, contending that the CJMs had no jurisdiction to pass such orders.

Taking note of the conflicting judgements given by High Courts of Bombay, its bench at Aurangabad and Madras High Courts, a Division Bench, comprising Acting Chief Justice Rajesh Kumar Agrawal and Justice Chitra Venkataraman thought it would be fitting to refer the matter to a larger bench.