PC.
1. An important question of law has been raised by the learned counsel appearing on behalf of the Petitioners, viz. whether borrower has a right to be heard and has locus to file an application before the District Magistrate or Chief Metropolitan Magistrate, on an application filed by the Bank under Section 14 of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (for short the “SARFAESI Act”). Reliance is placed on a judgments of the Apex Court in the case of - (i) Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd. [Cri. Appeal No. 736/2014, arising out of S.L.P (Cri.) No. 1666/2012]; and (ii) Standard Chartered Bank v. Noble Kumar [2013 (2) D.R.T.C 609 (S.C)]. It is also submitted that by virtue of amendment to section 14 of the sarfaesi act and insertion of proviso, the Magistrate is now required to satisfy himself about the correctness of the factual averments made in the application. It is submitted that order of the Magistrate is no longer a mechanical passed but a judicial order. It is, therefore, submitted that since the said order entails civil consequences on the borrower as per the law laid down by the Supreme Court. Even if there is no provision under any Act or rules framed thereunder, on account of the adverse civil consequences which entails civil consequence upon the borrower on the order passed by the Chief Metropolitan Magistrate/District Magistrate, he has a right to be heard by the Magistrate before passing the impugned order.
2. This is vehemently opposed by the learned counsel appearing on behalf of the Respondents. It is submitted that so far as Harshad Sondagar's (supra) case is concerned, the Apex Court has observed that only lessee would get a right of hearing before the Chief Metropolitan Magistrate/District Magistrate, and not the borrower. It is also submitted that to that extent, the judgment in the case of - Trade Well v. Indian Bank [2007 Cri. L.J 2544] is not over-ruled. The learned counsel further submitted that he would like to make further submissions on this point. In our view, matter requires further hearing, and therefore, till the next date learned Magistrate shall not hear the application filed by the Respondent-Bank; Petitioner shall not create any third party right in respect of the property in question or hand over possession to the third party. S.O to 28.1.2015