Magistrates Can Appoint & Authorize Advocate Commissioners To Take Possession Of Secured Assets U/Sec 14 SARFAESI Act
Case: NKGSB Cooperative Bank Limited vs Subir Chakravarty
Coram: Justices AM Khanwilkar and CT Ravikumar
Case No.: SLP (C) 30240 OF 2019
Court Observation: “Indeed, in the case of advocate, the logic of “administrative subordination” or “statutory subordination” cannot be extended. Inasmuch as, for being a case of “statutory subordination”, the provisions of the 2002 Act and the Security Interest (Enforcement) Rules, 200245 made thereunder, must expressly provide for such mechanism. This cannot be said about the provisions of the 2002 Act and the Rules made thereunder.”
Whereas applying the “functional subordination” test, we are persuaded to take the view that sub-Section (1A) of Section 14 of the 2002 Act is no impediment for the CMM/DM to engage services of an advocate (an officer of the court) — only for taking possession of secured assets and documents relating thereto and to forward the same to the secured creditor in furtherance of the orders passed by the CMM/DM under Section 14(1) of the 2002 Act in that regard. It does not follow that the advocate so appointed needs to be on the rolls in the Office of the CMM/DM or in public service. There is intrinsic de jure functional subordinate relationship between the CMM/DM and the advocate being an officer of the court. The apprehension of the borrowers about improper execution of orders of the CMM/DM passed under Section 14(1) of the 2002 Act by the Advocate Commissioner, is plainly misplaced. Further, being an officer of the court and appointed by the CMM/DM, the acts done by the Advocate Commissioner would receive immunity under Section 14(3) of the 2002 Act — as an officer authorised by the CMM/DM. There is no reason to assume that the advocate so appointed by the CMM/DM would misuse the task entrusted to him/her and that will not be carried out strictly as per law or it would be a case of abuse of power. Rather, going by the institutional faith or trust reposed on advocates being officers of the court, there must be a presumption that if an advocate is appointed as commissioner for execution of the orders passed by the CMM/DM under Section 14(1) of the 2002 Act, that responsibility and duty will be discharged honestly and in accordance with rules of law.
“He has an important duty as that of a Judge. He bears responsibility towards the society and is expected to act with utmost sincerity and commitment to the cause of justice. He has a duty to the court first. As an officer of the court, he owes allegiance to a higher cause and cannot indulge in consciously misstating the facts or for that matter conceal any material fact within his knowledge. In the case of OP Sharma & Ors. vs. High Court of Punjab & Haryana, the Court noted that in all professional functions, an advocate should be diligent and his conduct should conform to the requirements of the law by which he plays a vital role in the preservation of society and justice system. As an officer of the court, he is under a higher obligation to uphold the rule of law and justice system.”
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Keywords
Advocate Commissioners, Magistrates
