[SARFAESI] Time Limit Stipulation For District Magistrates To Deliver Possession Of Secured Asset Is Not Mandatory: Supreme Court [Read Judgment]

The Supreme Court has held that time limit stipulation in Section 14 of the SARFAESI Act mandating the District Magistrate to deliver possession of a secured asset, is directory and not mandatory and that the inability to take possession within time limit does not render the District Magistrate Functus Officio.The bench comprising Justices L. Nageswara Rao, Hemant Gupta and Ajay Rastogi upheld. The Supreme Court has held that time limit stipulation in Section 14 of the SARFAESI Act mandating the District Magistrate to deliver possession of a secured asset, is directory and not mandatory and that the inability to take possession within time limit does not render the District Magistrate Functus Officio. The bench comprising Justices L. Nageswara Rao, Hemant Gupta and Ajay Rastogi upheld a judgment of Division Bench of Kerala High Court which held that Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, mandating the District Magistrate to deliver possession of a secured asset within 30 days, extendable to an aggregate of 60 days upon reasons recorded in writing, is a directory provision. Second Proviso states that, if no order is passed by the Chief Metropolitan Magistrate or District Magistrate within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such period not exceeding in the aggregate sixty days To hold that this stipulation is not mandatory, the High court had noted that, it is not the borrower, guarantor or lessee, who will be adversely affected or prejudiced, in any manner, whether such applications are decided in 60, 70 or 80 days, but it would be the secured creditor who will be adversely affected if the provision is construed as mandatory and not directory.