Additional Chief Judicial Magistrate Is Competent To Pass Orders Under Section 14 SARFAESI Act: Bombay High Court Rejects Jurisdictional Challenge

“For Judicial Powers, ACJM Stands At Par With Chief Judicial Magistrate” – Bombay High Court (Nagpur Bench) refused to quash orders passed by the Additional Chief Judicial Magistrate, Akola, allowing a bank’s application under Section 14 of the SARFAESI Act for taking possession of secured assets.

Delivering the judgment, Justice Urmila Joshi-Phalke held that an Additional Chief Judicial Magistrate (ACJM) exercises the same judicial powers as a Chief Judicial Magistrate, and therefore is competent to entertain and decide an application under Section 14 of the SARFAESI Act. The Court further held that borrowers aggrieved by measures taken under the Act must pursue the statutory remedy before the Debt Recovery Tribunal (DRT) rather than invoking inherent powers of the High Court under Section 482 CrPC.

The applicants, M/s. Shubham Flour Mill, a proprietary business operating in Akola, had obtained several credit facilities from Indian Bank, including multiple term loans, CECLS facilities, and a cash credit limit, secured through equitable mortgages over four immovable properties located at Akola, Akot and Nagpur.

According to the bank, the applicants defaulted on repayment, resulting in the loan account being classified as a Non-Performing Asset (NPA). Consequently, the bank issued a demand notice dated 26.11.2024 under Section 13(2) of the SARFAESI Act.

The borrowers submitted a representation under Section 13(3-A) on 23.01.2025, which was rejected by the bank on 31.01.2025. Thereafter, the bank filed an application under Section 14 of the SARFAESI Act before the Additional Chief Judicial Magistrate, Akola, seeking assistance in taking possession of the secured assets.

By order dated 30.08.2025, the ACJM allowed the application, appointed a Court Commissioner, and authorized him to take possession of the secured properties with police assistance if necessary.

Aggrieved, the borrowers filed Criminal Revision No.113/2025, which was dismissed by the Additional Sessions Judge, Akola on 26.09.2025. The borrowers then approached the High Court under Section 482 CrPC seeking quashing of both orders.

Whether ACJM Has Jurisdiction Under Section 14 SARFAESI Act

The applicants argued that Section 14 of the SARFAESI Act specifically mentions the Chief Metropolitan Magistrate or District Magistrate, and therefore the Additional Chief Judicial Magistrate lacked jurisdiction to entertain the bank’s application.

They contended that Section 10 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and Section 12 CrPC require the High Court to specifically confer powers of the Chief Judicial Magistrate upon the Additional Chief Judicial Magistrate. According to them, the High Court notifications appointing ACJMs did not expressly confer such powers, making the order without jurisdiction.

Court’s Analysis On Powers Of Additional Chief Judicial Magistrate

The High Court rejected the argument and clarified the scope of Section 10 BNSS and Section 12 CrPC.

The Court observed that although ACJMs may be administratively subordinate to the Chief Judicial Magistrate, their judicial powers are equivalent.

Referring to the Supreme Court decision in M/s. R.D. Jain & Co. v. Capital First Ltd., the Court emphasized:

“As far as judicial powers are concerned, the Additional Chief Judicial Magistrate is not subordinate to the Chief Judicial Magistrate and exercises powers at par with him.”

The Court explained that the High Court notification appointing Judicial Magistrates as Additional Chief Judicial Magistrates inherently confers the powers associated with that office.

Rejecting the jurisdictional challenge, the Court held:

“The contention that the Additional Chief Judicial Magistrate is incompetent to deal with the application filed under Section 14 of the SARFAESI Act is not sustainable.”

Court On Scheme Of SARFAESI Act

The Court also examined the broader legislative scheme of the SARFAESI Act, noting that it empowers banks and financial institutions to enforce security interests and recover dues without intervention of courts.

The judgment explained that Section 13 of the Act allows secured creditors to take possession of secured assets, while Section 14 enables them to seek assistance of the Magistrate for taking physical possession.

The Court noted that the Magistrate’s role under Section 14 is primarily to verify compliance with statutory requirements and facilitate possession of secured assets.

Availability Of Alternative Remedy Before DRT

Another key ground for dismissal was the availability of an effective statutory remedy under Section 17 of the SARFAESI Act.

The Court relied on several Supreme Court precedents including Phoenix ARC Pvt. Ltd. v. V. Ganeshmurthy, Kanaiyalal Lalchand Sachdev v. State of Maharashtra, and Indian Overseas Bank v. Ashok Saw, which consistently held that borrowers must challenge SARFAESI measures before the Debt Recovery Tribunal.

Quoting the Supreme Court in Indian Overseas Bank v. Ashok Saw, the High Court noted:

“Section 17 provides a mechanism whereby the Debt Recovery Tribunal can examine the legality of measures taken by the secured creditor and even restore possession if the action is found invalid.”

The Court emphasized that the SARFAESI Act constitutes a complete code, providing both enforcement powers to lenders and adjudicatory safeguards to borrowers.

Inherent Powers Under Section 482 CrPC Not Maintainable

The High Court further clarified that inherent powers under Section 482 CrPC cannot be invoked to challenge recovery proceedings governed by a special statute like the SARFAESI Act.

It held that when the legislature has provided a specialized adjudicatory mechanism before the Debt Recovery Tribunal, the High Court should refrain from interfering through criminal jurisdiction.

Accordingly, the Court concluded that the application itself was not maintainable.

The Bombay High Court dismissed the criminal application, upholding:

• The order of the Additional Chief Judicial Magistrate granting possession under Section 14 SARFAESI Act, and
• The order of the Additional Sessions Judge rejecting the revision petition.

The Court also rejected the applicants’ request for stay of the possession proceedings, observing that they had failed to pursue the appropriate remedy under the SARFAESI framework.

This judgment reiterates two important principles in SARFAESI litigation. First, Additional Chief Judicial Magistrates possess the same judicial powers as Chief Judicial Magistrates and are competent to entertain applications under Section 14 of the SARFAESI Act. Second, borrowers aggrieved by measures taken under the SARFAESI Act must approach the Debt Recovery Tribunal rather than invoking the inherent jurisdiction of the High Court.

Date of Decision: 04 March 2026