Court dismisses plea challenging jurisdiction of Additional Chief Judicial Magistrate, reiterating the role of Debt Recovery Tribunal under SARFAESI Act.
Nagpur, March 4, 2026 – In a significant ruling, the Bombay High Court (Nagpur Bench) has dismissed an application by M/s. Shubham Flour Mill, challenging the jurisdiction of the Additional Chief Judicial Magistrate (ACJM) in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The judgment reaffirmed that the ACJM holds judicial powers equivalent to those of the Chief Judicial Magistrate (CJM) as per the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
The petitioner, M/s. Shubham Flour Mill, had sought to quash the orders passed by the Additional Chief Judicial Magistrate, Akola, and the Additional Sessions Judge, Akola, arguing that the ACJM was not competent to handle applications under Section 14 of the SARFAESI Act. The petitioner contended that High Court notifications did not explicitly confer CJM powers on the ACJM, thus rendering the proceedings void.
Justice Urmila Joshi-Phalke, presiding over the case, clarified that the SARFAESI Act is a comprehensive code providing a complete procedure for secured creditors and remedies for aggrieved parties. The court emphasized that the appropriate recourse for challenging actions under the SARFAESI Act lies with the Debt Recovery Tribunal (DRT), not through invoking Section 482 of the Criminal Procedure Code (CrPC).
The court also addressed the petitioner’s argument regarding the jurisdiction of the ACJM, noting that the High Court had indeed conferred CJM powers on the ACJM through relevant notifications. As such, the ACJM was competent to deal with applications under Section 14 of the SARFAESI Act, which empowers secured creditors to request judicial assistance in taking possession of secured assets.
The judgment further underlined that the SARFAESI Act provides stringent powers to banks and financial institutions for the recovery of debts while ensuring safeguards through the DRT for rectifying any errors or wrongful actions by these institutions. The court reiterated that any grievances related to actions under the SARFAESI Act should be addressed through the DRT, which is equipped to adjudicate such matters and provide necessary reliefs.
M/s. Shubham Flour Mill had defaulted on a substantial loan, resulting in the classification of its account as a Non-Performing Asset (NPA). Consequently, the respondent bank initiated proceedings under the SARFAESI Act to take possession of the secured assets.
In conclusion, the Bombay High Court dismissed the application, highlighting the non-maintainability of the plea under Section 482 of the CrPC, given the specific remedies available under the SARFAESI Act. The court's decision reinforces the importance of the DRT as the appropriate forum for addressing disputes under the SARFAESI Act, thus ensuring the Act’s efficacy and integrity in financial recovery processes.
Bottom Line:
SARFAESI Act - Additional Chief Judicial Magistrate has judicial powers equivalent to Chief Judicial Magistrate under the BNSS 2023. Remedy against actions under SARFAESI Act lies before Debt Recovery Tribunal (DRT) rather than invoking Section 482 of CrPC.
Statutory provision(s): SARFAESI Act, 2002 Sections 13(4), 14, 17; Criminal Procedure Code, 1973 Section 482; Bharatiya Nagarik Suraksha Sanhita, 2023 Section 10
M/s.Shubham Flour Mill v. State of Maharashtra, (Bombay)(Nagpur Bench) : Law Finder Doc id # 2861966
