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Chief Judicial Magistrate Can’t Grant Time For Payment Of Debt Due To Secured Creditor

In Canara Bank v. Stephen John, the bank had assailed an order of the Chief Judicial Magistrate, who granted 45 days’ time to debtors to pay Rs. 45 lakh to the secured creditor.

The Kerala High Court observed that there is no discretion whatsoever for the Chief Judicial Magistrate exercising power under Section 14 and the power is conferred only for the regulation of matter as distinguished from a power to decide the rights of parties. If the scope of the jurisdiction of the Chief Judicial Magistrate under Section 14 is understood in this fashion, there is no difficulty in arriving at the conclusion that the power is only administrative and not judicial.

The court also took note of the amendment brought in which mandates that before rendering assistance to the secured creditor, it is obligatory for the Chief Judicial Magistrate exercising power under Section 14 of the Act to satisfy that the secured creditor has made a declaration in the form of an affidavit as regards matters specifically mentioned in the first proviso to sub section (1) of Section 14.

On this aspect, the court observed that if the secured creditor does not file an affidavit declaring all the facts required to be declared in terms of the first proviso, the Chief Judicial Magistrate is not obliged to render assistance to them. “The correctness, if any, of the declaration made by the secured creditor for the purpose of availing assistance under Section 14 of the Act is a matter for the Debts Recovery Tribunal exercising power under Section 17 of the Act to adjudicate upon, if raised,” the court added.

Article referred: http://www.livelaw.in/chief-judicial-magistrate-cant-grant-time-for-payment-of-debt-due-to-secured-creditor-kerala-hc/

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