SC Held That Magistrate's Order Cannot Be Quashed Under Sec 482 Of CrPC

The Supreme Court held that a Magistrate's Order cannot be quashed under the Section 482 of the CrPC. This is in relation to the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act) in the case of MS Phoenix Arc Private Limited v. V Ganesh Murthy and Another.

The observation was brought forward by Justices AS Bopanna and MM Sundresh. The Court was hearing an appeal challenging a decision of the Madras HC to quash an order under Sections 14 of the SARFAESI Act by using the inherent powers under Section 482 of CrPC.

The Court held that, "the contention put forth in the instant petition is that a petition filed under Section 482 of the Criminal Procedure Code (Cr.P.C.) to quash an order passed under the provisions of the SARFAESI Act was not sustainable. We note that the said contention has sufficient force as any remedy against such order can be availed only under the SARFAESI ACT’, 2002." 

The Magistrates have the power to assist creditors in taking possession of secured property from the defaulting debtors.

Section 482 of the CrPC also clarified that the power is vested with the High acourt to make any order to carry out the provisions under the CrPF to use prevent abuse of the court processes and secure the ends of justice.

The Madras High Court in this case has quashed the orders of the Chief Metropolitan Magistrate, Chenna under Section 14 of the SARFAESI Act by invoking inherent power under Section 482.

The High Court found out the Magistrate's order was passed without affording an hearing to the debtors. The Magistrate has been directed for a fresh order after hearing the debtor.

The Supreme Court had quashed the ruiling of the High Court as there were remedies under SARFAESI Act.