C. BRIGHT versus THE DISTRICT COLLECTOR & ORS.

Citation: [2020] 7 S.C.R. 997 · Decided: 05-11-2020 · Supreme Court of India · Bench: L. NAGESWARA RAO · Disposal: Dismissed

Cited by 1 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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C. BRIGHT
v.
THE DISTRICT COLLECTOR & ORS.
(Civil Appeal No. 3441 of 2020)
NOVEMBER 05, 2020
[L. NAGESWARA RAO, HEMANT GUPTA
AND AJAY RASTOGI, JJ.]
Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002: s.14 – Whether
mandatory or directory provision – Held: s.14 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 – The purpose of enactment of the
2002 Act was to provide a machinery for empowering banks and
financial institutions, so that they may have  power to take possession
of secured assets and to sell them – Keeping the objective of the Act
in mind, the time limit to take action by the District Magistrate was
fixed to impress upon the authority to take possession of the secured
assets – However, inability to take possession within time limit does
not render the District Magistrate functus officio – The time limit is
to instill a confidence in creditors that the District Magistrate will
make an attempt to deliver possession as well as to impose a duty
on the District Magistrate to make an earnest effort to comply with
the mandate of the statute to deliver the possession within 30 days
and for reasons to be recorded within 60 days – In this light, the
remedy under s.14 of the Act is not rendered redundant if the District
Magistrate is unable to handover the possession.
Interpretation of Statutes: Word ‘shall’ – Connotation of –
Held: The use of the word “shall” in a statute, does not necessarily
mean that in every case it is mandatory that unless the words of the
statute are literally followed, the proceeding or the outcome of the
proceeding, would be invalid – It is also not always correct to say
that if the word “may” has been used, the statute is only permissive
or directory in the sense that non-compliance with those provisions
will not render the proceeding invalid and that when a statute uses
the word “shall”, prima facie, it is mandatory, but the Court may
[2020] 7 S.C.R. 997
997
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SUPREME COURT REPORTS
[2020] 7 S.C.R.
ascertain the real intention of the legislature by carefully attending
to the whole scope of the statute – Securitisation and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002
– s.14.
Dismissing the appeal, the Court
HELD: 1. A well settled rule of interpretation of the statutes
is that the use of the word “shall” in a statute, does not necessarily
mean that in every case it is mandatory that unless the words of
the statute are literally followed, the proceeding or the outcome
of the proceeding, would be invalid. It is not always correct to
say that if the word “may” has been used, the statute is only
permissive or directory in the sense that non-compliance with
those provisions will not render the proceeding invalid and that
when a statute uses the word “shall”, prima facie, it is mandatory,
but the Court may ascertain the real intention of the legislature
by carefully attending to the whole scope of the statute. The
principle of literal construction of the statute alone in all
circumstances without examining the context and scheme of the
statute may not serve the purpose of the statute. [Para 7]
[1004-B-D]
2. The DRT Act was first enacted to streamline the recovery
of public dues but the proceedings under the said Act have not
given desirous results. Therefore, the Act in question was
enacted. Keeping the objective of the Act in mind, the time limit
to take action by the District Magistrate has been fixed to impress
upon the authority to take possession of the secured assets.
However, inability to take possession within time limit does not
render the District Magistrate Functus Officio. The secured
creditor has no control over the District Magistrate who is
exercising jurisdiction under Section 14 of the Act for public good
to facilitate recovery of public dues. Therefore, Section 14 of the
Act is not to be interpreted literally without considering the object
and purpose of the Act. If any other interpretation is placed upon
the language of Section 14, it would be contrary to the purpose of
the Act. The time limit is to instill a confidence in creditors that
the District Magistrate will make an attempt to deliver possession
as well as to impose a duty on the District Magistrate to make an
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earnest effort to comply with the

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