The Madras High Court has sought an explanation from the Chengalpattu Chief Judicial Magistrate regarding the fixation of high fees for Advocate Commissioners in SARFAESI recovery cases.

  • Madras High Court has summoned Chengalpattu CJM to explain high Advocate Commissioner fees.
  • AU Small Finance Bank alleged arbitrary fees of ₹80,000 even for small loan recoveries.
  • The Court ordered the submission of a list of all appointed Advocate Commissioners.
  • Judicial officers were reminded that their role in SARFAESI cases is purely ministerial.

In a significant move toward judicial accountability, the Madras High Court has directed the Chief Judicial Magistrate (CJM) of Chengalpattu to provide a formal explanation regarding the fixation of exorbitant fees for Advocate Commissioners. This action follows complaints regarding the arbitrary nature of fees levied in applications filed by banks under the SARFAESI Act, 2002.

A division bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan took note of the grievances raised by AU Small Finance Bank Limited. The bank contended that the CJM had been fixing a uniform fee of ₹80,000 per Advocate Commissioner across multiple applications, even in instances where the total loan recovery amounts were as low as ₹2.47 lakh and ₹3.43 lakh.

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Why This Matters

BozokMedia analysis shows that such high administrative costs during the recovery process can undermine the efficiency of the SARFAESI Act. The Act was specifically designed to enable quick recovery for financial institutions; however, excessive judicial-mandated fees create an additional financial barrier that can stall the legal machinery.

The integrity of the judicial process relies on the consistency and reasonableness of administrative costs imposed on litigants.

The High Court has instructed the Registrar General to obtain this explanation within 10 days and has also demanded a comprehensive list of all Advocate Commissioners appointed by the CJM in such cases to date. The matter is scheduled for further hearing on September 8, 2026.

Historical Background

This scrutiny comes after a previous instance where Punjab National Bank flagged over 200 pending SARFAESI applications at the Chengalpattu court that exceeded the statutory 30-day limit. Consequently, the High Court had issued strict guidelines to all judicial officers in the state. The Supreme Court has previously emphasized that the role of CJMs in Section 14 applications is strictly ministerial, meaning they should facilitate the process rather than engage in complex adjudicatory functions that cause delays.

Did You Know?: The SARFAESI Act allows banks to seize and sell secured assets of defaulters without the intervention of a court, provided certain conditions are met.

Frequently Asked Questions

1. What was the specific complaint against the Chengalpattu CJM?
The complaint alleged that the CJM was fixing arbitrary and unreasonably high fees (₹80,000) for Advocate Commissioners in bank recovery cases.

2. What is the role of a CJM under the SARFAESI Act?
According to Supreme Court rulings, the CJM's role in Section 14 applications is ministerial, intended to assist in the possession of property rather than conducting a full trial.