Madras HC Seeks Explanation from Chengalpattu CJM Over SARFAESI Advocate Fees

The Madras High Court has sought an explanation from the Chengalpattu Chief Judicial Magistrate (CJM) following complaints of fixing exorbitant fees for Advocate Commissioners in applications filed by banks under the SARFAESI Act, 2002.

A First Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan directed the judicial officer to explain the rationale behind setting a uniform Advocate Commissioner fee of ₹80,000 across seven separate applications submitted by AU Small Finance Bank Limited. These applications included cases seeking the recovery of loan amounts as low as ₹2.47 lakh and ₹3.43 lakh.

The bench instructed the CJM to submit the explanation along with the names of the Advocate Commissioners appointed in these matters. The High Court Registrar General has been directed to secure the response within 10 days, with the matter scheduled for its next hearing on September 8, 2026.

The directive came after AU Small Finance Bank approached the court, stating that the fees fixed by the Chengalpattu CJM were arbitrary and unreasonable. The petitioner pointed out that such orders were being issued routinely in Section 14 applications under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, despite prior directions issued by the High Court regarding their disposal.

The issue of SARFAESI proceedings before the Chengalpattu CJM had surfaced earlier following a complaint by Punjab National Bank regarding more than 200 property possession applications pending beyond the 30-day statutory limit. On June 5, the High Court issued detailed directions reminding judicial officers across the State of Supreme Court rulings establishing that the role of CJMs under Section 14 is purely ministerial rather than adjudicatory.

The court had reiterated that Section 14 applications must not be delayed beyond statutory timelines, emphasising that time is of the essence under the SARFAESI Act to assist financial institutions in the swift recovery of outstanding dues.