Can a private lawyer be a 'government officer'? Supreme Court settles it

A bank wanted to take over a defaulter's property. The magistrate sent a private lawyer to do it. The borrower cried foul—arguing that only a government employee could legally take possession of his home. The question reached the Supreme Court, and the answer turned on a single word: "subordinate."

Could a private lawyer, paid by the bank, really be a "government officer" just because a magistrate said so? Or had the banks found a loophole to bypass the law? The Supreme Court's 2022 judgment in NKGSB Cooperative Bank Limited v. Subir Chakravarty & Ors. settled a conflict that had split four High Courts—and gave lenders a powerful new tool to recover defaulted loans.

The magistrate's order

The story begins with a familiar pattern in India's banking system. A group of borrowers took loans from banks. They stopped repaying. The banks classified the accounts as non-performing assets (loans that have stopped generating income) and issued formal notices demanding payment under Section 13(2) of the SARFAESI Act, 2002—the law that lets banks seize and sell defaulted property without going to court.

When the borrowers still didn't pay, the banks took the next step. They approached the Chief Metropolitan Magistrate (CMM) or District Magistrate (DM) under Section 14(1) of the same Act. This section allows banks to ask a magistrate for "assistance" to physically take possession of the mortgaged property—the house, the shop, the land that was offered as security for the loan.

On the magistrate's desk, the SARFAESI file sat thick with loan documents and default notices. The magistrate's pen hovered over the order sheet, then came down with a signature that would send an advocate—a private lawyer—to the borrower's property. The advocate's letter of appointment, crisp and official, bore the court's seal. It was this piece of paper that the borrowers would later tear apart in court.

That's when the borrowers pushed back.

The borrower's challenge

The borrowers' lawyers pointed to Section 14(1A) of the SARFAESI Act, which says the magistrate can "delegate" the possession-taking work to "any officer subordinate to him." Their argument was simple and literal: a private advocate is not a government officer, is not on the magistrate's staff, and therefore cannot be "subordinate" to the magistrate. Only a government employee—a tehsildar, a police officer, a clerk from the magistrate's office—could be appointed.

The Bombay High Court agreed. In a 2019 judgment, it struck down the appointment of advocate commissioners, calling it illegal. The court applied a strict, literal interpretation: if Parliament had meant "any person," it would have said so. It said "officer subordinate" means someone in government service.

But the High Courts of Kerala, Madras, and Delhi had taken the opposite view. They said the law should be read purposively—to achieve the object of helping banks recover their money quickly. An advocate, as an officer of the court, was functionally subordinate to the magistrate and could be appointed. The Supreme Court had to resolve this deadlock.

The courtroom silence during argument

The Supreme Court bench—Justice A.M. Khanwilkar and Justice C.T. Ravikumar—heard arguments from both sides. The courtroom fell into a deep silence as the borrowers' counsel stood to argue. The only sound was the rustle of paper as the judges turned the pages of the SARFAESI Act. The banks and secured creditors (lenders who hold security against a loan) argued that the purpose of Section 14 was to provide a quick, efficient mechanism for possession. If only government officers could be appointed, magistrates would be overburdened. Advocates were trained, available, and could do the job professionally.

The borrowers countered that the law was clear: "officer subordinate" meant a person in the magistrate's chain of command. A private lawyer was independent, not subordinate. Allowing advocates would open the door to abuse—lawyers who were paid by the bank might act unfairly.

The court had to decide: what does "subordinate" really mean in this context? Does it refer to someone on the government payroll, or someone who is functionally under the magistrate's control for a specific task?

The Supreme Court's reasoning

The Supreme Court chose the second option. It held that the expression "officer subordinate to him" in Section 14(1A) must be interpreted through what it called the functional subordination test. This means: is the person, for the purpose of this particular task, under the control and supervision of the magistrate? If yes, they are "subordinate" for that purpose—even if they are not a government employee.

The court declared: "The expression 'officer subordinate to him' in Section 14(1A) must be interpreted through the functional subordination test; it does not require the person to be on the rolls of the CMM/DM's office or in public service." This single sentence resolved the conflict that had divided the High Courts.

An advocate, the court said, is an officer of the court. When a magistrate appoints an advocate as a commissioner, the advocate acts under the magistrate's authority and direction. The magistrate can modify, cancel, or supervise the commissioner's actions. That makes the advocate functionally subordinate.

The court also clarified that taking possession of secured assets and handing them over to the bank is a ministerial act (a routine, non-discretionary task), not a judicial or quasi-judicial function. It doesn't require a government officer's authority. Any competent person can do it, as long as the magistrate appoints them.

The possession-taking scene

Picture the scene that this judgment validates: an advocate commissioner arrives at a borrower's home. The borrower's gate is locked. The advocate carries the magistrate's order, stamped and signed. A court bailiff stands nearby. The advocate reads the order aloud, then instructs the locksmith. The lock clicks open. Inside, the family's belongings are packed into boxes. The advocate inventories each item—a cot, a stove, a school bag. The borrower watches from the roadside, silent. The advocate hands the keys to the bank's representative. The possession is complete. This is the ministerial act the court described—routine, but life-altering for the borrower.

The judgment drew a careful line. It did not say that any person can be appointed. The magistrate must exercise prudence—choosing someone capable of handling the situation, especially if there is risk of resistance or violence. The power to appoint "any" officer does not permit appointing someone who cannot do the job.

But it rejected the idea that only a government servant qualifies. The court noted that the SARFAESI Act is designed to help banks recover debts quickly, without getting stuck in court battles. Requiring magistrates to use only their own staff would defeat that purpose—especially in cities where magistrates already have heavy workloads.

The court also held that acts done by an advocate commissioner receive immunity under Section 14(3) of the SARFAESI Act—the same protection that applies to acts done by the magistrate or any authorised officer. This means the advocate cannot be sued personally for actions taken in good faith while executing the magistrate's order.

Why this matters for lenders and borrowers

For banks and other secured creditors, this judgment is a significant win. It confirms that they can continue using advocate commissioners to take possession of defaulted properties—a practice that had been thrown into doubt by the Bombay High Court's decision. It also means that the process is faster and cheaper than waiting for government officers to become available.

For borrowers, the judgment is not necessarily bad news. The court emphasized that magistrates must choose commissioners carefully. An incompetent or biased commissioner can still be challenged before the magistrate. And the borrower's right to approach the High Court under Article 226 (the power of High Courts to review government actions) remains intact if the magistrate's order is arbitrary.

But the core message is clear: the law is not about labels. It is about function. A private lawyer, when appointed by a magistrate, becomes an instrument of the court—and that is enough.

THE PLAY: When appointing a commissioner under Section 14(1A) of the SARFAESI Act, magistrates should use the functional subordination test: if the person is under the court's control for this task, they qualify—regardless of whether they are a government employee.

The court ended where it began: with a magistrate's order, a lawyer's appointment, and a borrower's home.