1. Securitisation proceedings initiated under Section 14 of SARFAESI Act after default in loan repayment — possession taken by bank but later forcibly retaken by borrowers. (Para 2 , 3 , 6 , 7 )
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2026 Supreme(Raj) 795
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
ANOOP KUMAR DHAND, J.
Indusind Bank Limited - Petitioner
Versus
State of Rajasthan, Through Principal Secretary, Department of Home, Government Secretariat, Jaipur, Rajasthan - Respondent
S.B. Civil Writ Petition No.6623 of 2026
Decided On : 09-09-2026
Important Points
State authorities are obligated to restore possession of a mortgaged property to a secured creditor when such property, legally obtained under Section 14 of the SARFAESI Act, is forcibly recaptured by the borrower, in order to uphold the rule of law and prevent lawlessness.
Subject
Banking Law - Debt Recovery
Act Referred
Headnote
(A) Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Section 14 - Forcible possession of mortgaged property - Obligation of state functionaries to restore rule of law - When possession of a mortgaged property is legally taken over by a secured creditor under Section 14, and subsequently forcibly recaptured by the borrower through muscle power, the state functionaries are under a legal obligation to restore the rule of law and ensure the possession is returned to the creditor (Para 9, 11).
(B) Writ Jurisdiction - Directions to law enforcement - Failure of the investigating agency to act upon an FIR regarding the forcible recapture of a legally possessed property creates a situation of lawlessness, necessitating the interference of the Court to ensure the majesty of law is upheld (Para 8, 9).
Facts of the case:
The petitioner-bank initiated proceedings under Section 14 of the Act of 2002 against borrowers who defaulted on loans. Pursuant to an order by the concerned Magistrate, the bank took physical possession of the mortgaged property. However, the borrowers forcibly regained possession of the property. Despite the registration of an FIR for the same, the police failed to restore possession to the bank over a considerable period, prompting the filing of a writ petition seeking directions for the removal of trespassers.
Findings of Court:
The court found that the borrowers used muscle power to dislodge the bank from the legally acquired possession. The court observed that if state functionaries do not act in such situations, it would amount to defiance of the rule of law and create lawlessness in the state.
Issues: Whether the state authorities are legally obligated to restore possession to a secured creditor when a mortgaged property, legally possessed under the Act of 2002, is forcibly recaptured by the borrower.
Ratio Decidendi: State functionaries are under a mandate to uphold the rule of law. When a person forcibly takes back a property after it has been legally possessed by a bank through a court order, the failure of law enforcement to restore said possession is a defiance of the rule of law that must be corrected to prevent anarchy.
Result: The writ petition stands disposed of by issuing directions to the respondents to take all possible endeavours to restore the possession of the mortgaged property to the petitioner-Bank in accordance with law within a period of six weeks.
(B) Writ Jurisdiction - Directions to law enforcement - Failure of the investigating agency to act upon an FIR regarding the forcible recapture of a legally possessed property creates a situation of lawlessness, necessitating the interference of the Court to ensure the majesty of law is upheld (Para 8, 9).
Facts of the case:
The petitioner-bank initiated proceedings under Section 14 of the Act of 2002 against borrowers who defaulted on loans. Pursuant to an order by the concerned Magistrate, the bank took physical possession of the mortgaged property. However, the borrowers forcibly regained possession of the property. Despite the registration of an FIR for the same, the police failed to restore possession to the bank over a considerable period, prompting the filing of a writ petition seeking directions for the removal of trespassers.
Findings of Court:
The court found that the borrowers used muscle power to dislodge the bank from the legally acquired possession. The court observed that if state functionaries do not act in such situations, it would amount to defiance of the rule of law and create lawlessness in the state.
Issues: Whether the state authorities are legally obligated to restore possession to a secured creditor when a mortgaged property, legally possessed under the Act of 2002, is forcibly recaptured by the borrower.
Ratio Decidendi: State functionaries are under a mandate to uphold the rule of law. When a person forcibly takes back a property after it has been legally possessed by a bank through a court order, the failure of law enforcement to restore said possession is a defiance of the rule of law that must be corrected to prevent anarchy.
Result: The writ petition stands disposed of by issuing directions to the respondents to take all possible endeavours to restore the possession of the mortgaged property to the petitioner-Bank in accordance with law within a period of six weeks.
Legal Category Hierarchy
- banking and finance
- practice and procedure
- crime and sentencing
Advocates:
Advocate Appeared:
For the Petitioner: Mr. Jitendra Choudhary.
Advocate Appeared:
For the Petitioner: Mr. Jitendra Choudhary.
Table of Contents
2. Petitioner bank contended that despite FIR and police inaction for over a year, possession of the secured asset was not restored to it. (Para 3 , 7 , 8 )
3. Court observed that forcible re-possession by borrowers using muscle power after lawful takeover is a clear case of defiance of rule of law. (Para 7 , 8 , 9 )
4. State authorities are obliged to restore possession of secured assets to the bank when possession was forcibly retaken after lawful proceedings under Section 14, SARFAESI Act. (Para 9 , 10 )
5. Writ petition disposed of directing respondent authorities to restore possession of the mortgaged property to the petitioner-bank within six weeks. (Para 11 , 12 )
6. What is the duty of state authorities when a borrower forcibly retakes possession of a secured asset after lawful takeover under Section 14, SARFAESI Act?
State authorities are under a legal obligation to restore possession of the secured asset to the bank to uphold rule of law and prevent lawlessness. (Para 9 , 10 )
7. Can a writ petition be maintained for restoration of possession under the SARFAESI Act against police inaction?
Yes, a writ petition is maintainable to direct police authorities to act when they fail to restore possession despite a valid order under Section 14 of the SARFAESI Act. (Para 1 , 8 , 10 )
ORDER :
Anoop Kumar Dhand, J.
1. The instant writ petition has been filed by the petitioner with the following prayer:-
“That in lieu of the above stated facts and circumstances the humble Petitioner prays as under:
That your lordships may be pleased with direction to respondent no. 2 & no. 3 to consider and obey sec-14 order passed by Ld. CJM Kotputli-Beharor as a valid and enforceable and to forthwith remove trespassers from the property viz. “(i) Flat No. 173/101, First Floor At Plot No. B-173, Meri Gold Green Acres Ashadeep, Village-Ishwar Singh Pura, and Faulandmpur, Neemrana, Alwar Pincode 301705 Total Admeasuring Super Build Up Area- 1199.97 and Built Up Area 850.14 Sq Ft.” which was in physical possession of the petitioner company and to take further steps in handing over the vacant and physical possession of the said property to the Authorized Officer of the petitioner company in time bound manner. Any other appropriate order or direction which the Hon'ble Court may deem fit and proper in the facts and circumstances of the case.
That your lordships may be pleased to pass any other order as they may deem fit and proper, in favor of the Petitioner in the interest of justice.”
2. By way of filing this writ petition, the petitioner is seeking directions against the respondent Nos.2 & 3 for getting physical possession of the subject land.
3. Learned counsel for the petitioner submits that the respondent Nos.4 & 5 borrowed certain amount from the petitioner-Bank and when they failed to repay the same, their bank accounts were declared as Non-Performing Assets (NPA) and, thereafter the proceedings under Section 14 of the Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 (for short “the Act of 2002”) was initiated against them before the court of Chief Judicial Magistrate, Kotputli, who allowed the application vide order dated 30.08.2025 and directed the concerned Police Superintendent to take the possession of the subject land from the borrowers. Learned counsel submits that the aforesaid order passed by the Chief Judicial Magistrate was enforced and, accordingly, the possession of the said premises was taken on 10.12.2025 from the borrowers but they have taken forceful possession of the subject land for which an FIR No.33/2026 has been registered with the Police Station Shahjahanpur, District Kotputli-Behror, but inspite of passing of considerable time, i.e., more than one year, till date no effective steps have been taken by the Police for restoration of the possession, hence, under these circumstances, interference of this Court is warranted.
4. In support of his contentions, learned counsel for the petitioner has placed reliance upon the judgment passed by the co-ordinate Bench of this Court at Principal Seat at Jodhpur in the case of Atma Ram Bishnoi & Another Vs. District Collector & Others while deciding S.B. Civil Writ Petition No.8983/2022.
5. Heard and considered the submissions made at the Bar and perused the material available on record.
6. The fact narrated above clearly indicates that the respondents have taken loan from the petitioner-Bank and have failed to repay the same, hence, proceedings under Section 14 of the Act of 2002 was initiated against them before the Chief Judicial Magistrate, Kotputli by way of filing an application and the same was allowed vide order dated 30.08.2025 and, accordingly, the possession of the subject land was taken from the respondents on 10.12.2025.
7. It appears that by using the muscle power, they have taken the possession of the subject land forcefully for which an FIR has been registered against them with Police Station on 06.03.2026.
8. Inspite of passing of considerable time, till date no steps have been taken by the Investigating Agency to take back the possession from the respondents, hence, under these circumstances, the petitioner has approached this Court by way of filing the instant writ petition.
9. The co-ordinate Bench of this
