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2025 Supreme(P&H) 1760
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
SHEEL NAGU, CJ, RAMESH KUMARI, J.
AU Small Finance Bank – Appellant
Versus
State of Punjab and Others – Respondents
CWP No. 23941 of 2025
Decided On : 20-08-2025
For the Appellants : Deepika Mittal, Bharat Mani Goyal
For the Respondent: Vipin Pal Yadav
Authorities are mandated to execute orders under Section 14 of the SARFAESI Act within specified timeframes to ensure prompt recovery of secured assets and maintain liquidity in the banking system.
Headnote:(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 14 - Non-execution of order by concerned authorities - Court directs the concerned authority to execute previous order within 30 days, emphasizing statutory duty to recover NPAs for liquidity in the banking system - Court highlights the necessity of adherence to the timelines set for execution and mandates an Orientation Course for officials. (Paras 1, 4, 14)
Facts of the case:
The petitioner/bank filed a writ petition against the non-execution of an order for handing over possession of secured assets under Section 14 of the SARFAESI Act, which is essential for managing NPAs.
Findings of Court:
The court mandated the immediate execution of the order to recover the secured assets, criticizing the failure of the authorities to act promptly and emphasizing the statutory obligations under the SARFAESI Act.
Issues: The main issues addressed were the delay in executing the order under Section 14 and the statutory responsibilities of the relevant authorities.
Ratio Decidendi: The court determined that the authorities are required to act without delay and that any failure to execute orders under Section 14 could constitute contempt of court, reaffirming that timeliness is critical in the enforcement of the SARFAESI Act.
Result: Petition stands disposed of.
| Table of Content |
|---|
| 1. petition filed against non-execution of order. (Para 1) |
| 2. importance of enforcing recovery mechanisms. (Para 2 , 3) |
| 3. court orders execution timeline for asset possession. (Para 4 , 6) |
| 4. court highlights requirement for timely execution. (Para 7 , 8) |
| 5. supreme court emphasizes ministerial duties under sarfaesi. (Para 9) |
| 6. orientation course mandated for compliance. (Para 10 , 11 , 12) |
| 7. consequences for failing statutory duties. (Para 14 , 15) |
| 8. case disposes with compliance report expected. (Para 16 , 17) |
JUDGMENT :
SHEEL NAGU, CJ.
1. The present writ petition has been filed by petitioner/bank aggrieved by non-execution of the order dated 14.02.2025 (Annexure P-3) passed by the Chief Judicial Magistrate, Ludhiana under the provisions of Section 14 SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT , 2002 (SARFAESI Act for brevity).
2. It is rather surprising that concerned Tehsildar-cum-Duty Magistrate, Ludhiana i.e. respondent no. 3 have failed to discharge their statutory duty of assisting and handing over physical possession of the secured asset to the petitioner Bank.
3. Non-Performing Assets (NPAs) are a huge burden on the public exchequer, banking and financial system, and, thus, prompt enforcement of recovery mechanism under the SARFAESI Act is paramount for liquidity in the system.
4. In view of the above, this court by way of writ of mandamus directs respondent no.3 or the concerned authority to execute the order dated 14.02.2025 (Annexure P-3) passed under Section 14 of SARFAESI Act by handing over physical possession of the secured asset to the petitioner Bank as expeditiously as possible, preferably, within a period of 30 days. The petitioner/bank, thereafter, can proceed to adopt all possible legitimate means to liquidate the secured asset to recover the due amount.
5. The petition for the time being stands disposed of in the terms aforesaid. Needless to say that the guidelines laid down by Coordinate Bench in Bank of Maharashtra Vs. District Magistrate, Hisar and Others [CWP-7018-2022 decided on 28.05.2024] be adhered to by the concerned authorities.
6. We hasten to add that this order shall however be subject to any restraint/ interim/ final order which may have been passed by any judicial forum, in favour of the borrowers/ guarantor/ any aggrieved person, who is party to this lis.
7. It is surprising to note that time and again this Court is coming across cause of actions raised by the Banks aggrieved by the fact that an order passed under Section 14 of the SARFAESI Act is not executed. The scheme of the SARFAESI Act enjoins the District Magistrate to pass an order under Section 14 of the SARFAESI Act within the extended period of 60 days, and thereafter, the Tehsildar or the concerned Revenue Authority to execute such order without any unnecessary delay. Merely because, time frame is not prescribed for execution of an order passed under Section 14 of the SARFAESI Act does not mean that the District Magistrate and the concerned Revenue Authority sits over the file, thereby frustrating the object of SARFAESI Act, which is inter alia to expeditiously recover the mounting bad debts in shape of NPA which are a huge burden on the public exchequer.
8. It is further surprising to note that a Coordinate Bench of this Court, vide common order as early as 14.05.2024, passed in a bunch of petitions including CWP No. 11499 of 2019 and CWP No. 7738 of 2023, laid down not only the procedure to be followed by the District Magistrate/Chief Judicial Magistrate, as the case may be, to deal with an application u/s 14 of SARFAESI Act, but also prescribing timeline for implementation and execution of such orders passed u/s 14 of SARFAESI Act.
9. The Apex Court in R.D. Jain & Co. Vs. Capital First Limited and Others, 2023 (1) SCC 675 while explaining the width and ambit of jurisdiction under section 14 SARFAESI Act held thus :-
“23. However, for taking physical possessi
