Secured creditors are entitled to assistance from authorities to restore possession of mortgaged property if the borrower unlawfully reenters, as per Securitization Act provisions.

ORDER :

Anand Pathak, J.

The present petition under Article 226 of the Constitution of India is preferred by the petitioner seeking following reliefs:

“i) That, this Hon’ble Court be pleased to issue directions to the respondent authorities to render necessary assistance with the aid and assistance of Police for restoration of secured assets in the hands of Authorized Officer of the petitioner in the light of the judgment passed in W.P.1681/2025.

ii) Authorities may be directed to take appropriate action against the borrowers for illegal act, iii) Any other relief deemed fit and expedient in the facts of the case may also be granted to the petitioner.”

2. Precisely stated facts of the case, giving rise to the present petition are that petitioner is a financial institution as defined under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the Securitization Act”). Petitioner company extended the loan facility to the borrower in lieu of property mortgaged by the borrower. Thereafter, since borrower failed to pay the loan amount, therefore, petitioner issued a notice under Section 13 (2) of the the Securitization Act but borrower did not chose to repay the loan amount. Therefore, petitioner moved an application under Section 14 of the the Securitization Act before the District Magistrate, Guna for taking possession of the property from the borrower. That application was allowed on 06.01.2025 directing the concerned Tahsildar to take possession of the property under mortgage.

3. Despite the order of District Magistrate, Guna, since possession of the property was not handed over to the petitioner, therefore, petitioner preferred writ petition No.12114/2025 before this Court and ultimately possession was handed over to the petitioner on 03.06.2025. However, borrower and his family members again reentered into the possession of the mortgaged property and thereafter, not ready to vacate the mortgaged premises. Petitioner again approached the respondents authorities but they denied to help the petitioner on the pretext that the order of District Magistrate, Guna dated 06.01.2025 has already been executed and now they cannot re-execute the said order. Therefore, petitioner is before this Court.

4. It is the submission of learned counsel for the petitioner that respondents are not adhering to the provisions of the Securitization Act as they are under bounden duty to provide assistance to the secured creditor to recover loan in case of default. The reason assigned by the respondents authorities for not executing the order of handing over of possession to the petitioner again, is unsustainable and amounts to mockery of rule of law. Petitioner is a financial institution having the money of public at large, therefore, as a secured creditor, respondents authorities are required to extend assistance to recover the loan from the borrower. Thus, prayed for suitable directions to the respondents authorities.

5. Learned counsel for the respondents/State opposed the submission and prayed that petitioner has been handed over the possession of the mortgaged property but it failed to maintain it and borrower again entered into the mortgaged property, therefore, once possession of the mortgaged property is handed over to the petitioner, provisions of the Securitization Act have been followed by the respondents. The plea of alternative remedy has also been raised. Thus, prayed for dismissal of this petition.

6. Heard learned counsel for the parties and perused the documents