State authorities cannot levy collection charges following the issuance of a recovery certificate if no actual recovery effort was executed by them. Demanding such fees after an independent settlement of debts is impermissible, as it lacks statutory authority and constitutes unjust enrichment.

JUDGMENT :

Indrajeet Shukla, J.

Ref: Civil Misc. Delay Condonation Application No.02 of 2026

1. Cause shown for delay in filing the restoration application is sufficient. Delay in filing the restoration application is condoned.

2. The delay condonation application is accordingly allowed.

Ref: Civil Misc. Restoration Application No.03 of 2026

1. Cause shown is sufficient. The Restoration Application is allowed.

2. The order dated 16.09.2025 is recalled.

3. The Writ Petition is restored to its original number and status.

Ref: Writ Petition

1. Heard Shri Krishna Raj Singh Jadaun, learned counsel for the petitioner and Shri Chandra Prakash Yadav, learned Standing Counsel for the State respondents.

2. By means of instant writ petition, the petitioner has questioned the correctness of recovery citation dated 18.03.2008 issued by 4th respondent/Tehsildar, Tehsil Jansath now Khatauli, District Muzaffarnagar contained as Annexure No.10 to the writ petition.

3. The factual matrix giving rise to instant writ petition is, the petitioner is Nationalized Bank registered under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The petitioner- Bank lent a loan to M/s Deep Chand Sushil Kumar, Shri Sushil Kumar Jain, Neeraj Kumar Jain, Surendra Kumar Jain and Dhanendra Kumar Jain ((hereinafter referred to as "borrowers" for the sake of brevity) but their accounts turned Non-Performing Assets, as such statutory notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act" for the sake of brevity), was issued, which was followed by a notice for possession as envisaged under Section 13(4) of SARFAESI Act.

4. The recovery proceedings under SARFAESI Act were challenged by borrowers by means of a Securitisation Application No.33 of 2004 before the Debt Recovery Tribunal, Lucknow (herein after referred as "DRT"), and thereafter, a writ petition bearing Writ Petition No.2640 of 2004 was instituted before this Court at Lucknow. This Court directed the DRT, Lucknow to decide the interim relief application filed in Securitisation Application No.33 of 2004 but the DRT, Lucknow vide order dated 17.01.2005 dismissed the Securitisation Application No.33 of 2004 itself and directed the borrower and the bank to resolve their dispute amicably. They were in fact, directed to dispose of the immovable properties as detailed in the bank's notice under Section 13(2) & 13(4) of the SARFAESI Act dated 11.06.2003 and 26.08.2003 respectively, in all possible manner and strictly as per rules and regulations to get the reasonable fair price according to the present market rate at the earliest, so that claim of the respondent bank is satisfied properly.

5. The loan was liquidated by the borrower and this outstanding dues were satisfied, as such vide letter dated 17.03.2005 the petitioner- Bank requested the District Magistrate to return the recovery certificate so issued.

6. The letter dated 17.03.2005 issued by the bank was replied by the 4th respondent/Tehsildar concerned stating therein that return of recovery certificate is not feasible owing to recovery process set into motion through State machinery. Several reminders were also sent by the bank for return of recovery certificate but they remained of no avail.

7. Based on the report of Collection Amin, impugned recovery certificate dated 18.03.2008 was issued. The impugned recovery certificate is for realization of 10% demand raised by the bank, which is being termed as collection charges.

8. Submission advanced by learned counsel for the petitioner-bank is that the State authorities have not acted upon the recovery certificate issued against the original borrower and they have not effected the recovery as such and hence, they have no authority in law to ask for collection charges. Any demand of collection charges without effecting the recovery would be unlawful and arbitrary. The impugned recover