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Scanned Judgements…!
Prerequisites- Action under Section 14(2) is consequential to Section 13(4), requiring prior compliance with Sections 13(2) (demand notice) and 13(4) (possession notice); procedure must be mandatorily followed before Section 14 application. it is clear that action under Section 14 of the SARFAESI Act is consequential which flows from the action under Section 13(4) of the SARFAESI Act ["Nageshwar Rao VS Collector, Collector Office - Bombay"]; from the scheme of the Act, it is implicit that the procedure of Sections 13(2) and 13(4) is mandatorily to be followed before initiating action under Section 14 of the Act ["Shipra Hotels Limited VS State of U. P. - Allahabad"].- Secured creditor must file written application under Section 14(1) with details, including prior notices and representations under Section 13(3A). an application that is required to be filed under Section 14 of the SARFAESI Act, requires to give all the details that are related to the matter ["Bansal Agro Products VS District Magistrate, Udham Singh Nagar - Uttarakhand"] ["Bansal Flour Mill VS District Magistrate, Udham Singh Nagar - Uttarakhand"].- Applies if Section 31 exclusions do not bar Sections 13/14. The bank and financial institution shall also consider before approaching CMM/ DM for an order under Section 14 of the NPA Act, whether Section 31 of the NPA Act excludes the application of Sections 13 and 14 thereof ["Nageshwar Rao VS Collector, Collector Office - Bombay"].
Procedure- CMM/DM must act immediately on Section 14(1) application (within 30 days, extendable), pass order, take possession of secured assets/documents using necessary force under Section 14(2), and forward to secured creditor; ministerial act, can appoint receiver/commissioner. After passing an order thereon, he/she (CMM/DM) must proceed to take possession of the secured assets and documents relating thereto for being forwarded to the secured creditor in terms of Section 14(1) read with Section 14(2) of the SARFAESI Act ["Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278"] ["PUNJAB SIND BANK Vs DISTRICT MAGISTRATE AMRITSAR AND OTHERS - Punjab and Haryana"] ["PUNJAB SIND BANK Vs DISTRICT MAGISTRATE AMRITSAR AND OTHERS - Punjab and Haryana"]; Under sub-section (2) of S.14 of the Securitisation Act the authority is empowered to take such steps and use such force as may be necessary for taking possession ["Vishal Chopra and Others v. State of Chhattisgarh and Others - Chhattisgarh"]; Section 14 does not oblige the CMM/DM to go personally and take possession... is a ministerial step ["UNION BANK OF INDIA Vs CHIEF JUDICIAL MAGISTRATE LUDHIANA - Punjab and Haryana"].- Time-bound disposal emphasized across cases. the provisos to Section 14(1) of the Act provide a time limit for disposal of application under Section 14 ["Girish Bansal S/o Late Shri Dhyan Chand VS Yashpal Singla S/o Shri Satish Kumar Singla R/o Flat No. 304, Manchaster-02, Sector-78, Mahagun Modern Manthan, School, Noida, Gautam Budh Nagar, Noida, (Up) 201301 - Delhi"].
Remedies/Challenges- Action under Section 14(2) cannot be questioned in courts except under Section 17 (DRT appeal by aggrieved persons, including borrowers/guarantors); writs generally not maintainable pre-DRT. action taken under Section 14 of the SARFAESI Act may not be challenged in any other court as per Section 14 (3) of the SARFAESI Act ["Bansal Agro Products VS District Magistrate, Udham Singh Nagar - Uttarakhand"] ["Bansal Flour Mill VS District Magistrate, Udham Singh Nagar - Uttarakhand"]; Under sub-section (3) of S.14... the action shall not be called in question by any court or before any authority ["Vishal Chopra and Others v. State of Chhattisgarh and Others - Chhattisgarh"]; the action under Section 14 of the SARFAESI Act constitute the action taken after stage of Section 13(4)... would fall within the ambit of Section 17(1) ["Nageshwar Rao VS Collector, Collector Office - Bombay"] ["Shipra Hotels Limited VS State of U. P. - Allahabad"].- If Section 17 appeal succeeds, Section 14 order lapses. Any action taken under S.13(4) is appealable under S.17... necessarily the order... under S.14 will not survive thereafter ["Vishal Chopra and Others v. State of Chhattisgarh and Others - Chhattisgarh"].
Analysis and ConclusionAction under Section 14(2) is permissible and mandatory for CMM/DM post-Section 14(1) application, provided Sections 13(2)/13(4) are followed; it enables forceful possession as a ministerial function with statutory protection under Section 14(3), but challengeable only via Section 17 DRT. Courts direct expeditious disposal but bar parallel writs. ["Nageshwar Rao VS Collector, Collector Office - Bombay"] ["Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278"] ["Shipra Hotels Limited VS State of U. P. - Allahabad"] ["Vishal Chopra and Others v. State of Chhattisgarh and Others - Chhattisgarh"] ["Bansal Agro Products VS District Magistrate, Udham Singh Nagar - Uttarakhand"].
In the realm of banking and financial recovery in India, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) plays a pivotal role. One common query from secured creditors, borrowers, and legal practitioners is: Can action under Section 14(2) of the SARFAESI Act be taken? This section empowers authorities to assist in taking possession of secured assets, often raising questions about its scope, procedure, and limitations.
This blog post delves into the legal framework, judicial interpretations, and practical implications of Section 14(2). While this provides general insights based on precedents, it is not a substitute for professional legal advice—consult a qualified lawyer for your specific situation.
Section 14 of the SARFAESI Act allows a secured creditor to approach the Chief Metropolitan Magistrate (CMM) or District Magistrate (DM) for assistance in taking possession of secured assets after issuing notice under Section 13(2) and taking symbolic possession under Section 13(4). Specifically, Section 14(2) authorizes the CMM or DM to use or cause to be used such force as may, in their opinion, be necessary to effect possession. Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278Authorized Officer, Bandhan Bank Limited, Gruh Centre VS District Magistrate Cum District Collector Balod - 2022 0 Supreme(Chh) 582
This power is ministerial in nature, not adjudicatory. The CMM/DM must act expeditiously upon verifying the secured creditor's compliance with Section 14(1) requirements, such as filing an affidavit detailing the debt, notice served, and ownership claims. No hearing is required for borrowers or third parties at this stage—their disputes are reserved for the Debts Recovery Tribunal (DRT) under Section 17. Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273
Key characteristics include:- Time-bound execution: Typically within 30-60 days from application.- Delegation allowed: CMM/DM can entrust the task to subordinate officers or Advocate Commissioners.- Force as an enabling tool: Used only if resistance is encountered, at the authority's discretion. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278
Judicial precedents consistently affirm that powers under Section 14, including 14(2), are ministerial steps where time is of the essence. Powers exercisable by CMM/DM under Section 14 of SARFAESI Act are ministerial step – It cannot brook delay – Time is of essence and this is spirit of special enactment. Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273
The CMM/DM's role is limited to verifying formalities in the secured creditor's affidavit under the proviso to Section 14(1). No quasi-judicial application of mind is needed beyond this. The step taken by the CMM/DM while taking possession of the secured assets and documents relating thereto is a ministerial step. It could be taken by the CMM/DM himself/herself or through any officer subordinate to him/her, including the advocate commissioner. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278Authorized Officer, Bandhan Bank Limited, Gruh Centre VS District Magistrate Cum District Collector Balod - 2022 0 Supreme(Chh) 582
This ensures swift recovery for secured creditors without procedural hurdles, aligning with the Act's objective to expedite non-performing asset resolution.
The process begins with the secured creditor's application under Section 14(1). Upon receipt, the CMM/DM must:1. Verify compliance with prerequisites (e.g., Section 13(2) notice).2. Pass an order assisting possession.3. Take or facilitate possession, using force under 14(2) if required, and forward assets/documents to the creditor.
As soon as such an application is received, the CMM/DM is expected to pass an order after verification of compliance of all formalities by the secured creditor referred to in the proviso in Section 14(1) of the SARFAESI Act and after being satisfied in that regard, to take possession of the secured assets and documents relating thereto and to forward the same to the secured creditor at the earliest opportunity. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278Authorized Officer, Bandhan Bank Limited, Gruh Centre VS District Magistrate Cum District Collector Balod - 2022 0 Supreme(Chh) 582
Delays or refusals have been quashed by courts, emphasizing expedition. Section 14(2) is enabling: it permits force as may, in his opinion, be necessary. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278
Supreme Court and High Court rulings reinforce non-adjudication at this stage. While disposing of the application under Section 14 of the SARFAESI Act, no element of quasi-judicial function or application of mind would require. The Magistrate has to adjudicate and decide the correctness of the information given in the application and nothing more. Authorized Officer, Bandhan Bank Limited, Gruh Centre VS District Magistrate Cum District Collector Balod - 2022 0 Supreme(Chh) 582
In cases of resistance from lessees or third parties, courts direct aggrieved parties to Section 17. For instance, challenges to DM orders delaying possession (e.g., awaiting tenant eviction) were set aside as erroneous. Balkrishna Rama Tarle Dead Thr LRS VS Phoenix ARC Private Limited - 2023 2 Supreme 273Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278
Related precedents highlight remedy exclusivity:- Action under Section 14 falls within Section 17(1) ambit post-Section 13(4), providing borrowers an efficacious DRT remedy. Writs under Article 226 are generally not entertained pre-possession due to alternate forums. VISABHAI PUNABHAI PADSARIYA VS ADDITIONAL SENIOR CIVIL JUDGE AND ADDITIONAL CHIEF JUDI MAGISTRATE - 2022 Supreme(Guj) 1565P. S. Ganesan VS Authorized Officer, Canara Bank, SME Branch, Perundurai, Erode District - 2016 Supreme(Mad) 3313- High Courts dismiss writs if statutory mechanisms exist, cautioning against prejudicing creditors' rights. VISABHAI PUNABHAI PADSARIYA VS ADDITIONAL SENIOR CIVIL JUDGE AND ADDITIONAL CHIEF JUDI MAGISTRATE - 2022 Supreme(Guj) 1565- Lessees claiming pre-mortgage rights must approach DRT under Section 17(4A); no interference at Section 14 stage. P. S. Ganesan VS Authorized Officer, Canara Bank, SME Branch, Perundurai, Erode District - 2016 Supreme(Mad) 3313
One case stressed candid disclosure in writs: suppression of facts (e.g., post-auction possession) leads to dismissal without merits. AUROVILL APPLIANCES PVT LTD. VS DISTRICT MAGISTRATE - 2015 Supreme(Guj) 1039
DM orders must record satisfaction on the nine-point affidavit under Section 14(1) proviso and delegate only to subordinates, not creditor's officers. KRISHNA BUILDERS AND DEVELOPERS VS SHRIRAM HOUSING FINANCE LIMITED - 2019 Supreme(Cal) 91
While robust, Section 14(2) has boundaries:- Contingent on compliance: No action without proper Section 14(1) affidavit/notice.- No title/lease adjudication: Disputes deferred to DRT. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278- Time limits: 30 days, extendable to 60; undue delays may invalidate. Authorized Officer, Bandhan Bank Limited, Gruh Centre VS District Magistrate Cum District Collector Balod - 2022 0 Supreme(Chh) 582- Successor liability: Not persona designata; powers pass to successors. Hindustan Petroleum Corporation Ltd. Thru. Its Chief Manager VS Union Of India Thru. Ministry Of Finance Banking Division Deptt. Of Financial Services - 2023 0 Supreme(All) 278
SARFAESI prevails in conflicts, e.g., over MPID Act attachments on pre-mortgaged properties. The SARFAESI Act prevails over the MPID Act, protecting properties mortgaged prior to the attachment under the MPID Act. Saraswat Co-operative Bank Ltd. VS Purnanadu Shekharmal Jain, deceased Through LRs. - Anupama P. Jain
Immediate action is mandated: The statutory obligation enjoined upon the CMM/DM is to immediately move into action after receipt of a written application under Section 14(1). PUNJAB SIND BANK Vs DISTRICT MAGISTRATE AMRITSAR AND OTHERS - 2026 Supreme(Online)(P&H) 2758
For Secured Creditors:- File complete Section 14(1) applications with affidavits.- Expect prompt ministerial aid, including force if needed.
For Borrowers/Third Parties:- Raise objections via Section 17 DRT within 45 days.- Avoid premature writs unless exceptional urgency; alternate remedies exist.
Navigating SARFAESI requires precision. Stay informed on evolving precedents to protect interests effectively.
#SARFAESIAct, #Section14, #AssetRecovery
In view of said decision, it is clear that action under Section 14 of the SARFAESI Act is consequential which flows from the action under Section 13(4) of the SARFAESI Act. ... State of Maharashtra & ors, 2011(2) SCC 782, in which it has been observed that the action under Section 14 of the SARFAESI Act constitute the action t....
After passing an order thereon, he/she (CMM/DM) must proceed to take possession of the secured assets and documents relating thereto for being forwarded to the secured creditor in terms of Section 14(1) read with Section 14(2) of the SARFAESI Act. ... Magistrate under Section 14 of the SARFAESI Act, 2002. ... The statutory obligation enjoined upon the CMM/DM is to immediately move into action afte....
The application under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the Act") is taken up for consideration. 2. ... It takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken under Section 13(4) or Section 14 of the SARFAESI Act. 10. ... So far as the argument r....
Under Section 13 (4) of the SARFAESI Act, an aggrieved person may ventilate his grievance under Section 17 of the SARFAESI Act, but action taken under Section 14 of the SARFAESI Act may not be challenged in any other court as per Section 14 (3) of the SARFAESI Act. ... (ii) The action under Section 14 of the SARFAESI Act has ....
Under sub-section (3) of S.14 of the Securitisation Act, such act of the authority is protected and the action shall not be questioned in any Court or before any authority. ... Under sub-section (2) of S.14 of the Securitisation Act the authority is empowered to take such steps and use such force as may be necessary for taking possession of the secured assets an....
The statutory obligation enjoined upon the CMM/DM is to immediately move into action after receipt of a written application under Section 14(1) of the SARFAESI Act from the secured creditor for that purpose. ... Accordingly, the present petition is hereby disposed of with a direction to the respondent No.1/District Magistrate, Amritsar, to consider and dispose of the application under Section 14 of the Act moved by....
The statutory obligation enjoined upon the CMM/DM is to immediately move into action after receipt of a written application under Section 14(1) of the SARFAESI Act from the secured creditor for that purpose. ... Accordingly, the present petition is hereby disposed of with a direction to the respondent No.1/District Magistrate, Amritsar, to consider and dispose of the application under Section 14 of the Act moved by....
14 of the SARFAESI Act, on 05.08.2025. ... The statutory obligation enjoined upon the CMM/DM is to immediately move into action after receipt of a written application under Section 14(1) of the SARFAESI Act from the secured creditor for that purpose. ... dated 29.04.2025 (Annexure P-1) under Section 13(2) of the SARFAESI Act was duly served upon the borrower(s), calling upon them to discharge thei....
Under Section 13 (4) of the SARFAESI Act, an aggrieved person may ventilate his grievance under Section 17 of the SARFAESI Act, but action taken under Section 14 of the SARFAESI Act may not be challenged in any other court as per Section 14 (3) of the SARFAESI Act. ... (ii) The action under Section 14 of the SARFAESI Act has ....
It appears that the petitioner has committed default in payment of the outstanding dues of the respondent No. 3-Bank and therefore the respondent-Bank has initiated action under the provisions of the SARFAESI Act by issuing notice under section 13(2) thereof and thereafter has taken action under sub ... Civil Judge, Surat in CRMA/2700/2022 and intimation dated 17.11.2022 issued by Court Commissioner, Surat u/s 14 of the SARFAESI #HL....
9. Considering that admittedly a security interest in the attached property is created in favour of the Petitioner and which is attached by the Special Court, MPID, we are of the view that rather than relegating the Petitioner to the Hon’ble Bombay Session’s Court for a decision on its Miscellaneous Application, it would be prudent to entertain this Writ Petition and raise the attachment levied on the said attached property. We say this because admittedly and undisputedly, the Petitioner is a secured creditor, and the said property is its secured asset. Under the provisions of the SARFAESI A....
22 and 23 thereof, it was laid down that an action under Section 14 of the SARFAESI Act constitutes an action taken after the stage of Section 13(4) of the Act and therefore, would fall within the ambit of Section 17(1) of the Act. It is argued that the said previous judgment was not considered by the Supreme Court in V. Noble Kumar (supra), denuding the value of the deviating rider, as to Section 17 being available only after dispossession, as a binding precedent.
Against the contractor, the action can be taken under Section 14(6) of the Act. Interest is to be charged and the contractee is liable to pay the same. Only this action can be taken against the contractee. In case a contractee is a registered dealer then only the provisions of the Section 14(6) of the Act will apply.
9. In Kanaiyalal Lalchand Sachdev vs. State of Maharashtra [(2011) 2 SCC 782], the Supreme Court has held that an action under Section 14 of SARFAESI Act constitutes an action after the stage of 13(4) and therefore the same would fall within the ambit of Section 17 (1) of SARFAESI Act. Its a case arising under Section 14 of SARFAESI Act. It has also been held that SARFAESI Act contemplates an efficacious remedy for the borrower or any person affected by an action under Section 13(4) of the Act, by providing for an appeal before the Debt Recovery Tribunal.
The action under Section 14 of the SARFAESI Act constitutes an action taken after the stage of Section 13(4), therefore, it would fall within the ambit of Section 17(1) of the SARFAESI Act. Reliance has been placed upon a judgment of a Division Bench of this Court in the case of Bharatbhai Ramniklal Sata v. Collector and District Magistrate and Anr. reported in AIR 2010 Gujarat 72, wherein it is held that the order passed by the District Magistrate/ Chief Metropolitan Magistrate is a measure under Section 13(4) and the remedy lies under Section 17 of the SARFAESI Act. 7.4 T....
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