AADHAR HOUSING FINANCE LTD. vs MANPREET SINGH

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CGHC010324902021 2026:CGHC:45681

AVINASH
SHARMA
Digitally signed by
AVINASH SHARMA
Date: 2026.10.29
18:48:23 +05'30'
AFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 4952 of 2021
Judgment Reserved On :10.09.2026.
Judgment Delivered On : 29.10.2026.
1 - Aadhar Housing Finance Ltd. Regional Office Shop No. 1 Ab, 2nd Floor, Shyam
Plaza, Near Pandari Bus Stand, Pandari Raipur Chhattisgarh Pin 492001, (New
Address)
Previous Office Address Aadhar Housing Finance Ltd. Branch Office 302-302 A-3,
R Floor, Ganga Midas, Fafadih, Raipur Chhattisgarh Through Its Authorised Officer,
Anirudha Kumar S/o N. Prasad Aged About 42 Years Branch Manager, Branch
Office Aadhar Housing Finance Ltd. 1st Floor Krishna Sonchatra Compound, Near
Rnt Square, Tarbahar Road, Bilaspur Chhattisgarh 495004 R/o 608, Shivam Harsh
Kingdom, Sarkanda Bilaspur District Bilaspur Chhattisgarh
... Petitioner(s)
versus
1 - Manpreet Singh S/o Kulwant Singh R/o Shankar Nagar, Ward No. 10, Near Shiv
Mandir Rajnandgaon Chhattisgarh
2 - Smt. Manjeet Kaur (Wrongly mentioned as Manpreet Kaur in impugned order)
W/o Manpreet Singh R/o Shankar Nagar Ward No. 10, Near Shiv Mandir
Rajnandgaon Chhattisgarh
3 - Sheikh Wafeed S/o Abdul Shareef Shanti Nagar, Ward No. 11, Tahsil And
District Rajnandgaon Chhattisgarh
4 - District Magistrate/collector Rajnandgaon Office Of The Collector Rajnandgaon
District Rajnandgaon Chhattisgarh
... Respondent(s)
For Petitioner(s) : Shri Atul Kumar Kesharwani, Advocate.
For Respondent No.3 : Shri Pushpendra Kumar Patel, Advocate.
For State/Respondent
No.4
: Shri Soumitra Kesharwani, PL.

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Hon’ble Mr. Justice Amitendra Kishore Prasad
C A V Order
1. This Writ Petition has filed against the impugned order dated 06.09.2021
passed by the Respondent No.4/District Magistrate, Rajnandgaon C.G.
whereby application preferred by the petitioner under Section 14 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 {for short ‘SARFAESI ACT’} has been rejected.
2. Brief facts giving rise to this case are that initially respondent no. 01 &
02/borrowers, borrowed loan from the petitioner financial institution to the
tune of Rs. 7,96,388/-, and as a security, mortgaged their House built over
Khasra No. 101/5, P.H.N 35, R.N.M Rajnanadgaon-1, Tahsil & District
Rajnandgaon (C.G.), and the agreement in this regard was also executed on
24.05.2017. Respondent no. 01 & 02 failed to repay the loan amount to the
petitioner Financial Institution, as a result of which, their loan account no.
00131442 was declared as Non Performing Asset by the petitioner on
10.08.2019. Thereafter, a notice u/s 13(2) of SARFAESI Act has been issued
to the borrowers for payment of outstanding amount of Rs. 8,29,436/-.
However, despite the said notice, the borrowers have failed to repay the
amount mentioned in the notice, and consequently the petitioner financial
institution had filed an application u/s 14 of the SARFAESI Act, before
respondent no. 04 [District Magistrate, Rajnandgaon (C.G.)], which was
registered as Case No. 202003090100010/77-B/121/Year 2019-20. Learned
District Magistrate passed the impugned order dated 06.09.2021, holding
thereby that the application of petitioner u/s 14 of the Act cannot be allowed
for the fact that the secured asset has been sold to respondent no. 03

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(Subsequent Purchaser), vide registered sale deed dated 13.12.2019.
Hence, the petitioner has filed the instant writ petition.
3. Learned counsel for the petitioner submits that Respondent no. 04 has erred
in law by entering into the merits of the case and thereby adjudicating the
rights and entitlement of the parties. The powers conferred to District
Magistrate while exercising powers under Section 14 of the SARFAESI Act
are purely ministerial in nature and not adjudicatory as has been held by the
Hon'ble Supreme Court in the matter of R.D. Jain & Co. v. Capital First &
Ors. reported in (2023) 1 SCC 675, paragraph 25 of which reads as under:-
“25. As observed and held by this Court in NKGSB Coop.
Bank [NKGSB Coop. Bank Ltd. v. Subir Chakravarty, (2022)
10 SCC 286 : (2023) 1 SCC (Cri) 157] , 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 who is considered as an officer of his/her
court. Section 14 does not oblige the CMM/DM to go
personally and take possession of the secured assets and
documents relating thereto. Thus, we reiterate that the step
to be taken by the CMM/DM under Section 14 of the
S ARFAESI Act, is a ministerial step. While disposing of the
application under Section 14 of the S ARFAESI 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. Therefore, Section 14 does not involve
an adjudicatory process qua points raised by the borrower
against the secured creditor taking possession of secured
assets.”

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4. Learned counsel for the petitioner submits that it is the settled proposition of
law that, any transfer of property in favour of a third party by the mortgagor
would not oust the right of secured creditor from redemption of the loan
amount from the mortgaged property. As per section 14 of SARFAESI Act,
the DM is only required to satisfy with the contents of the application and not
more than that, however in the instant case, he has exceeded its jurisdiction
which is not vested upon him by virtue of section 14 of the SARFAESI Act.
Hence, it is prayed that the impugned order dated 06.09.2021 may be set
aside and the matter may be remanded back to respondent no. 04 for
considering it afresh.
5. On the other hand, counsel for respondent No.3 would support the impugned
order.
6. Learned State counsel would also submit that the District Magistrate has
rightly passed the impugned order holding that the property in question has
been sold therefore, order cannot be passed for possession of secured
assets.
7. I have heard learned counsel for the parties and perused the documents
annexed with the petition carefully.
8. The principal question that arises for consideration in the present writ petition
is whether, while exercising jurisdiction under Section 14 of the SARFAESI
Act, the District Magistrate is empowered to enter into the merits of the claim
and adjudicate upon disputed questions concerning the rights of the parties.
9. Section 14 of the SARFAESI Act has been enacted to facilitate the secured
creditor in obtaining possession or control of the secured asset. The provision
enables the secured creditor to approach the concerned Chief Metropolitan

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Magistrate or District Magistrate for assistance in taking possession of the
secured asset. However, once the secured asset has been mortgaged in
favour of the secured creditor and the loan account has been classified as a
Non-Performing Asset, the secured creditor is entitled to take recourse to the
measures contemplated under the SARFAESI Act, subject to fulfilment of the
statutory requirements. Moreover, while considering an application under
Section 14 of the SARFAESI Act, the District Magistrate is not vested with the
jurisdiction to adjudicate upon the merits of the secured creditor's claim or to
determine disputed questions of fact concerning the rights of the parties.
Such adjudicatory issues fall within the jurisdiction of the Debts Recovery
Tribunal, as contemplated under the statutory scheme of the SARFAESI Act.
11.In the present case, the fact that the mortgaged property was subsequently
transferred in favour of a third party could not, by itself, confer upon the
District Magistrate jurisdiction to adjudicate upon the validity, effect or legal
consequences of such transfer while considering the application under
Section 14 of the SARFAESI Act.
12.The role of the District Magistrate under Section 14 is ministerial in nature.
The legal position in this regard stands settled by the Hon’ble Supreme Court
in R.D. Jain & Co. (supra), wherein it has been reiterated that the
proceedings under Section 14 do not involve an adjudicatory process with
respect to the objections or disputes raised by the borrower against the
secured creditor. Therefore, the District Magistrate was not justified in
entering into the merits of the dispute or in undertaking a detailed
examination of the rights and claims of the parties on the basis of the
subsequent sale of the secured asset.

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13. The Hon’ble Supreme Court being conscious of the judgment passed in
R.D. Jain & Co. (supra), observed the following in the matter of Balkrishna
Rama Tarle v. Phoenix ARC (P) Ltd., reported in (2023) 1 SCC 662:-
18. Thus, the powers exercisable by CMM/DM under
Section 14 of the S ARFAESI Act are ministerial steps and
Section 14 does not involve any adjudicatory process qua
points raised by the borrowers against the secured
creditor taking possession of the secured assets. In that
view of the matter once all the requirements under Section
ARFAESI
14 of the S Act are complied with/satisfied by the
secured creditor, it is the duty cast upon the CMM/DM to
assist the secured creditor in obtaining the possession as
well as the documents related to the secured assets even
with the help of any officer subordinate to him and/or with
the help of an advocate appointed as Advocate
Commissioner. At that stage, the CMM/DM is not required
to adjudicate the dispute between the borrower and the
secured creditor and/or between any other third party and
the secured creditor with respect to the secured assets
and the aggrieved party to be relegated to raise objections
in the proceedings under Section 17 of the S ARFAESI Act,
before the Debts Recovery Tribunal.
19. Under the circumstances in the present case, no error
has been committed by the High Court in setting aside the
order dated 27-8-2021 passed by the designated authority
keeping the application pending till the secured creditor
initiates the legal proceedings for eviction of the tenant
cannot get the possession in an application under Section
ARFAESI
14 of the S Act. The High Court has rightly
directed the designated authority to proceed further with
ARFAESI
the application under Section 14 of the S Act, and

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to dispose of the same in accordance with the provisions
of Section 14 of the S ARFAESI Act.
12. Also, the High Court of Calcutta in the matter of Only wheel and Others vs.
Bank of Baroda and Others reported in 2025 SCC OnLine Cal 7217,
observed in paragraph 25, 26 as under:-
25. The aforesaid proposition of law laid down in R.D. Jain
(supra) was reiterated by the Hon'ble Supreme Court in
Phoenix ARC (supra). In the said reports it was held that the
nature of inquiry to be conducted by the Chief Metropolitan
Magistrate or the District Magistrate under Section 14 of the
2002 Act is limited to the verification of compliance of the
proviso to Section 14(1) of the 2002 Act. The powers of the
Chief Metropolitan Magistrate or the District Magistrate
under Section 14 of the 2002 Act are essentially
administrative or executive functions. The Chief
Metropolitan Magistrate or the District Magistrate is not
required to adjudicate the dispute between the borrower and
the secured creditor and or between the third party and the
secured creditor with respect to the secured asset and the
aggrieved party to be relegated to raise objections in the
proceedings under Section 17 of the SARFAESI Act before
the DRT.
26. From the aforesaid discussion it follows that the powers
of the Chief Metropolitan Magistrate or the District
Magistrate under Section 14 of the 2002 Act are
administrative or executive functions. Such authorities do
not exercise judicial or quasi judicial functions under the
2002 Act.

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13.On a consideration of the entire matter, this Court is of the view that the
District Magistrate, while exercising jurisdiction under Section 14 of the
SARFAESI Act, travelled beyond the scope of the jurisdiction vested in him
and entered into an adjudicatory exercise which is not contemplated under
the said provision. As in the instant case, the District Magistrate, passed the
impugned order dated 06.09.2021, holding thereby that the application of
petitioner under Section 14 of the SARFAESI Act cannot be allowed for the
fact that the secured asset has been sold to respondent no. 03 (Subsequent
Purchaser), vide registered sale deed dated 13.12.2019, which is erroneous
and unsustainable in view of the foregoing discussion.
14.Accordingly, the present Writ Petition is allowed. The impugned order dated
06.09.2021 passed by Respondent No.4/District Magistrate, Rajnandgaon
(C.G.), is hereby set aside.
15.The matter is remanded to the District Magistrate, Rajnandgaon, for
consideration of the petitioner's application under Section 14 of the
SARFAESI Act afresh, strictly in accordance with law and within the scope of
the jurisdiction conferred under the said provision. The District Magistrate
shall pass an appropriate order within a period of 30 days from the date of
receipt of a copy of this order, after affording due opportunity of hearing to the
concerned parties.
15.The petitioner-financial institution shall extend full cooperation in the
proceedings before the District Magistrate. Sd/-
(Amitendra Kishore Prasad)
Judge
Avinash

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The date when the
The date when the
The date when the judgment is
judgment is reserved
judgment is
uploaded on the website
pronounced
Operative Full
10.09.2026 29.10.2026 ------ 29.10.2026

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HEAD NOTE:-
(WPC No. 4952 of 2021)
The powers exercised by the Chief Metropolitan Magistrate/District
Magistrate under Section 14 of the SARFAESI Act, 2002, are
administrative or executive in nature and do not involve any judicial or
quasi-judicial function. The authority is required to verify compliance
with the statutory requirements prescribed under Section 14 and cannot
adjudicate upon disputed questions concerning the rights of the secured
creditor, borrower or third party.