Swatantra Micro Housing Finance Corporation Limited Earlier Micro Housing Finance Corporation Lmited vs The District Magistrate Indore

NEUTRAL CITATION NO. 2026:MPHC-IND:20863
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IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE

BEFORE
HON'BLE SHRI JUSTICE SANDEEP N. BHATT
th
ON THE 30 OF JULY, 2026
WRIT PETITION No. 29160 of 2026
SWATANTRA MICRO HOUSING FINANCE CORPORATION LIMITED
EARLIER MICRO HOUSING FINANCE CORPORATION LMITED
Versus
THE DISTRICT MAGISTRATE INDORE AND OTHERS
Appearance:
Shri Priyanshu Khare - Advocate for the petitioner.
Shri Mayank Verma - GA for the State.
ORDER
Heard counsel for the parties.
Present petition has been preferred under Article 226 of the
Constitution of India seeking following reliefs:
i) Issue an appropriate writ, order or direction '--directing Respondent Nos. 1 to 3 to
forthwith restore peaceful and vacant possession of the secured asset - bearing
Bhukhand No.137, Ward No.13, Sanjay Gandhi Ward, Shri Braj Vihar Colony,
Block-A, Rau, District Indore (M.P.) to the petitioner by removing borrower Smt.
Poonam Yadav and all persons claiming through or under her.
ii) Direct Respondent No.1 (District Magistrate, Indore) and Respondent No.3
(Tehsildar, Indore) to provide all necessary administrative assistance and re-
execute/implement the order dated 10.03.2023 passed under Section 14 of the
SARFAESI Act, to the extent necessary for restoration of possession.
iii) Direct the respondents to decide the petitioner’s representation dated 27.05.2026
within a time-bound period and act upon it in accordance with law. Pass any other
order or direction deemed fit in the interest of justice, including costs of the petition.
Considering the submission made at the bar and more particularly the
fact that after taking possession from the respondent / Authority, respondent
no. 4 has re-entered into possession of the petitioner and if respondent no. 3
Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 30-07-2026
18:15:45

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is supposed to take appropriate action, no action is taken place.

He further submitted that considering the order dated 16/06/2025
passed by Division Bench at Gwalior in W.P no. 1681/2025
[ CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LTD. Vs. THE DISTRICT
MAGISTRATE, DISTRICT GWALIOR & ORS] , present petition deserves to be
allowed.
I have considered the submissions at the bar.
It is also relevant to reproduced the paragraph nos. 7 to 13 and 18 as
under :
7. This is a case where the petitioner which is a financial institution is seeking the
relief of restoration of possession of secured creditor. Borrower reentered into the
possession of the mortgaged property on the pretext of removing his belongings.
Earlier the respondents authorities handed over possession of the mortgaged
property to the petitioner but now they are not ready to dispossess the borrower from
the mortgaged property ignoring the fact that borrower is under illegal possession of
the mortgaged property.
8. The Aims and Objects of the Securitisation Act is worth consideration because
this Act addresses the predicament of the creditors and 4 difficulties faced by them
for realization of their debts/ dues from borrowers. For ready reference, Aims and
Objects of the Act are reproduced as under:-
“The financial sector has been one of the key drivers in India's efforts to
achieve success in rapidly developing its economy. While the banking
industry in India is progressively complying with the international prudential
norms and accounting practices there are certain areas in which the banking
and financial sector do not have a level playing field as compared to other
participants in the financial markets in the world. The is no legal provision for
facilitating securitisation of financial assets of banks and financial
institutions. Further, unlike international banks, the banks and financial
institutions in India do not have power to take possession of securities and
sell them. Our existing legal framework relating to commercial transactions
has not kept pace with the changing commercial practices and financial sector
reforms. This has resulted in slow pace of recovery of defaulting loans and
mounting levels of non-performing assets of banks and financial institutions.
Narasimham Committee I and II and Andhyarujina Committee constituted by
the Central Government for the purpose of examining banking sector reforms
have considered the need for changes in the legal system in respect of these
areas. These committees, inter alia, have suggested enactment of a new
Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 30-07-2026
18:15:45

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legislation for securitisation and empowering banks and financial institutions
to take possession of the securities and to sell them without the intervention
of the court. Acting on these suggestions, the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest
Ordinance, 2002 was promulgated on 21-06-2002 to regulate securitisation
and reconstruction of financial assets and enforcement of security interest and
for matters connected therewith or incidental thereto. The provisions of the
Ordinance would enable banks and financial institutions to realise long-term
assets, manage problem of liquidity, asset liability mismatches and improve
recovery by exercising powers to take possession of securities, sell them and
reduce non-performing assets by adopting measures for 5 recovery or
reconstruction.”
9. Section 14 of the Securitization Act deals in respect of providing assistance to the
secured creditor to recover its loan, which reads as under:

“14. Chief Metropolitan Magistrate or District Magistrate to assist secured
creditor in taking possession of secured asset.—(1) Where the possession of
any secured assets is required to be taken by the secured creditor or if any of
the secured assets is required to be sold or transferred by the secured creditor
under the provisions of this Act, the secured creditor may, for the purpose of
taking possession or control of any such secured assets, request, in writing,
the Chief Metropolitan Magistrate or the District Magistrate within whose
jurisdiction any such secured asset or other documents relating thereto may
be situated or found, to take possession thereof, and the Chief Metropolitan
Magistrate or, as the case may be, the District Magistrate shall, on such
request being made to him—
(a) take possession of such asset and documents relating thereto; and
(b) forward such asset and documents to the secured creditor:
Provided that any application by the secured creditor shall be accompanied by
an affidavit duly affirmed by the authorised officer of the secured creditor,
declaring that—
(i) the aggregate amount of financial assistance granted and the total claim of
the Bank as on the date of filing the application;
(ii) the borrower has created security interest over various properties and that
the Bank or Financial Institution is holding a valid and subsisting security
interest over such properties and the claim of the Bank or Financial Institution
is within the limitation period;
(iii) the borrower has created security interest over various properties giving
the details of properties referred to in subclause (ii) above;
(iv) the borrower has committed default in repayment of the financial
assistance granted aggregating the specified amount;
(v) consequent upon such default in repayment of the financial assistance the
account of the borrower has been classified as a non-performing asset;
(vi) affirming that the period of sixty days notice as required by the provisions
of sub-section (2) of section 13, demanding payment of the defaulted financial
Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 30-07-2026
18:15:45

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assistance has been served on the borrower;
(vii) the objection or representation in reply to the notice received from the
borrower has been considered by the secured creditor and reasons for non-
acceptance of such objection or representation had been communicated to the
borrower;
(viii) the borrower has not made any repayment of the financial assistance in
spite of the above notice and the Authorised Officer is, therefore, entitled to
take possession of the secured assets under the provisions of sub-section (4)
of section 13 read with section 14 of the principal Act;
(ix) that the provisions of this Act and the rules made thereunder had been
complied with: Provided further that on receipt of the affidavit from the
Authorised Officer, the District Magistrate or the Chief Metropolitan
Magistrate, as the case may be, shall after satisfying the contents of the
affidavit pass suitable orders for the purpose of taking possession of the
secured assets [within a period of thirty days from the date of application]:
[Provided also that if no order is passed by the Chief 7 Metropolitan
Magistrate or District Magistrate within the said period of thirty days for
reasons beyond his control, he may, after recording reasons in writing for the
same, pass the order within such further period but not exceeding in
aggregate sixty days.]
Provided also that the requirement of filing affidavit stated in the first proviso
shall not apply to proceeding pending before any District Magistrate or the
Chief Metropolitan Magistrate, as the case may be, on the date of
commencement of this Act.] [(1A)
The District Magistrate or the Chief Metropolitan Magistrate may authorise
any officer subordinate to him,—
(i) to take possession of such assets and documents relating thereto; and
(ii) to forward such assets and documents to the secured creditor.]
(2) For the purpose of securing compliance with the provisions of sub-section
(1), the Chief Metropolitan Magistrate or the District Magistrate may take or
cause to be taken such steps and use, or cause to be used, such force, as may,
in his opinion, be necessary.
(3) No act of the Chief Metropolitan Magistrate or the District Magistrate
[any officer authorised by the Chief Metropolitan Magistrate or District
Magistrate] done in pursuance of this section shall be called in question in any
court or before any authority.”
10. From perusal of the aforesaid provision, it is clear that there is no legal bar on
re-executing the order of possession or providing reassistance to the secured creditor
as tried to be projected by the respondents through their return. As such there is no
legal impediment to dispossess the borrower from the mortgaged property once he
has illegally entered into it.
11. Illegality cannot be permitted to be perpetuated. Here, in the present 8 case, the
borrower with their family members, reentered into the mortgaged property on the
pretext of removing their belongings and thereafter if they are not vacating the

Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 30-07-2026
18:15:45

NEUTRAL CITATION NO. 2026:MPHC-IND:20863
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mortgaged property, then the petitioner being secured creditor has remedy to again
approach the respondents authorities to provide assistance and aid to take possession
back from the borrower by dispossessing him from the property in question.
12. The tricks adopted by the borrower in entering into the mortgaged property after
taking over possession by the petitioner, cannot be permitted to be rewarded. Once
the borrower failed to repay the loan amount then the property which is under
mortgage should be taken over by the petitioner as petitioner falls under the category
of secured creditor. In fact, by the action of borrowers, while re-entering into the
premises, legally owned by petitioner, made themselves vulnerable. Now, petitioner
may initiate criminal proceedings also for criminal trespass and other related
offences.
13. So far as the plea of respondents in relation to petitioner having other alternative
remedy is concerned, since the Securitization Act itself provides mechanism for
recovery of loan amount, therefore, in the attending facts and circumstances of the
case, no effective legal remedy is available to the petitioner.
18. In the conspectus of facts and circumstances of the case, this Court is of the
considered view that the respondent authorities are required to provide assistance
and aid to the petitioner in dispossessing the borrower from the mortgaged property
(in question). Accordingly, the writ petition preferred by the petitioner is allowed.
Respondents are directed to provide necessary assistance to the petitioner to
dispossess the borrower from the mortgaged property and hand over the possession
of the property in question to the petitioner in accordance with law

Considering the aforesaid judgment and observations made by the
Division Bench, let respondent no. 3 do the needful to take free possession of
the property within 15 days from today after receipt of copy of this order.
The petitioner is permitted to supply a copy of the order to respondent no. 3 /
Authority to do the needful with appropriate application.
With the aforesaid observations, petition is disposed of.
CC as per rules.
(SANDEEP N. BHATT)
JUDGE
amol

Signature Not Verified
Signed by: AMOL
NIVRUTTIRAO MAHANAG
Signing time: 30-07-2026
18:15:45