Uco Bank Having Branch Office At Old Highcourt Road Inderganj (Mp) Through Its Authorised Officer Ga vs The State Of Madhya Pradesh

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IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR

BEFORE
HON'BLE SHRI JUSTICE PAVAN KUMAR DWIVEDI
th
ON THE 24 OF AUGUST, 2026
WRIT PETITION No. 20239 of 2026
UCO BANK HAVING BRANCH OFFICE AT OLD HIGHCOURT ROAD
INDERGANJ (MP) THROUGH ITS AUTHORISED OFFICER GA
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Ajay Sharma - Advocate for the petitioner.
Shri SS Kushwah - GA for the respondents/State.
Shri Sanjay Shukla and Shri Pankaj Singh - learned counsel for the
respondent Nos. 2 to 11.
ORDER
The present petition under Article 226 of the Constitution of India has been
filed by the petitioners seeking following reliefs:-
"7. 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. Learned counsel for the petitioner submitted that pursuant to an order
passed by the Additional District Magistrate, Vidisha under Section 14 of the
Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (for short, "the SARFAESI Act"), possession of the
mortgaged property was handed over to the petitioner. However, under the pretext
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Signed by: RAM KUMAR
SHARMA
Signing time: 8/25/2026
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of removing their household articles, the borrower and his family again re-entered

the premises on 31.05.2026 and illegally regained possession thereof. It is
submitted that although an application in this regard was submitted on 03.06.2026
seeking restoration of possession, no action has been taken till date and the
possession of the said property has not been restored to the petitioner.
3. Learned counsel for the petitioner further submitted that appropriate
directions be issued to the authorities concerned in the light of the order dated
16.06.2025 passed by the Division Bench of this Court in W.P. No. 1681/2025 in
the matter of Cholamandalam Investment and Finance Company Ltd. vs. The
District Magistrate, District Gwalior & Ors., wherein it has been held that where
the borrower has illegally re-entered the secured asset after possession had been
taken under Section 14 of the SARFAESI Act, the competent authority can direct
restoration of possession on the strength of the same order passed under Section
14 of the SARFAESI Act. It is contended that despite submission of the
application by the petitioner, no action has been taken by the authorities.
Therefore, the present petition deserves to be allowed in the light of the aforesaid
settled legal position.
4. Per contra, learned counsel appearing for the respondents/State opposed
the submissions advanced on behalf of the petitioner and submitted that once
possession of the mortgaged property had been handed over to the petitioner
pursuant to the order passed under Section 14 of the SARFAESI Act, it was
incumbent upon the petitioner to safeguard the same. Since the petitioner failed to
do so, enabling the borrower to re-enter the premises, the order passed under
Section 14 of the SARFAESI Act, having already been executed, cannot again be
enforced for securing possession. On the aforesaid grounds, prayer has been made
for dismissal of the present petition.
Signature Not Verified
Signed by: RAM KUMAR
SHARMA
Signing time: 8/25/2026
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5. Heard learned counsel for the parties and perused the record.

6. The Division Bench of this Court in the matter of Cholamandalam
Investment and Finance Company Ltd. (supra) while dealing with the similar
controversy has held as under:-
"1. 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
Authorised Officer of the petitioner,
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, Gwalior for taking
possession of the property from the borrower. That application was
allowed on 05-01-2023 directing the concerned Tahsildar to take
possession of the property under mortgage.
3. Despite the order of District Magistrate, Gwalior, since possession of
the property was not handed over to the petitioner, therefore, petitioner
preferred writ petition No.17288/2023 and thereafter Contempt Petition
2252/2024 before this Court and ultimately possession was handed
over to the petitioner on 30-07-2024. However, borrower and his
family members again reentered into the possession of the mortgaged
property on the pretext of removing their belongings from 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, Gwalior dated 05-01-2023 has already been
executed and now they cannot re-execute the said order. Therefore,
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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
appended thereto.
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 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

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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 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 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 assetx ix 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

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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 sub-clause (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 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 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,
(1) to take possession of such assets and documents relating thereto;
and

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(11) 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 he 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 re-
assistance 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 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 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.
14. The High Court of Bombay in W.P. No.6805/2023 Kotak Mahindra
Bank Vs. State of Maharastra & Ors., has decided in similar matter and
vide order dated 30/06/2023, directed the State Authority to restore the
possession to the secured creditor.
Relevant para 13 of the judgment is reproduced as under:-
13. Considering the law laid down by the Division Bench of this court
and referred to by us above, we are unable to agree with the

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submission made by the learned AGP that the District Magistrate does
not have the power to re-execute his own order or that he has become
functus officio. If we were to take the view as propounded by the
learned AGP it would lead to a complete chaos. We have no hesitation
in stating that the borrowers have devised a novel, unimaginable and
unsustainable modus operandi to defeat the ends of justice. It is not
only the mater of physical altercation by assaulting the security guard
appointed by the Petitioner Bank and breaking open the lock and seal
affixed on the secured asset which is wholly illegal, but the same
would also tantamount to an assault on the law and the statute itself. If,
after orders are passed under section 14 for dispossession of the
borrower, and the same are inter-meddled with by any person including
the borrower, the same would result in a mockery of the rule of law. In
such a situation the Court cannot and should not remain a mute
spectator and allow the illegality to continue. The tendency of trying to
overreach the law as well as the orders passed by Judicial Authorities
has to be nipped in the bud right away, lest the rule of law shall suffer."
15. In the case of HDB Financial Services Limited Vs. The State of
Maharashtra & Ors. (W.P. 1080/2024), The High Court of Bombay
directed the authorities to re-execute the order. In many similar cases
where the possession of the secured assets are wrongfully taken from
the secured creditor, authorities are directed by the Hon'ble High Court
to restore the possession and take appropriate action against the persons
who committed this wrong.
16. The Full Bench of this Court in W.P. No. 11500/2020 also
observed that "Therefore,, it is clear that the action taken under section
14 of the Act by the District Magistrate or Chief Metropolitan
Magistrate is not adjudicatory but merely ministerial, consequent to the
action taken by the secured creditor requiring the District Magistrate or
Chief Metropolitan magistrate to assist the secure creditor to take
possession of the secured asset and their action would in effect
be deemed to be an action for and on behalf of the secured creditors."
17. If one can see powers of the revenue Authorities/ Executive
Magistrate while keeping Section 14 of the SARFAESI Act in
juxtaposition to Section 248 of the MPLRC then it appears that
authorities deserve to execute the work again in case of such event as
referred above.
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

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possession of the property in question to the petitioner in accordance
with law.
19. Writ Petition stands allowed and disposed of in above terms."

7. In the light of the aforesaid settled legal position, this Court is of the
considered opinion that the petitioner is entitled to the relief claimed.
Accordingly, the present petition is allowed. The respondents/authorities are
directed to provide assistance and aid to the petitioner for dispossessing the
borrower from the mortgaged property in question and for restoring possession
thereof to the petitioner in accordance with law
8. Accordingly, with the aforesaid observations and directions, the present
petition stands allowed and disposed of.
9. No order as to costs.
(PAVAN KUMAR DWIVEDI)
JUDGE
Rks

Signature Not Verified
Signed by: RAM KUMAR
SHARMA
Signing time: 8/25/2026
6:40:11 PM