Authorities must execute Section 14 SARFAESI possession orders within prescribed timelines; unjustified delay warrants costs and contempt.

Indian Bank initiated proceedings under Sections 13 and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) for taking possession of two secured immovable properties belonging to the borrowers.

The competent authority passed an order dated 20 August 2025 directing that possession of the mortgaged properties be taken under Section 14 of the SARFAESI Act.

The matter was thereafter placed before the concerned Tahsildar for execution, but no effective action was taken for more than five months, and possession was neither obtained nor delivered to the Bank.

The State counsel conceded the inaction and submitted that the Tahsildar would execute the order within one month.

The State also accepted that the matter was covered by AU Small Finance Bank Ltd. through its Authorized Officer Gaurav Shrivastava v. State of M.P. & Others, decided on 11 November 2025 in W.P. No. 38230 of 2025.

Whether the High Court should issue a writ of mandamus directing the District Administration and the concerned Tahsildar to execute the order passed under Section 14 of the SARFAESI Act and deliver physical possession of the secured assets to the Bank within a fixed time?

Whether the concerned Tahsildar should be subjected to costs for failing to act upon the Section 14 possession order for more than five months?

The Court applied Article 226 of the Constitution of India to enforce the statutory and public duties of the District Administration in proceedings under the SARFAESI Act.

Sections 13 and 14 of the SARFAESI Act empower a secured creditor to enforce security interests and enable the competent authority to assist in taking possession of secured assets.

Relying on IIFL Home Finance Ltd. v. The State of M.P. & Others, as reiterated in AU Small Finance Bank Ltd. v. State of M.P. & Others, the Court held that the Collector must decide Section 14 applications expeditiously and must ensure execution of orders passed under Section 14 in a time-bound manner; any interim order of the Debt Recovery Tribunal affecting the SARFAESI proceedings must first be respected.

The Court further relied on the principle that unexplained administrative delay in executing a Section 14 order warrants a specific judicial direction fixing a definite period for compliance.

The competent authority had already passed an order for taking possession under Section 14, so the Bank was not seeking adjudication of a fresh right but enforcement of an existing statutory possession order.

Despite the passage of more than five months, the concerned Tahsildar had neither served the necessary notices nor taken possession, and the State’s report confirmed the failure to comply.

Since the factual situation was materially identical to that considered in AU Small Finance Bank, the Court applied the previously prescribed procedure requiring the District Administration to execute Section 14 orders expeditiously and in a time-bound manner.

The Tahsildar’s prolonged inaction justified issuance of a mandatory direction under Article 226 and also warranted imposition of costs to ensure compliance.

The Tahsildar, Bahodapur, District Gwalior, was directed to execute the Section 14 possession order and complete the proceedings within one month from the date of production of a certified copy of the judgment.

The Tahsildar was additionally directed to deposit ₹15,000 as costs before the Principal Registrar of the High Court within one month from the date of the order.

In default, the Principal Registrar was directed to initiate recovery proceedings and register a contempt case.