Borrowers are not entitled to a hearing before orders under Section 14 of the SARFAESI Act.

The petitioners, who were borrowers, challenged an order dated 28 February 2026 passed by the Additional District Magistrate in Case No. 336 of 2026 under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”), concerning an application by Adhar Housing Finance Limited for taking possession of the secured asset.

The petitioners contended that the order was invalid because no prior notice or opportunity of hearing had been granted to them.

The secured creditor argued that proceedings under Section 14 were ministerial in nature and did not require a hearing to the borrower.

The petitioners relied on Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd., while the respondents relied on Bank of Baroda (Earlier Vijaya Bank) v. State of U.P. and the Supreme Court’s decisions in Balkrishna Rama Tarle v. Phoenix ARC Pvt. Ltd. and R.D. Jain & Co. v. Capital First Ltd.

Whether a borrower is entitled to prior notice and an opportunity of hearing before an order is passed under Section 14 of the SARFAESI Act for taking possession of a secured asset?

Whether the principle in Harshad Govardhan Sondagar requiring notice and hearing applies to a borrower challenging Section 14 proceedings?

Whether the impugned order dated 28 February 2026 suffered from legal infirmity for having been passed without hearing the petitioners?

Section 14 of the SARFAESI Act authorises the Chief Metropolitan Magistrate or District Magistrate to assist a secured creditor in taking possession of secured assets, after satisfying the statutory requirements and the affidavit filed by the secured creditor.

The provision does not require issuance of notice to or an adjudicatory hearing for the borrower before passing such an order.

Relying on Balkrishna Rama Tarle v. Phoenix ARC Pvt. Ltd., (2023) 1 SCC 662, and R.D. Jain & Co. v. Capital First Ltd., (2023) 1 SCC 675, the Court held that proceedings under Section 14 are ministerial and do not involve adjudication of disputes between the borrower and secured creditor; the Magistrate is required only to verify the correctness of the information and statutory declarations placed before him.

Harshad Govardhan Sondagar v. International Assets Reconstruction Co. Ltd., (2014) 6 SCC 1, applies where a person in possession claims to be a qualifying lessee of the mortgagor or borrower, in which situation notice and hearing may be necessary; it does not establish a general right of hearing for the borrower.

The Court treated the petitioners’ status as borrowers, rather than tenants or independent persons in possession claiming protected leasehold rights, as decisive.

Since Section 14 proceedings are ministerial and are limited to verifying the secured creditor’s compliance with the statutory requirements, the District Magistrate was not required to adjudicate the borrowers’ objections or determine the merits of the underlying debt or security interest.

The Court therefore distinguished Harshad Govardhan Sondagar, noting that the notice requirement recognised there concerned a person claiming to be a qualifying lessee, not the borrower himself.

Consequently, the absence of a prior hearing did not render the impugned order unlawful.

The reliance on Harshad Govardhan Sondagar was held inapplicable because the petitioners were borrowers and not tenants or qualifying lessees.

The writ petition was dismissed as meritless, and no order was made as to costs.