Borrower’s illegal re-entry cannot defeat SARFAESI possession order; MP High Court directs authorities to restore bank’s possession

UCO Bank obtained an order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”) from the Additional District Magistrate, Vidisha, pursuant to which possession of the mortgaged property was handed over to the Bank.

On 31 May 2026, the borrower and family members allegedly re-entered the secured premises on the pretext of removing household articles and unlawfully regained possession.

The Bank submitted an application to the authorities on 3 June 2026 seeking restoration of possession and police assistance, but no action was taken.

It consequently filed the present petition under Article 226 of the Constitution, relying on the Division Bench decision in Cholamandalam Investment and Finance Company Ltd. v. District Magistrate, District Gwalior & Others, W.P. No. 1681 of 2025.

Whether the authorities can re-execute or provide further assistance under an existing order passed under Section 14 of the SARFAESI Act where the borrower has unlawfully re-entered the secured asset after possession was delivered to the secured creditor.

Whether the secured creditor is entitled to a writ directing the State authorities to dispossess the borrower and restore possession of the secured property.

Whether the availability of an alternative remedy bars the exercise of writ jurisdiction in such circumstances.

Section 14 of the SARFAESI Act empowers the Chief Metropolitan Magistrate or District Magistrate to take possession of secured assets and forward them to the secured creditor, including by authorising subordinate officers and using necessary force to secure compliance.

The provision does not create a legal bar against re-executing an order or providing re-assistance when possession delivered to the secured creditor is unlawfully disturbed.

The Court relied principally on Cholamandalam Investment and Finance Company Ltd. v. District Magistrate, District Gwalior & Others, W.P. No. 1681 of 2025, which held that illegal re-entry by a borrower cannot be permitted to defeat an order under Section 14 and that the authorities may restore possession.

It also relied on Kotak Mahindra Bank v. State of Maharashtra & Others, W.P. No. 6805 of 2023, and HDB Financial Services Ltd. v. State of Maharashtra & Others, W.P. No. 1080 of 2024, where restoration and re-execution of possession orders were directed.

The Full Bench decision in W.P. No. 11500 of 2020 was cited for the principle that proceedings under Section 14 are ministerial and undertaken in aid of the secured creditor.

The Court further referred to Section 248 of the Madhya Pradesh Land Revenue Code as reflecting the authority’s power to execute the necessary process again in appropriate circumstances.

The Court found that possession had already been lawfully delivered to the Bank under Section 14 and that the borrower’s subsequent re-entry was illegal.

The State’s contention that the Section 14 order had become exhausted or could not be re-executed was rejected because such an interpretation would allow an unlawful act to defeat the statutory recovery mechanism and undermine the rule of law.

Since Section 14 contains no prohibition against renewed assistance, the authorities remained competent to dispossess the borrower and restore possession to the Bank.

The Court also held that the alternative-remedy objection did not justify dismissal because the SARFAESI mechanism itself required administrative assistance for recovery and no effective remedy was available to address the alleged illegal re-entry in the circumstances.

The Court held that UCO Bank was entitled to governmental assistance for dispossessing the borrower from the mortgaged property and restoring possession to the Bank in accordance with law.

The respondent authorities were directed to provide the necessary aid and assistance for restoration of possession.

The petition was disposed of without any order as to costs.