Magistrate Directed to Decide Section 14 SARFAESI Application Within Two-Month Specified Timeline

The applicant, a Non-Banking Financial Company (NBFC), provided loan facilities totaling ₹24,13,517 to Respondent Nos. 2 and 3, secured by a mortgage.

Following a default in repayment, the loan was classified as a Non-Performing Asset (NPA) on August 5, 2024.

The applicant subsequently initiated recovery proceedings under the SARFAESI Act, including the issuance of a Section 13(2) demand notice.

Despite the notice, the respondents failed to liquidate the debt, prompting the applicant to file Complaint Case No. 246/2025 under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate, Dehradun, to obtain physical possession of the secured asset.

The applicant approached the High Court seeking a direction for the lower court to decide the matter, which had remained pending despite the conclusion of arguments.

The Court's decision is rooted in the procedural mandates of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), specifically Section 14, which obligates the District Magistrate or Chief Judicial Magistrate to assist secured creditors in taking possession of secured assets.

The court also relied on the principle of "expeditious disposal" in the interest of justice to ensure that statutory remedies for debt recovery are not frustrated by procedural delays.

The Court evaluated the applicant's submission that although the recovery proceedings under Section 14 were instituted in 2025 and arguments had been concluded, the lower court had not yet delivered a final order.

Without delving into the merits of the underlying financial dispute, the Court observed that the statutory intent of the SARFAESI Act is to facilitate the efficient recovery of dues by secured creditors.

Given that the matter was already heard but remained pending, the Court determined that the ends of justice necessitated a time-bound direction to the trial court to prevent further stagnation of the recovery process.

The High Court ordered that the disposal should be carried out as expeditiously as possible, preferably within a period of two months from the date a certified copy of the order is produced before the lower court.