Magistrate has power under Section 14(2) of SARFAESI Act to restore possession if borrower forcibly re-enters.

The petitioners are financial institutions registered under the SARFAESI Act, 2002

Private respondents (borrowers) defaulted on loans, leading the petitioners to invoke Section 13 of the Act

Following an application under Section 14, the District Magistrate (DM) passed orders directing police assistance to take physical possession of the secured assets

Although possession was initially handed over to the petitioners, the borrowers subsequently and unauthorizedly re-entered the premises

The petitioners filed writ petitions under Article 226 of the Constitution seeking directions to the police to restore possession, while the State contended that an alternative efficacious remedy exists under the SARFAESI Act

1. Whether a writ petition under Article 226 is maintainable when a borrower forcibly re-enters a secured asset after possession was lawfully delivered under Section 14 of the SARFAESI Act

2. Whether the District Magistrate/Chief Metropolitan Magistrate becomes functus officio after the initial delivery of possession, or if they retain power under Section 14(2) to restore the status quo ante

The court primarily interpreted Section 14 of the SARFAESI Act, 2002

Section 14(1) empowers the Magistrate to assist secured creditors in taking possession

Section 14(2) provides that the Magistrate may take such steps or use such force as may be necessary for securing compliance with the provisions of sub-section (1)

The court applied the principle that statutory provisions intended to facilitate recovery should not be interpreted in a narrow manner that frustrates the legal process

The court reasoned that the expression "for the purpose of securing compliance" in Section 14(2) has a wide amplitude

It held that the right of a secured creditor to maintain possession is an integral part of the Section 14 proceedings

The court rejected the petitioner’s argument that the Magistrate becomes functus officio after the initial order, qualifying such a view as a misinterpretation of the law

It determined that if possession delivered under legal authority is disturbed by trespass, the Magistrate’s power under Section 14(2) extends to passing subsequent orders to ensure the original order is not rendered meaningless or ineffective

Consequently, an application to the Magistrate to restore possession constitutes an "efficacious remedy"

The petitions were dismissed

The court granted liberty to the petitioners to file applications under Section 14(2) before the concerned Magistrate. The Magistrate was directed to treat such applications as a continuation of previous proceedings and to pass appropriate orders expeditiously to secure compliance and restore possession to the secured creditors