Mandamus Lies to Compel Authorities to Provide Assistance for Execution of Section 14 SARFAESI Orders

In brief

The question

1. Whether the respondent authorities are duty-bound to provide police and administrative assistance to execute an order passed under Section 14 of the SARFAESI Act for the recovery of secured assets

The court held

The Court allowed the writ petition and issued a mandamus directing Respondent Nos. 1 and 2 to provide the necessary police and administrative assistance to the petitioner Bank

It also directed

The Court held that physical possession of the secured assets must be handed over in accordance with the law within a period of thirty days from the production of the certified copy of the order

All pending applications were disposed of accordingly

01Facts

The petitioner, ICICI Bank Ltd., extended credit facilities to respondent no. 4 (Invent Pharma Incorporation), which were secured by the mortgage of two properties in Dehradun

p. 1

Due to default in repayment, the account was classified as a Non-Performing Asset (NPA) on 24.05.2023

p. 2, para 2

The Bank initiated proceedings under Sections 13(2) and 13(4) of the SARFAESI Act, 2002. Facing resistance in obtaining physical possession, the Bank secured an order from the District Magistrate, Dehradun, on 28.12.2023 under Section 14 of the Act

p. 2, para 2

Despite this order and the disposal of subsequent challenges by the borrowers before the DRT and High Court via settlement, the administrative authorities failed to deliver physical possession of the assets

pp. 2-3, para 3

02Issues

i.1. Whether the respondent authorities are duty-bound to provide police and administrative assistance to execute an order passed under Section 14 of the SARFAESI Act for the recovery of secured assets

p. 3, para 5

03Law Applied

Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, which mandates that the District Magistrate or Chief Metropolitan Magistrate assist secured creditors in taking possession of secured assets

p. 1

The legal principle that the object of the SARFAESI Act is the expeditious enforcement of security interests and the recovery of public money

p. 3, para 5

Provisions in the judgment · 2 · Linked ones open on LawLens

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Section 14 Section 13

04Reasoning

The Court observed that the petitioner had complied with all statutory requirements under the SARFAESI Act and the Rules framed thereunder

p. 3, para 4

It noted that the District Magistrate had already passed a formal order on 28.12.2023 directing that assistance be provided to the Bank

p. 3, para 5

The Court reasoned that the continued inaction of the Respondent Nos. 1 to 3 in executing this order, despite it attaining finality, effectively defeated the legislative intent of the SARFAESI Act, which seeks to streamline the recovery process for financial institutions without protracted litigation

p. 3, para 5

Since the settlement between the parties had not resulted in the delivery of possession, judicial intervention was necessary to compel the performance of the statutory duty by the administrative authorities

p. 4, para 6

05Holding

The Court allowed the writ petition and issued a mandamus directing Respondent Nos. 1 and 2 to provide the necessary police and administrative assistance to the petitioner Bank

p. 4, para 6

The Court held that physical possession of the secured assets must be handed over in accordance with the law within a period of thirty days from the production of the certified copy of the order

p. 4, para 6

All pending applications were disposed of accordingly

p. 4, para 7

LawLens.Uttarakhand High Court

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