Police must restore possession and register FIR against borrowers who forcibly retake secured assets after SARFAESI dispossession.

The petitioner, a financial institution under the SARFAESI Act, 2002, sanctioned a loan to a borrower against a mortgaged asset in Sehore, M.P. Following a default and NPA classification, the petitioner obtained a possession order from the Chief Judicial Magistrate (CJM) under Section 14 of the SARFAESI Act.

Physical possession was legally transferred to the petitioner by revenue authorities on April 13, 2026. Subsequently, the borrower allegedly broke the locks and forcibly re-entered the property.

Despite a written complaint filed on April 17, 2026, the police failed to register an FIR or restore possession, prompting this writ petition seeking a mandamus for criminal investigation and repossession.

1. Whether the police are mandated to register an FIR when a complaint discloses a cognizable offense regarding criminal trespass on a secured asset.

2. Whether the authorities have a duty to restore and protect the physical possession of a secured asset if a borrower illegally ousts a secured creditor after a Section 14 order has been executed.

The Court applied the mandatory FIR registration rule established by the Supreme Court in Lalita Kumari v. Govt. of U.P., which requires police to act upon information regarding cognizable offenses.

Regarding the SARFAESI Act, the Court relied on Cholamandalam Investment and Finance Co. Ltd. v. District Magistrate, Gwalior and Kotak Mahindra Bank v. State of Maharashtra, which establish that a Magistrate’s order under Section 14 is ministerial and remains valid until the debt is recovered; thus, authorities have the power to re-execute possession orders if the borrower interferes.

It further noted from Smt. Mishri Bai v. Shubh Laxmi Mahila Cooperative Bank that a creditor need not seek a fresh Section 14 order if they are wrongfully dispossessed.

The Court observed that the petitioner had legally acquired possession through a judicial order and a formal panchnama. It found that the borrower’s act of breaking locks and re-entering the property constituted a "mockery of the rule of law" and an "assault on the statute".

The Court reasoned that once a Section 14 order is passed, the state’s duty to assist the creditor is ongoing and doesn't cease if a borrower uses "muscle power" to regain entry. The Court criticized the growing tendency of police authorities to remain passive in the face of such trespasses, emphasizing that the majesty of the law must be maintained through effective administrative action.

It further ordered effective criminal proceedings against the borrowers for trespassing and flouting court orders. The petition was disposed of with a mandate that the police discharge their statutory duties to prevent the frustration of SARFAESI proceedings.