Revenue Authorities Must Expeditiously Execute Section 14 SARFAESI Orders as Time is of the Essence

The Petitioner, a secured creditor, filed a writ petition under Article 226 of the Constitution of India aggrieved by the non-execution of an order dated March 24, 2025, passed by the District Magistrate (DM), Raipur, under Section 14 of the SARFAESI Act, 2002.

The DM’s order directed the Tahsildar to take physical possession of the secured assets.

The private respondents (borrowers) contended that they had challenged the DM’s order before the Debt Recovery Tribunal (DRT), Jabalpur; however, they admitted that no stay order had been granted by the DRT.

The Petitioner argued that the Tahsildar’s failure to discharge his statutory duty was causing a burden on the financial system.

1. Whether the Tahsildar or revenue authorities are under a statutory obligation to execute an order passed by the District Magistrate under Section 14 of the SARFAESI Act without unnecessary delay.

2. Whether the mere pendency of an application before the Debt Recovery Tribunal (DRT), in the absence of an express stay order, justifies the non-execution of a Section 14 order by the revenue authorities.

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

R.D. Jain & Co. v. Capital First Limited and Others (2023), which held that the powers exercised under Section 14 are ministerial, and the authority must act within the stipulated time-limit as "time is of the essence".

Kotak Mahindra Bank Limited v. Girnar Corrugators Private Limited and Others (2023), establishing that neither the DM nor the Tahsildar has the jurisdiction to adjudicate disputes between the creditor and debtor, as such jurisdiction lies solely with the DRT under Section 17.

The Court observed that revenue authorities often "sit over the matter" after a Section 14 order is passed, thereby frustrating the legislative intent of the SARFAESI Act.

the function of the DM/CMM under Section 14 is purely ministerial and intended to assist the secured creditor, the Tahsildar cannot brook delay in execution.

the mere filing of a Securitisation Application before the DRT does not act as an automatic stay.

the Naib Tahsildar or Tahsildar has no legal authority to refuse the execution of a Section 14 order based on pending disputes or other recovery certificates, as their role is limited to the physical act of assisting the creditor in obtaining possession.

The High Court allowed the petition.

The Court directed the Tahsildar, Raipur, to execute the order dated March 24, 2025, passed in Case No. 328/B-121/2021-22, expeditiously and preferably within a maximum period of 30 days from the production of the Court’s order.

The petition was disposed of with no further reliefs to the borrowers.