State Authorities are Mandated to Provide Necessary Police Protection to Execute Possession Orders under SARFAESI Act

The petitioner, a secured creditor, extended a loan of ₹3,02,32,023/- to Respondent No. 3 (acting as M/s Sarah) with Respondent No. 4 serving as a guarantor.

The loan was secured by a mortgage of a commercial property in Bhopal.

Following a default, the petitioner initiated proceedings under Sections 13(4) and 14 of the SARFAESI Act, 2002.

Though the Debt Recovery Tribunal (DRT) granted the respondents multiple opportunities to repay the dues in installments through various stay orders and extensions, the borrowers failed to comply with the repayment conditions.

Finding no compliance, the Additional District Magistrate, Bhopal, issued an order on 29.04.2019 under Section 14, directing the Tahsildar to deliver physical possession of the property to the Bank.

However, an attempt to take possession on 30.01.2020 failed because a female occupant created a ruckus, and the police party lacked female personnel to manage the situation.

The petitioner subsequently approached the High Court seeking a Writ of Mandamus to compel the authorities to hand over possession.

1. Whether the State authorities are legally obligated to provide necessary police assistance, including female personnel, to execute an order passed under Section 14 of the SARFAESI Act.

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

The Court emphasized the administrative duty of State authorities to prevent assets from becoming non-productive (NPA) or being siphoned off once legal proceedings under the Act have culminated.

The Court observed that the petitioner had been struggling to obtain physical possession for seven years despite having a valid order under Section 14 of the SARFAESI Act.

The failure to execute the order was attributed to a lack of coordination, specifically the absence of female police officers during the initial attempt to take possession.

The Court noted the State's submission that the delay was due to specific law-and-order exigencies on the day of the attempt (Martyr’s Day) but acknowledged the State’s current readiness to provide the necessary force, including women personnel.

The Court reasoned that once an order under Section 14 is passed and the borrower has failed to adhere to the remedial timelines set by the DRT, the Tahsildar and police are "duty bound" to ensure the delivery of possession to the secured creditor to protect the financial integrity of the asset.

The Court held that the respondents, particularly the Tahsildar, must proceed in accordance with the law to deliver the mortgaged property to the petitioner, ensuring that requisite female police assistance is provided to manage any potential disruption.