Magistrate Cannot Direct Secured Creditor To Bear Police Expenses While Taking Possession Of Secured Asset: Rajasthan High Court

The Rajasthan High Court at Jaipur has recently ruled that a Magistrate cannot direct a secured creditor to deposit expenses for police assistance while taking possession of a secured asset under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

A single-judge bench of Justice Ashutosh Kumar made the ruling while setting aside a condition imposed by the Chief Judicial Magistrate (CJM), Alwar in a dispute between a finance company and its borrowers,

“There is no provision under Section 14 of the 'Act of 2002' which may authorize the learned Magistrate to direct the secured creditor to deposit any expenses of police assistance in taking possession of the secured asset.”, it said.

The case arose from a writ petition by Tyger Home Finance Private Limited challenging an August 12, 2024 order of the CJM, Alwar, in proceedings under Section 14 of the Act. The Magistrate had asked the company to approach the police for assistance after depositing expenses. The police later demanded Rs 6.34 lakh for assistance, though the loan amount was only Rs 9.9 lakh.

Allowing the challenge, the High Court set aside the direction to deposit police expenses and directed the company to move an application before the police to implement the CJM's possession order. It also directed the police to comply with the orders at the earliest.

Case Title: Tyger Home Finance Private Limited v State Of Rajasthan and Ors

Case Number: S.B. Civil Writ Petition No. 14449/2025

For Petitioner: Advocates Kartikeya Sharma, Puneet Chahar, Mukul Choudhary

For Respondents: Advocates Shubham Sharma, Somitra Chaturvedi

Click here to read/download order