DM Can Re-Execute Possession Orders U/S 14 Of SARFAESI Act After Illegal Re-Entry By Borrower: MP High Court

A division bench of Madhya Pradesh High Court, comprising Justice Anand Pathak and Justice Hirdesh, has allowed an appeal and upheld that a district magistrate can re-execute possession orders u/s 14 of the SARFAESI Act after illegal re-entry by the borrower. The Court directed the respondent authorities to provide necessary assistance to the petitioner to dispossess the borrower from the mortgaged property.

Background of the Case

The petitioner granted a certain mortgage loan facility to the borrower. The borrower failed to repay the same, and the petitioner issued a section 13(2) SARFAESI Act notice, but the borrower ignored the same. Thus, the petitioner filed an application u/s 14 of the SARFAESI Act before the District Magistrate to take possession of the property mortgaged by the borrower.

The district magistrate failed to hand over the possession to the petitioner, which led the petitioner to file a writ before this court, and ultimately the petitioner got the possession. However, the borrower again entered the premises of the mortgage property and took possession. Aggrieved by this, the petitioner again approached the respondent authorities seeking the possession again, but the authorities refused, citing the reason that they cannot re-execute the order. Hence, the petitioner again approached the High Court through writ jurisdiction and requested the Hon'ble Court to issue a writ of mandamus to the respondent authorities to take necessary actions against the borrower.

The petitioner argued that under the SARFAESI Act it is the duty of the respondents to provide assistance to the secured creditor in case of default.

Per contra, the respondent submitted that it has handed over the possession to the petitioner, but he failed to maintain that, which led the borrower to re-enter the property.

Observations of the High Court

The Hon'ble bench discussed the aims and objectives of the SARFAESI Act and said that it addresses the difficulties faced by the creditors in the realization of their dues from borrowers.

While considering section 14 of the act, the bench ruled that there is no bar in re-executing the order of possession. It said that the law puts no restrictions on dispossessing the borrower from the mortgaged property if he has illegally entered into it. The court said illegality cannot be permitted to be perpetuated.

The Court ruled that the petitioner can again approach the respondent authorities to provide assistance in taking back the property. Further, it was observed that the petitioner can also initiate the proceedings for criminal trespass.

The bench referred to the rulings of the Hon'ble Bombay High Court in the matter of Kotak Mahindra Bank vs. State of Maharashtra & Ors., W.P. No. No.6805/2023 and HDB Financial Services Limited vs. The State of Maharashtra & Ors. (W.P. 1080/2024), wherein the court directed the authorities to re-execute the order.

Referring to its own ruling in W.P. No. 11500/2020, the court ruled that the action taken by the District Magistrate under section 14 of the SARFAESI Act is not adjudicatory but merely ministerial.

The Hon'ble Court lastly observed that, “If one can see powers of the revenue Authorities/ Executive Magistrate while keeping Section 14 of the SARFAESI Act in juxtaposition to Section 248 of the MPLRC then it appears that authorities deserve to execute the work again in case of such event as referred above.”

The court allowed the petition and directed the respondent to provide necessary assistance to the petitioner to dispossess the borrower from the mortgaged property.

Case Name: Capri Global Housing Finance Ltd. v. State of Madhya Pradesh & Ors.

Citation: 2025 LiveLaw (MP) 171

Bench: Hon'ble Shri Justice Anand Pathak and Hon'ble Shri Justice Hirdesh

For Petitioner: Shri Ajay Sharma

For Respondent: Shri G.K. Agarwal

Order Date: 01.07.2025