Recently, taking strong exception to delays by revenue authorities in executing orders under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), the Punjab and Haryana High Court has directed that District Magistrates (DMs) and Tehsildars must strictly comply with statutory obligations, warning that any failure would invite contempt.
The Division Bench of Chief Justice Sheel Nagu and Justice Ramesh Kumari observed, “Non-Performing Assets (NPAs) are a huge burden on the public exchequer, banking and financial system, and, thus, prompt enforcement of recovery mechanism under the SARFAESI Act is paramount for liquidity in the system.”
The case arose from a petition filed by AU Small Finance Bank before the High Court, complaining that despite an order passed by the Chief Judicial Magistrate, under Section 14 of the SARFAESI Act, the concerned Tehsildar-cum-Duty Magistrate failed to execute the order and deliver possession of the secured asset to the bank. Aggrieved by this inaction, the bank sought a writ of mandamus.
The Court observed that under Section 14 of the SARFAESI Act, it is the statutory duty of the Chief Metropolitan Magistrate or District Magistrate to take possession of the secured asset along with its documents and hand them over to the creditor. The Bench reiterated, while referring to case R.D. Jain & Co. v. Capital First Ltd., that this function is strictly ministerial in nature, requiring the Magistrate to act within 30 days of the application, extendable to a maximum of 60 days, and cannot admit of any delay.
The Bench expressed surprise that despite earlier directions in Bank of Maharashtra v. District Magistrate, Hisar (2024) and Cholamandal Investment and Finance Co. Ltd. v. DM Bhatinda (2024), authorities continued to disregard timelines prescribed for execution of orders under Section 14 of the SARFAESI Act.
Accordingly, the Court directed the Chandigarh Judicial Academy to organise an orientation programme for all District Magistrates and Tehsildars across Punjab, Haryana and Chandigarh to ensure effective implementation of the SARFAESI Act. It further directed that after training, DMs/Deputy Commissioners must pass orders under Section 14 within 60 days and ensure execution within 30 days thereafter.
Emphasising accountability, the Court cautioned, “Any failure on the part of District Magistrate/Deputy Commissioner in performing statutory duty of passing or executing an order under Section 14 of SARFAESI Act would amount to contempt of the orders passed by this Court.”
The States of Punjab and Haryana have been directed to file a compliance report by November 7, 2025.
Case Title: AU Small Finance Bank Vs. State of Punjab And Others
Case No: CWP No. 23941 of 2025
Coram: Chief Justice Sheel Nagu and Justice Ramesh Kumari
Advocate For Petitioner: Advs. Deepika Mttal, Bharat Mani Goyal
Advocate For Respondent: Addl. Advocate General, Vipin Pal Yadav
