[Cites 3, Cited by 0]
Madhya Pradesh High Court
Au Small Finance Bank Limitd Through Its ... vs The State Of Madhya Pradesh on 14 January, 2026
Author: Vijay Kumar Shukla
Bench: Vijay Kumar Shukla
NEUTRAL CITATION NO. 2026:MPHC-IND:1167
1 WP-49296-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIJAY KUMAR SHUKLA
&
HON'BLE SHRI JUSTICE ALOK AWASTHI
ON THE 14th OF JANUARY, 2026
WRIT PETITION No. 49296 of 2025
AU SMALL FINANCE BANK LIMITD THROUGH ITS AUTHORIZED
SIGNATORY MR. MADHUR GUPTA
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Rohit Saboo - Advocate for the petitioner.
Shri Surendra Kumar Gupta - Govt. Advocate for respondents/State,
on advance notice.
ORDER
Per: Justice Vijay Kumar Shukla
The petitioner is challenging the procedure adopted by the Upper
Collector, Mandsaur while deciding the application under Section 14 of the
SARFAESI Act, 2002. He has drawn our attention to the order sheets which
shows that the said authority on the application filed by the petitioner /
Secured Creditor under Section 14 of the SARFAESI Act, 2002 has issued
notices to the borrower and thereafter the case is kept pending since 29th
August, 2025.
Learned counsel for the petitioner argued that the procedure adopted
by the said authority is contrary to the procedure prescribed under Section 14
NEUTRAL CITATION NO. 2026:MPHC-IND:1167
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of the SARFAESI Act, 2002 under the law.
We have noticed that in number of cases the District Authorities are
not deciding the application under Section 14 of the SARFAESI Act, 2002 in
accordance with law and contrary to the law and the object of Section 14 of
the Act they are issuing notices to the borrower and keeping the matter
pending. In the present case, we find that the application is pending since
August, 2025.
In view of the aforesaid, we direct the respondent No.2 to decide the
pending application of the petitioner within ten days from the date of filing
of the certified copy of the order passed today.
As per the judgment passed by the Division Bench of the High Court
of Madhya Pradesh in the case of Equitas Small Finance Bank Ltd. V/s.
State of M.P. passed in W.P.No.26176/2023 decided on 23rd November,
2023 it has already been held that for deciding an application under Section
14 of the SARFAESI Act, the notices are not required to be issued to the
borrower. The Court has further held that while deciding the application, the
authority has to consider only two aspects :-
(i) Whether the secured assets fall within the territorial jurisdiction ?.
(ii) Whether notice under Section 13(2) of the SARFAESI Act has
been furnished or not ?.
The following order was passed after para 21, which reads as under :-
"Let a copy of this order be sent to the Registrar General,
High Court of M.P, Jabalpur.
The Registrar General, High Court of M.P., Jabalpur is
NEUTRAL CITATION NO. 2026:MPHC-IND:1167
3 WP-49296-2025
directed to circulate the copy of this order to all the Principal
District Judges in the State of M.P. with a direction to circulate
this order amongst Chief Judicial Magistrate who are exercising
powers under the SARFAESI Act in their respective districts. The
Registrar General is also directed to send a copy of this order to
the Principal Secretary, Revenue Department, Bhopal with a
request to circulate this order amongst all DM/ADM in the State
of Madhya Pradesh only for the purpose of avoiding unnecessary
delays and unwanted procedures giving rise to flooding of High
Court with unwanted litigation."
Despite the said order the competent authorities are still issuing the
notices to the borrower and following the procedure as if the matter is being
heard on merits. It is well settled that the proceedings under Section 14 of the
SARFAESI Act is a special kind of administrative function. The Principal
Secretary, Revenue Department, Vallabh Bhavan, Bhopal (M.P.) shall
circulate this order to all the District Magistrate / Additional District
Magistrate of the State of Madhya Pradesh for the purpose of avoiding
unnecessary delay and unwanted procedures.
With the aforesaid, the petition stands disposed off.
(VIJAY KUMAR SHUKLA) (ALOK AWASTHI)
JUDGE JUDGE
SS/-
