Failure to Execute Section 14 SARFAESI Orders Within Prescribed Time Will Attract Contempt: Punjab & Haryana High Court
- REEDLAW
- Sep 4
- 3 min read
REEDLAW Legal News Network reports: In a crucial ruling, the Punjab and Haryana High Court has held that District and Revenue Authorities are under a statutory obligation to execute orders passed under Section 14 of the SARFAESI Act within the prescribed timeframe. The Court further observed that failure to comply with these mandates amounts to contempt, as the powers under Section 14 are ministerial in nature and must ensure swift possession and recovery of secured assets.
The Punjab and Haryana High Court Division Bench, comprising Chief Justice Sheel Nagu and Justice Ms. Ramesh Kumari, while adjudicating a Civil Writ Petition, held that the authorities cannot delay the implementation of Section 14 orders and are required to act within the timelines prescribed by law. The Bench emphasised that any failure in execution not only undermines the statutory mandate but also attracts contempt proceedings.
The High Court entertained a writ petition filed by the petitioner bank challenging the non-execution of an order dated 14 February 2025 passed by the Chief Judicial Magistrate, Ludhiana, under Section 14 of the SARFAESI Act. The Court expressed serious concern over the inaction of the Tehsildar-cum-Duty Magistrate in discharging the statutory duty of handing over physical possession of the secured asset to the bank. It was observed that Non-Performing Assets pose a significant burden on the banking system and the public exchequer, and therefore, timely enforcement of SARFAESI provisions is crucial to maintain liquidity and recover debts.
The Court issued a writ of mandamus directing the concerned authority to execute the order dated 14 February 2025 and deliver possession of the secured asset to the bank within 30 days. It clarified that the bank, thereafter, would be free to proceed with the liquidation of the secured asset in accordance with the law. The Court reiterated that the guidelines laid down by a Coordinate Bench in Bank of Maharashtra v. District Magistrate, Hisar and Others must be strictly followed and emphasised that delay in implementing Section 14 orders defeats the object of SARFAESI, which is to ensure speedy recovery of bad debts.
Referring to the Supreme Court’s decision in R.D. Jain and Company v. Capital First Limited and Others, REEDLAW 2022 SC 07201, the Court reaffirmed that the powers exercised by the Chief Judicial Magistrate or District Magistrate under Section 14 are purely ministerial in nature and must be performed within the statutory time frame. It criticised the repeated instances where authorities fail to execute such orders promptly and noted that ignorance or non-compliance with earlier directions cannot be condoned. Consequently, the Court directed the Chandigarh Judicial Academy to organise an orientation program for all District Magistrates and Tehsildars of Punjab, Haryana, and U.T. Chandigarh to ensure proper implementation of SARFAESI procedures.
The Court further warned that failure by District Magistrates or Deputy Commissioners to comply with their statutory duties under Section 14 of the SARFAESI Act would amount to contempt of court. It directed the Chief Secretaries of Punjab and Haryana, and the Deputy Commissioner of U.T. Chandigarh, to ensure compliance and mandated that a compliance report be filed by 7 November 2025, failing which the matter would be listed for further action. The petition was accordingly disposed of with these directions.
Ms. Deepika Mittal (Arguing Counsel) and Mr. Bharat Mani Goyal, Advocates, represented the Petitioner.
Mr. Vipin Pal Yadav, Additional Advocate General, Punjab, appeared for the Respondent.
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