Chandigarh: The Punjab and Haryana High Court has come down heavily on revenue authorities for failing to execute lawful orders passed under the SARFAESI Act. In a recent case, a petition filed by AU Small Finance Bank exposed how officials at Ludhiana delayed handing over possession of secured property despite a clear judicial directive.
The Bench comprising Chief Justice Sheel Nagu, Justice Ramesh Kumari, observed that such lapses undermine the entire recovery mechanism under the SARFAESI Act, 2002.
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"Non-Performing Assets are a huge burden on the public exchequer and prompt enforcement is paramount for liquidity in the system," the Chief Justice remarked.
The bank had approached the High Court after the Tehsildar-cum-Duty Magistrate failed to implement a February 2025 order directing physical possession of the secured asset. Despite the law being clear that District Magistrates and Revenue Authorities must act without delay, officials had simply not complied.
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The Court directed the concerned authority to execute the order within 30 days, enabling the bank to proceed with liquidation of the asset and recovery of dues. It further reminded authorities to follow the precedent laid down in Bank of Maharashtra vs. District Magistrate, Hisar (2024), which had set timelines for such matters.
Referring to the Supreme Court's decision in R.D. Jain & Co. v. Capital First Limited (2023), the High Court highlighted that the role of District Magistrates under Section 14 of the SARFAESI Act is purely ministerial. The law requires them to act within 30 days, extendable up to 60 days, to hand over possession.
"Time is of the essence This is the spirit of the special enactment," the apex court had earlier ruled.
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Pointing out repeated lapses, the Bench noted that either state officials are unaware of these rulings or they are deliberately ignoring them. To prevent further delays, the Court directed the Chandigarh Judicial Academy to conduct a special orientation programme for all District Magistrates and Tehsildars in Punjab, Haryana and Chandigarh.
Copies of the order have been sent to the Chief Secretaries of Punjab, Haryana and the UT Administration. The Court made it clear that any failure to act on Section 14 orders in future would amount to contempt.
Case Title: AU Small Finance Bank v. State of Punjab and Others
Case Number: CWP No. 23941 of 2025
