Punjab & Haryana High Court on Delay by District Magistrate in Deciding SARFAESI Application.

The Punjab & Haryana High Court directed the District Magistrate, Ludhiana, to expeditiously decide Kotak Mahindra Bank’s application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), which had been pending since November 2024. The Court emphasized that under Section 14, the District Magistrate’s function is ministerial, not adjudicatory, and must be completed within the statutory period of 30 to 60 days. Delay beyond that period violates the legislative intent and warrants judicial intervention through a writ of mandamus.

1. The petitioner, Kotak Mahindra Bank Ltd., filed a writ petition under Articles 226/227 of the Constitution of India, challenging the inaction of the District Magistrate, Ludhiana, in deciding its application under Section 14 of the SARFAESI Act, pending since 04.11.2024.
2. The borrowers had availed a loan of ₹29,72,482, which was later classified as a Non-Performing Asset (NPA) after default.
3. A demand notice dated 25.11.2023 under Section 13(2) was served but not complied with, leading the Bank to issue a possession notice under Section 13(4).
4. Subsequently, the Bank filed the Section 14 application seeking assistance from the District Magistrate to take physical possession of the secured asset.
5. Despite the clear legal mandate, no action had been taken on the Bank’s application for nearly a year.

1. The Court relied upon the Supreme Court judgment in R.D. Jain & Co. v. Capital First Ltd., (2023) 1 SCC 675, which clarified that:
2. The Chief Metropolitan Magistrate/District Magistrate (CMM/DM) must act immediately upon receiving an application under Section 14(1) of the SARFAESI Act.
3. The process is a ministerial act, not a quasi-judicial function.
4. The CMM/DM must verify compliance and pass suitable orders within 30 days, extendable up to 60 days at most.
5. “Time is of the essence” under the special enactment.
6. The Court also referred to Bank of Maharashtra v. District Magistrate, Hisar & Ors. [CWP-7018-2022, decided on 28.05.2024], directing that its guidelines be followed by all concerned authorities.
7. Since the District Magistrate failed to act within the statutory period, the Court found it necessary to issue a writ of mandamus directing compliance.

1. The Court disposed of the petition with a direction to the District Magistrate, Ludhiana (Respondent No. 2) to:
2. “Consider and dispose of the petitioner’s application under Section 14 of the SARFAESI Act (Annexure P-2, dated 04.11.2024) expeditiously, preferably within four (4) weeks from the date of receipt of a copy of this order.”
3. The order was made subject to any restraint/interim/final orders that may have been passed by a competent judicial forum in favour of the borrowers or guarantors.

1. Section 13(2), SARFAESI Act, 2002 – Demand notice by secured creditor.
2. Section 13(4), SARFAESI Act, 2002 – Taking possession of secured assets.
3. Section 14, SARFAESI Act, 2002 – Assistance by Chief Metropolitan Magistrate/District Magistrate to take possession.
4. Articles 226 & 227, Constitution of India – Writ and supervisory jurisdiction of High Courts.

Citation: 2025:P&H:— (exact citation awaited)

Case: Kotak Mahindra Bank Ltd. v. State of Punjab & Ors.

Court: High Court of Punjab & Haryana at Chandigarh

Coram: Hon’ble Mr. Justice Sheel Nagu, Chief Justice & Hon’ble Mr. Justice Sanjiv Berry

Date of Decision: 27 October 2025

Writ Petition (CWP) No.: 31308 of 2025