In a petition filed before the Punjab and Haryana High Court by AU Small Finance Bank Ltd., aggrieved by the non-execution of an order dated 20-02-2025 by the Chief Judicial Magistrate, Sangrur under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), a Division Bench of Chief Justice Sheel Nagu and Justice Sanjiv Berry issued a writ of mandamus and directed the respondents to execute the said order expeditiously.
It was mentioned that respondents 5 to 7 (borrowers) had filed an application before DRT-III, Chandigarh, challenging the action of AU Small Finance Bank, but no relief was granted.
The Court found it surprising that the Tehsildar, Dhuri, District Sangrur (respondent 3), appointed as Duty Magistrate with directions to take possession of secured assets and hand over the same to the authorised officer of AU Small Finance Bank and Senior Superintendent of Police, Sangrur (respondent 4), had failed to discharge their statutory duty. It was stated that Non-Performing Assets (NPAs) are a huge burden on the public exchequer, banking and financial system, which is why prompt enforcement of the recovery mechanism is essential.
Thus, the Court, by a writ of mandamus, directed the Tehsildar and SSP to execute the order dated 20-02-2025 within thirty days and stated that AU Small Finance Bank could then adopt all legitimate means to liquidate secured assets to recover the due amount. The Court directed all authorities concerned to adhere to the guidelines laid down in Bank of Maharashtra v. District Magistrate, Hisar & Ors. (CWP-7018-2022 decided on 28-05-2024).
The Court added that the present order would be subject to any order by any judicial forum passed in favour of the borrowers/guarantor/any aggrieved party in the present matter. Lastly, the Court directed the Tehsildar to file a compliance report within 45 days, and the Registry was directed to place the matter before an appropriate bench on the judicial side under the IOIN category in case any deficiency is found in the compliance report.
Appearances:
For Petitioner – Ms. Deepika Mittal
For Respondents – Mr. Vipin Pal Yadav (AAG), Ms. Ridhi Bansal, Ms. Sidhi Bansal
