Allahabad HC Flooded With Pleas Seeking Expeditious Disposal Of Section 14 SARFAESI Matters, Directs UP Govt To Issue Instructions

Observing a “flood” of petitions over delays in processing applications for assistance in taking possession of secured assets and non-compliance with earlier directions, the Allahabad High Court has cautioned that such inaction defeats the purpose of the SARFAESI Act.

“Recently we have seen a flood of writ petitions before this Court in which the secured creditor or auction purchaser comes for the expeditious disposal of the application under Section 14 of the SARFAESI Act, 2002 and further in the event directions are issued under Section 14 of the SARFAESI Act, 2002, the same is not complied with despite the judgment passed by this Court in the case of C. Bright v. The District Collector & others, AIR 2020 SC 5747,” the court said.

The bench of Justices Ajit Kumar and Indrajeet Shukla was hearing a petition filed by Hinduja Housing Finance Limited, a secured creditor, which complained that the Prescribed Authority had not accepted its application seeking assistance for taking possession of secured assets under Section 14 of the SARFAESI Act.

Expressing concern, the court said it failed to understand why such applications were not being accepted. It reiterated that all Prescribed Authorities in the State of Uttar Pradesh are hidebound in law to comply with the directions issued by this Court in Hinduja Housing Finance Ltd. and by the Supreme Court in C. Bright (supra) in view of the mandate contained under Section 14 of the SARFAESI Act, 2002.

“We are of this considered view that all the Prescribed Authorities in the State of Uttar Pradesh are hide bound in law to comply with the directions of this Court issued in Hinduja Housing Finance Ltd. and C. Bright (supra) in view of the mandate contained under Section 14 of the SARFAESI Act, 2002. Any violation to the guidelines laid down by the Supreme Court and this Court in the above judgments amounts to frustrating the very provisions under Section 14 of the SARFAESI Act, 2002 defeating the very purpose for which the SARFAESI Act, 2002 has been enacted,” the bench observed.

In the present case, the court directed the petitioner to move a fresh application before the Prescribed Authority within four weeks. It said that if such an application is filed, the Prescribed Authority shall proceed to decide it in the light of an earlier judgment of the High Court in Hinduja Housing Finance Ltd. decided on January 12, 2026.

“By way of extra precaution, we direct the Additional Chief Secretary, Ministry of Finance and Revenue, Government of U.P., Lucknow, to issue necessary executive orders or directions to all the Prescribed Authorities in the State of Uttar Pradesh under Section 14 of the SARFAESI Act, 2002 that in the matters of application being moved by the secured creditor, such application should be entertained and disposed of in the light of judgment in the case of Hinduja Housing Finance Ltd. (supra),” the court said.

The Registrar (Compliance) was directed to send a copy of the order to the Additional Chief Secretary within three days.

The writ petition was accordingly disposed of.