Delay In Taking Possession Of Secured Asset Not Ground To Close Section 14 SARFAESI Proceedings: Supreme Court

The Supreme Court on Tuesday held that a Chief Judicial Magistrate (CJM) is under a statutory obligation to ensure execution of a warrant of possession under Section 14 of the SARFAESI Act and cannot close proceedings merely because possession could not be taken within the prescribed time limit.

The top court cautioned that the secured creditor cannot be made to run from pillar to post for recovery.

A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe was hearing an appeal filed by India Infoline Home Finance against the Andhra Pradesh High Court order dated June 27, 2025, which had permitted the creditor to file a fresh application after the CJM closed earlier proceedings.

“The CJM is under a statutory obligation to ensure that the warrant of possession is executed, and the secured creditor is not required to run from pillar to post. The inability to take possession within the prescribed time-limit does not render the District Magistrate functus officio,” the court observed.

The case arose from recovery proceedings initiated by the secured creditor, in which the CJM, by order dated January 20, 2025, had appointed an Advocate Commissioner to execute the warrant of possession in respect of the secured asset within thirty days.

The Advocate Commissioner made multiple attempts in February 2025 to take possession of the mortgaged property, but the process could not be completed due to obstruction by the borrower. On February 28, 2025, the Advocate Commissioner filed a memo before the CJM seeking extension of time for execution of the warrant.

Instead of considering the request, the CJM, by order dated March 3, 2025, directed that if the warrant had not been executed, it should be returned and thereafter consigned the record to the record room, resulting in closure of the proceedings. The High Court upheld this approach and granted liberty to the secured creditor to file a fresh application under Section 14.

Disapproving this, the Supreme Court held that the CJM had abdicated the statutory duty cast upon him under Section 14 of the Act.

“The impugned order suffers from the vice of non-application of mind and amounts to abdication of the statutory duty cast upon the CJM under Section 14 of the Act.",

The court noted that the secured creditor has no control over the magistrate exercising jurisdiction under Section 14 and therefore cannot be compelled to initiate fresh proceedings due to procedural delays.

It held that Section 14 must be interpreted in light of its object of facilitating recovery of public dues and cannot be applied in a manner that defeats the purpose of the Act.

Setting aside the orders of the CJM and the High Court, the Court restored the Section 14 proceedings and directed the CJM to provide police protection to the Advocate Commissioner and ensure expeditious execution of the possession warrant, preferably within one month.

Click Here To Read/Download Andhra Pradesh HC Order