Bombay High Court Dismisses Contempt Plea Against Kotak Mahindra Bank Over 7-Day Possession Notice

On 21 August, the Bombay High Court dismissed a contempt petition alleging that Kotak Mahindra Bank and the Tahsildar, Mira-Bhayandar violated the Court's direction to give seven days' notice before taking physical possession of a secured flat.

A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat held that the failure to give the full seven-day notice did not amount to gross contempt or wilful disobedience, and found that the Tahsildar's office appeared to have miscalculated the notice period. It observed:

"We do not find the act of the Respondent No. 9 of giving notice of less than 7 days or that the Bank not giving notice, to be a case of gross contempt or any willful act for which any action under contempt of court is required to be initiated against the Respondent No. 1 or 9 in the Contempt Petition, although the prayer is for initiating contempt proceedings only against Respondent No 1. The office of the Tahsildar seems to have miscalculated the notice period."

The dispute concerned a flat mortgaged to ICICI Bank, whose loan was subsequently assigned to Kotak Mahindra Bank. After the borrowers defaulted, a demand notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was issued on 25 June 2009, followed by an order passed by the District Magistrate, Thane on 3 March 2010 directing physical possession of the flat.

After several unsuccessful attempts to take possession, the High Court on 24 September 2025 directed the Bank to give at least seven days' notice before taking possession.

The Tahsildar issued a notice on 7 October 2025, fixing 13 October 2025 as the date for taking possession. Rekha Bhavesh Shah, who was occupying the secured flat, alleged that the notice violated the High Court's seven-day direction and filed the contempt petition.

Shah had not immediately challenged the notice. The Court also took note of her earlier undertaking that she would not obstruct possession if the Debt Recovery Tribunal (DRT) declined to grant interim protection.

The DRT rejected Shah's application on 13 October 2025, following which the Bank took possession of the flat.

The Court held that contempt requires wilful disobedience and found that the failure to provide the full seven-day notice resulted from an inadvertent calculation error by the Tahsildar's office rather than a deliberate violation of the Court's direction. It also observed that Shah had deliberately failed to remove all her belongings from the secured flat, thereby prolonging the proceedings on one pretext or another. It held:

"We have also gathered an impression that the Respondent No. 2, has deliberately chosen not remove her entire belongings from the secured asset. We are of the opinion that the Respondent No. 2 has sufficiently dragged the proceedings under one pretext or the other. This cannot continue ad nauseam. The Majesty of law has to prevail. No person will be permitted to subvert the rule of law."

The Bench directed Shah to appear on 25 August 2026 and remove her belongings under the supervision of the Tahsildar and police. It further directed that an inventory be prepared and the entire process be videographed. It stated that if Shah failed to appear, the Bank could remove and safely store her belongings at its own cost. It further directed that a compliance to be reported to the Court on 31 August 2026.

Accordingly, the High Court dismissed the contempt petition, finding no wilful disobedience warranting contempt action.

For Petitioner: Mathews Nedumpara a/w. Hemali Kurne, Dayanand Hebballi, Sanjay Anabhawane i/b. Ms. Medha Rane

For Respondents: Fatima Lakdawalla, AGP, Oduvil Mohandas a/w. Ms. Farah Broacha and Mr. J.P. Kapadia i/b. Little & Co., Tanu Bhatia, AGP