SARFAESI Act | Allahabad High Court Refuses To Fast-Track Recovery Of Possession, Says Executing Authority May Fix Its Own Priority

The Allahabad High Court has held that although the District Magistrate must proceed to deliver possession of a secured asset once an application under Section 14 of the SARFAESI Act, 2002 is made, and the function is a ministerial one, the authority is free to fix its priority according to the number of cases pending before it. The bench of Justice Prakash Padia and Justice Vivek Saran held,“There is no doubt that the Additional District Magistrate (Finance and Revenue) has to proceed for dis-possession once an application under Section 14 of the Act is made and the said Act is a ministerial act but it is always upon to the concerned authority to fix priority as per the number of cases pending before it.”Petitioner, Shivalik Small Finance Bank Limited, had obtained an order under Section 14 of the Act from the Additional District Magistrate (Finance and Revenue), Gautam Budh Nagar, but physical possession of the secured asset was not made over to it. It approached the High Court seeking a direction to the authorities to deliver possession, in compliance with that order, in a time-bound manner.Counsel for the petitioner submitted that respondent no. 3 was duty bound to have his own order complied with. Although the borrower had preferred S.A. No. 516 of 2026, in which 24th September 2026 was the next date, no interim order was in force and there was accordingly no embargo on the Additional District Magistrate proceeding to dispossess. Reliance was placed on the decision of a coordinate bench in Dilip Kumar Singh and Another v. State of U.P. and Others.Standing Counsel accepted that the Additional District Magistrate was under a duty to proceed for dispossession, but submitted that with the securitisation application pending and a date fixed in it, taking the matter forward would render the borrower's recourse to law meaningless.The Court noted that in Dilip Kumar Singh it was held that the filing of an application under Section 17 of the Act does not by itself operate as a stay, and that the Tribunal may impose a condition as to deposit while staying an auction. It held that the reliance was misplaced, since that decision did not empower the High Court to direct that a borrower be dispossessed of a secured asset.“Admittedly, before this Court the effort of the petitioner/financial institution is to seek dispossession by force of the borrower from the mortgaged property that too during the pendency of the legal recourse taken by the borrower as admittedly S.A. No.516 of 2026 is pending adjudication before the Debt Recovery Tribunal and in which a date is fixed.”The Court referred to the decision of a coordinate bench in Alishad Usmani and others v. Ali Isteba and Ors., wherein it was held that a petition under Article 226 or Article 227 ought not to be entertained merely to have a case heard sooner, as orders of that kind carve out a preferential class of litigants while matters equally old and equally pressing are left to be taken up in the ordinary course.It observed that a Constitution Bench of the Supreme Court had taken the same view in High Court Bar Association, Allahabad v. State of U.P. and Others, where it was held that constitutional courts should not ordinarily fix a time-bound schedule for the disposal of cases, that out-of-turn priority is best left to the court seized of the matter, whose judges know the position on the ground. It had held that outer limits for disposal should be set only in exceptional circumstances to meet extraordinary situations.The Court observed that nothing had been placed on record to show how many matters were pending before the authority against which the direction was sought.“Thus it would be in the fitness of thing that as the S.A. No.516 of 2016 is pending before the Debt Recovery Tribunal with a specific date fixed as 24.09.2026 then the respondent no.3/Additional District Magistrate (Finance & Revenue) be left to determine the manner in which he decides to proceed, although it is expected from the authority that it would be adhering to the statutory provision and law laid down in that regard.”Accordingly, the writ petition was dismissed. Case Title: Shivalik Small Finance Bank Limited vs. State of Uttar Pradesh and 8 others 2026 LiveLaw (AB) 533Case citation : 2026 LiveLaw (AB) 533Click Here To Read/Download Order

SARFAESI Act | Allahabad High Court Refuses To Fast-Track Recovery Of Possession, Says Executing Authority May Fix Its Own Priority

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SARFAESI Act | Allahabad High Court Refuses To Fast-Track Recovery Of Possession, Says Executing Authority May Fix Its Own Priority

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