Can Fin Homes Limited Vs State of Haryana and… — Banking and Recovery | Punjab & Haryana HC (2025)

Can Fin Homes Limited Vs State of Haryana and… — Banking and Recovery | Punjab & Haryana HC (2025)

What the court decided

AI extract

Outcome

Writ of mandamus to respondents No.2 and 5 to execute the order dated 21.02.2024 (Annexure P-3) of the District Magistrate, Jind under Section 14 SARFAESI Act by handing over physical possession of the secured asset to the petitioner-Financial Institution, preferably within thirty days; liberty to petitioner thereafter to liquidate the secured asset to recover dues; adherence to the Bank of Maharashtra (CWP-7018-2022) guidelines; all subject to any restraint/interim/final order of any judicial forum in favour of borrowers/guarantor/aggrieved persons.

Issue for consideration

Whether a writ of mandamus should issue directing the respondents to execute the order dated 21.02.2024 (Annexure P-3) of the District Magistrate, Jind under Section 14 SARFAESI Act by handing over physical possession of the secured asset to the petitioner-Financial Institution.

Court's answer

Noting that Tehsildar Jind (respondent No.3) had failed to discharge his statutory duty of assisting and handing over physical possession of the secured asset, this Court by writ of mandamus directed respondents No.2 and 5 to execute the order dated 21.02.2024 (Annexure P-3) passed by the District Magistrate, Jind under Section 14 of the SARFAESI Act by handing over physical possession of the secured asset to the petitioner-Financial Institution as expeditiously as possible, preferably within a period of thirty days.

Ratio / Principle

Upon obtaining physical possession, the petitioner-Financial Institution may thereafter adopt all possible legitimate means to liquidate the secured asset to recover the due amount.

Key takeaways

The guidelines laid down by the Coordinate Bench in Bank of Maharashtra Vs. District Magistrate, Hisar and others, CWP-7018-2022 (decided on 28.05.2024) shall be adhered to by the concerned authorities while executing the Section 14 order.ratio¶19
The order is subject to any restraint/interim/final order which may have been passed by any judicial forum in favour of the borrowers/guarantor/any aggrieved person who is party to the lis.ratio¶20
Observation: Non-Performing Assets (NPAs) are a huge burden on the public exchequer, banking and financial system, and prompt enforcement of the recovery mechanism under the SARFAESI Act is paramount for liquidity in the system.

Detailed headnote1 paragraphs

SARFAESI Act, S.14 — Execution of District Magistrate's possession order — writ of mandamus. Can Fin Homes Limited, a financial institution, aggrieved by non-execution of the order dated 21.02.2024 (Annexure P-3) passed by the District Magistrate, Jind under Section 14 SARFAESI Act, approached the High Court. Deprecating the failure of Tehsildar Jind (respondent No.3) to discharge his statutory duty of assisting and handing over physical possession of the secured asset, the Division Bench (Sheel Nagu, CJ and Sanjiv Berry, J) issued a writ of mandamus to respondents No.2 and 5 to execute the said order by handing over physical possession of the secured asset to the petitioner preferably within thirty days, with liberty to the petitioner thereafter to adopt legitimate means to liquidate the secured asset and recover dues. Directions were made subject to the guidelines of the Coordinate Bench in Bank of Maharashtra Vs. District Magistrate, Hisar (CWP-7018-2022, decided 28.05.2024) and to any restraint/interim/final order of any judicial forum in favour of the borrowers/guarantor/aggrieved persons. Petition disposed of accordingly.

CWP-20849-2025 -1-

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

CWP-20849- 2 025 Date of decision : 06.08. 2 025

CAN FIN H omes Limited

…….Petiti o ner Versus State of H a ryana and others

...….Respon d ents

CORAM: HON'BLE MR. JUSTICE SHEEL NAGU, CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV BERRY

Present: Mr. Banni Thomas, Advocate , for the petitioner.

Mr. Deepak Balyan, Addl. A. G ., Haryana.

SHEEL NAGU, CHIEF JUSTICE ( Or a l )

The present petition has be e n filed by petitioner – Fina n cial Institution aggrieved by non-execution o f order dated 21.02.2024 (Anne x ure P-3) passe d by the District Magistrate, Jin d , under the provisions of Sectio n 14 of the Sec u ritisation and Reconstruction of Financial Assets and Enforce m ent of Securit y Interest Act, 2002 (in short, ‘S A RFAESI Act’).

It is rather surprising that th e Tehsildar Jind (respondent N o .3), has failed to discharge his statutory d u ty of assisting and handing o ver physical p ossession of the secured as s et to the petitioner – Fina n cial Institution.

2.1 Non-Performing Assets (NP A s) are a huge burden on the p u blic exchequer, banking and financial system , and, thus, prompt enforceme n t of

AJAY PRASHER 2025.08.19 09:42 I attest to the accuracy and integrity of this document

CWP-20849-2025 -2-

recovery m echanism under the SARFAE S I Act is paramount for liquidi t y in the system .

In view of the above, this C ourt by way of writ of mand a mus directs re s pondents No.2 and 5 to ex e cute the order dated 21.02. 2 024 (Annexure P-3) passed by the District Ma g istrate, Jind, under Section 14 o f the SARFAESI Act, by handing over physic a l possession of the secured ass e t to the petitio n er – Financial Institution, as e x peditiously as possible, preferably within a p e riod of thirty days. The petitioner – Financial Institution, there a fter, can proce e d to adopt all possible legiti m ate means to liquidate the sec u red asset to re c over the due amount.

This petition for the time be i ng stands disposed of in the t e rms aforesaid. Needless to say that the guidelines laid down by Coordinate B e nch in Bank of Maharashtra Vs. District Magistrate, Hisar and others, C W P- 7018-2022 (decided on 28.05.2024) be adhered to by the conce r ned authorities .

We hasten to add that this or d er shall, however, be subject to any restraint/interim/final order which may h ave been passed by any jud i cial forum, in favour of the borrowers/guara n tor/any aggrieved person, w h o is party to th i s lis.

( SHEEL NAGU ) CHIEF JUSTICE ( SANJIV BERRY ) August 06, 2025 JUDGE Ajay Prasher Whether speaking/reasoned : Yes/No Whether reportable : Yes/No

AJAY PRASHER 2025.08.19 09:42 I attest to the accuracy and integrity of this document