Au Small Finance Bank Ltd. Vs State of Punjab… — Banking and Recovery | Punjab & Haryana HC (2026)

Au Small Finance Bank Ltd. Vs State of Punjab… — Banking and Recovery | Punjab & Haryana HC (2026)

What the court decided

AI extract

Outcome

Direction to the Chief Judicial Magistrate, Ludhiana to decide the application (Annexure P-3) under Section 14 of the SARFAESI Act as expeditiously as possible, preferably within 60 days from communication of copy of the order, unless there is any legal impediment.

Issue for consideration

Whether a writ of mandamus should be issued directing the Chief Judicial Magistrate, Ludhiana to decide the petitioner's pending application (Annexure P-3) under Section 14 of the SARFAESI Act. +1 more

Court's answer

Keeping in view its own earlier observations in Bank of Maharashtra vs. District Magistrate, Hisar (2024 (2) PLR 346) and IIFL Home Finance Limited vs. State of Haryana (Law Finder Doc ID #2875322), the writ petition is disposed of with a direction to the Chief Judicial Magistrate, Ludhiana to decide the application (Annexure P-3) as expeditiously as possible, preferably within a period of 60 days from the date of communication of copy of the order, unless there is any legal impediment in doing so.

Detailed headnote1 paragraphs

Securitisation - Section 14 SARFAESI Act - disposal of application by Chief Judicial Magistrate - mandamus. AU Small Finance Bank Ltd., having classified borrowers' loan account as NPA on 09.12.2024, issued Section 13(2) notice dated 13.12.2024 and Section 13(4) notice dated 16.04.2025 and taken symbolic possession of the secured asset, moved an application (Annexure P-3) under Section 14 of the SARFAESI Act before the Chief Judicial Magistrate, Ludhiana in August 2025, which remained pending. Seeking a writ of mandamus for its disposal, the bank approached this Court (CWP-18246-2026). Relying on its own observations in Bank of Maharashtra vs. District Magistrate, Hisar (2024 (2) PLR 346) and IIFL Home Finance Limited vs. State of Haryana (Law Finder Doc ID #2875322), the Bench of Suvir Sehgal, J. (oral, authoring) and Vikas Suri, J. disposed of the writ petition on 29.05.2026, directing the CJM, Ludhiana to decide the Section 14 application as expeditiously as possible, preferably within 60 days of communication of the order, unless there is any legal impediment.

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

188 CWP-18246-2026 Date of Decision: 29.05.2026

AU Small Finance Bank Limited ....Petitioner

Versus

State of Punjab and others

....Respondents

CORAM: HON'BLE MR. JUSTICE SUVIR SEHGAL HON'BLE MR. JUSTICE VIKAS SURI

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Present: Mr. Vaibhav Mittal, Advocate and Mr. Shivansh Mahajan, Advocate for the petitioner.

Mr. Akhil Kamra, Assistant Advocate General, Punjab.

SUVIR SEHGAL, J. (ORAL)

This writ petition has been filed, inter alia, for issuance of a writ in the nature of mandamus directing Chief Judicial Magistrate, Ludhiana, to decide the application, Annexure P-3, filed by petitioner under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘SARFAESI Act’).

Counsel for the petitioner submits that borrowers had taken a loan from the petitioner-bank and had mortgaged immovable property. Counsel asserts that due to continuous default in repayment, the loan account was classified as NPA on 09.12.2024. A notice under Section 13(2) of SARFAESI Act was issued on 13.12.2024 (Annexure P-1), followed by notice under Section 13(4) of SARFAESI Act dated 16.04.2025 (Annexure P-2), whereafter symbolic possession of the secured asset was taken. Counsel states

VARINDER PRASHAD 2026.05.30 15:53 I attest to the accuracy of this document PHHC

CWP-18246-2026

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that petitioner moved an application (Annexure P-3) under Section 14 of SARFAESI Act before the Chief Judicial Magistrate, Ludhiana in August 2025, which is still pending. Counsel has made a reference to the statutory provisions and has urged that the application has to be decided within the time frame provided in the statute.

Advance copy of the petition has been served upon the official respondents.

On asking, State counsel has put in appearance on behalf of respondents-state. He does not have any instructions.

Having heard counsel for parties and keeping in view the observations of this Court in Bank of Maharashtra vs. District Magistrate, Hisar and others, 2024 (2) PLR 346, as well as in IIFL Home Finance Limited vs. State of Haryana and others, Law Finder Doc ID #2875322, writ petition is disposed of with a direction to Chief Judicial Magistrate, Ludhiana, to decide the application (Annexure P-3) as expeditiously as possible, preferably within a period of 60 days from the date of communication of copy of this order, unless there is any legal impediment in doing so.

(SUVIR SEHGAL) JUDGE

(VIKAS SURI) May 29, 2026 JUDGE Varinder Whether speaking/reasoned : Yes/No Whether reportable : Yes/No

VARINDER PRASHAD 2026.05.30 15:53 I attest to the accuracy of this document PHHC