The Chhattisgarh High Court has reinforced the mandatory statutory timeline under Section 14 of the SARFAESI Act, holding that District Magistrates must conclude proceedings for enforcement of security interest within 60 days of application. This judgment clarifies the legal obligation of revenue authorities to act expeditiously, preventing undue delay that undermines the efficacy of secured creditors' remedies.
Background & Facts
The Dispute
The petitioner, Bank of Baroda, initiated proceedings under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) against borrower Rajmeet Singh Domir, whose loan account had been classified as a Non-Performing Asset (NPA). The bank sought the District Magistrate’s assistance to take possession of the secured assets, as permitted under Section 13(4) read with Section 14 of the Act.
Key Facts
- The borrower defaulted on repayment of financial assistance, leading to classification of the account as NPA on or before 28.10.2025
- The bank issued a notice under Section 13(2) of the SARFAESI Act, demanding payment within 60 days
- The borrower submitted objections, which the bank considered and rejected in writing
- On 28.10.2025, the Bank filed an application under Section 14 before the District Magistrate, Bilaspur, accompanied by a duly affirmed affidavit as required by the proviso to Section 14
- Revenue Case No. 202510072100017/B-121/2025-26 was registered on the same date
- As of the date of the writ petition, over five months had elapsed without any order being passed by the District Magistrate
Procedural History
- 28.10.2025: Section 14 application filed by Bank of Baroda before District Magistrate, Bilaspur
- 28.10.2025: Revenue Case No. 202510072100017/B-121/2025-26 registered
- 07.04.2026: Writ Petition No. 1531 of 2026 filed before the Chhattisgarh High Court seeking direction to conclude proceedings
Relief Sought
The petitioner sought a direction to the District Magistrate to decide the Section 14 application within a stipulated time, in compliance with the statutory mandate under the proviso to Section 14 of the SARFAESI Act.
The Legal Issue
The central question was whether the District Magistrate is legally bound to decide an application under Section 14 of the SARFAESI Act within 60 days from the date of filing, and whether prolonged inaction constitutes a violation of the statutory framework.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the proviso to Section 14 imposes a mandatory time limit: the District Magistrate must pass an order within 30 days, and if unable to do so for reasons beyond his control, may extend the period by a further 30 days, making the aggregate limit 60 days. The failure to decide the matter in over five months, without any recorded reasons, amounted to a breach of statutory duty and rendered the enforcement mechanism ineffective. Reliance was placed on the plain language of the proviso and the legislative intent to ensure swift enforcement.
For the Respondent/State
The State did not file a written reply. The Government Advocate appeared and submitted that the matter was under consideration, but no specific reasons for delay were offered or recorded in writing as required by law.
The Court's Analysis
The Court examined the text of the proviso to Section 14 of the SARFAESI Act, which states: "...the District Magistrate... shall... pass suitable orders... within a period of thirty days from the date of application" and further provides that if no order is passed within 30 days for reasons beyond the Magistrate’s control, he may pass the order within a further period not exceeding 60 days in aggregate.
"Provided further that on receipt of the affidavit from the Authorised Officer, the District Magistrate... shall after satisfying the contents of the affidavit pass suitable orders for the purpose of taking possession of the secured assets within a period of thirty days from the date of application... Provided also that if no order is passed... within the said period of thirty days for reasons beyond his control, he may, after recording reasons in writing for the same, pass the order within such further period but not exceeding in aggregate sixty days."
The Court observed that the 60-day limit is not discretionary but mandatory, and any delay beyond this period without recorded reasons violates the statutory scheme. The Court noted that the application was filed on 28.10.2025 and, as of 07.04.2026, more than five months had passed without any order or recorded justification. This delay was not merely procedural but substantive, undermining the very purpose of the SARFAESI Act - to enable timely recovery by secured creditors.
The Court emphasized that the requirement to record reasons for delay is not a formality but a condition precedent to any extension. The absence of such reasons rendered the delay unlawful. The Court further held that the District Magistrate’s inaction could not be justified by administrative burden or workload, as the Act prescribes a clear, time-bound process to prevent such stagnation.
The Verdict
The writ petition was allowed. The Chhattisgarh High Court directed the District Magistrate, Bilaspur, to conclude the proceeding under Section 14 of the SARFAESI Act bearing Revenue Case No. 202510072100017/B-121/2025-26 within 30 days from the date of receipt of a copy of this order. The Court held that any further delay beyond this period, without recorded reasons, would amount to a violation of statutory mandate. All pending interlocutory applications were disposed of.
What This Means For Similar Cases
Statutory Deadlines Are Non-Negotiable
- Practitioners must now insist on strict compliance with the 60-day limit under Section 14 of the SARFAESI Act
- Any delay beyond 60 days without written reasons is illegal and subject to writ jurisdiction
- Banks and financial institutions should file writ petitions promptly if no order is passed within 60 days
Record Keeping Is Critical for Magistrates
- District Magistrates must record written reasons for any delay beyond 30 days
- Failure to record reasons invalidates any extension, even if the delay is objectively justified
- Administrative convenience cannot override statutory timelines
Enforcement Mechanism Must Be Effective
- The SARFAESI Act’s efficacy depends on timely execution of orders
- Courts will not tolerate passive inaction by revenue authorities
- This judgment reinforces that Section 14 is not a discretionary power but a statutory duty with fixed deadlines
