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Dinesh Bhati (Partner)     02 December 2012

Sarfaesi act - possession

I have purchased a flat in SEPT. 2012 through bank auction under sarfaesi act. i have paid full amount of the property and received sale certificate as well as got it registered by paying stamp duty on it. The bank had received District Megistrate Order for possession in Nov. 2011 but could not get the possession due to some reason. After the sale confirmation, bank started the process of taking the possession.

The defaulter had given the same property as guarantee for two separate accounts and in one account he had gone to consumer court and got a stay stating - "bank shall not excersise the recovery till next order" in year 2010. after that bank settled some how in DRT and got the money recovered from other guaranters.  after that bank started the process for securitisation of next account under sarfaesi act and put it on sale. bank had already taken symbolic possession in 2011. 

problem started, when bank and i started process for taking possission, the defaulter now going to consumer court for conempt (after one year of DM order) and pleaded with District Megistrate for review of its order. The concerened police station is not providing the police man force for taking possession stating that there is leagal issues in the case and they wont follow DM order. the party is just taking the dates in consumer court and DM court bu making silly excuses. the property is empty but in possession of the defaulter.

My basic question is how can take possession of the property?

Can i directely take possession of the property? will there be leagal issue in that? bank and seaser of the bank says they will do the porcess of taking possession with me?

is police really required for taking possession as i dont thing under sarfeasi act there such clause that police will take possession? 


 16 Replies

RAJU O.F., (Advocate)     03 December 2012

Bank had to take steps to take physical possession and handover the same to the purchaser on receipt of the sale value. Except DRT/DRAT any civil court  (including consumer court do not have any jurisdiction to deal in any SARFAESI matter. Submit the legal posion before Consumer court and get stay order quashed.

1 Like

Surendra Gupta (Banker)     04 December 2012

How can one person create equitable mortgage of one property at three differelant places at the same time when equitable mortgage can be created by depositing original title deeds. No civil court including Consumer Court has any jurisdiction to interfere in SARFAESI Cases which is well settled in various SC Judgement besides provision in SARFAESI Act itself.

The bank from whom you have purchased the property is bound to heand over peacful posession

c.p.s. ramachary (1500)     04 December 2012

Dist. Magistrate performs only administrative function. No adjudication powers are conferred to the Dist. Magistrate. Police also cannot take any independent decision against the order of the DM. It is only the DRT which has to decide any issue relating to enforcement of security interest. The bank may convince the Dist. Magistrate to dismiss the Review petition filed by the borrower. Sec 14 is procedural in nature and merely empowers the CMM or DM to assist the secured creditor in taking possession of the secured assets and it does not clothe the DM with the power to adjudicate in respect of any dispute pertaining to secured assets.  No notice to the borrower by Magistrate is contemplated under Sec.14 : C.R.Sindhu Vs. State o Kerala & Ors. :AIR 2008 Ker 65; Indian Overseas Bank Vs. Sri Aravind Steels Ltd. 2009 (1) CTC 341=AIR 2009 Mad.10; The Industrial Investment Corporation Ltd Vs. M/s. Sudarshanam Industries & Ors.: AIR 2009 Mad. 15. No trial / enquiry / adjudication of dispute by Magistrate is contemplated (Muhammed Ashraf  and Anr. Vs. Union of India and Ors. : AIR 2009 Kerala 14); Union Bank Of India Vs. State of Maharashtra & Others:2010 (2) DRTC 487 (Bom.). No hearing of borrower or guarantor by the Magistrate is contemplated in the Act (Tensile Steel Ltd. & Anr. Vs. Punjab & Sindh Bank & Ors. AIR 2007Guj 126). Metropolitan Magistrate while considering an application under section 14 need not issue any notice to borrower or any person A. Aboobacker Vs. PNB & others 2005 (127) CC 519(Kerala); Mrs. Sunanda Kumari and another Vs Standard Chartered Bank (2007) 135Comp. Cas.604(Kar.); Vijaya Bank Vs Shameem Transport: 2007(1)D.R.T.C. 494(Kar.); State Bank of India Vs Kathikkal Tea Plantations, Melur : AIR 2009 Mad.152. It is very much clear that absolutely no power, jurisdiction, competence or expertise is intended or vested with the Magistrate to deal with any claim as to the nature of the property in question or as to the merits or demerits with regard to other aspects involved in connection with loan transaction, but for considering whether the property in question in respect of which assistance is sought is a secured asset or not. That is all. Consumer forum cannot exercise jurisdiction over the matter to decide legality of the order of DM. Request the bank to get the natter dismissed before the Consumer Forum. 

If the police does not cooperate in rendering assistance to the Authorised officer in taking physical possession inspite of the order of the Dist. Magistrate, then, the only alternative is to file 'writ of mandamus' against the Commissioner of Police  and the Dist.Magistrate for nesessary direction. The borrower need not be made party to it as he is not entitled to any kind of notice. Please persue the bank which has sold the secured asset to you.

You cannot take  physical possession as you are only purchaser and have to wait till you get physical possession through the bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

1 Like

Sagnik (Management Trainee)     04 December 2012

I completely agree with Ramachary sir please refer to the case of State Bank of India Vs Kathikkal Tea Plantations, Melur : AIR 2009 Mad.152 I have attached the said case, it shall provide some closure in the said affair. Kindly know that District Majistrate will not have any right to adjudicate the matter & shall have to follow the court's order. Also if I may add that consumer court can not override the bank's power to initiate proceedure to forcefully takeover the posseion of the same. The Bank can do follow section 14 of SARFAESI Act

Where an immoveable property secured to the Bank is occupied by the Borrower or is let out by him, the Bank approaches the Jurisdictional CMM under section 14 of SARFAESI Act.The Authorized Officer prefers an application / request to the Jurisdictional CMM. The jurisdiction of the CMM is determined on the basis of the Jurisdictional Police Station where the immoveable property is situated.

The registry of the court (CMM) numbers the request / application as  C.Misc No……of……..

One date is fixed for the Authorised Officer to appear Before the CMM with originals of:

a)      Title deed establishing the Borrower’s title to the immoveable Property

b)      Upto date Encumbrance Certificate of the immoveable property

c)      Possession Notice, Paper Publication and service by Registered Post & evidence of affixing the notice on the conspicuous portion of the property.

After being satisfied that the Bank has followed the prescribed procedure as directed in SARFAESI Act, the CMM will issue a direction to the Jurisdictional Police Station to assist the Bank-secured Creditor to obtain Physical/actual possession. The CMM order also authorizes breaking open of the Lock if necessary.

With this order (certified copy) in hand a letter serve a letter addressed to the Jurisdictional Police station informing the SP about the date on which the Authorised Officer will proceed to take Physical Possession. [Copy of the CMM order is enclosed for reference of the Police]. On that day with the help of Police Officials the Physical possession is obtained. 

Attached File : 585478457 m s.kathikkal tea plantations vs (r2 impleaded vide order of on 30 july, 2009.pdf downloaded: 540 times
1 Like

Dinesh Bhati (Partner)     12 February 2013

I really Thankful to you all for your kind help in this matter. Now the situation is We have got the stay of Consumer commission quashed and case before commission is dismissed. The defaulter party has submitted a review application in DM Court and They have filed a contempt of court in Consumer commission against the bank (Against the saty which is already quashed).

We (Bank and I) have sumitted the order copies to Police stating that the stay is quashed and now there is no legal lakuna in getting the possession. But now police is adjudicating the matter and taking vairous papers from us as well as from the defalters and behaving as a court. they say they will decide the matter whether police Japta for taking possession will be given or not. Now the SP of the area says that you go and search if there is any contempt case filed by the defaulter. 

Please suggest how can this police matter be resolved as they are in the role of a court and asking for new papers every time we clear their old formality. Police is not taking action on the DM Order. Is there amy court judgement which prohibits the police from adjudicating the case. I think police is just an agency to follow DM order and can not behave like this.

RAJU O.F., (Advocate)     12 February 2013

Police have no facility for adjudication in the given issue. Please approach High Court by preferring a Writ through an advocate of experience.

Sagnik (Management Trainee)     13 February 2013

I completely afirm with the views of the above ld. Advocate. The police can not take any magistrial power in their hand & has to comply with the DMM's order. In case they are making prolonged delays in the said matter then file a writ of mandamus against the district police authorities in the High Court & ask the High Court to direct the Police Authorities of your district to strictly follow the DMM's order.


Sagnik Sanyal

1 Like

c.p.s. ramachary (1500)     13 February 2013

Yes. Immediate action against police is filing of writ petition for mandamus as advised above. Otherwise the police will contribute for the delay unnecessarily involving in the adjudication process which power is not conferred even to the Magistrate u/s 14 of the Act. Governer of the State may also be added as party so that the High Court may give diection to to the Governer for issuing a circular to the police department not to interfere in future in this kind of deal.  Mr. Dinessh Bhati should contact High Court lawyer for taking expeditious action.

1 Like

nishant agnihotri (abm)     20 August 2013

Sir is there any time frame under which the magistrate will sign the evitction order.I have purchased a house under the sarsarsi act  in nov 2012and till date possession is pending for the want of dm to sign the orders . ALSO SUGGEST A REMIDY FOTR THE SAME


1 Like

c.p.s. ramachary (1500)     20 August 2013

There is no time frame within which the magistrate has to pass order directing his subordinates or police to render assistance to authorised officer in taking physical possession of secured asset. The Magistrate does not pass any eviction order as wrongly understood by you. If the DM has not taken any steps to render assistance to authorised officer, I have already advised that a writ petition is required to be filed by the secured creditor for a direction to the magistrate to perform the statutory duty contemplated under Se.14 of the SARFAESI Act. Please read the entire discussion in the matter before raising a question which is repeatedly answered.

2 Like

nishant agnihotri (abm)     20 August 2013


nishant agnihotri (abm)     20 August 2013


c.p.s. ramachary (1500)     21 August 2013

As the bank is not ceased to be  secured creditor you have to compel the bank to do so. You cannot file writ petition.

1 Like

c.p.s. ramachary (1500)     22 August 2013


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