The Punjab and Haryana High Court recently censured the authorities of the two State governments for their repeated failure to implement the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act).

A Division Bench of Justice Suvir Sehgal and Justice Deepak Manchanda was hearing IIFL Home Finance Limited's plea seeking enforcement of an order passed by a District Magistrate in Haryana for physical possession of certain secured assets.

The financial institution alleged that authorities in Haryana had failed to provide assistance to it for taking over physical possession of the assets inspite of the mandate of Section 14 of the SARFAESI Act.

The provision provides for securing the possession of the secured asset with the assistance of the Chief Metropolitan Magistrate or District Magistrate.

The Court noted that petitions were repeatedly being filed raising identical grievances against the State authorities, despite earlier directions to ensure proper understanding and implementation of the law.

"This repeated non-compliance reflects a concerning state of affairs and amounts to clear disobedience of the orders passed by this Court. It is further evident that even after the authoritative pronouncements in the aforementioned cases, the respondent-authorities have failed to implement the prescribed guidelines, leading to an unnecessary burdening of this Court with numerous petitions seeking identical reliefs," the Bench said.

It noted that despite passing of an order in IIFL Home Finance's favour on June 23, 2025, the execution was yet to take place.

Despite repeated steps and formal communications, the necessary assistance was not extended and the possession of the property was neither taken nor handed over to the petitioner, the Court added.

"Such prolonged inaction on the part of the respondent-State authorities defeats the very purpose and object of Section 14 of the SARFAESI Act, 2002, which mandates prompt assistance for taking physical possession of the secured assets. The conduct of the respondents, in effect, has paralyzed the statutory mechanism and created an unwarranted impediment in the enforcement of secured creditor’s rights," the Bench said.

The Court further observed that despite the previous judgments being well within the knowledge of the State authorities, they have still failed to comply with the settled legal position and have unnecessarily delayed the process.

Such conduct on the part of the authorities is wholly unjustified, cannot be countenanced, and deserves to be strongly deprecated and same is in the teeth of binding judicial precedents, it added.

"In these circumstances, as a punitive measure, this Court is constrained to impose costs of Rs.50,000/- each upon the State authorities, namely, the State of Haryana, and the State of Punjab, the same is ordered to be deposited with Institute for Blind, Sector-26, Chandigarh within one month, from the date of receipt of copy of this order," the Court ordered.

The Court also directed physical possession of the secured asset within two months, subject to there being no subsisting stay or prohibitory order from any competent court or tribunal having jurisdiction over the matter. 

Advocate Vineet Sehgal represented the petitioner.

[Read Judgment]