1

1IN THE HIGH COURT OF MADHYA PRADESH

AT GWALIOR

BEFORE

HON'BLE SHRI JUSTICE ANAND PATHAK

&

HON'BLE SHRI JUSTICE PUSHPENDRA YADAV

WRIT PETITION NO.31051/2025

UCO BANK

Vs.

M/S ASHA OIL INDUSTRIES AND OTHERS

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APPEARANCE:

Shri Praveen Surange – Advocate for the petitioner.

Shri Santosh Agrawal – Advocate for the respondents.

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ORDER

{Pronounced on 28

th

January, 2026}

Per: Justice Anand Pathak,

1.The instant Writ Petition under Article 226(1) of the Constitution of

India is filed seeking following reliefs:-

“I. That the present writ petition may kindly be allowed.

II. That, the impugned orders dated 14.05.2025 and 28.09.2021

passed by the learned Debts Recovery Appellate Tribunal, Allahabad

in Regular Appeal No.15/2022 titled as Uco Bank-V-M/s. Asha Oil

Mills & Ors. and Debts Recovery Tribunal, Jabalpur in S.A.

No.217/2019 titled as M/s. Asha Oil Mills & Ors. V. UCO Bank

respectively may kindly be quashed and set aside.

III. That, the directions issued by Learned Tribunal and Appellate

Tribunal in the impugned orders to the petitioner bank to return

money deposited by auction purchaser may kindly be quashed, being

contrary to the rules.

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IV. That, the directions issued by learned DRT and thereafter by

learned DRAT in the impugned orders to restore physical possession

of the subject properties including the movable stock and

machineries to the respondents may kindly be quashed, being

impracticable to perform.

V. That, the respondents may kindly be directed to pay the expenses

of present proceedings and other legal proceedings and

VI. Any other relief/ direction/ order which this Hon'ble Court deems

fit in the interest of justice.”

2.Precisely stated facts of the case are that petitioner/ UCO Bank is a

Government of India undertaking which is established under Banking

Companies (Acquisition and Transfer of Undertakings) Act, 1970.

Respondent No.1 is a proprietorship concern acting through its

proprietor Shri Pradeep Shivhare and respondent No.2- Smt. Poonam

Shivhare. They availed the Cash Credit (Hypothecation) Limit to the

extent of Rs.05 crores from the petitioner/ Bank from time to time.

As a security of loan, respondents mortgaged their immovable

properties comprising of Plot No.63 Malanpur Industrial Area, Bhind

Road, District Bhind, M.P. (Mortgage property no.1) and plot no.58,

Laxmibail Colony, Gwalior (M.P.) (Mortgaged property no.2).

Respondents failed to comply with various terms of loan agreements

and defaulted. Therefore, Loan Account of respondents was

classified by the petitioner/ Bank as Non-Performing Assets (NPA)

w.e.f. 31/10/2018 in accordance with the guidelines issued by the

Reserve Bank of India from time to time. Chain of events precipitated

filing of this petition.

3.Following list of dates and events are worth consideration and the

same are as under:-

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Date Events

01/04/19The respondents filed an application under Section 17(1) of

the SARFAESI Act, 2002 against respondent seeking

quashment of entire proceedings initiated by the petitioner/

Bank.

15/05/2019Petitioner/ Bank filed detailed reply denying all the

allegations. Petitioner/ Bank filed an application for

amendment in the application filed by the respondents and

the same was allowed vide order dated 16.05.2019.

04/06/19Respondents filed detailed additional reply to the amendment

application filed by the petitioner/ Bank.

17/08/2020

&

22/10/2020

The respondents again filed an application for amendment.

Respondents also filed an application dated 17/08/2020 for

impleadment of auction purchaser M/s Shurti Corportaion

through its Proprietor Shri Pramod Gurjar as respondent

No.3. The said application was allowed vide order dated

02/09/2021.

13/09/2021The respondents filed amended securitisation application.

22/09/2021Petitioner/ Bank filed a detailed additional reply to the

amended securitisation application and denied all the

allegations.

27/09/2021Thereafter, petitioner/ Bank submitted written submissions

and relevant citations in support of its claim.

28/09/2021The learned Debt Recovery Tribunal (DRT) after considering

the submissions advanced by both the parties passed the

impugned order dated 28/09/2021 directing the petitioner/

Bank to restore the physical possession of the subject

properties to the respondents within a period of one month

and the money deposited by the auction purchaser be

returned back to him as per law within 15 days.

Being aggrieved by the said order, petitioner/ Bank filed an

appeal before the learned Debts Recovery Appellate Tribunal

(DRAT), Allahabad which was registered as Regular Appeal

No.15/2022.

14/05/2025The said appeal was dismissed by the learned Appellate

Tribunal.

Being aggrieved by the orders of the learned Debt Recovery

Tribunal and Debt Recovery Appellate Tribunal, petitioner/

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Bank has preferred the instant petition.

4.It is the submission of learned counsel for the petitioner/ Bank that

learned Debt Recovery Tribunal, Jabalpur (DRT) as well as learned

Debt Recovery Appellate Tribunal (DRAT), Allahabad caused

illegality in passing the impugned orders. According to learned

counsel, Tribunals below erred in giving conclusion that once notice

under Rule 8 (1) of the (Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002)

(hereinafter referred as “SARFAESI Act”) is issued, affixed and

delivered then there is obligation on part of the Bank either to resort

Section 14 proceedings of the SARFAESI Act before taking physical

possession or the borrower/ mortgagor/ guarantor should be present

there for handing over peaceful possession.

5.According to learned counsel, said approach is erroneous. As

submitted, it is not required that secured creditor has to approach

Chief Metropolitan Magistrate (CMM)/ District Magistrate (DM) for

taking possession from the borrower necessarily. Scheme of

SARFAESI Act specially Section 13(4) provides that in case of

failure of borrower to discharge his liability in full within the period

specified in sub-section (2) of the SARFAESI Act, the secured

creditor may take recourse to take possession of the secured assets of

the borrowers.

6.Similarly, Section 14 of the SARFAESI Act contemplates that if

possession of any secured asset is required to be taken by the

secured creditor then secured creditor may approach CMM/ DM.

Role of these authorities is to assist secured creditor in taking

possession of the secured asset.

7.It is further submitted that Rule 8 of the Security Interest

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(Enforcement) Rules, 2002 (hereinafter referred as “2002 Rules”)

also provides that authorized officer shall take or cause to be taken

possession, by delivering a possession notice prepared as nearly as

possible in Appendix IV to these rules, to the borrower and by

affixing the possession notice on the outer door or at such

conspicuous place of the property. Meaning thereby it is not required

that possession can only be handed over once proceedings under

Section 14 of the SARFAESI Act is undertaken by the secured

creditor.

8.In the present case, notice under Section 13(2) and Section 13(4) of

SARFAESI Act were given on 13/11/2019 and 30/11/2019 and same

were published in two newspapers on 05/02/2019 and 05/04/2019.

Notice was also issued to the borrower on 17/04/2019 before taking

physical possession therefore, findings of both the tribunals below

are perverse and contrary to the law.

9.Learned counsel for the petitioner/ Bank relied upon the judgment

passed by the Hon'ble Apex Court in the case of Standard

Chartered Bank Vs. Noble Kumar and Others (2013) 9 SCC 620,

Transcore Vs. Union of India and Another (2008) 1 SCC 125 and

judgment of the High Court of Jammu & Kashmir and Ladakh in the

case of Ablum Electrical Industries and Ors. Vs. Authorised

Officer, Cluster Head, J & K Bank, Pulwama, 2024 (6) JKJ 71.

10.Learned counsel for the respondents on the other hand opposed the

prayer. According to learned counsel on 30/01/2019 symbolic

possession was taken by the Bank under Section 13(4) of the

SARFAESI Act. Thereafter, on 19/04/2019, Bank Manager

(petitioner) with the help of police took forcible possession of the

mortgaged properties. Thereafter, a private complaint was filed by the

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respondents against officers of the petitioner/ Bank before the Special

Sessions Judge District-Gohad, which was dismissed on 13/01/2022

prompting respondents to file CRR No.3075/2023 (M/s Asha Oil

Industries Vs. Rohan Tuteja & Ors.). He supported the impugned

orders of the Tribunals below and prayed for dismissal of the petition.

11.Heard the learned counsel for the parties and perused the documents

appended thereto.

12.This is a case where petitioner/Bank is aggrieved by the orders

passed by the DRT and DRAT. Prime ground on which case of

respondents was allowed by the learned tribunals below is that if the

possession was taken by the petitioner/ Bank without resorting to

Section 14 of the SARFAESI Act, then the same is illegal.

13.In other words, as per learned tribunals, secured creditor has to resort

to proceedings under Section 14 of the SARFAESI Act mandatorily.

However, the scheme of SARFAESI Act does not provide so. While

interpreting different provisions of SARFAESI Act, the Hon'ble Apex

Court has also given guidance in this regard.

14.Aims and Objects of the SARFAESI Act is to Regulate Securitisation

and Reconstruction of Financial Assets and Enforcement of Security

Interest and to provide Central Data Base of Security Interest created

on property rights, etc.

15.Section 13 of the SARFAESI Act is worth consideration in this

regard:-

“13. Enforcement of Security Interest—(1) Notwithstanding anything

contained in section 69 or section 69A of the Transfer of Property Act,

1882 (4 of 1882), any security interest created in favour of any secured

creditor may be enforced, without the intervention of court or tribunal,

by such creditor in accordance with the provisions of this Act.

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(2) Where any borrower, who is under a liability to a secured creditor

under a security agreement, makes any default in repayment of secured

debt or any installment thereof, and his account in respect of such debt

is classified by the secured creditor as non-performing asset, then, the

secured creditor may require the borrower by notice in writing to

discharge in full his liabilities to the secured creditor within sixty days

from the date of notice failing which the secured creditor shall be

entitled to exercise all or any of the rights under sub-section (4).

Provided that— (i) the requirement of classification of secured debt as non-

performing asset under this sub-section shall not apply to a borrower who has

raised funds through issue of debt securities; and (ii) in the event of default, the

debenture trustee shall be entitled to enforce security interest in the same manner

as provided under this section with such modifications as may be necessary and

in accordance with the terms and conditions of security documents executed in

favour of the debenture trustee.”

(3)xxxxxxxxxxxx

(4) In case the borrower fails to discharge his liability in full within the

period specified in sub-section (2), the secured creditor may take recourse

to one or more of the following measures to recover his secured debt,

namely:— (a) take possession of the secured assets of the borrower

including the right to transfer by way of lease, assignment or sale for

realising the secured asset; (b) take over the management of the business

of the borrower including the right to transfer by way of lease, assignment

or sale for realising the secured asset:

Provided that the right to transfer by way of lease, assignment or sale

shall be exercised only where the substantial part of the business of the borrower

is held as security for the debt: Provided further that where the management of

whole of the business or part of the business is severable, the secured creditor

shall take over the management of such business of the borrower which is

relatable to the security for the debt; (c) appoint any person (hereafter referred to

as the manager), to manage the secured assets the possession of which has been

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taken over by the secured creditor; (d) require at any time by notice in writing,

any person who has acquired any of the secured assets from the borrower and

from whom any money is due or may become due to the borrower, to pay the

secured creditor, so much of the money as is sufficient to pay the secured debt.

(5)xxxxxxxxxxx

(6)xxxxxxxxxxx

(7)xxxxxxxxxxx

(8) Where the amount of dues of the secured creditor together with

all costs, charges and expenses incurred by him is tendered to the

secured creditor at any time before the date of publication of notice

for public auction or inviting quotations or tender from public or

private treaty for transfer by way of lease, assignment or sale of the

secured assets,— (i) the secured assets shall not be transferred by

way of lease assignment or sale by the secured creditor; and

(ii) in case, any step has been taken by the secured creditor for

transfer by way of lease or assignment or sale of the assets before

tendering of such amount under this sub-section, no further step

shall be taken by such secured creditor for transfer by way of lease

or assignment or sale of such secured assets.

16.Similarly, relevant provisions of Section 14 of the SARFAESI Act are

reproduced as under:-

“14. Chief Metropolitan Magistrate or District Magistrate to assist

secured creditor in taking possession of secured asset:- (1) Where

the possession of any secured asset is required to be taken by the

secured creditor or if any of the secured asset is required to be sold

or transferred by the secured creditor under the provisions of this

Act, the secured creditor may, for the purpose of taking possession

or control of any such secured asset, request, in writing, the Chief

Metropolitan Magistrate or the District Magistrate within whose

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jurisdiction any such secured asset or other documents relating

thereto may be situated or found, to take possession thereof, and the

Chief Metropolitan Magistrate or, as the case may be, the District

Magistrate shall, on such request being made to him-

(a) take possession of such asset and documents relating thereto; and

(b) forward such assets and documents to the secured creditor shall

be accompanied by an affidavit duly affirmed by the authorised

officer of the secured creditor, declaring that:-

Provided that any application by the secured creditor shall be

accompanied by an affidavit duly affirmed by the authorised officer of the

secured creditor, declaring that— (i) the aggregate amount of financial

assistance granted and the total claim of the Bank as on the date of filing the

application; (ii) the borrower has created security interest over various

properties and that the Bank or Financial Institution is holding a valid and

subsisting security interest over such properties and the claim of the Bank or

Financial Institution is within the limitation period; (iii) the borrower has

created security interest over various properties giving the details of properties

referred to in sub-clause (ii)above; (iv) the borrower has committed default in

repayment of the financial assistance granted aggregating the specified amount;

(v) consequent upon such default in repayment of the financial assistance the

account of the borrower has been classified as a non-performing asset; (vi)

affirming that the period of sixty days notice as required by the provisions of sub-

section (2) of section 13, demanding payment of the defaulted financial

assistance has been served on the borrower;

(vii) the objection or representation in reply to the notice received from the

borrower has been considered by the secured creditor and reasons for non-

acceptance of such objection or representation had been communicated to the

borrower; (viii) the borrower has not made any repayment of the financial

assistance in spite of the above notice and the Authorised Officer is, therefore,

entitled to take possession of the secured assets under the provisions of sub-

section (4) of section 13 read with section 14 of the principal Act; (ix) that the

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provisions of this Act and the rules made thereunder had been complied with:

Provided further that on receipt of the affidavit from the Authorised Officer, the

District Magistrate or the Chief Metropolitan Magistrate, as the case may be,

shall after satisfying the contents of the affidavit pass suitable orders for the

purpose of taking possession of the secured assets1 [within a period of thirty

days from the date of application:

Provided also that if no order is passed by the Chief Metropolitan

Magistrate or District Magistrate 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. Provided also that the requirement of filing affidavit stated in the first

proviso shall not apply to proceeding pending before any District Magistrate or

the Chief Metropolitan Magistrate, as the case may be, on the date of

commencement of this Act. (1A) The District Magistrate or the Chief

Metropolitan Magistrate may authorise any officer subordinate to him,— (i) to

take possession of such assets and documents relating thereto; and (ii) to forward

such assets and documents to the secured creditor. (2) For the purpose of

securing compliance with the provisions of sub-section (1), the Chief

Metropolitan Magistrate or the District Magistrate may take or cause to be taken

such steps and use, or cause to be used, such force, as may, in his opinion, be

necessary. (3) No act of the Chief Metropolitan Magistrate or the District

Magistrate any officer authorised by the Chief Metropolitan Magistrate or

District Magistrate done in pursuance of this section shall be called in question

in any court or before any authority.”

17.Similarly, Rule 8 of Rules, 2002 are reproduced as under:-

“8. Sale of immovable secured assets- (1) Where the secured asset is

an immovable property, the authorised officer shall take or cause to

be taken possession, by delivering a possession notice prepared as

nearly as possible in Appendix IV to these rules, to the borrower and

by affixing the possession notice on the outer door or at such

conspicuous place of the property.

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(2) The possession notice as referred to in sub-rule (1) shall also be

published, as soon as possible but in any case not later than seven

days from the date of taking possession, in two leading newspaper

one in vernacular language having sufficient circulation in that

locality, by the authorised officer.

(2A) All notices under these rules may also be served upon the

borrower through electronic mode of service, in addition to the

modes prescribed under sub-rule (1) and sub-rule (2) of rule 8.

(3) In the event of possession of immovable property is actually taken

by the authorised officer, such property shall be kept in his own

custody or in the custody of any person authorised or appointed by

him, who shall take as much care of the property in his custody as a

owner of ordinary prudence would, under the similar circumstances,

take of such property.

(3) xxxxxxxxxxxxx

(4) The authorised officer shall take steps for preservation and

protection of secured assets and insure them, if necessary, till they

are sold or otherwise disposed off.”

18.From combined reading of Section 13(4)(a), 14(1)(b) of the

SARFAESI Act and Rule 8 (1) (2) and (4) and Appendix IV of Rules,

2002, it is clear that authorized officer of the Bank can take physical

possession of the secured asset by his own and there is no

requirement under the SARFAESI Act and Rules, 2002 made

thereunder that presence of borrower/ mortgagor/ guarantor is

required while taking possession of the mortgaged property and in

absence of such presence, it cannot be presumed that possession was

taken forcibly. Only requirement under the law is to give notice under

Section 13(2) & 13(4) of the SARFAESI Act to the borrower, which

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was admittedly given in the present case on 13/11/2019 and

30/11/2019. Same was also published in two newspapers dated

05/02/2019 and 05/04/2019. Notice was also issued to the borrower

on 17/04/2019 before taking physical possession. Said facts are

admitted by the learned Tribunals and referred in the impugned

orders but finding given by learned Tribunals below are perverse and

contrary to law.

19.Section 13 of the SARFAESI Act contemplates certain contingency,

which may require active intervention by the secured creditor. In

other words, secured creditor has the option as provided in Section

13 of the Act. However, exhaustion of options leads to remedy as

provided under Section 14 of the Act, however, once secured creditor

reaches CMM/ DM, then it is mandatorily on them to facilitate taking

possession of the assets/ documents and forward it to the secured

creditor.

20.One fact deserves consideration is that secured asset no.1 (factory)

was closed since past many years and secured asset no.2 (house

property) was under construction and no one was residing thereunder.

Therefore, no resistance was offered and said fact is confirmed by the

Panchnama duly drawn by the petitioner/Bank.

21.The Apex Court in the case of Standard Chartered (supra) has

held as under:-

“36. Thus, there will be three methods for the secured creditor to

take possession of the secured assets:

36.1. (i) The first method would be where the secured creditor gives

the requisite notice under Rule 8(1) and where he does not meet with

any resistance. In that case, the authorised officer will proceed to

take steps as stipulated under Rule 8(2) onwards to take possession

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and thereafter for sale of the secured assets to realise the amounts

that are claimed by the secured creditor. ”

36.2. (ii) The second situation will arise where the secured creditor

meets with resistance from the borrower after the notice under Rule

8(1) is given. In that case he will take recourse to the mechanism

provided under Section 14 of the Act viz. Making application to the

Magistrate. The Magistrate will scrutinize the application as

provided in Section 14, and then if satisfied, appoint an officer

subordinate to him as provided under Section 14(1-A) to take

possession of the assets and documents. For that purpose the

Magistrate may authorise the officer concerned to use such force as

may be necessary. After the possession is taken the assets and

documents will be forwarded to the secured creditor.

36.3. (iii) The third situation will be one where the secured creditor

approaches the Magistrate concerned directly under Section 14 of

the Act. The Magistrate will thereafter scrutinise the application as

provided in Section 14, and then if satisfied, authorise a subordinate

officer to take possession of the assets and documents and forward

them to the secured creditor as under clause 36.2(ii) above.

36.4. In any of the three situations above, after the possession is

handed over to the secured creditor, the subsequent specified

provisions of Rule 8 concerning the preservation, valuation and sale

of the secured assets, and other subsequent rules from the Security

Interest (Enforcement) Rules, 2002, shall apply.”

22.Similarly, in the case of Transcore (supra) has held as under:-

“As stated above, the NPA Act provides for recovery of possession by

non-adjudicatory process; therefore, to say that the rights of the

borrower would be defeated without adjudication would be

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erroneous. Rule 8, undoubtedly, refers to sale of immovable secured

asset. However, Rule 8(4) indicates that where possession is taken by

the authorised officer before issuance of sale certificate under Rule

9, the authorised officer shall take steps for preservation and

protection of secured assets till they are sold or otherwise disposed

of. Under Section 13(8), if the dues of the secured creditor together

with all costs, charges and expenses incurred by him are tendered to

the creditor before the date fixed for sale or transfer, the asset shall

not be sold or transferred. The costs, charges and expenses referred

to in Section 13(8) will include costs, charges and expenses which

the authorised officer incurs for preserving and protecting the

secured assets till they are sold or disposed of in terms of Rule 8(4).

Thus, Rule 8 deals with the stage anterior to the issuance of sale

certificate and delivery of possession under Rule 9. Till the time of

issuance of sale certificate, the authorised officer is like a Court

Receiver under Order XL Rule 1 CPC. The Court Receiver can take

symbolic possession and in appropriate cases where the Court

Receiver finds that a third-party interest is likely to be created

overnight, he can take actual possession even prior to the decree.

The authorised officer under Rule 8 has greater powers than even a

Court Receiver as security interest in the property is already created

in favour of the banks/FIs. That interest needs to be protected.

Therefore, Rule 8 provides that till issuance of the sale certificate

under Rule 9, the authorised officer shall take such steps as he deems

fit to preserve the secured asset. It is well settled that third-party

interests are created overnight and in very many cases those third

parties take up the defence of being a bona fide purchaser for value

without notice. It is these types of disputes which are sought to be

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avoided by Rule 8 read with Rule 9 of the 2002 Rules. In the

circumstances, the drawing of dichotomy between symbolic and

actual possession does not find place in the scheme of the NPA Act

read with the 2002 Rules.”

23.Even otherwise, Section 13(4) of the SARFAESI Act itself mandates

the secured creditors to take possession of the secured assets of the

borrower and requirement of Section 14 comes when possession of

any secured asset is required to be taken with the help of authority as

provided in Section 14 of the Act. Meaning thereby, if possession is

already taken by the secured creditor from borrower then resorting to

proceeding under Section 14 of the SARFAESI Act is not required.

24.The very object of the SARFAESI Act is to regulate securitisation

(acquisition of financial assets by any asset reconstruction company)

and reconstruction of financial asset as defined in Section 2(l) and

enforcement of security interest as defined in Section 2(z)(f) of the

SARFAESI Act.

25.If arguments advanced by counsel for the respondents is accepted

then it will give premium to the borrower, who is neither paying the

loan amount, nor permitting secured creditor to get the possession of

the secured/mortgaged asset. This would render the object and

provision of SARFAESI Act in-effective and secured creditor would

run into cob web of procedural inertia. That was never the Aims and

Objects of the SARFAESI Act.

26.Even the Division Bench of Jammu & Kashmir in the case of

Ablum Electrical (supra) in para 46, 46, 51 and 71 has held that

secured creditor can himself take possession of the secured asset

under Section 13 of the SARFAESI Act. Therefore, it is clear that for

taking possession of the secured asset, only recourse available to the

16

petitioner/ Bank is to file an application under Section 14 of the

SARFAESI Act before CJM/ DM is contrary to the language of

Section 14 of the SARFAESI Act itself. As discussed above Section

14 of the SARFAESI Act comes into play when “assistance” is

required to the authorized officer (for the secured creditor) for taking

possession of the secured asset.

27.One more fact deserves consideration is that despite account being

declared Non-Performing Asset (NPA) and proceedings initiated

under Section 13 of the SARFAESI Act in the year 2018, seven years

have passed. During this period, respondents/ borrowers did not avail

the remedy provided under Section 13(8) of the Act and has not

settled the amount. Acceptance of arguments of

respondents/borrowers would give premium to the borrower for the

default committed by him.

28.In fact, petitioner/ Bank is also entitled to recover the outstanding

amount from the respondents by executing the decree duly passed by

the DRT vide judgment dated 18

th

July, 2022 (Annexure P/3).

Therefore, in the facts and circumstances of the case, the learned

Tribunal erred in passing the impugned judgments and caused

illegality. Judgments passed by the learned DRT dated 18

th

July, 2022

passed in OA. No.223/2020 and DRAT dated 14/05/2025 passed in

Regular Appeal No.15/2022 are hereby set aside.

29.Petitioner/ Bank may proceed in accordance with law from the stage

where they are required to proceed as per law.

30.Petition stands allowed and disposed of accordingly.

(ANAND PATHAK) (PUSHPENDRA YADAV)

vc JUDGE JUDGE