State Must Give Police Help for SARFAESI Section 14 Possession Without Charging Banks: Rajasthan High Court

As projected by AU Small Finance Bank, a secured creditor, its borrowers defaulted, their accounts became non-performing assets, and despite a Section 13(2) notice it could not obtain physical possession of the secured assets (paras 2, 4-5). The Designated Authority passed Section 14 orders directing police deployment to help it take possession (para 6). The police demanded charges for the deployment under a circular of 3 February 2026 and other executive orders (para 7), which the bank challenged in writ petitions (para 8). On 12 August 2026 a Single Judge disposed of them, allowing a demand only at the rates in Rule 10 of the Rajasthan Police Rules, 2008 (paras 3, 9).

Reading Section 14(1) and (2) together, the Court held that the District Magistrate or Chief Metropolitan Magistrate has both the power to take possession for the secured creditor and a duty to ensure the order is implemented, using necessary force, so the State must provide police aid without charges (para 25). Section 14 orders are statutory and bear the trappings of judicial orders; carrying them out discharges a statutory obligation and aids a sovereign function (para 26). As the Act has no separate execution machinery, the cost of police assistance cannot be imposed on the secured creditor merely because the loan is commercial (paras 27, 29). Section 46 of the Rajasthan Police Act, 2007 allows user charges for additional police needed for occupations, gatherings, exhibitions, sales or entertainments carried on for monetary gain; it does not cover Section 14 deployments, and the State cannot insist on payment without a clear statutory provision (paras 24, 28-29, 31). The Single Judge had recognised the statutory character of these orders yet denied relief (para 30). The Court found support in the Allahabad High Court's Division Bench ruling in PNB Housing Finance and in the Act's aims and objects (paras 32-34).