AU Small Finance Bank Ltd. v. State of Rajasthan & Ors.

[2026:RJ-JD:52513-DB]

Reportable

HIGH COURT OF JUDICATURE FOR RAJASTHAN
AT JODHPUR

D.B. Special Appeal Writ No. 1107/2026
CNR: RJHC010968912026 | URN: SAW / 2273U / 2026

Au Small Finance Bank Ltd., Having Its Office At 5Th Floor, Shantivan Building, 11Th A Road, Sardarpura, Jodhpur Through Its Authorized Officer [name and age omitted by NyayVidhan] ----Appellant
Versus
(1) The State Of Rajasthan, Through The Additional Chief Secretary Department Of Home, Secretariat, Jaipur. (2) The Director General Of Police, Rajasthan, Jaipur Police Headquarter, Lal Kothi, Jaipur. (3) The Superintendent Of Police, Pratapgarh. (4)-(5) [private respondents: names, parentage and addresses omitted by NyayVidhan] ----Respondents

Connected With

D.B. Special Appeal Writ Nos. 1092/2026, 1093/2026, 1094/2026, 1096/2026, 1098/2026, 1099/2026, 1101/2026, 1108/2026, 1109/2026, 1110/2026, 1115/2026, 1120/2026, 1121/2026, 1129/2026, 1130/2026, 1132/2026, 1133/2026, 1134/2026, 1136/2026, 1141/2026, 1142/2026, 1144/2026, 1149/2026, 1152/2026, 1153/2026, 1154/2026, 1156/2026, 1158/2026, 1159/2026, 1161/2026, 1162/2026, 1167/2026, 1184/2026, 1185/2026 (34 appeals)

*

D.B. Special Appeal Writ No. 1123/2026

Connected With

D.B. Special Appeal Writ Nos. 1114/2026, 1118/2026, 1125/2026, 1126/2026, 1143/2026, 1145/2026 (6 appeals)

*

D.B. Special Appeal Writ No. 1097/2026

Connected With

D.B. Special Appeal Writ Nos. 1100/2026, 1103/2026, 1104/2026, 1105/2026, 1113/2026, 1116/2026, 1117/2026, 1119/2026, 1122/2026, 1124/2026, 1127/2026, 1128/2026, 1131/2026, 1135/2026, 1137/2026, 1138/2026, 1139/2026, 1140/2026, 1147/2026, 1150/2026, 1151/2026, 1157/2026, 1160/2026, 1183/2026 (24 appeals)

[In every appeal the appellant is AU Small Finance Bank Ltd. through its Authorized Officer; the respondents are the State of Rajasthan, police authorities and private respondents, whose names, parentage and addresses are omitted by NyayVidhan.]

For Appellant(s): Mr. Vijay Purohit.
For Respondent(s): Mr. B.L. Bhati, AAG with Mr. Deepak Chandak, AAAG, Mr. Sukhdev Sharma, AGC.

[NyayVidhan notes: Stored from the official Rajasthan High Court PDF of the common judgment (hcraj file 209900011072026_3.pdf, 54 pages, uploaded 29.10.2026). (1) The paragraph numbers 1-36 are the Court's own. (2) The cause title, which fills pages 1-36 of the PDF, is abridged: it is printed in three groups separated by '*' (D.B. Special Appeal Writ No. 1107/2026 with 34 connected appeals; No. 1123/2026 with 6; No. 1097/2026 with 24), 67 special appeals in all, every one filed by AU Small Finance Bank Ltd. through its Authorized Officer against the State of Rajasthan, police authorities and private respondents. Only the lead appeal's official respondents are shown; the connected appeals are listed by case number only; the Authorized Officer's name and age and all private respondents' names, parentage and addresses are omitted. (3) The table at the head of the judgment (date of conclusion of argument, date of reservation, full judgment or operative part, date of pronouncement) is printed with row numbers 1-4; it is stored without those numbers so that they are not read as paragraph numbers. (4) Quoted matter (Section 14 of the SARFAESI Act and Section 46 of the Rajasthan Police Act, 2007 in paragraph 24; the Allahabad High Court passage in paragraph 32; the aims and objects of the SARFAESI Act in paragraph 33) is kept inline within the quoting paragraph. (5) The text is otherwise as printed, including 'learned Single Bench' (paragraph 3), 'impugned judgment dated 12.08.26' (paragraph 5), the jumbled wording of Section 14(1) as quoted in paragraph 24 ('for the purpose of taking Metropolitan Magistrate or the District Magistrate within whose jurisdiction ... request, in writing, the Chief such secured asset ... situated or found. to take possession thereof') and 'the Chief Metropolitan Magistrate of the District Magistrate' in the quoted Section 14(2), 'Metorpolitan' (paragraph 32) and 'slow place of recovery' (paragraph 33). Page furniture (running heads, page numbers, upload/download stamps, the staff lines and the TCPDF line) is removed. The PDF is authoritative.]

[Source: Rajasthan High Court, hcraj.nic.in — judgment dated 29 October 2026.]

HON'BLE MR. JUSTICE VINIT KUMAR MATHUR
HON'BLE MR. JUSTICE CHANDRA SHEKHAR SHARMA

Judgment

BY THE COURT: (PER HON’BLE MR. JUSTICE VINIT KUMAR MATHUR)

Date of conclusion of argument: 26.10.2026
Date on which the judgment was reserved: 26.10.2026
Whether the full judgment or only operative part is pronounced: Full Judgment
Date of Pronouncement: 29.10.2026

1. The present batch of special appeals arise out of the common order and involve the same question based on same facts, therefore, the same are being decided by this common judgment.

2. For convenience, the facts mentioned in appeal No. 1107/2026 are taken into consideration for deciding the present controversy.

3. The present special appeals have been filed against the order dated 12.08.2026 passed by the learned Single Bench, whereby the writ petitions filed by the petitioners-appellants have been disposed of and the demand raised by the police authorities for police protection charges sought under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”) has been upheld, and a direction has also been issued to levy the charges as per Rule 10 of the Rajasthan Police Rules, 2008.

4. The essential facts, as projected in the present appeals, are that the appellant-Bank is a secured creditor within the meaning of the SARFAESI Act, and is engaged in the business of providing financial facilities. The private respondents, being borrowers, had availed financial facilities from the appellant-Bank but failed to discharge their repayment obligations, pursuant to which their loan account was classified as a Non-Performing Asset (NPA).

5. Consequent thereto, the appellant-Bank initiated proceedings under the SARFAESI Act for enforcement of its security interest and recovery of its outstanding dues. The appellant-Bank issued a demand notice under Section 13(2) of the SARFAESI Act and thereafter initiated the requisite statutory measures for taking possession of the secured asset. However, despite such measures, the appellant-Bank could not obtain actual and physical possession of the secured asset, a fact which has also been noticed in the impugned judgment dated 12.08.26.

6. In view of the aforesaid circumstances, the appellant-Bank approached the competent Designated Authority under Section 14 of the SARFAESI Act by submitting an appropriate application seeking statutory assistance for taking physical possession of the secured asset. Upon being satisfied with the requisite statutory requirements, the Designated Authority passed an order under Section 14 of the SARFAESI Act directing the deployment of police personnel to assist the appellant-Bank in obtaining physical possession of the secured asset.

7. During the course of implementation of the aforesaid order, the respondent-police authorities raised a demand towards police charges/fees for the deployment of police personnel to provide assistance in taking physical possession of the secured asset. The said demand was raised with reference to the circular dated 03.02.2026 and other executive orders governing the levy of such charges.

8. Aggrieved by the aforesaid demand notice/order, as well as the underlying circular dated 03.02.2026 and the other executive orders/instruments, the appellant-Bank preferred writ petitions before learned Single Judge, challenging the legality and validity of the demand raised by the respondent-police authorities.

9. The learned Single Judge, while disposing of the writ petition, directed that the respondent-police authorities could raise a demand for providing police assistance pursuant to an order passed under Section 14 of the SARFAESI Act only at the rates prescribed under Rule 10 of the Rajasthan Police Rules, 2008. In doing so, the learned Single Judge proceeded on the premise that the police authorities were entitled to levy charges/fees for providing police assistance in taking physical possession of the mortgaged/secured property.

10. Being aggrieved by and dissatisfied with the impugned judgment passed by the learned Single Judge, particularly the finding recorded by the learned Single Judge recognizing the entitlement of the respondent-police authorities to levy charges/fees for such police assistance, the appellant-Bank has preferred the present Special Appeal (Writ), challenging the impugned order to the extent indicated herein above.

11. Hence, the present Special Appeals have been filed by the appellant-Bank.

12. Learned counsel appearing for the appellant-Bank submitted that the learned Single Judge erred in law in treating the deployment of police personnel pursuant to an order passed under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the SARFAESI Act”) as a private commercial service rendered to the appellant-Bank. He submitted that once the competent Designated Authority had passed an order under Section 14 of the Act of 2002 directing or authorising the use of necessary force for securing possession of the secured asset, the police assistance so provided was in aid of the implementation of a statutory order and could not be equated with a private security arrangement between the appellant-Bank and the police authorities.

13. Learned counsel further submitted that Section 14 of the SARFAESI Act provides a special statutory mechanism for enabling a secured creditor to obtain possession of the secured asset through the assistance of the competent Magistrate. In particular, sub-section (2) of Section 14 empowers the Magistrate to take or cause to be taken such steps and to use, or cause to be used, such force as may be necessary for securing compliance with the order passed under the said provision. He, therefore, submitted that the deployment of police personnel in the present case constituted an incident of the statutory mechanism contemplated under Section 14 and could not be regarded as an independently procured service for which the appellant-Bank was necessarily liable to pay charges.

14. Learned counsel submitted that the learned Single Judge failed to appreciate the legal consequences flowing from the aforesaid statutory character of the police assistance and erroneously proceeded on the principle of quid pro quo to sustain the levy of police charges. According to learned counsel, the police authorities were acting in furtherance of the statutory process initiated under the SARFAESI Act and pursuant to the order passed by the competent Designated Authority.

15. Learned counsel submitted that Section 46 of the Rajasthan Police Act, 2007, provides for the levy of charges in the circumstances contemplated therein, and the same may be attracted only in the cases involving occupations, gatherings, exhibitions, sales, entertainments and other activities falling within the ambit of the said provision, where additional police force is required for purposes of public security or the maintenance of public peace and order. He submitted that the said provision does not expressly contemplate the levy of charges for the deployment of police personnel in aid of the implementation of an order passed by a competent Designated Authority under Section 14 of the SARFAESI Act. The learned Single Judge, therefore, erred in extending the operation of Section 46 of Rajasthan Police Act, 2007 to a situation not covered by its express language.

16. Learned counsel further submitted that a provision authorising the levy of a monetary charge must be construed strictly, and the scope of such a provision cannot be enlarged by analogy, administrative convenience or executive practice. Learned counsel emphasised that the expressions employed in Section 46 of the Rajasthan Police Act, 2007 cannot be disregarded while determining the circumstances in which the State is authorised to recover charges for the deployment of police personnel. In the absence of a clear statutory provision covering the present deployment, the impugned demand could not be sustained merely on the ground that the appellant-Bank stood to benefit from obtaining possession of its secured asset.

17. Learned counsel submitted that the learned Single Judge proceeded on the premise that, since the secured asset was private property and the recovery of possession thereof advanced the commercial interests of the appellant-Bank, the police assistance provided in that regard constituted a private commercial service. He submitted that such reasoning overlooked the distinction between the ultimate benefit accruing to a secured creditor and the legal character of the statutory process through which possession is obtained. The mere fact that the exercise of a statutory remedy advances the interests of a private party does not, by itself, transform the performance of a statutory function into a commercial service.

18. Learned counsel also assailed the reliance placed by the learned Single Judge upon Rule 10 of the Rajasthan Police Rules, 2008, which prescribes rank-wise rates for police services. It was pointed out that Rule 10 itself contemplates the levy of user charges in accordance with Section 46 of the Rajasthan Police Act, 2007. Consequently, Rule 10 is necessarily subordinate to, and dependent upon, the substantive provision contained in Section 46 and cannot enlarge the scope of the said provision or create an independent category of liability not contemplated by the parent enactment. He, therefore, submitted that the question of applying the rates prescribed under Rule 10 could arise only after it was first established that the deployment in question fell within the ambit of Section 46 or not. According to learned counsel, the learned Single Judge failed to take into consideration this important aspect of the matter.

19. Learned counsel further submitted that the learned Single Judge had himself recognised that an order passed under Section 14 of the SARFAESI Act constitutes a statutory direction requiring administrative and police assistance for the delivery of possession of the secured asset. Having acknowledged the statutory character of such assistance, the learned Single Judge erred in subsequently treating the same as a private commercial service availed by the appellant-Bank. He submitted that, once the deployment was recognised as assistance required for implementation of the statutory mechanism under Section 14, the applicability of Section 46 of the Rajasthan Police Act, 2007, had to be independently examined on the basis of its express language.

20. Learned counsel further submitted that the direction issued by the learned Single Judge to the effect that the respondent-police authorities could raise revised demand bills only at the rates prescribed under Rule 10 of the Rajasthan Police Rules, 2008, did not afford complete and effective relief to the appellant-Bank. Learned counsel submitted that the appellant's principal challenge was not confined to the quantum of charges demanded, but even to levy such charges for providing police assistance in connection with an order under Section 14 of the SARFAESI Act, itself not in accordance with law. Accordingly, learned counsel submitted that, if Section 46 of the Rajasthan Police Act, 2007 was inapplicable to the deployment in question, the entire demand was liable to be quashed, rather than merely recalculated at the rates prescribed under Rule 10.

21. Per contra, Mr. B.L. Bhati, learned Additional Advocate General, appearing on behalf of the respondent authorities, vehemently opposed the present batch of special appeals and submitted that the mortgaged asset constitutes private property and that taking of physical possession thereof ultimately serves the commercial interests of the appellant-Bank. It was contended that the deployment of police personnel for facilitating the recovery of such assets does not constitute a routine law-and-order duty of the State, but rather amounts to the provision of an additional service to the secured creditor, for which charges are required to be recovered on the principle of quid pro quo.

22. Learned Additional Advocate General, appearing on behalf of the respondent-police authorities, vehemently opposed the submissions advanced by learned counsel for the appellant-Bank and supported the order dated 12.08.2026 passed by the learned Single Judge. He submitted that the learned Single Judge had rightly held that the respondent-police authorities were entitled to levy charges for providing police assistance in taking physical possession of the mortgaged/secured asset pursuant to an order passed under Section 14 of the SARFAESI Act. Learned Additional Advocate General further submitted that the learned Single Judge had correctly directed that such charges could be levied only at the rates prescribed under Rule 10 of the Rajasthan Police Rules, 2008. Accordingly, it was contended that the impugned order does not warrant any interference by this Court and that the present special appeals are liable to be dismissed.

23. We have considered the submissions made at the Bar and have gone through the relevant record of the case.

24. To appreciate the controversy in its proper perspective, it would be apposite to reproduce the relevant provisions of Section 14 of the SARFAESI Act and Section 46 of the Act of 2007, which read as under:- “Section 14 of SARFAESI Act :- 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 Metropolitan Magistrate or the District Magistrate within whose jurisdiction any possession or control of any such secured asset, request, in writing, the Chief 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: [Provided that any application by the secured creditor shall be accompanied by an affidavit duly affirmed by the authorized officer of the secured creditors 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 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 assets [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 of 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.” Section 46 of the Rajasthan Police Act, 2007:- “46. Payment for police service. - The State Government may levy from any person, who carries on any such occupation, gathering, exhibition, sale, entertainment, etc., for monetary gain, as may, for the purpose of public security or for the maintenance of public peace or order, require deployment of additional police force, such user charges as may be prescribed”.

25. Section 14(1) of the SARFAESI Act, empowers the Chief Metropolitan Magistrate or the District Magistrate, upon a request being made by the secured creditor, to take possession of the secured assets and the documents relating thereto and forward the same to the secured creditor. Sub-section (2) of Section 14 further empowers the Chief Metropolitan Magistrate or the District Magistrate to take, or cause to be taken, such steps and to use, or cause to be used, such force as may be necessary for securing compliance with the provisions of sub-section (1). A conjoint reading of the aforesaid provisions makes it evident that the statute not only confers power upon the competent authority to facilitate the taking over of possession of the secured assets, but also casts a corresponding duty upon such authority to ensure the effective implementation of its directions in accordance with law. Therefore, for effectively implementing the orders passed under Section 14 of the Act of 2002, the police aid is required. Thus, the State Government is under an obligation to provide the same without any charges.

26. The orders passed by the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act are statutory in nature as they bear the trappings of judicial orders, inasmuch as they are passed by a statutory authority in the exercise of powers conferred by law. The implementation of such orders, therefore, constitutes the discharge of a statutory obligation in furtherance of the legislative mandate. The effective implementation of such orders is essential to ensure the fulfillment of objects underlying the SARFAESI Act and that the statutory remedy provided to secured creditors is rendered meaningful and efficacious and for this purpose, if the police assistance is required then it is the duty of the State to provide the same without levy of any charges. The police assistance required in the present case cannot be equated with the police assistance sought for as mentioned in Section 46 of the Act of 2007, as the assistance required in the present case is to provide aid to the sovereign function for achieving the objectives enshrined under the SARFAESI Act, whereas the assistance required for maintaining law and order in the private functions can be granted on payment of cost as mentioned in Section 46 of the Act of 2007.

27. It is also significant to note here that the SARFAESI Act does not prescribe any separate mechanism for the execution of orders passed under Section 14. In this backdrop, the specific conferment of power under sub-section (2) thereof to take such steps and employ such force as may be necessary assumes considerable significance. The said provision necessarily contemplates the assistance of the police and other relevant authorities, wherever required, to facilitate the implementation of such orders. Where police assistance is requisitioned for discharging this statutory obligation and implementing the directions of the competent authority, the same partakes of the character of a sovereign function of the State. Consequently, the cost of providing such assistance cannot be imposed upon the secured creditor merely because the proceedings arise out of a commercial transaction between the secured creditor and the borrower.

28. A perusal of Section 46 of the Rajasthan Police Act, 2007 indicates that the State Government is empowered to levy charges for providing additional police force in the circumstances contemplated therein, including where such force is required in connection with certain occupations, gatherings, exhibitions, sales or entertainments conducted for monetary gain, or for the purposes of public security, public peace or public order, however, the provision does not specifically contemplate the levy of charges for police assistance requisitioned for the implementation of statutory orders passed under Section 14 of the SARFAESI Act. The legislative scheme, therefore, distinguishes between the provision of additional police force for private purposes or activities falling within the ambit of Section 46 of the Rajasthan Police Act, 2007, and the deployment of police personnel in discharge of a statutory obligation imposed upon the State under a special enactment.

29. In the present case, the police assistance sought by the appellant-petitioner was not for any independent private purpose, but for implementation of orders passed by the competent authority under Section 14 of the SARFAESI Act, with a view to advancing the statutory objectives of the said enactment. The State, being under an obligation to facilitate the effective implementation of such orders, cannot insist upon the payment of charges in absence of a clear statutory provision authorising the levy of such charges in the circumstances in question. The mere fact that the underlying loan transaction is commercial in nature does not alter the character of the statutory process through which possession of the secured assets is sought to be taken.

30. We also find that the learned Single Judge, in paragraph 19 of the impugned order, has observed that although the loan transaction between the borrower and the bank arises out of a commercial arrangement, the enforcement mechanism is governed by the statutory provisions of Section 14 of the SARFAESI Act, however, the said provision facilitates the taking over of possession of secured assets through the intervention of the competent statutory authority, with police assistance wherever necessary. It has also been recognised by the Hon’ble Supreme Court that directions issued by the Chief Metropolitan Magistrate or the District Magistrate under Section 14 of the SARFAESI Act are statutory in nature and require the administration and the police to facilitate the delivery of possession of the secured assets. Despite such observation, the relief prayed for in the writ petitions has been denied.

31. In view of the aforesaid statutory scheme and the nature of the obligation involved, it is incumbent upon the State to ensure the effective implementation of orders passed under Section 14 of the SARFAESI Act by providing the requisite police assistance, without levying charges upon the secured creditor in the circumstances of the present case. Section 46 of the Rajasthan Police Act, 2007 cannot be construed as authorising the imposition of such charges where the police force is deployed in aid of the implementation of statutory orders passed by the competent authority in effective implementation of the objects of the SARFAESI Act.

32. In a somewhat similar matter, the Division Bench of the Allahabad High Court, in PNB Housing Finance Ltd. v. State of Uttar Pradesh (Writ – C No.9723 of 2024), decided on 14.11.2024, has held as under:— “The above quoted provision evidently says that the District Magistrate or the Chief Metorpolitan Magistrate may authorize 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. This makes intention of the legislature clear, that, it is the District Magistrate or the Chief Metropolitan Magistrate (who in the State of U.P. would be the Chief Judicial Magistrate) are obliged to take possession of such assets and documents relating thereto, and to forward such assets & documents to the secured creditor. Therefore, it is not the secured creditor who after obtaining an order under Section 14 of the Act, 2002 who is supposed to run from pillar to post or to the police personnel to get the order executed, it is the obligation of the aforesaid officer. Further, for the purpose of securing compliance with the provisions of Sub-section (1) of the Act, 2002, 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. This also makes it clear that it is the statutory obligation of the District Magistrate or the Chief Metropolitan Magistrate / Chief Judicial Magistrate, to take or cause to be taken such steps and use, or cause to be used, such force, as may, in his opinion, be necessary. In fact, a separate execution case or enforcement case need not be registered either by the District Magistrate or the Chief Judicial Magistrate, but after passing of requisite orders under Section 14 of the Act, 2002, its execution should also be ensured and after possession has actually been handed over to the secured creditor, only then the proceedings under Section 14 should be consigned and treated as concluded, not prior to it. It appears that after passing of such orders, the District Magistrates or the Chief Judicial Magistrates leave the secured creditor to the mercy of the police personnel, as if, it is the secured creditor who has to get the order enforced through the police, which is not the correct legal position”

33. Providing of police assistance at free of cost would facilitate the fulfillment of the objectives and purposes for which the SARFAESI Act, 2002 was enacted. For the purpose of ready reference, aims and objects of SARFAESI Act reads as under: - “The financial sector has been one of the key drivers in India's efforts to achieve success in rapidly developing its economy. While the banking industry in India is progressively complying with international prudential norms and accounting practices there are certain areas in which the banking and financial sector do not have a level playing field as compared to other participants in the financial markets in the world. There is no legal provision for facilitating securitisation of financial assets of banks and financial institutions. Further, unlike international banks, the banks and financial institutions in India do not have power to take possession of securities and sell them. Our existing legal framework relating to commercial transactions has not kept pace with the changing commercial practices and financial sector reforms. This has resulted in slow place of recovery of defaulting loans and mounting levels of non-performing assets of banks and financial institutions. Narasimham Committee I and II and Andhyarujina Committee constituted by the Central Government for the purpose of examining banking sector reforms have considered the need for changes in the legal system in respect of these areas. These Committees, inter alia, have suggested enactment of a new legislation for securitisation and empowering banks and financial institutions to take possession of the securities and to sell them without the intervention of the court. Acting on these suggestions, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002 was promulgated on the 21st June, 2002 to regulate securitisation and reconstruction of financial assets and enforcement of security interest and for matters connected therewith or incidental thereto. The provisions of the Ordinance would enable banks and financial institutions to realise long-term assets, manage problem of liquidity, asset liability mismatches and improve recovery by exercising powers to take possession of securities, sell them and reduce non-performing assets by adopting measures for recovery or reconstruction.”

34. In view of the above, this Court is of opinion that an efficient, robust and expeditious mechanism for the recovery of outstanding dues would not only instil confidence among banking institutions in the country to lend money with greater assurance and security, but would also strengthen the financial ecosystem, facilitate the smooth flow of credit, and ultimately serve as a catalyst for the sustained growth, economic prosperity and overall development of our nation. Accordingly, we are of the considered view that the learned Single Judge was not justified in rejecting the claim of the appellant-Bank and directing it to deposit charges at the rates prescribed under Rule 10 of the Rajasthan Police Rules, 2008, for the provision of additional police force to implement orders passed under Section 14 of the SARFAESI Act.

35. Hence, the appeals merit acceptance and the same are, hereby, allowed. The order dated 12.08.2026 passed by the learned Single Judge is quashed and set aside, and the writ petitions stand allowed. The respondent-State is directed to provide the requisite additional police force for effective implementation of orders passed under Section 14 of the SARFAESI Act, without levying any charges in this regard.

36. The stay application(s) and other pending applications, if any, also stand disposed of.

(CHANDRA SHEKHAR SHARMA),J
(VINIT KUMAR MATHUR),J