DRAT Kolkata Clarifies: Delay in Section 14 Order Not a Ground to Halt SARFAESI Measures
The Debts Recovery Appellate Tribunal, Kolkata (DRAT Kolkata) has recently reiterated important principles governing proceedings under the SARFAESI framework, particularly the scope of scrutiny of an order passed under Section 14 of the SARFAESI Act, 2002 and the effect of delay in passing such order.
The matter arose from a challenge to the Debts Recovery Tribunal-III, Kolkata (DRT-III) order dated 19.02.2025 in S.A. No. 1041 of 2025, whereby the DRT had restrained Axis Bank Limited from taking “any coercive steps” under a Section 14 order dated 04.11.2024 passed by the Chief Judicial Magistrate (CJM), Alipore.
In appeal, DRAT Kolkata set aside the DRT’s order, holding that:
- An executing order under
Section 14cannot be lightly interdicted when the statutory affidavit is in order and the Magistrate has applied his mind. - The time period prescribed in
Section 14is directory, not mandatory, and delay does not render the Magistrate functus officio. - Minor objections on figures and format, without substantive prejudice or pleadings on jurisdiction, cannot justify stopping SARFAESI enforcement.
Background of the Dispute
Origin of the Securitisation Application
The respondents (borrowers/guarantors) had approached the DRT by filing S.A. No. 1041 of 2025 challenging:
- The demand notice issued under
Section 13(2)of the SARFAESI Act, and - The subsequent possession-related action under
Section 13(4).
- The demand notice issued under
During the pendency of the S.A., Axis Bank Limited (secured creditor) obtained an order under
Section 14of the SARFAESI Act from the Learned CJM, Alipore on 04.11.2024, based on a nine-point affidavit filed by the Authorised Officer of the Bank.The respondents then filed I.A. No. 4838 of 2024 before the DRT, assailing the
Section 14order mainly on the following grounds:- The CJM allegedly failed to correctly record the sanctioned loan figures.
- The nine-point affidavit was claimed to have not been properly appreciated.
- There was an alleged and unexplained delay between filing of the affidavit on 22.02.2024 and passing of the order on 04.11.2024.
DRT’s Interim Restraint on the Bank
The DRT, by order dated 19.02.2025, accepted the borrowers’ objections in part and:
- Held that the Learned CJM did not record the total claim amount as indicated in the
Section 13(2)notice or the affidavit, and treated this as violative ofSection 14. - Noted that the Learned CJM had not assigned reasons for the delay in issuing the
Section 14order. - Directed Axis Bank not to take any coercive steps in respect of the secured assets without prior permission of the DRT.
Aggrieved, Axis Bank preferred an appeal before DRAT Kolkata.
Procedural Conduct Before DRAT
Adjournments and Delay Tactics
The Appellate Tribunal recorded in detail the manner in which the respondents conducted themselves in the appellate proceedings:
- On 13.08.2025, the appeal was fully heard. Counsel for both sides addressed arguments and the matter was reserved for judgment.
- During that hearing, after arguments had already commenced, multiple counsels appearing for the respondents sought adjournments on grounds of their unavailability or engagement in other matters. These requests were declined, particularly as one counsel for the respondents had already argued.
- Later, upon a mention by respondents’ counsel, DRAT granted another opportunity to argue on 18.08.2025.
- When the matter was relisted on 10.12.2025, despite the opportunity, no submissions were advanced on behalf of the respondents.
DRAT observed that this pattern clearly indicated an intention to prolong the litigation and delay the secured creditor’s recovery efforts, and therefore refused any further adjournment and proceeded to decide the matter on merits.