Rajasthan High Court caps police charges for SARFAESI possession at rule rates

The Rajasthan High Court at Jodhpur on 12 October 2026 held that police charges for helping a bank take possession of a mortgaged property under the SARFAESI Act must be limited to the rates in Rule 10 of the Rajasthan Police Rules, 2008. It quashed demands above those rates that rest only on executive circulars, including a circular dated 3 February 2026. The ruling came on a petition by State Bank of India.

What Happened

According to the bank, a loan it had given was classified as a non-performing asset (NPA) on 12 August 2025, and it then issued a demand notice under Section 13(2) of the Act. When the dues were not paid, it applied under Section 14, and on 27 May 2026 the competent authority allowed it to take possession of the mortgaged property with police assistance without paying any cost.

The bank asked the court to modify that order so that police help would be given on payment of user fees strictly as prescribed under Rule 10. It relied on a 12 August 2026 judgment of the same court in a batch led by AU Small Finance Bank Ltd, which permitted police to raise a demand for assistance under Section 14. The bank said it was ready to pay.

The court directed the bank to approach the state's Home Department, the Director General of Police and the Jodhpur Police Commissioner. The police must then tell the bank the cost strictly under Section 46 read with Section 2(m) of the Rajasthan Police Act, 2007, limited to the Rule 10 rates, and issue revised bills.

What It Means

Under the ruling, a police demand for SARFAESI possession assistance that goes above the Rule 10 rates and rests only on executive circulars is without authority of law. The court made the ruling prospective: it does not let borrowers or banks reopen or seek refunds of police charges already imposed and deposited under earlier circulars.

The court also said the State Government is expected to take quick steps to update the obsolete Rule 10 rates so that they match present-day administrative costs and police salary expenditure.

Source: High Court judgment