Rajasthan High Court: police help for SARFAESI possession must be free for banks

The Rajasthan High Court has held that the state must provide police help to banks taking possession of mortgaged property under the SARFAESI Act without charging them for it. In a judgment delivered on 29 October 2026, a division bench at Jodhpur allowed a batch of appeals filed by AU Small Finance Bank and set aside an earlier order that had asked the bank to pay for the police force.

What Happened

The SARFAESI Act lets banks recover bad loans by taking over the property pledged as security. Under Section 14 of the Act, the District Magistrate or Chief Metropolitan Magistrate can order that possession be handed to the lender, using force if needed. AU Small Finance Bank had sought police assistance to carry out such orders in several districts of Rajasthan.

On 12 August 2026, a single judge had rejected the bank's plea and directed it to deposit charges at the rates prescribed under Rule 10 of the Rajasthan Police Rules, 2008, for providing additional police force. The bank appealed.

The division bench held that police help to carry out a Section 14 order is part of a statutory duty of the state and takes the character of a sovereign function. The court said Section 46 of the Rajasthan Police Act, 2007 allows charges for additional police force in certain situations, but does not provide for charges when police are deployed to implement orders under Section 14 of the SARFAESI Act. The fact that the underlying loan is a commercial transaction does not change this, the court held. It also referred to a 2024 Allahabad High Court ruling that it is the magistrate's duty, not the lender's, to see that possession is actually handed over.

The court quashed the 12 August 2026 order and directed the state to provide the required police force for implementing Section 14 orders without levying any charges.

What It Means

For banks and other lenders in Rajasthan, possession of secured assets under court-backed SARFAESI orders should no longer carry a police bill. For borrowers who have defaulted on secured loans, the ruling means the magistrate and police are bound to help the lender take possession once a Section 14 order has been passed.

Source: High Court judgment