Rajasthan High Court tells police to restore AU Small Finance Bank's mortgaged property

The Rajasthan High Court has directed the Superintendent of Police, Sri Ganganagar and the station house officer of Kesrisingpur police station to restore a mortgaged property to AU Small Finance Bank. In its order of 14 October 2026, the Jodhpur bench said it expected the police to act within 15 days of receiving a certified copy of the order.

What Happened

According to the bank's submissions recorded in the order, the bank gave a loan to three borrowers, the loan was not repaid and the account was declared a non-performing asset, meaning the loan had stopped being serviced. The bank then started proceedings under the SARFAESI Act, 2002 and took possession of the mortgaged property with police help on 5 May 2026.

The bank told the court that the borrowers later forcibly entered the property by breaking in. It said it had approached the Superintendent of Police and the station house officer to get possession restored, but no action had been taken on its complaint. The bank sought restoration of possession, criminal action, costs and compensation.

After hearing the bank's counsel, the court disposed of the petition with a direction to the two police officers to act immediately and take appropriate action, in accordance with law, to restore possession of the mortgaged property to the bank. The court observed that if the bank is not allowed to take possession, it will amount to a clear case of defiance of law, and that the police are under an obligation to act since the bank had already approached them. The order does not record any appearance by the borrowers.

What It Means

For borrowers whose property has been taken over by a lender under the SARFAESI Act, the order shows that the High Court treated re-entry into the property, as alleged by the bank, as a matter for the police to set right in accordance with law.

The order does not pass any direction on the bank's other requests for criminal action, costs or compensation. It directed the police to act within 15 days of receiving the certified copy.

Source: High Court judgment