Tahsildar Cannot Override Chief Judicial Magistrate’s SARFAESI Order: Kerala High Court Clarifies Limits of Administrative Intervention

“Once possession is granted under Section 14 of SARFAESI Act, Tahsildar has no jurisdiction to interfere”— Kerala High Court  held that a Tahsildar has no legal authority to override or interfere with the judicial possession granted under Section 14 of the SARFAESI Act by a Chief Judicial Magistrate (CJM). The Court ruled that any administrative order passed in contradiction to judicial directives under the SARFAESI framework is ultra vires and cannot survive.

In quashing Ext. P10—an order issued by the Tahsildar on a complaint that the wrong property was taken into possession during SARFAESI enforcement—the Court made it unequivocally clear:

“The Tahsildar cannot look into, much less observe, anything about the proceedings of the Chief Judicial Magistrate.” [Para 15]

The case throws light on the hierarchy between judicial orders and administrative action, especially within the statutory regime of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

Administrative Interference in Judicial Possession Proceedings Under SARFAESI Is Without Jurisdiction

The dispute arose when JM Financial Asset Reconstruction Company Ltd., having acquired a financial asset from Federal Bank, proceeded to enforce the mortgage by taking possession of a secured asset (property in Re.Sy.No.160/14, Kanayannur Taluk) through orders of the CJM, Ernakulam. Following due process under Section 14, including the appointment of an Advocate Commissioner, the secured asset was taken into possession in March 2018.

Subsequently, however, a complaint was filed before the Tahsildar, alleging that a different property, not connected with the mortgage, was wrongly taken over. Acting upon directions in a prior writ petition (in which the ARC was not made a party), the Tahsildar passed Ext. P10, holding the possession as improper.

The High Court took strong exception to this administrative overreach: “That part of the enquiry conducted by the Tahsildar with respect to the matters covered by the orders of the Chief Judicial Magistrate and under the provisions of the SARFAESI Act cannot be countenanced at all.” [Para 16]

The Court held that possession proceedings under Section 14 SARFAESI fall within the exclusive domain of the CJM, and no parallel administrative review can operate in defiance of judicial pronouncements.

Review and Recall of Writ Judgment Invalidates Tahsildar’s Order Based on It

A crucial backdrop to the decision was the procedural flaw in the earlier writ petition (W.P.(C) No. 11829/2019), which led to the Tahsildar's impugned decision. In that petition, filed by the borrower, JM Financial was not impleaded, nor was the order of possession by the CJM disclosed. That writ was later reviewed and recalled, with the High Court finding suppression of material facts.

The Court noted: “The writ petition preferred by the 1st respondent was dismissed essentially for suppression of material facts and also for not impleading the petitioner herein. The same was upheld in a writ appeal as well.” [Para 16]

Therefore, the foundation of the Tahsildar’s order (Ext. P10) was itself rendered void, as it was built upon a judicial direction that no longer survived.

Dispute on Property Identification Is a Civil Question, Not for SARFAESI Enforcement

However, the Court drew a clear line between execution of SARFAESI orders and the dispute over property identification. While it barred the Tahsildar from interfering with the CJM’s order, it preserved the rights of the parties to adjudicate whether the property possessed is the correct secured asset in pending civil proceedings.

“The dispute in this case essentially trickles down to the identification of the secured asset.” [Para 18]

The Court noted that O.S. No. 1090/2019, a civil suit regarding the correct identity of the secured property, is pending, and any findings under SARFAESI do not preclude the Trial Court from independently deciding the issue:

“The findings of the Magistrate Court under Section 14 of the SARFAESI Act cannot be taken as one deciding on the property rights of the parties.” [Para 18]

Quashment Is Limited—Tahsildar May Proceed Against Village Officer on Misconduct Allegations

Importantly, the Court allowed the Tahsildar to proceed against the Village Officer if there are allegations of official misconduct arising from the possession proceedings. Since the original complaint against the Village Officer (dated 31.03.2018) raised independent administrative concerns, the Court held:

“It is made clear that the quashing of Ext.P10 to the above extent will not prevent the Tahsildar from taking appropriate steps in accordance with law on the complaint filed by the 1st respondent... with notice to the petitioner and other affected parties.” [Para 18]

This nuanced approach ensured administrative accountability without judicial encroachment.

High Court Protects SARFAESI Proceedings From Collateral Attack

In conclusion, the Court partly allowed the writ petition, holding that Ext. P10 is quashed to the extent it interferes with the SARFAESI proceedings and orders of the CJM. However, other contentions—such as claims against the Village Officer or disputes on property identification—remain open for proper adjudication before the appropriate forum.

The ruling stands as a strong reaffirmation of the sanctity of judicial orders under Section 14 SARFAESI, ensuring that enforcement actions cannot be collaterally attacked through administrative channels.

Date of Decision: 24 September 2025