Authority: Calcutta High Court (Court No.12)

Order Date: 15 July 2026

Case Overview

  • Parties: Union Bank of India (Appellant) vs. State of West Bengal & Others (Respondents) and additional respondents Nos.3‑5.
  • Proceedings: Appeal filed against an order dated 6 November 2025 (WPA 22020 of 2025) that had directed the bank to approach the appellate authority.
  • Underlying Dispute: The bank challenged a District Magistrate’s decision dated 11 December 2024, wherein the Magistrate, relying on land records, held the subject land to be agricultural and therefore allegedly barred SARFAESI‑Act action.
  • Statutory Provision: Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
  • Key Legal Submissions:
  • Appellant argued the Magistrate’s role is ministerial, not adjudicatory, and that classification of land should not be decided by the Magistrate.
  • Cited precedents: Binay Chaudhary & Others v. AU Small Finance Bank Ltd. (2026 SCC OnLine Cal 2238), Indian Bank & Another v. K. Pappireddiyar & Another (2018) 18 SCC 252, K. Sreedhar v. Raus Constructions Pvt. Ltd. (2023) 11 SCC 169, among others.
  • Respondent argued, relying on Standard Chartered Bank v. V. Nobel Kumar & Others (2013) 9 SCC 620 and UCO Bank v. District Magistrate & Collector & Another (2025 SCC OnLine Cal 4993), that the Magistrate must verify factual correctness of the affidavit before directing possession.

Observations and Reasoning

  • The Court held the writ petition is maintainable as it challenges a jurisdictional error by the District Magistrate.
  • It affirmed that the District Magistrate’s function under Section 14 is ministerial, limited to ascertaining whether the nine statutory points in the affidavit are satisfied, not to adjudicate the nature of the land.
  • The nine points to be verified are:

1. Aggregate amount of financial assistance and total claim of the bank.

2. Existence of a valid security interest over various properties within the limitation period.

3. Details of the properties over which security interest is created.

4. Borrower’s default in repayment of the specified amount.

5. Classification of the borrower’s account as a non‑performing asset.

6. Service of a sixty‑day notice under Section 13(2).

7. Consideration of any objection or representation by the borrower and communication of reasons for non‑acceptance.

8. No repayment despite notice, entitling the authorised officer to take possession under Section 13(4) read with Section 14.

9. Compliance with the provisions of the Act and its rules.

  • The Court noted that the issue of whether SARFAESI proceedings are prohibited for agricultural land under Section 31 requires adjudication by the appropriate forum and therefore remains open.

Final Outcome

  • The order dated 6 November 2025 is set aside.
  • The District Magistrate’s order dated 11 December 2024 is set aside.
  • The District Magistrate is directed to act in accordance with law and dispose of the pending application within 30 days of receipt of this order.
  • The question of the land’s agricultural status and any alleged erroneous exercise of SARFAESI powers is remitted to the Debts Recovery Tribunal for determination in the pending SA or a subsequent application.
  • The appeal and the connected application are disposed of.
  • Parties are directed to act on the basis of the server copy of this order.

Topics: SARFAESI Act, Banking Regulation, Judicial Review