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Section 32: Protection of action taken in good faith

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2002
Section 31 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 33

Legal Commentary & Landmark Judgments: Section 32

Section 32 of the SARFAESI Act, 2002 provides complete statutory immunity and protection from civil suits, criminal prosecutions, and legal proceedings for actions taken in good faith by secured creditors, authorized officers, and appointed administrators under the Act.

  • Statutory Immunity Shield: Absolute protection from suits, prosecutions, and other legal proceedings for anything done or intended to be done in good faith under the Act or rules.
  • Protected Entities: Extends to secured creditors, authorized officers, managers, receivers, and any person acting under their statutory authority.
  • Presumption of Good Faith: Actions taken in pursuit of statutory recovery mandates under Section 13(4) or 14 carry a strong legal presumption of bona fide official discharge.
Key Landmark Precedents:
  • K. Virupaksha v. State of Karnataka (2020) 4 SCC 440: A 3-Judge Bench of the Supreme Court quashed criminal proceedings initiated by a borrower against bank officers for initiating SARFAESI proceedings, holding that Section 32 grants complete statutory protection for bona fide actions under the Act, and criminal courts cannot be misused to thwart recovery.
  • General Manager, Sri Siddheshwara Cooperative Bank Ltd. v. Ikbal (2013) 10 SCC 83: The Supreme Court held that action taken by bank officials under SARFAESI cannot be branded as criminal trespass or extortion; Section 32 shields officers acting within the scope of statutory recovery powers.
Courtroom Practice & Strategic Litigation Guidance:

In cases where borrowers initiate retaliatory FIRs (alleging cheating, criminal trespass, dacoity) against the Authorised Officer or recovery team upon possession under Section 13(4) or 14, immediately petition the High Court under Section 482 CrPC / 528 BNSS relying on K. Virupaksha and Section 32 for summary quashing.

Section 31 All 42 Sections of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 Section 33