Alternative remedy under SARFAESI Act bars writ jurisdiction against bank recovery despite residence orders under DV Act.

In brief

The question

1. Whether the High Court should exercise its writ jurisdiction to interfere with SARFAESI proceedings when an alternative statutory remedy has already been invoked by the petitioner

The court held

The Court dismissed the appeal and the connected interlocutory application, holding that there was no merit in interfering with the Single Bench's order due to the availability and prior invocation of an alternative remedy

It also directed

The Court directed the Debts Recovery Tribunal-I, Kolkata, to hear the Appellant's Section 17(1) application and her prayer for interim stay on its merits, preferably within 30 working days

It clarified that no opinion was expressed on the merits of the title or interest in the property

01Facts

The Appellant (wife) obtained a protection order on June 22, 2022, from a Jurisdictional Magistrate under the P.W.D.V. Act, restraining her husband (Respondent No. 6) from interfering with her possession of their residence

¶ 5, 13

Subsequently, HDFC Bank (Respondent No. 5) initiated recovery proceedings under the SARFAESI Act for the same property, issuing a possession notice dated June 13, 2024

¶ 6, 15

The Appellant challenged this notice by filing an application under Section 17(1) of the SARFAESI Act before the Debts Recovery Tribunal (DRT)

¶ 10, 17

Simultaneously, she filed a writ petition (W.P.A 18540 of 2024) seeking police protection to enforce the Magistrate’s order, which the Single Bench declined to entertain

¶ 4, 8

The Appellant moved the Division Bench in appeal against this refusal.

02Issues

i.1. Whether the High Court should exercise its writ jurisdiction to interfere with SARFAESI proceedings when an alternative statutory remedy has already been invoked by the petitioner

¶ 18-19

ii.2. Whether a residence protection order passed under the D.V. Act is binding on a secured creditor (Bank) that was not a party to the D.V. proceedings

¶ 11, 14

03Law Applied

The court applied the principle of "Alternative Remedy" regarding the SARFAESI Act, 2002, specifically Section 17(1), which provides a specialized forum (DRT) for aggrieved persons to challenge measures taken by secured creditors

¶ 10, 19

The court also noted the procedural principle that interim orders in personam (under the D.V. Act) generally do not bind third parties/secured creditors who were not joined as parties to those proceedings

¶ 11, 14

Provisions in the judgment · 2 · Linked ones open on LawLens

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Section 13 Section 17

04Reasoning

The Court observed that the Appellant had already exercised her statutory right by approaching the Debts Recovery Tribunal under Section 17(1) of the SARFAESI Act to quash the possession notice

¶ 17, 18

The Court reasoned that since the Appellant is already ventilating her grievances and seeking interim protection before a specialized tribunal, the Single Bench was justified in refusing to exercise discretionary writ jurisdiction under Article 226

¶ 18, 19

Regarding the D.V. Act order, the Court found that because the Bank was not a party to the Magistrate's proceeding, the restraint order against the husband did not per se bar the Bank's statutory right to recover the secured asset

¶ 11, 14

Therefore, the appropriate venue for balancing the wife's right to residence against the Bank's recovery rights is the DRT

¶ 22

05Holding

¶ 20, 21

The Court directed the Debts Recovery Tribunal-I, Kolkata, to hear the Appellant's Section 17(1) application and her prayer for interim stay on its merits, preferably within 30 working days

¶ 22

It clarified that no opinion was expressed on the merits of the title or interest in the property

¶ 23

LawLens.Calcutta High Court

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