Borrowers must challenge SARFAESI measures before the DRT when an effective statutory remedy exists.

The petitioners challenged sale notices issued by IDFC First Bank under the SARFAESI Act, including notices dated 15 May, 23 June and 21 September 2024.

They also sought a direction requiring the Bank to consider their revised One Time Settlement (OTS) offer dated 19 August 2024.

The loans had been secured by mortgaged assets, and the accounts were classified as non-performing after defaults.

The Bank had earlier issued a demand notice and possession notice.

The Bank submitted that a sale certificate had been registered and that the petitioners’ four securitisation applications had been dismissed; the petitioners’ counsel stated that proceedings were pending before the DRT and DRAT.

1. Whether the petitioners could challenge the Bank’s SARFAESI measures through writ petitions despite the statutory remedy under Section 17 of the SARFAESI Act

2. Whether the Court should direct the Bank to consider the petitioners’ revised OTS offer

Section 17 of the SARFAESI Act provides a remedy before the DRT to a person aggrieved by measures taken under Section 13(4); the DRT may examine their legality and grant appropriate consequential relief.

An order of the DRT under Section 17 is appealable to the DRAT under Section 18.

The Supreme Court’s decisions in United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, and PHR Invent Educational Society v. UCO Bank, (2024) 4 SCC 579, caution High Courts against entertaining Article 226 petitions in SARFAESI matters where an effective statutory remedy is available.

The petitioners’ challenges to the sale notices concerned the legality and validity of measures taken by the secured creditor—matters within the DRT’s jurisdiction under Section 17.

Because the statutory remedy was available, and the petitioners’ counsel stated that proceedings were pending before the DRT and DRAT, the Court considered those forums appropriate for raising the petitioners’ grounds.

The Court did not determine the merits of the sale-notice challenges or the request concerning the OTS offer.

The writ petitions were disposed of; no direction requiring the Bank to consider the revised OTS offer was issued.