High Court Declines Article 226 Jurisdiction Against Section 14 SARFAESI Orders Due to Efficacious Alternative Remedies

The petitioners availed of loan facilities from Respondent No. 2 Bank in 2024. In March 2026, the account was classified as a Non-Performing Asset (NPA).

The Bank issued a Demand Notice under Section 13(2) of the SARFAESI Act on 11.03.2026, followed by a Possession Notice under Section 13(4) on 14.05.2026.

The Bank subsequently applied to the Chief Judicial Magistrate (CJM), Rajkot, under Section 14 of the Act. On 03.07.2026, the 15th Additional CJM passed an order appointing an Assistant from the Rajkot Civil Court as a Court Commissioner to take physical possession of the secured residential asset.

The petitioners challenged this order and the subsequent possession notice dated 06.07.2026 before the High Court of Gujarat.

1. Whether a writ petition under Article 226/227 of the Constitution is maintainable and should be entertained against an order passed under Section 14 of the SARFAESI Act when an alternative statutory remedy exists.

2. Whether the appointment of a subordinate court staff (Assistant) as a Court Commissioner under Section 14(1A) is legally permissible.

The court primarily applied Section 14 and 14(1A) of the SARFAESI Act, which permits the Magistrate to authorize any "officer subordinate to him" to take possession of assets.

The court relied on Section 17 of the SARFAESI Act, which provides a right of appeal to the Debt Recovery Tribunal (DRT) for any person aggrieved by measures taken under Section 13(4).

Regarding maintainability, the Court applied Whirlpool Corporation v. Registrar of Trade Marks, which limits the exercise of writ jurisdiction in the face of alternative remedies to cases involving fundamental rights, natural justice, or lack of jurisdiction.

The Court cited NKGSB Cooperative Bank Limited v. Subir Chakravarty & Ors. regarding the appointment of subordinate officers and M/S South Indian Bank Limited v. Naveen Mathew Philip regarding the discouragement of circumventing statutory fees by filing writ petitions.

The Court noted that while a writ petition may be technically maintainable, it should not be entertained if an efficacious alternative remedy under Section 17 of the SARFAESI Act exists.

The Court observed that the petitioners sought to bypass the mandatory filing fees required at the DRT by invoking Article 226.

Regarding the merits of the appointment, the Court interpreted Section 14(1A) and the NKGSB precedent to mean that "subordinate officers" include court staff. It rejected the petitioners’ argument that the Magistrate failed to record "subjective satisfaction" of the Commissioner’s capability, holding that court staff undergo rigorous selection and are inherently capable of performing the ministerial task of taking possession.

The Court clarified that previous interim orders in similar matters did not constitute binding precedents as they were often passed by consent or without detailed examination of these legal principles.

The Court dismissed the petition, holding that it would not exercise its extraordinary jurisdiction because the petitioners had an alternative remedy under Section 17 of the SARFAESI Act. All earlier interim relief was vacated, though a 10-day stay was granted to allow the petitioners to approach the appropriate forum.