High Court Grants Interim Protection from Dispossession Contingent on Part-Payment Due to Non-Functional DRT.

The petitioner, a borrower, defaulted on loan installments, leading the respondent Bank to declare his account a Non-Performing Asset (NPA)

The Bank initiated recovery proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

On 02.04.2026, the Upper District Magistrate, Raisen, passed an order under Section 14 of the Act for the Bank to take possession of the petitioner’s property

The petitioner challenged this before the Debt Recovery Tribunal (DRT), Jabalpur, under Section 17; however, because the office of the Presiding Officer was vacant, the DRT was non-functional

The petitioner approached the High Court seeking a stay on dispossession, citing his readiness to pay a part of the loan to prove bonafides

1. Whether the High Court should exercise its extraordinary jurisdiction under Article 226 to grant interim protection to a borrower when the statutory alternative remedy (DRT) is temporarily unavailable due to a vacancy in the office of the Presiding Officer

SARFAESI Act, 2002, specifically Section 14 regarding the assistance of the Magistrate in taking possession of secured assets

Section 17, which provides the right to appeal before the DRT against measures taken by the secured creditor

Article 226 of the Constitution of India to provide an interim arrangement in "peculiar facts and circumstances" where the statutory remedy was practically non-functional

The Court noted that while the petitioner had a pending statutory remedy under Section 17 of the SARFAESI Act, the unavailability of a Presiding Officer at the DRT, Jabalpur, rendered the petitioner remediless against imminent dispossession

The respondent Bank quantified the total liability at over Rs. 24,78,038/-

Balancing the Bank's right to recover dues with the petitioner's right to seek adjudication, the Court formulated an interim arrangement. It reasoned that protecting the petitioner's possession contingent upon a substantial part-payment (Rs. 5,00,000/-) would preserve the status quo without causing undue prejudice to the creditor

This protection was designed as a stop-gap measure until the DRT becomes functional

The Court disposed of the writ petition by granting conditional interim relief, directing that once the DRT becomes functional, the petitioner must press for interim relief before the Presiding Officer within one month, and granting the Bank liberty to proceed in accordance with law if any condition is breached