High Courts should not entertain SARFAESI challenges under Article 226 when an effective statutory remedy exists.

M/s Jagdamba Enterprises, through its proprietor Fakira Prasad, challenged a Canara Bank, Sitamarhi Branch notice dated 14 February 2006, seeking its quashing and the release of certain mortgaged properties situated at Village Rajopatti, Sitamarhi.

The petitioners also sought a mandamus directing release of the mortgaged property and compensation for the alleged illegal mortgage of their property.

After hearing the parties, the Court considered whether the writ petition was maintainable in view of the statutory remedies available against bank-recovery proceedings.

Whether the writ petition under Article 226 of the Constitution was maintainable against the bank’s recovery-related action when an alternative and effective statutory remedy was available to the petitioners.

Whether the petitioners should be permitted to pursue the appropriate statutory remedy, subject to consideration of limitation, despite the writ petition having been filed in 2023 against a notice dated 14 February 2006.

The Court applied the principle that the High Court ordinarily should not entertain a petition under Article 226 where an effective alternative remedy is available, particularly in matters concerning recovery of public dues and dues of banks or financial institutions, as laid down in United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110.

It further relied on Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1, which reiterated that writ petitions should generally not be entertained where an effective remedy exists under the SARFAESI Act.

It further relied on PHR Invent Educational Society v. UCO Bank & Ors., 2024 INSC 297, which reaffirmed the same principle.

The rule applied was that the statutory mechanism for challenging bank-recovery measures must ordinarily be exhausted before invoking writ jurisdiction.

The petitioners’ challenge concerned a bank notice and the alleged mortgage of their property, matters falling within the specialised statutory framework governing bank-recovery actions.

Applying the authorities cited above, the Court held that the existence of an alternative and effective statutory remedy barred direct exercise of writ jurisdiction in the present circumstances.

The Court did not adjudicate the validity of the mortgage, the bank’s notice, or the petitioners’ claim for compensation on merits.

Since the challenged notice was issued in 2006 but the writ petition was filed in 2023, the Court expressly directed that the question of limitation be considered by the appropriate forum.

The petition was accordingly disposed of, with liberty to the petitioners to approach the appropriate forum.

The concerned authority was directed to consider the issue of limitation, particularly in view of the substantial delay between the 2006 notice and the filing of the writ petition in 2023.

Any pending interlocutory applications were also disposed of.