High Courts should not entertain SARFAESI writ petitions where an effective statutory appellate remedy exists.

The petitioner, a proprietorship firm operating as Bombay Tent House, maintained Cash Credit Account No. 1606738545 with the Central Bank of India. The Bank issued a demand notice under Section 13(2) of the SARFAESI Act dated 6 February 2014, claiming ₹2,18,356.68, followed by a possession notice dated 1 August 2014 under Section 13(4).

The petitioner sought instalment and one-time-settlement arrangements but did not comply with the agreed payment schedule. The District Magistrate-cum-Collector, Samastipur, thereafter directed taking possession of the petitioner’s residential house by order dated 31 August 2016. The petitioner challenged that order before the Debt Recovery Tribunal (DRT), which initially directed maintenance of status quo upon production of a cheque for ₹2,18,356 and called upon the Bank to disclose the dues. The Bank subsequently recalculated the dues at ₹6,25,031, and the DRT dismissed the petitioner’s SARFAESI appeal by order dated 15 April 2017.

The petitioner then invoked the High Court’s writ jurisdiction seeking quashing of the DRT and District Magistrate’s orders, production of the account statement, and return of the title deed.

1. Whether the High Court should entertain a writ petition challenging orders passed under the SARFAESI Act when the petitioner had an effective statutory remedy before the Debt Recovery Appellate Tribunal (DRAT).

2. Whether the petitioner was entitled to writ relief concerning the SARFAESI proceedings, possession of the secured property, the alleged repayment of dues, and production of the bank account statement.

The Court applied the principle that a writ petition under Article 226 of the Constitution should ordinarily not be entertained where an effective alternative statutory remedy is available, particularly in matters concerning recovery of public money and bank dues.

Relying on United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, the Court held that the SARFAESI Act constitutes a comprehensive statutory mechanism for recovery and grievance redressal, and that litigants should ordinarily exhaust those remedies before invoking Article 226.

The Court further relied on Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1, and PHR Invent Educational Society v. UCO Bank, 2024 INSC 297, reiterating that High Courts should not entertain SARFAESI challenges where an effective remedy under the statute exists.

The relevant statutory framework included the Bank’s enforcement measures under Sections 13(2) and 13(4) of the SARFAESI Act and the appellate remedies before the DRT and DRAT.

The Court noted that the writ petition directly challenged both the District Magistrate’s order authorising possession and the DRT’s order dismissing the petitioner’s SARFAESI appeal.

Since the petitioner could challenge the DRT’s order before the DRAT, the Court treated that remedy as adequate and effective.

Applying the rule in Satyawati Tondon and the subsequent Supreme Court decisions, the Court declined to examine the petitioner’s factual claims regarding deposits, the disputed account statement, recalculation of dues, or the validity of the possession proceedings in writ jurisdiction.

The existence of an alternative statutory remedy was therefore determinative of maintainability, notwithstanding the petitioner’s contention that he was a small proprietor and that the property was his residential house.

The petition was accordingly disposed of without adjudicating the merits of the SARFAESI proceedings.

The petitioner was granted liberty to approach the appropriate forum, and the concerned authority was directed to consider the issue of limitation in accordance with law.

The writ petition and any pending interlocutory application were disposed of.