Interim protection vacated as petitioners are relegated to statutory remedies before the DRT.

The petitioner in W.P. No. 5318/2026 is a borrower, while the petitioners in W.P. No. 9651/2026 are tenants of said borrower.

Following an order by the Debt Recovery Tribunal (DRT), Jabalpur, on 14/11/2025, the borrower was granted a 15-day "cushion" to deposit Rs. 10 lacs and submit a One Time Settlement (OTS) proposal to the respondent Bank.

Although the money was deposited within three days, the borrower failed to submit the OTS proposal for over a month.

The Bank subsequently rejected the late proposals and the Tahsildar issued a notice dated 29/01/2026 for the borrower to hand over physical possession of the mortgaged property.

The petitioners challenged this notice, seeking a stay until OTS negotiations were concluded.

1. Whether the possession notice dated 29/01/2026 was issued in violation of the directions passed by the DRT, Jabalpur.

2. Whether the petitioners are entitled to protection from dispossession while OTS negotiations are pending or have failed.

The Court exercised its discretionary jurisdiction under Article 226 of the Constitution of India regarding the issuance of writs of mandamus or certiorari.

The court adhered to the principle that when statutory remedies (such as those under the SARFAESI Act or RDDBFI Act) are available before the Debt Recovery Tribunal (DRT), the High Court may allow the withdrawal of writ petitions to permit parties to pursue such specialized legal forums.

The Court observed that the borrower failed to adhere to the timeline prescribed by the DRT for submitting the OTS proposal, despite complying with the deposit requirement.

The Bank established that because the OTS proposal was either delayed or unsatisfactory, it had initiated recovery proceedings through a show-cause notice dated 17/03/2024.

The Court noted the Bank's position that the purpose of the writ petition was effectively frustrated by the failure of the settlement process.

Consequently, when the petitioners sought to withdraw the petitions to approach the DRT, the Court found no reason to maintain the interim stay, as the Bank had the right to proceed with the auction of the mortgaged property following the failure of the OTS.

It granted liberty to the petitioners to approach the DRT, Jabalpur, to raise all available legal grounds.

The Court specifically vacated the interim relief granted on 12/02/2026 and directed that the respondent Bank is permitted to proceed with the auction proceedings of the mortgaged property in accordance with the law.