Interlocutory Orders Imposing Conditional Stays Under SARFAESI Act Do Not Warrant Supervisory Intervention Under Article 227

The petitioners, borrowers of Respondent No. 1, were subjected to proceedings under the SARFAESI Act, ending in an order dated 24.03.2025 by the District Magistrate, Raipur, under Section 14

The petitioners challenged this before the Debts Recovery Tribunal (DRT), Jabalpur, via Securitisation Application No. 538/2025.

On 03.07.2025 and 15.07.2025, the DRT passed interlocutory orders directing the petitioners to deposit the outstanding amount as a condition for interim protection, allegedly treating a counsel's affidavit as consent for such payment

The petitioners’ subsequent Review/Recall Application (I.A. No. 7813 of 2025) was dismissed on 12.12.2025

The petitioners approached the High Court under Article 227 of the Constitution to quash these orders, alleging a lack of adjudicatory merit and jurisdictional error

1. Whether the High Court should exercise its supervisory jurisdiction under Article 227 to interfere with interlocutory and review orders passed by the DRT during the pendency of a Securitisation Application

2. Whether the financial conditions imposed by the DRT as a prerequisite for interim relief constitute a manifest perversity or jurisdictional error

The Court primarily applied the principles governing the supervisory jurisdiction of High Courts under Article 227 of the Constitution of India, which dictates that such power must be exercised sparingly and only in cases of "patent lack of jurisdiction, manifest perversity, or gross failure of justice"

The Court also highlighted the discretionary nature of interim orders under Section 17 of the SARFAESI Act, noting that a High Court should not act as an appellate court to re-appreciate factual controversies or "adjudicatory proceedings" while a statutory remedy is still pending

The Court reasoned that since Securitisation Application No. 538/2025 is still pending before the DRT, the petitioners have not been rendered remediless

Regarding the petitioners' claim that an affidavit was wrongly construed as "consent" for deposit, the Court held that these are disputed factual questions linked to the merits of the case which the DRT must decide based on evidence

The High Court emphasized that it cannot enter into a re-appreciation of facts as if sitting in appeal under the limited scope of Article 227

Furthermore, the Court found that the DRT’s rejection of the review application was supported by reasons and that the financial conditions imposed were within the realm of interim discretionary powers and not inherently arbitrary or perverse

The Court dismissed the writ petition, concluding that the petitioners remain at liberty to raise all grounds, including those regarding limitation and the District Magistrate’s proceedings, before the DRT where the matter remains seized

Dismissed