Karnataka HC Calls Borrowers’ Repeat Challenge To Bank’s SARFAESI Section 14 Order Abuse Of Process, Imposes ₹10,000 Costs

The petitioners challenged an order dated 27 July 2023 made under Section 14 of the SARFAESI Act by the Principal Senior Civil Judge and Chief Judicial Magistrate, Udupi.

Their challenge to the possession notice had earlier been dismissed by the Debt Recovery Tribunal in S.A. No. 320/2021; a previous writ petition challenging the same Section 14 order was disposed of with liberty to pursue an efficacious remedy.

In this petition, the respondent Bank argued that a writ against a private bank was not maintainable.

The petitioners were unrepresented when the matter was called.

Under Article 226, a writ may issue against a private body where it discharges a public duty or statutory function carrying a public-law element; ordinarily, mandamus compels performance of a public duty imposed by statute or statutory rule.

In S. Shobha v. Muthoot Finance Ltd., 2025 INSC 117, the Supreme Court held that a private company carrying on banking business as a scheduled bank does not, merely by conducting that business or complying with RBI regulatory guidelines, perform a public function or public duty.

The Court also relied on Federal Bank Ltd. v. Sagar Thomas, (2003) 10 SCC 733, and the Karnataka High Court decisions in Gowtham v. Karnataka Bank Ltd. and Karnataka Bank Ltd. v. Smt. Rekha Rao on the limits of writ jurisdiction against private banks.

Applying S. Shobha and the cited authorities, the Court held that Karnataka Bank’s status as a private scheduled bank did not make its actions amenable to writ jurisdiction absent a relevant public duty or public-law element.

The Court further noted that the petitioners had already challenged the same Section 14 order in an earlier writ petition, which had been disposed of with liberty to pursue an efficacious remedy.

It considered the renewed challenge, without taking effective steps through that remedy, an abuse of process.

The merits of the Section 14 order were not adjudicated.

In view of the repeated challenge to the same order, imposed costs of ₹10,000 payable to the Karnataka State Legal Services Authority.

The earlier order also recorded that dismissal would not prevent the petitioners from pursuing a remedy before the competent forum and that time spent prosecuting the writ petition would be considered for limitation purposes.