Karnataka HC Declines to Halt SBI Recovery as Borrower’s SARFAESI Challenge Remains Pending Before DRT

The petitioner challenged measures taken by the State Bank of India under the SARFAESI Act, including a Magistrate’s order dated 17 August 2023 under Section 14, a demand notice under Section 13(2), and a possession notice under Section 13(4).

He alleged that the Section 14 order was invalid because it was made against a deceased person and a non-existent person.

The petitioner initially sought declarations that Section 14 was unconstitutional or should be read to require a hearing, but withdrew those prayers.

He had previously challenged the Section 13(2) notice in a writ petition, which he later withdrew, and had filed S.A. No. 860/2026 before the Debts Recovery Tribunal (DRT), challenging, among other matters, the auction of one property and the bank’s SARFAESI action.

Section 14 of the SARFAESI Act provides for assistance by the Chief Metropolitan Magistrate or District Magistrate in taking possession of secured assets in furtherance of enforcement measures under the Act.

The Court proceeded on the basis that a challenge to a Section 14 order must be considered in the context of the connected SARFAESI measures, including measures under Section 13(4), and the remedies pursued before the DRT.

The Court noted that the Section 14 order was consequential to the Bank’s SARFAESI measures and that the petitioner had not challenged the Section 13(4) measures in this writ petition.

It also considered that the petitioner had already invoked the DRT’s jurisdiction in S.A. No. 860/2026, seeking relief concerning the auction and the Bank’s SARFAESI action.

In those circumstances, the Court held that the petitioner’s allegation concerning the Section 14 order did not warrant separate intervention in the writ petition, particularly when related measures were before the DRT.

Pending interlocutory applications, if any, were disposed of.