Patna HC Declines Borrower’s Writ Over Alleged Wrong-Plot Mortgage, Citing Available SARFAESI Remedy

In brief

The question

1. Whether the writ petition was maintainable under Article 226 where an alternative remedy was available under the SARFAESI framework.

The court held

The Court held that the writ petition was not maintainable in view of the available alternative and effective remedy and disposed of it, leaving the petitioner at liberty to approach the appropriate forum, with limitation to be considered by the concerned authority.

It also directed

It also clarified that the petitioner could approach the bank to settle the loan without seeking judicial permission.

01Facts

The petitioner challenged the bank’s SARFAESI action, alleging that when a cash-credit facility of ₹15 lakh was secured by an equitable mortgage, the bank’s authorised lawyer mistakenly verified a different parcel of land—Khata No. 262, Plot No. 1355—instead of the land described in the petitioner’s intended mortgage documents, Khata No. 118, Plot No. 109.

pp. 2–4

The petitioner sought, among other reliefs, a direction to treat the latter property as the mortgaged property and to refrain from further recovery action; he also expressed willingness to settle the loan.

pp. 2–4

The High Court considered the availability of an alternative remedy and disposed of the writ petition without determining the underlying property or mortgage dispute.

pp. 4–6

02Issues

i.1. Whether the writ petition was maintainable under Article 226 where an alternative remedy was available under the SARFAESI framework.

pp. 4–6

ii.2. Whether the petitioner’s request to settle the loan required permission or a specific direction from the Court.

p. 6

03Law Applied

Under Article 226, the High Court will ordinarily decline to entertain a petition where an effective statutory remedy is available, with particular rigour in matters concerning recovery of public dues and bank debts.

pp. 4–5

In United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, the Supreme Court held that parties should ordinarily exhaust remedies under the relevant recovery legislation before invoking writ jurisdiction.

pp. 4–5

Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1, reiterated that High Courts should not entertain Article 226 petitions where an effective remedy is available under the SARFAESI Act.

p. 5

The Court also relied on PHR Invent Educational Society v. UCO Bank, 2024 INSC 297, as reiterating the same principle.

pp. 5–6

04Reasoning

The petitioner’s claims concerned the identification of the property allegedly mortgaged and the bank’s recovery action. Applying the alternative-remedy principle in the cited Supreme Court decisions, the Court held that the petitioner should pursue the remedy available before the appropriate forum rather than seek relief under Article 226.

pp. 4–6

It left the merits of the property and mortgage dispute undecided and stated that the appropriate authority could consider limitation.

p. 6

As to settlement, the Court observed that the petitioner could approach the bank directly and did not require the Court’s permission to do so.

p. 6