WRIT PETITION CHALLENGING SARFAESI MEASURES IS NOT MAINTAINABLE DURING THE PENDENCY OF STATUTORY PROCEEDINGS BEFORE THE DRT.

The appellants, an auction purchaser (Waheguru Projects) and a secured creditor (Phoenix Arc), challenged interim orders dated 28.11.2025 passed by a Single Judge in Writ Petitions C No. 11302 and 11298 of 2025.

The respondent-petitioner, Bharat Petroleum Corporation Limited (BPCL), and its sub-lessee, M/s Arora Auto Center, had filed these writ petitions seeking restoration of possession of a secured asset (a petrol pump site) after physical possession was taken under Section 14 of the SARFAESI Act, 2002.

Crucially, at the time of filing the writ petitions, the respondents had already filed several Securitization Applications (S.A. Nos. 909/2023, 487/2024, and 1067/2025) before the Debt Recovery Tribunal (DRT), Lucknow, seeking substantially the same reliefs.

The Single Judge had ordered restoration of possession within 24 hours despite the pendency of these statutory proceedings.

1. Whether the writ petitions were maintainable before a Single Judge Bench in light of the High Court's roster and the Chief Justice’s orders dated 18.09.1981.

2. Whether the writ petitions were maintainable under Article 226/227 when the petitioners had already invoked the alternative statutory remedy under Section 17 of the SARFAESI Act, 2002.

3. Whether a writ petition is maintainable against a private financial institution/Asset Reconstruction Company (ARC) for actions taken under the SARFAESI Act.

The Court applied the administrative orders of the Chief Justice (18.09.1981) which dictate that matters involving the SARFAESI Act are cognizable by a Division Bench.

The High Court should not entertain writ petitions when an effective statutory remedy has already been availed, as established in Bombay Metropolitan Region Development Authority v. Gokak Patel Volkart Ltd. and Om Prakash Saini v. DCM Ltd.

Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, which holds that a writ petition against a private ARC for commercial recovery actions is not maintainable as the ARC does not perform public functions.

The court also noted the status of a "tenant in sufferance" under the SARFAESI framework as per Bajarang Shyamsunder Agarwal v. Central Bank of India.

The Court observed that the respondents bypassed the jurisdictional hierarchy of the High Court; the Reporting Section had flagged the cases for a Division Bench, but the petitioners’ counsel insisted they be heard by a Single Judge.

Substantively, the Court found that BPCL and the sub-lessee were engaged in "forum shopping" by seeking the same reliefs before the High Court that were already pending in multiple applications before the DRT.

The Court reasoned that Section 17 of the SARFAESI Act provides a complete mechanism for adjudicating the rights of tenants and the validity of Section 14 orders.

The Single Judge erred by entering into complex factual disputes—such as the validity of mortgage deeds, the death of guarantors, and the expiration of lease terms—which require evidence better suited for the DRT.

The Court emphasized that since the secured creditor (Phoenix ARC) is a private entity not performing a public duty, a writ under Article 226 was fundamentally misplaced.

The special appeals were allowed, and the interim orders dated 28.11.2025 were quashed. Writ C No. 11298 of 2025 and Writ C No. 11302 of 2025 were dismissed.

The Court directed that issues regarding petroleum stocks and structures could be resolved via specialized Petroleum Rules or before the DRT, but the High Court would not interfere with the recovery process.