Writ petition is not maintainable under Article 226 when an alternative effective remedy exists under the SARFAESI Act.

The petitioner, Canara Bank (erstwhile Syndicate Bank), filed a writ petition under Article 226 of the Constitution of India seeking to quash a Sale Notice dated 24/08/2023 issued by Respondent No. 3 (Bank of Baroda).

The petitioner contended that the subject property (situated at Mauza-Sahbazpur, Muzaffarpur) was already mortgaged to them in 2012 to secure loan accounts of Respondent No. 5.

These accounts were classified as Non-Performing Assets (N.P.A.) in 2015, and the petitioner had already initiated recovery proceedings under the SARFAESI Act, 2002.

The petitioner sought to restrain Bank of Baroda from proceeding with the sale of the same property, alleging the sale notice was illegal.

1. Whether a writ petition under Article 226 is maintainable against recovery actions taken under the SARFAESI Act when an alternative statutory remedy is available.

High Courts should not ordinarily entertain Article 226 petitions if an effective statutory remedy exists, especially regarding bank dues [United Bank of India v. Satyawati Tondon (2010) 8 SCC 110].

High Courts must refrain from exercising writ jurisdiction when the SARFAESI Act provides a specific redressal mechanism [Celir LLP v. Bafna Motors (Mumbai) (P) Ltd. (2024) 2 SCC 1 and PHR Invent Educational Society v. UCO Bank & Ors. (2024) INSC 297].

The Court reasoned that the legislations enacted for the recovery of public money and bank dues are "a code unto themselves," containing comprehensive procedures for recovery and quasi-judicial bodies for dispute resolution.

Referring to the precedents set by the Hon’ble Supreme Court, the Court noted that the rule of exhausting alternative remedies applies with "greater rigour" in financial recovery matters.

Since the dispute involved a challenge to sale proceedings initiated under the SARFAESI Act, the Court found that the petitioner had an effective and alternative statutory forum to challenge the Bank of Baroda's actions.

The Court declined to exercise its extraordinary jurisdiction under Article 226, determining that the petition was not maintainable in light of the available statutory remedies.

The petition was disposed of with the observation that the petitioners are at liberty to approach the appropriate forum/authority to seek relief.

The Court further directed the concerned authority to consider the aspect of limitation while entertaining such a plea and disposed of all pending interlocutory applications.