Writ Petition under Article 226 Inadmissible Where Effective Alternative Remedy Exists Under SARFAESI Act

The petitioner, a proprietary firm, challenged an ex-parte order dated 01.08.2023 (communicated via DB no. 949 dated 25.10.2023) issued by the District Magistrate, Madhepura, under Section 14 of the SARFAESI Act, 2002.

The order directed the Circle Officer to take physical possession of the petitioner’s mortgaged residential property (khata no. 88, khesra no. 6081/935, measuring 2.183 decimals) following the classification of the petitioner’s overdraft account as a Non-Performing Asset (NPA) on 27.06.2019.

The petitioner sought to set aside the order and requested a stay on interference with the dwelling house.

1. Whether a Writ Petition under Article 226 of the Constitution is maintainable when an alternative statutory remedy is available under the SARFAESI Act, 2002?

The Court applied the principle of "alternative and effective remedy," emphasizing that High Courts should ordinarily refrain from exercising writ jurisdiction under Article 226 if a statutory remedy exists.

The Court relied on United Bank of India v. Satyawati Tondon (2010), which established that this rule applies with greater rigour in matters of bank dues recovery.

It further cited Celir LLP v. Bafna Motors (Mumbai) (P) Ltd. (2024) and PHR Invent Educational Society v. UCO Bank & Ors (2024), both of which reiterate that High Courts should not entertain petitions where the SARFAESI Act provides a remedy.

The Court analyzed the maintainability of the writ petition in light of established Supreme Court precedents regarding financial recoveries.

It noted that the SARFAESI Act serves as a "code unto itself," providing a comprehensive procedure for redressal through quasi-judicial bodies (such as the DRT).

The Court reasoned that because the petitioner has an effective and alternative statutory remedy available to challenge the Section 14 order and the possession proceedings, the High Court’s extraordinary jurisdiction under Article 226 should not be invoked.

The petition was disposed of, granting the petitioner liberty to approach the appropriate forum (DRT) for relief.

The Court further directed the concerned authority to consider the aspect of limitation if the petitioner seeks such remedy. All interlocutory applications were also disposed of.