[SARFAESI Act] HC Cannot Interfere In Commercial Matters When Relief Is Available Before DRT: Kerala High Court

The Division Bench comprising Justice Anil K Narendran and Justice Muralee Krishna S were delivering the judgment in a writ appeal filed by Kerala Bank against a single judge decision which allowed an instalment relief and return of possession of a mortgaged property under SARFAESI Act.

The case arose after the borrower, who had availed a Rs 16 lakh business loan in 2019, defaulted on repayment. The Appellant Bank took possession of the mortgaged property in March 2025 under SARFAESI proceedings. The borrower filed a writ petition seeking installment relief and the return of possession, which a Single Judge allowed conditionally, ordering the bank to return possession upon payment of Rs. 4,00,000 and to accept the remaining dues in twelve monthly installments.

The bench examined whether the High Court could entertain a writ petition under Article 226 of the Constitution challenging SARFAESI proceedings when the borrower had not availed the alternative statutory remedy under Section 17 of the SARFAESI Act.

The Bench held that the writ jurisdiction cannot be invoked to circumvent the statutory remedy available before the DRT. The Court relied on precedents by the Supreme Court which included South Indian Bank Ltd. v. Naveen Mathew Philip [(2023) 17 SCC 311], United Bank of India v. Satyawati Tondon [(2010) 8 SCC 110], and Phoenix ARC Pvt. Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345], and reiterated that High Courts must refrain from interfering in SARFAESI matters except in extraordinary circumstances involving procedural illegality or violation of natural justice.

The Division Bench observed that since the bank had already taken possession of the secured asset before the writ petition was filed, the Single Judge erred in directing restoration of possession. The proper course for the borrower was to approach the DRT under Section 17 of the Act instead of invoking the writ jurisdiction under Article 226 of Constitution of India.

“If the respondent-petitioner and his mother, who are the borrowers, are aggrieved by the proceedings initiated by the appellants under the provisions of the SARFAESI Act, which had resulted in the Bank repossessing the secured asset on 17.03.2025, they should have invoke the statutory remedy provided under Section 17 of the SARFAESI Act by approaching the Debts Recovery Tribunal, instead of invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India.” the bench observed.

The Court thus allowed the appeal by setting aside the judgment by the Single Judge and noted that the writ petition was not maintainable. The Court has noted that the petitioner can the statutory remedy provided under Section 17 of the SARFASI Act against coercive steps initiated by the Appellant Bank.

Case Title: Kerala Bank and Anr v Jishith Kumar

Case No: WA 2036/ 2025

Citation: 2025 LiveLaw (Ker) 648

Counsel for Appellant: P C Sasidharan

Counsel for Respondent: Anilkumar V