Reaffirming Supreme Court precedent, the High Court clarifies that intervention under Article 226 in matters under the SARFAESI Act is to be avoided when the statutory remedies before DRT/DRAT have not been exhausted. This decision upholds the binding nature of settled law and guides all subordinate courts on the principle of relegation to alternative remedies in the secured creditor-borrower context.
Summary
| Category | Data |
|---|---|
| Case Name | CWP/16333/2024 of GURMEET SINGH AND OTHERS Vs CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LTD AND OTHERS |
| CNR | PHHC010913222024 |
| Date of Registration | 16-07-2024 |
| Decision Date | 30-10-2025 |
| Disposal Nature | DISPOSED OF |
| Judgment Author | SHEEL NAGU, CHIEF JUSTICE |
| Concurring or Dissenting Judges | MR. JUSTICE SANJIV BERRY (Concurring) |
| Court | High Court of Punjab & Haryana |
| Bench | Division Bench: SHEEL NAGU (CJ), SANJIV BERRY, J. |
| Precedent Value | Binding within territorial jurisdiction of the court |
| Overrules / Affirms | Affirms prior Supreme Court judgments |
| Type of Law | Procedural (Writ Jurisdiction; SARFAESI Act) |
| Questions of Law | Should writ jurisdiction be exercised under Article 226 to intervene in SARFAESI proceedings when alternative statutory remedies exist? |
| Ratio Decidendi |
The High Court reiterated that SARFAESI Act is a complete code for enforcement and recovery of secured assets and provides detailed mechanisms including remedy before DRT/DRAT. Consistent with Supreme Court precedent, writ jurisdiction under Article 226 should not be exercised where an adequate statutory remedy exists, unless exceptional circumstances are demonstrated. Petitioners should approach the DRT under Section 17 of the SARFAESI Act before seeking writ intervention. |
| Judgments Relied Upon |
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| Logic / Jurisprudence / Authorities Relied Upon by the Court |
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| Facts as Summarised by the Court |
Petitioners, being borrowers, challenged a notice dated 14.06.2023 under Section 13(4) of SARFAESI Act before the High Court, without having availed the remedy before DRT/DRAT. The High Court noted the absence of recourse to statutory remedy, reminded of consistent Supreme Court jurisprudence, and relegated the petitioners to approach the DRT under Section 17 within 30 days, with protection for existing interim relief. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the territorial jurisdiction of Punjab & Haryana High Court |
| Persuasive For | Other High Courts interpreting scope of Article 226 vis-à-vis the SARFAESI Act |
| Follows |
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What’s New / What Lawyers Should Note
- The High Court has clearly stated that writ petitions challenging SARFAESI notices/orders are not maintainable where the alternative remedy of appeal before DRT/DRAT has not been exercised.
- Relief under Article 226 remains strictly exceptional in the SARFAESI regime; standard disputes must be presented before statutory tribunals.
- Interim protection granted by the High Court will continue if the DRT is approached in stipulated time, but will lapse if petitioners default.
- The DRT is directed to ignore the High Court’s interim order while considering interim relief, ensuring an independent and merits-based assessment.
- Lawyers must advise clients to approach DRT under Section 17 before invoking writ jurisdiction in SARFAESI cases.
Summary of Legal Reasoning
- The Court noted that SARFAESI Act establishes a complete mechanism for redressal in relation to enforcement of secured interests, including appeals to the DRT and DRAT.
- Relying on Supreme Court precedents — United Bank of India v. Satyawati Tondon (AIR 2010 SC 3413), Phoenix ARC Pvt. Ltd. v. Vishwa Bharati Vidya Mandir (2022) 5 SCC 345, and PHR Invent Educational Society v. UCO Bank (2024) 6 SCC 579 — the Court emphasized that High Courts should refrain from exercising Article 226 jurisdiction where effective statutory remedies are available.
- The Court found the petitioners had not exhausted their statutory remedy by approaching the DRT under Section 17 of SARFAESI Act.
- Accordingly, petitioners were relegated to approach the DRT/DRAT, and interim relief was protected till such time as the DRT considered the interim application on merits.
- The Court clarified that its own order would not prejudice the DRT’s consideration of interim relief.
- The writ petition was thus disposed of without adjudicating on the merits.
Arguments by the Parties
Petitioner
No appearance; Court summarised that the borrowers challenged the notice issued under Section 13(4) of the SARFAESI Act on various grounds.
Respondent
Senior DAG representing the State; no submissions specifically noted by the Court.
Factual Background
The petitioners, borrowers, challenged a notice dated 14.06.2023 issued under Section 13(4) of the SARFAESI Act before the High Court. They had not availed the statutory alternative remedy of approaching the DRT/DRAT as provided under the Act. The High Court, referencing consistent Supreme Court precedent, directed petitioners to first approach the DRT, with procedural safeguards for interim relief.
Statutory Analysis
- The Court referenced and applied Section 13(4) (enforcement of security interest by the secured creditor) and Section 17 (right to appeal to DRT by aggrieved persons) of the SARFAESI Act.
- Affirmed the interpretation that the SARFAESI Act constitutes a complete code regarding enforcement and redressal mechanisms for secured creditors and borrowers.
- There was no expansive or restrictive statutory interpretation; rather, the existing statutory scheme and its remedies were invoked as exhaustive.
Dissenting / Concurring Opinion Summary
Both judges (Chief Justice SHEEL NAGU and MR. JUSTICE SANJIV BERRY) concurred in the decision; no dissent or alternative reasoning recorded.
Procedural Innovations
- The Court provided specific direction that interim relief already granted would subsist until the DRT considered the application for interim relief, provided petitioners approached within 30 days.
- Clarified that DRT must assess interim relief independently, uninfluenced by the High Court’s order.
Alert Indicators
- ✔ Precedent Followed – When existing law is affirmed.