Non-Borrower Aggrieved By SARFAESI Action Can Approach DRT, Writ Not Maintainable: Rajasthan High Court

The Rajasthan High Court has recently held that a flat purchaser whose property is treated as a secured asset under the SARFAESI Act cannot bypass the remedy before the Debt Recovery Tribunal by directly invoking writ jurisdiction. The court said a writ petition is not maintainable when an effective statutory remedy is available.

Justice Sunil Beniwal dismissed the petition, holding that even though the petitioner was not a borrower or a guarantor, the possession notice directly affected his rights.

“Although, the petitioner is neither a borrower nor a guarantor, however, since his rights are grievously affected by the impugned notice, he is an aggrieved person and can very well approach the Debt Recovery Tribunal,” the court said.

The petitioner, Rajeev Bhandari, had bought a flat in Parshvanath City, Jodhpur, in August 2018 and had been living there with his family. In September 2025, Edelweiss Asset Reconstruction issued a notice under Section 13(4) of the SARFAESI Act treating the flat as a secured asset.

The notice was not addressed to Bhandari, but it described his flat as part of the secured property. He later lodged an FIR against the developer alleging forgery and moved the High Court.

Bhandari argued that SARFAESI proceedings could not be taken against him since he was neither a borrower nor a guarantor.He also contended that the remedy before the DRT was unavailable to him and relied on the Supreme Court's decision in Central Bank of India v. Prabha Jain to argue that disputes involving title could not be examined by the tribunal.

The court rejected these submissions. It noted that Edelweiss is a private financial institution and not “State” under Article 12 of the Constitution. It also observed that the possession notice treated Bhandari's flat as a secured asset and appeared to proceed on the basis that the developer had mortgaged the property.

In such a situation, the court held, the proper remedy lies before the DRT. The writ petition was dismissed as not maintainable, with liberty to approach the appropriate forum in accordance with law.

For Petitioner: Advocates Manish Patel and Nandipna Gehlot