Calcutta High Court Says MSME Can't Seek Revival Benefit After SARFAESI Action, Rejects Debpara Claim

The Calcutta High Court on 2 September dismissed a writ petition filed by Debpara Tea Company Ltd against State Bank of India (SBI), which sought the benefit of the Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises (MSMEs) and challenged the classification of its account as a Non-Performing Asset (NPA). Justice Krishna Rao held that an MSME cannot seek the benefit of the Framework at a belated stage after the bank has issued a notice under Section 13(4) of the...

Punjab & Haryana High Court Mandates CIN, DIR-12 For Cheque-Bounce Complaints Against Companies

The Punjab and Haryana High Court has recently directed that, from now on, cheque-bounce complaints against companies must carry the company's Corporate Identification Number (CIN) and a certified copy of Form DIR-12. The documents must help establish that the persons being arraigned were actually responsible for the company's affairs when the cheque was issued or dishonoured.The CIN is the company's unique identification number. The court wants it to be taken from the Ministry of Corporate...

Borrower Cannot Demand Hearing Before Magistrate U/S 14 SARFAESI Act: Allahabad High Court

The Allahabad High Court on 25 August held that a borrower has no right to a hearing before the District Magistrate passes an order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), as the Magistrate does not adjudicate disputes between the borrower and secured creditor.Section 14 of the SARFAESI Act enables a secured creditor to approach the Chief Metropolitan Magistrate or District Magistrate having...

DRT Can Decide Legality Of SARFAESI Action Against MSME Companies: Calcutta High Court

The Calcutta High Court recently observed that the Debts Recovery Tribunal (DRT) can examine whether Indian Bank rightly initiated SARFAESI proceedings against two MSME companies.The Division Bench of Justice Shampa Sarkar and Justice Arjun Ray Mukherjee observed,"Thus, the question whether the SARFAESI proceeding had been rightly initiated by the Bank and whether the steps taken under the SARFAESI Act were legally permissible in view of the Framework of the RBI, in our, prima facie, view can be...

Absence Of Prior Decree Does Not By Itself Negate Cheque Liability: Delhi High Court

The Delhi High Court has ruled that the absence of a prior decree or adjudication quantifying damages does not, by itself, establish at the stage of issuance of process that a cheque was not issued towards a legally enforceable liability.“A settlement is, by its very nature, an agreement between parties to resolve their existing disputes and claims on mutually agreed terms. The legal effect of the settlement, including the consideration for the promise to pay the agreed amount, would have to be...

No Interim Stay From High Court If DRT Already Considered Relief Sought: Calcutta High Court

The Calcutta High Court on 28 August held that a petitioner who has already approached the Debts Recovery Tribunal (DRT) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act cannot seek an interim stay from the High Court when the Tribunal has not granted such relief. Justice Om Narayan Rai dismissed a writ petition filed by Jayasri Acharya seeking to restrain a bank from taking possession of a property in which she claimed to be a...

Pending Registration Of Sale Certificate Does Not Mean SARFAESI Sale Is Incomplete: Delhi High Court

On 3 September, the Delhi High Court held that the mere pendency of registration of a Sale Certificate does not by itself render a sale under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) incomplete. A Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia dismissed an appeal filed by Patil Constructions against the Single Judge's order dated 23 July 2026, which had dismissed its writ...

Banks Can Use SARFAESI To Recover Dues Under Loans Acquired From Non-Notified Institutions: Supreme Court

The Supreme Court has ruled that a bank can use the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, commonly known as the SARFAESI Act, to recover a secured loan it acquired from an entity not covered by the law. This applies even if the original lender was not covered by the Act when the loan was granted.Justices Sanjay Kumar and Sanjeev Sachdeva ruled,“When the institution is one to which the SARFAESI Act is already applicable, acquisition...

MSME Borrower Can't Raise Revival Framework Defence In Subsequent SARFAESI Case: Kerala High Court

The Kerala High Court on 1 September held that an MSME borrower cannot invoke the MSME revival and rehabilitation framework for the first time in subsequent litigation to challenge SARFAESI proceedings when the borrower failed to raise the issue in the first round of litigation. A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. upheld the dismissal of a writ petition filed by Soubhagye Road Builders and its proprietors against recovery proceedings initiated by Canara Bank...

Recovery Officer Cannot Attach SARFAESI Statutory Pre-Deposit U/S 28(4) RDB Act: Kerala High Court

The Kerala High Court on 31 August held that a Recovery Officer cannot attach a statutory pre-deposit made by a borrower under the second proviso to Section 18 of the Securitisation and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002 (SARFAESI Act), by invoking Section 28(4) of the Recovery of Debts and Bankruptcy Act, 1993. A Division Bench of Chief Justices Soumen Sen and Syam Kumar V.M. set aside the Recovery Officer's order attaching E.T. Firoz's Rs....

Bombay High Court Dismisses Contempt Plea Against Kotak Mahindra Bank Over 7-Day Possession Notice

On 21 August, the Bombay High Court dismissed a contempt petition alleging that Kotak Mahindra Bank and the Tahsildar, Mira-Bhayandar violated the Court's direction to give seven days' notice before taking physical possession of a secured flat. A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat held that the failure to give the full seven-day notice did not amount to gross contempt or wilful disobedience, and found that the Tahsildar's office appeared to have miscalculated the...

Cheque Handover Date Discrepancy Does Not Defeat Liability When Signatures Are Admitted: Delhi High Court

The Delhi High Court on 10 August held that a discrepancy regarding the date on which a cheque bearing the defendant's admitted signatures was handed over, does not, by itself, undermine the underlying loan liability. Justice Neena Bansal Krishna dismissed Rakesh Srivastava's appeal and upheld the 30 April 2026 judgment of the District Judge, which had decreed Pradeep Yadav's recovery suit for Rs. 6 lakh with pendente lite and future interest at 9% per annum. She observed: "When the cheque...