State's Failure To Promptly Execute Section 14 SARFAESI Order Defeats Purpose Of Law: Punjab & Haryana High Court

The Punjab and Haryana High Court has recently observed that failure of state authorities to implement orders passed under Section 14 of the SARFAESI Act, which empowers the District Magistrate to assist secured creditors in taking physical possession of secured assets, defeats the statutory mandate of expeditious enforcement of security interests and undermines binding judicial precedents, observing that such inaction paralyses the statutory mechanism. Allowing a writ petition filed by IIFL...

DRT Has No Inherent Power To Refund Court Fee In Section 17 SARFAESI Proceedings: Karnataka High Court

The Karnataka High Court has recently held that the Debts Recovery Tribunal (DRT) has no inherent power to refund court fees paid in proceedings under Section 17 of the SARFAESI Act in the absence of an express statutory provision, even if the proceedings become infructuous due to settlement between the parties, ruling that courts cannot order the refund of a statutory levy unless authorized by law.Emphasising that court fees are governed strictly by statute, the Division Bench of Chief Justice...

Bombay High Court Flags Misuse Of IBC By Borrowers To Stall SARFAESI Recovery After Auction Sale

The Bombay High Court on Wednesday flagged a disturbing trend of defaulting borrowers invoking provisions of the Insolvency and Bankruptcy Code to frustrate proceedings under the SARFAESI Act, even after auction rights had crystallised in favour of auction purchasers. A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat was hearing a writ petition filed by auction purchasers challenging a November 26, 2025 order of the Debts Recovery Tribunal-I, Mumbai, which had halted further...

Establishment Of Kolhapur Bench No Ground To Say Mumbai Seat Lost Jurisdiction Over Writ Against DRAT Order: Bombay High Court

The Bombay High Court has recently ruled that the creation of the Kolhapur Circuit Bench does not divest the Principal Seat at Mumbai of jurisdiction over a writ petition challenging an order of the Debts Recovery Appellate Tribunal, even where the dispute originates in Kolhapur district. A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat made the observation while hearing a writ petition challenging a September 19, 2024 order of the Debts Recovery Appellate Tribunal (DRAT) in...

ACJM Not Subordinate To CJM In Judicial Functions In SARFAESI Possession Proceedings: Bombay High Court

The Bombay High Court has held that an Additional Chief Judicial Magistrate is competent to entertain applications under Section 14 of the SARFAESI Act, ruling that the magistrate exercises judicial powers at par with a Chief Judicial Magistrate. Section 14 allows a secured creditor (bank/financial institution) to seek assistance from a magistrate to take physical possession of secured assets when a borrower defaults.A coram of Justice Urmila Joshi Phalke dismissed a criminal application filed...

SARFAESI Action Does Not Bar Civil Court From Hearing Partition Suit: Bombay High Court

The Bombay High Court has held that civil courts retain jurisdiction to adjudicate partition suits involving secured assets, observing that the Debts Recovery Tribunal cannot grant such relief even where proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) have been initiated. A Single Bench of Justice N.J. Jamadar observed that, “The Tribunal, thus, cannot transgress its jurisdictional limits and delve into the...

Auction Of Pledged Gold Not Governed By SARFAESI: J&K and Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh on Wednesday dismissed writ petitions challenging Axis Bank's proposed auction of pledged gold ornaments, observing that such action does not fall within the ambit of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) since pledges of movable property are excluded under Section 31(b) of the statute. A division bench of Justice Sindhu Sharma and Justice Shahzad Azeem was dealing...

Single Judge Cannot Disregard Rulings Of Division Bench Under Guise Of Reference: Kerala High Court

The Kerala High Court on Wednesday held that a Single Judge is bound by decisions of Division Benches and Full Benches and cannot question or disregard a binding Division Bench ruling under the guise of making a reference. A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M was dealing with a reference arising from a writ petition filed by Grids Engineers and Contractors, challenging proceedings initiated by Union Bank of India under Section 14 of the SARFAESI Act. The Bench...

Bank Cannot Cancel Confirmed Auction Sale Due To Pending DRT Proceedings: Kerala High Court

The Kerala High Court on 3 March held that a bank cannot unilaterally set aside a confirmed auction sale merely because proceedings challenging the sale are pending before the Debts Recovery Tribunal (DRT). A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S was considering an appeal filed by the legal heirs of Vinod M.A., an auction purchaser. The Court stated: “It is trite that the authorised officer of the Bank cannot set aside the sale which was already confirmed in...

Limited SARFAESI Auction Deferment To Preserve Subject Matter Within Supervisory Jurisdiction: Kerala High Court

The Kerala High Court on Monday upheld a Single Judge's two-week deferment of a SARFAESI auction, holding that the limited relief granted to preserve the subject matter did not exceed supervisory jurisdiction under Article 227 of the Constitution. A division bench of Justice Anil K Narendran and Justice Muralee Krishna S dismissed a writ appeal filed by Union Bank of India, observing that the single judge had not entered into the merits of the dispute. S.S. Glass World had approached the...

Delhi High Court Sets Aside Bank-Issued LOCs Against Pomegranate Coaters Directors and Guarantors

The Delhi High Court on 18 February set aside Look Out Circulars (LOCs) issued by Bank of Baroda against the directors and guarantors of Pomegranate Coaters Pvt. Ltd. Justice Purushaindra Kumar Kaurav was hearing petitions by the directors, promoters, and guarantors of Pomegranate Coaters, who had availed credit facilities from the bank.Following defaults, the bank initiated recovery proceedings under the SARFAESI Act and the Recovery of Debts Due to Financial Institutions Act, and...

Kerala High Court Says Writ Maintainable Against SARFAESI Notice Before Recovery Action In Housing Loan Dispute

The Kerala High Court has held that a writ petition filed by the legal heirs of a deceased borrower was maintainable at the stage of a Section 13(2) notice under the SARFAESI Act, since no measures under Section 13(4) had yet been initiated and their challenge also concerned the bank's alleged failure to transfer the insurance premium to the insurer. A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S was hearing an appeal filed by Prameela Devi and her two daughters, the...