Calcutta High Court Denies Relief To SARFAESI Auctions Buyer After DRT Bars SBI From Issuing Sale Certificate

The Calcutta High Court has held that State Bank of India cannot be faulted for withholding a sale certificate to a successful auction purchaser when it is restrained from doing so by a subsisting Debts Recovery Tribunal order. The Court refused to direct the bank to either complete the sale or refund ₹11.41 crore paid by the purchaser. Justice Ravi Krishan Kapur held: “This is not a case where the respondent bank has failed to issue the sale certificate on its own volition. There is no...

Calcutta High Court Refuses Wife Relief Against Bank's SARFAESI Action Despite DV Act Protection Order

The Calcutta High Court has refused to interfere with HDFC Bank's SARFAESI action against a property despite a wife having secured a domestic violence protection Act order over the same premises. The Court noted that her challenge to the bank's possession notice is already pending before the Debts Recovery Tribunal. A Division Bench of Chief Justice Sujoy Paul and Justice Partha Sarathi Sen observed,“In view of availing of such alternative remedy, we are of the considered view that the learned...

Allahabad High Court Rejects Civil Court Relief In Covid Loan Diversion Case, Upholds SARFAESI Action

On 11 May, the Allahabad High Court dismissed an appeal seeking to restrain SARFAESI recovery proceedings against Srijan Hospital, holding that civil courts cannot interfere where a borrower breaches loan conditions by diverting funds and statutory remedies under the SARFAESI Act, 2002 are available. A Bench of Justice Abdul Shahid held: “The appellant/plaintiff has materially changed the purpose of the aforesaid loan. He had entered into an agreement with the respondent-bank under the LGSCAS...

Cheque Bounce Conviction Cannot Be Reversed In Revision Over POA Pleading Defect: Kerala High Court

The Kerala High Court on 18 May 2026 held that a conviction in a cheque dishonour case under Section 138 of the NI Act, cannot be set aside at the revision stage merely on the ground that the complaint was filed through a power-of-attorney holder without an averment as to the attorney's personal knowledge of the transaction, unless the accused shows that the defect caused prejudice or resulted in a failure of justice.Justice G Girish noted that in the present case, the Chief Judicial Magistrate...

'Security Cheque' Not Statutorily Defined, Not Exempt From Cheque Bounce Proceedings: Himachal Pradesh HC

The Himachal Pradesh High Court has refused to quash cheque dishonour proceedings at the threshold in a case where the accused claimed the dishonoured cheque had been issued only as security. Justice Sandeep Sharma said a cheque described as a “security cheque” is not automatically excluded from cheque dishonour proceedings. “Needless to say, expression “Security Cheque” is not a statutorily defined expression in the Negotiable Instruments Act, rather same is to be inferred from the pleadings...

Borrower Consent Mandatory For SARFAESI Sale At Reserve Price: Andhra Pradesh High Court

The Andhra Pradesh High Court has recently held that a bank cannot confirm the sale of a secured asset in a SARFAESI auction when the highest bid matches the reserve price unless the borrower consents. “The sale of the secured asset in the auction exactly at the reserve price cannot be confirmed by the Authorised Officer without the consent of the borrower,” the Court held. A Division Bench of Justice Cheekati Manavendranath Roy and Justice V. Gopala Krishna Rao dismissed writ petitions filed...

Proof Of Cheque Execution Under NI Act Triggers Presumption Unless Rebutted: Kerala High Court

The Kerala High Court on Monday, 18 May, held that once a complainant proves the transaction and execution of a cheque in a prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumptions under Sections 118 and 139 operate in the complainant's favour unless rebutted by the accused. Justice A. Badharudeen set aside a Trial Court judgment acquitting Jayapal, the accused in a cheque dishonour case involving Rs. 3 lakh and convicted him under Section 138 of the NI Act....

Bombay High Court Finds Prolonged Detention In Cheque Bounce Case “Shockingly Disproportionate”

The Bombay High Court on 5 May held that prolonged incarceration of a cheque bounce convict solely for non-payment of compensation is ex-facie unreasonable, excessively harsh and "shockingly disproportionate". A Bench of Justice N.J. Jamadar modified the default sentence imposed on Cyrus Noshirwan Kartak, the Director of Mintaur Engineering Private Limited in 17 cheque dishonour cases to the period already undergone and directed his release. He observed:“Default sentence is...

Mortgage Suit Transferred From Civil Court To DRT Does Not Become Money Recovery Proceeding: Calcutta High Court

The Calcutta High Court has recently held that a mortgage suit does not become a simple money recovery proceeding merely because it is transferred from a civil court to the Debt Recovery Tribunal, holding that the lender's security interest and the borrower's equity of redemption continue to subsist. Justice Ajoy Kumar Mukherjee made the observation while allowing UCO Bank's challenge to orders of the Debt Recovery Tribunal and Debt Recovery Appellate Tribunal that had held the bank's SARFAESI...

Telangana HC Upholds Sale of Mortgaged Property, Says 30-Day SARFAESI Notice Period Runs From First Valid Service

The Telangana High Court has upheld the auction sale of a mortgaged property by Bank of India, holding that the 30-day statutory period for an auction sale must be counted from the first valid service of the sale notice, not from a later supplementary communication. Explaining its reasoning, the Division Bench of Justices Moushumi Bhattacharya and Gadi Praveen Kumar observed: “Acceptance of the borrower's contention would result in uncertainty and enable manipulation of timelines, thereby...

Section 138 Case Not Maintainable Against Director Once Liquidator Takes Control: Delhi High Court

The Delhi High Court on 4 May quashed cheque bounce proceedings against a director of P.R.J Enterprises Limited, holding that once a Provisional Liquidator is appointed and takes control of the company's affairs, the directors lose authority over its bank accounts and cannot be prosecuted under Section 138 of the Negotiable Instruments Act. Justice Vikas Mahajan observed that the petitioner-director could not be fastened with criminal liability since he was divested of control over the...

NSEL Case: Bombay High Court Allows SBI's SARFAESI Action Despite MPID Attachment

The Bombay High Court on Friday allowed State Bank of India (SBI) to proceed against secured assets attached in the National Spot Exchange Ltd. (NSEL) scam proceedings under the SARFAESI Act, holding that the bank's rights as a secured creditor cannot be lightly defeated. Setting aside a March 8, 2023 order of the Maharashtra Protection of Interests of Depositors (MPID) special court, a Division Bench of Justices A.S. Gadkari and Kamal Khata held that SBI's earlier failure to deposit amounts...