Summary
The Supreme Court set aside High Court orders staying SARFAESI recovery proceedings on a partial deposit. Once possession measures were taken, the borrower had an effective Section 17 tribunal remedy and pleaded no concrete exception justifying bypassing it. A desire to regularise the loan and a bare natural-justice allegation did not suffice. The court had to apply settled law and explain any permissible departure before granting interim relief. All factual and legal issues remained open before the statutory forum.
Issues
- Whether the High Court properly granted interim protection against bank recovery despite the available statutory tribunal remedy.
Provisions considered
- Section 17, Explanation, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002Communication rejecting objections did not itself confer the tribunal remedy, but subsequent Section 13(4) possession measures made that remedy available. (¶¶ 7, 8)
Held
- An efficacious statutory remedy ordinarily requires restraint in Article 226 jurisdiction, particularly in recovery matters. Recognised exceptions remain, but the petition here lacked particulars showing one; a rhetorical natural-justice allegation and desire for loan regularisation did not establish it. (¶¶ 6, 7, 8, 11, 14)
- By the interim-order date, Section 13(4) possession measures had been taken and Section 17 relief was available. No compelling reason was pleaded to bypass that forum, and the High Court recorded no special reason for intervening. The legislative absence of an earlier challenge at the objection-response stage did not justify stalling recovery. (¶¶ 7, 8)
- Courts must apply settled law without waiting for an objection, and explain any departure through a recognised exception. Ex parte financial stays require particular care; saying the bank can later seek modification does not cure an unjustified order. (¶¶ 16, 17, 18, 19)
- The impugned orders were set aside, but all questions of fact and law remained open in an application before the SARFAESI statutory forum. The Court did not finally decide those underlying objections. (¶¶ 19, 20)
Result
Bank’s appeal allowed; impugned High Court orders set aside. All factual and legal issues left open before the statutory SARFAESI forum.