Petitioner Cannot File Writ Petition Before Exercising Remedy U/S 17 Of SARFAESI Act; Madras High Court

As per the terms of Section 17, an appeal can be filed to the Debt Recovery Tribunal within 45 days from the date on which the measures referred to under Section 13(4) of the Act are taken.

The Petitioner filed a writ petition under Article 226 of the Constitution of India in the Madras High Court, challenging the order passed under Section 14 of the SARFAESI Act and praying for issuance of the writ of certiorarified mandamus to call for records relating to proceedings of the CJM, Tirappur District, quash the same and consequently direct the Respondent to deseal the premises. Section 14 of the SARFAESI Act empowers the CMM or DM to assist the secured creditor in taking possession of the secured asset.

Relying on the Supreme Court judgments in The Authorized Officer, State Bank of Travancore and another Vs. Mathew K.C. and Agarwal Tracom Private Limited Vs. Punjab National Bank and others, the Bench held that the aggrieved parties cannot challenge proceedings taking place under the SARFAESI Act directly by way of a Writ Petition under Article 226, without exhausting the remedy of appeal available to them.

The High Court also relied on the Supreme Court decision in ICICI Bank Limitedv. Umakanta Mohapatra, wherein the Apex Court noted that High Courts continue to entertain matters arising under the SARFAESI Act and keep granting orders in favour of persons who are NPAs and held that a writ petition filed by the petitioner without exhausting the remedy available under the SARFAESI Act and Recovery of Debt Due to Banks and Financial Institutions Act, is not maintainable.

The Court dismissed the petition and said that the Petitioner is at liberty to challenge the impugned order before the Debt Recovery Tribunal as per Section 17 of the SARFAESI Act.

Case Title: R. Ganesan v. M/s. ASREC (India) Limited

Citation: W.P.No.27644 of 2021 W.M.P.Nos.29183 & 29185 of 2021

Counsel for Petitioner: Mr.R.N.Amarnath

Citation: 2022 LiveLaw (Mad) 14

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