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SARFAESI Act: HC Refuses to Entertain Disputes Under SARFAESI on Grounds of Alternate Remedy


The High Court of Punjab & Haryana (‘HC’), in the case of Oswal (India) v. State Bank of India[i], dismissed the writ petition (‘WP’) on the grounds that when specific remedies are available for proceedings under the relevant statute, then there is no need for HC to intervene unless there is a pure question of law or a jurisdictional issue.


  • Oswal (India) (‘Petitioner’) filed a WP in the HC seeking to quash the sale notice and sale intimation letter. The Petitioner alleged that the sale conducted by the State Bank of India (‘Respondent’) violated the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest, Act 2002 (‘SARFAESI Act’) and rs. 8(6) (A), (F) and 8(7) of the Security Interest Enforcement Rules, 2002 (‘Rules’).

  • The Respondent had extended financial facilities to M/s Oswal Apparels Private Limited (‘borrower’), which due to financial indiscipline, was declared as a non-performing asset (‘NPA’). Consequently, proceedings under the SARFAESI Act were initiated against the borrower.

  • The Respondent published the sale notice for the auction of immovable secured assets (‘property’), claiming that the property was free from encumbrances.

  • The Petitioner was successful in the auction with the highest bid and deposited partial payment of the bid amount.

  • The Petitioner while mobilizing the remaining funds noticed that the property in question was encumbered by a judgment and decree passed against the borrower, which restrained from interfering with the possession of the property.

Arguments Advanced

  • The Petitioner contended that the Respondent was well aware of the encumbrance of the property and did not disclose it in the sale notice.

  • The Petitioner further argued that the Respondent is not entitled to proceed with the auction proceedings, as doing so would amount to fraud and gross misrepresentation of facts.

  • It was also contended by the Petitioner that the Respondent should either hand over the property free of all encumbrances or refund the amount deposited by the Petitioner, along with interest at the rate of 18% and compensation of Rs. 1 crore.

  • The Respondent objected to the present WP on the ground that an efficacious alternate remedy is available to the Petitioner for redressal of any grievance in respect to proceedings initiated under the SARFAESI Act.

  • The Respondent asserted that the Petitioner and the borrower are sister concerns, with the partner of the Petitioner-firm being the son of the director of the borrower-firm. and it is unfathomable to believe that the Petitioner will not be aware of the encumbrance of the property.

  • The Respondent vehemently argued that the WP is merely a tactic to frustrate the recovery proceedings initiated against the borrower.


  • The HC dismissed the WP without delving into the merits of the case, relying on various Supreme Court decisions.

  • It observed that since the SARFAESI Act constitutes a complete code providing specific remedies for grievances arising from proceedings under it, the HC’s interference is warranted only in extraordinary or exceptional circumstances.

  • Consequently, the WP was dismissed, granting the Petitioner the liberty to pursue available remedies in accordance with the law.

Our Analysis

The HC through this decision has reiterated the important principle of law regarding the writ jurisdiction under a. 226 of the Constitution of India, 1949. The HC found it difficult to fathom any reason why the court should entertain a WP, when an effective alternate remedy is available to the Petitioner, such as filing an application, appeal, or revision, especially when the legislation contains a detailed mechanism for redressal of grievances.

The decision highlights that the HC is increasingly refusing WPs where an alternate remedy is available within the grievance redressal mechanism of the relevant statute. This approach ensures that the provisions of the relevant statute do not become ineffectual. The invocation of writ jurisdiction by the HC should, therefore, be minimal and reserved only for extraordinary or exceptional circumstances, particularly in matters that involve a pure question of law or a jurisdictional issue.

End Note

[i] 2023 SCC OnLine P&H 3995

Authored by Maarij Ahmad, Intern at Metalegal Advocates. The views expressed are personal and do not constitute legal opinion.


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