Supreme CourtOrder VII Rule 11 CPC | Plaint With Multiple Reliefs Cannot Be Rejected Just Because Some Reliefs Are Barred : Supreme CourtCase Title: CENTRAL BANK OF INDIA & ANR. VERSUS SMT. PRABHA JAIN & ORS.Citation : 2025 LiveLaw (SC) 96The Supreme Court observed that when a Plaint includes multiple reliefs, it cannot be rejected solely because one of the reliefs is barred by law,...
Case Title: CENTRAL BANK OF INDIA & ANR. VERSUS SMT. PRABHA JAIN & ORS.
Citation : 2025 LiveLaw (SC) 96
The Supreme Court observed that when a Plaint includes multiple reliefs, it cannot be rejected solely because one of the reliefs is barred by law, as long as the other reliefs remain valid.
According to the Court, the plaint cannot be partially rejected under Order VII Rule 11 of CPC.
“If the civil court is of the view that one relief (say relief A) is not barred by law but is of the view that Relief B is barred by law, the civil court must not make any observations to the effect that relief B is barred by law and must leave that issue undecided in an Order VII, Rule 11 application. This is because if the civil court cannot reject a plaint partially, then by the same logic, it ought not to make any adverse observations against relief B.”, the Court observed.
The bench comprising Justices JB Pardiwala and R Mahadevan was hearing a case under the SARFAESI Act in which the plaintiff sought three reliefs in a suit filed before the Civil Court. Two of the reliefs, concerning ownership and title over the suit property used as collateral for a bank-sanctioned loan, were not barred by law, and the Civil Court had jurisdiction to decide on them. However, the third relief, which pertained to the restoration of possession under Section 17 of the SARFAESI Act, was barred by law, as such an application must be filed before the Debt Recovery Tribunal (DRT), not the Civil Court.
Case Title: CENTRAL BANK OF INDIA & ANR. VERSUS SMT. PRABHA JAIN & ORS.
Citation : 2025 LiveLaw (SC) 96
The Supreme Court noted that the Debt Recovery Tribunal (DRT) is not authorized under the SARFAESI Act to "hand over" possession of the secured asset to an individual who was neither the borrower nor the possessor of the asset. It further stated that the DRT lacks the authority to "restore" possession of secured assets to an individual who is neither the borrower nor in possession of the assets.
The Court clarified that a plea for the handover or restoration of a secured asset by an individual, who is neither a borrower nor in possession of the asset, is maintainable before the civil court.
A bench of Justices JB Pardiwala and R Mahadevan was deciding an issue of whether an individual, who neither possessed nor borrowed the secured asset, would be entitled to claim restoration of the secured assets under Section 17(3) of the SARFAESI Act, 2002.
SARFAESI Act | Appeal Against Every DRT Order Doesn't Require Pre-Deposit : Supreme Court
Case Details: M/S SUNSHINE BUILDERS AND DEVELOPERS v. HDFC BANK LIMITED THROUGH THE BRANCH MANAGER & ORS. |CIVIL APPEAL NO.5290/2025
Citation : 2025 LiveLaw (SC) 459
The Supreme Court recently expressed a prima facie view that appeals filed against procedural orders of the Debts Recovery Tribunal (DRT) do not require pre-deposit as per Section 18 (appeal to the appellate tribunal) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
The present appeal arises from the Bombay High Court's order dated March 19, 2024, whereby it affirmed an order of the Debts Recovery Appellate Tribunal (DRAT). The matter arises from two interim applications filed by the Appellants, auction purchasers, to be impleaded in the securitization application pending before DRT. The DRT rejected their application for impleaded, against which they approached the DRAT under Section 18, and they were asked to pre-deposit Rs. 125 crores.
Supreme Court Quashes Criminal Case Against HDFC Bank Official Over Auction Sale
Case Details : SIVAKUMAR v. THE INSPECTOR OF POLICE & ANR. SLP(CRL) NOS.5815-5816 OF 2023
Citation : 2025 LiveLaw (SC) 478
The Supreme Court recently quashed a criminal case against an official of the HDFC Bank, after noting that he was not the "authorised officer" when the auction sale in question was held.
The criminal case, alleging the offences of cheating and forgery, was filed in Tamil Nadu over the allegation that the Bank had sold in auction a property which was previously acquired by the Tamil Nadu Housing Board.
Case Title: BANK OF INDIA VERSUS M/S SRI NANGLI RICE MILLS PVT. LTD. & ORS.
Citation : 2025 LiveLaw (SC) 616
In a significant ruling under the SARFAESI Act, 2002 (“Act”), the Supreme Court today (May 23) held that inter-creditor disputes (between secured creditors) must be resolved through arbitration under Section 11 of the Act read with the Arbitration & Conciliation Act, 1996 (“Arbitration Act”).
Unlike the Arbitration and Conciliation Act, which requires a written agreement for reference, Section 11 of the Act creates a statutory mandate for arbitration, eliminating the need for any such agreement, the court said.
Supreme Court Criticises High Courts For Staying SARFAESI Proceedings In Writ Petitions
Case Title – LIC Housing Finance Ltd v. Nagson and Company & Ors.
Citation : 2025 LiveLaw (SC) 722
The Supreme Court recently criticised the Karnataka High Court for restraining LIC Housing Finance Ltd. (secured creditor) from proceeding under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), without recording any reasons, despite repeated warnings from the apex court against such interference.
A bench of Justice Dipankar Datta and Justice Augustine George Masih reiterated that High Courts must exercise writ jurisdiction cautiously in matters involving secured creditors under the SARFAESI Act, considering the object and purpose of the statute.
Cause Title: PNB Housing Finance Limited VERSUS Sh. Manoj Saha & Anr.
Citation : 2025 LiveLaw (SC) 723
In a key ruling favouring secured creditors, the Supreme Court held that a tenant cannot resist eviction under the SARFAESI Act unless the tenancy is established before the mortgage creation.
The bench of Justices P.S. Narasimha and Joymalya Bagchi allowed the appeal filed by PNB Housing Finance Ltd., overturning a Calcutta High Court decision that had restored possession of a mortgaged property to a tenant.
The Court ruled that lease agreements made after the property has been mortgaged do not confer enforceable tenancy rights against a secured creditor exercising powers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”).
Cause Title: SHRI SHRI SWAMI SAMARTH CONSTRUCTION & FINANCE SOLUTION & ANR. VS. THE BOARD OF DIRECTORS OF NKGSB CO-OP. BANK LTD. & ORS.
Citation : 2025 LiveLaw (SC) 760
The Supreme Court recently held that secured creditors and banks are not obligated to identify "incipient stress" in the accounts of MSMEs prior to classifying them as Non-Performing Assets (NPAs), unless the MSME borrower has explicitly invoked the 2015 RBI Framework for revival and rehabilitation.
The Court clarified that MSMEs cannot belatedly rely on the Framework during the course of SARFAESI proceedings initiated by lenders following a default. Instead, it is incumbent upon the MSME to proactively initiate rehabilitation measures if it anticipates business distress.
Case Title – Mohammad Zubair Ahmad v. Punjab National Bank & Anr.
Citation : 2025 LiveLaw (SC) 939
The Supreme Court on Wednesday pulled up Punjab National Bank (PNB) for entering into a settlement with a borrower after already having auctioned the borrower's property. The court asked the bank to take a policy decision at the earliest to ensure that such instances do not recur.
A bench of Justices JB Pardiwala and Sandeep Mehta directed PNB to issue a final sale certificate to the auction purchaser. The Court was dealing with a plea filed by the auction purchaser, who was aggrieved by the bank's decision to refund the sale amount deposited by him, instead of issuing a sale certificate.
Case: M Rajendran v M/s KPK Oils and Proteins India Ltd
Citation: 2025 LiveLaw (SC) 931
The Supreme Court held that the 2016 amendment to Section 13(8) of the SARFAESI Act, which extinguishes a borrower's right of redemption once the secured creditor publishes an auction notice, will apply even to loans taken before the amendment came into force, provided the default occurred after September 1, 2016(the date when the amendment came into force).
A Bench of Justices J.B. Pardiwala and R Mahadevan rejected the contention of borrowers that since their loan was obtained in January 2016, the unamended Section 13(8) - which gave borrowers the right of redemption till the actual transfer of secured asset took place - would govern their rights. The Court held that the amended provision was applicable because the loan account was declared a non-performing asset (NPA) only in December 2019, and the auction notice was issued in January 2021, well after the amendment came into force.
Cause Title: M. RAJENDRAN & ORS. VERSUS M/S KPK OILS AND PROTIENS INDIA PVT. LTD. & ORS.
Citation : 2025 LiveLaw (SC) 931
The Supreme Court on Monday (Sep. 22) flagged a significant inconsistency between the SARFAESI Act, 2002 ("Act") and the Rules concerning the borrower's right of redemption after the 2016 amendment.
A bench of Justice JB Pardiwala and Justice R Mahadevan heard the case arising out of the Madras High Court's decision which had quashed a sale certificate issued in favour of auction purchasers (appellants) and permitted the original borrowers to redeem the mortgaged property by repaying the outstanding loan amount even after the publication of an auction notice.
DRT Must Decide Securitisation Applications Within Statutorily Mandated Timeline : Supreme Court
Cause Title: INDIAN OVERSEAS BANK VERSUS M/S RADHEY INFRA SOLUTIONS (PVT.) LTD. & ORS.
Citation : 2025 LiveLaw (SC) 997
The Supreme Court recently criticized the Debt Recovery Tribunal, Dehradun, for failing to decide a securitisation application preferred by a Bank within the statutory timeline mandated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act").
After noting that the DRT failed to abide by the strict timelines prescribed under the SARFAESI Act, a bench of Justices Sanjay Kumar and Alok Aradhe directed the DRT to dispose of the matter “without further delay” and strictly in line with Section 17(5) SARFAESI Act which requires a disposal of a securitization application within 60 days of filing the application, extendable up to four months.
Provident Fund Dues Take Precedence Over Bank's Claim Under SARFAESI Act : Supreme Court
Cause Title: Jalgaon District Central Coop. Bank Ltd. Versus State of Maharashtra and Ors.
Citation : 2025 LiveLaw (SC) 1125
The Supreme Court on Thursday (November 20) held that employees' provident fund dues take precedence over the 'priority' rights claimed by banks in the sale of a company's assets under the SARFAESI Act.
The Court held that dues under the Employees' Provident Funds and Miscellaneous Provisions Act enjoy priority over the claims of secured creditors proceeding under the SARFAESI Act, reaffirming that the statutory first charge created under the EPF law overrides the “priority” granted to secured creditors in Section 26E of the SARFAESI Act.
Cause Title: NORTH EASTERN DEVELOPMENT FINANCE CORPORATION LTD. (NEDFI) VS. M/S L. DOULO BUILDERS AND SUPPLIERS CO. PVT. LTD.
Citation : 2025 LiveLaw (SC) 1216
The Supreme Court on Tuesday (December 16) dismissed a secured creditor's plea to initiate recovery proceedings under the SARFAESI Act against a borrower in Nagaland, holding that such action was impermissible at a time when the Central legislation was not operational within the State.
Noting that the Appellant–secured creditor had initiated recovery proceedings in 2011 by issuing a demand notice under Section 13(2) of the Act, while the SARFAESI Act was formally adopted in Nagaland only in 2021 after the Governor notified its applicability, a bench comprising Justices Dipankar Datta and Aravind Kumar held that the proceedings commenced prior to such adoption were invalid.
Allahabad High Court
Case Title: M/S Durga Travels Thru. Proprietor Pankaj Sharma And 3 Others v. Debts Recovery Tribunal, Lko. And 2 Others [MATTERS UNDER ARTICLE 227 No. - 1133 of 2025]
Case citation : 2025 LiveLaw (AB) 109
The Allahabad High Court has held that Additional Commissioner of Police is not subordinate to Additional District Magistrate and cannot be delegated the authority to possess or further delegate power to possess assets under Section 14(1-A) of the Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002.
Perusing Sections 14(1) and 14(1-A), Justice Pankaj Bhatia held
“it is clear that Section 14 empowers the District Magistrate or the Chief Metropolitan Magistrate to take possession of the property concerned. Section 14(1-A) further empowers the District Magistrate or the Chief Metropolitan Magistrate to “authorized any Officer subordinate to him” to take possession of the said assets and thereafter to forward such assets to the secured creditor. Thus, in terms of the mandate of Section 14 (1-A), it is clear that the District Magistrate or the Chief Metropolitan Magistrate can either take the possession himself or can authorize any officer subordinate to him.”
Case Title: M/S K.C. International Situate And 2 Others vs. Indian Bank Kanpur Main Branch 2025 LiveLaw (AB) 147 [WRIT - C No. - 263 of 2025]
Case Citation: 2025 LiveLaw (AB) 147
While dealing with challenge to recovery proceedings initiated by bank, the Allahabad High Court has held that the Court must not interfere in matters pertaining to Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 unless the actions by the bank are patently illegal and/or mala fide.
Relying on the judgment of the Apex Court in United Bank Of India vs Satyawati Tondon & Ors, the bench of Justice Shekhar B. Saraf and Justice Dr. Yogendra Kumar Srivastava held
“This Court is required not to interfere in matters with regard to the SARFAESI Act unless this Court finds patent illegality and/or mala fide actions being taken by the bank authorities.”
Case Title: Anil Kumar Jaiswal v. Union Bank Of India And Another [WRIT C No. 13012 of 2025]
Case citation: 2025 LiveLaw (AB) 167
The Allahabad High Court has held that the bank reinitiating proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is not an “exception circumstance” to forgo the forfeiture of deposit prescribed under Rule 9(5) of the Security Interest (Enforcement) Rules, 2002.
Rule 9(5) of the Security Interest (Enforcement) Rules, 2002 provides that if the purchaser of the immovable property under Rule 9 defaults on payment within the stipulated time, then any amount deposited by him pursuant to the sale agreement will be forfeited in favour of the secured creditor and the property shall be resold. It further provides that the defaulting purchaser will have no claims over the immovable property or to the amount recovered on the resale of the property.
Case title - Saurabh Singh Chauhan vs. Bank Of Baroda, Regional Stressed Assets Recovery Branch And Another 2025 LiveLaw (AB) 181
Case citation: 2025 LiveLaw (AB) 181
The Allahabad High Court recalled its direction to Bank of Baroda to compensate the successful bidder (the auction purchaser) for its alleged 'arbitrary' action to return the auctioned property to the defaulting borrower (the original borrower), despite accepting the earnest money from the bidder.
For context, on April 9, the court passed this order while dealing with a writ plea moved by Saurabh Singh Chauhan, who claimed that he had successfully bid for the property in question under the SARFAESI Act.
Case Title: Vimla Kashyap and Ors v. Union of India and Ors [MATTERS UNDER ARTICLE 227 No.3953 of 2025]
Case citation : 2025 LiveLaw (AB) 301
The Allahabad High Court has held that limitation for filing securitization application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has to be calculated from the date on which last action occurred against which the aggrieved approached the Debt recovery Tribunal under Section 17.
Case Title: Axis Bank Ltd. v. State Of U.P. And 6 Others [WRIT - C No. - 21492 of 2025]
Case Citation: 2025 LiveLaw (AB) 308
The Allahabad High Court has held that once an order under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has been passed granting possession to the secured creditor, i.e., bank, the borrower cannot, through a tenant, obtain a stay from the Civil Court to escape liability.
The bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held
“Tenancy that has been created during the pendency of the mortgage without permission of the secured creditor, that is, the bank would be subject to the condition of Section 65A of the Transfer of Property Act and whether these conditions are satisfied will have to be decided by the Debts Recovery Tribunal (hereinafter referred to as 'the DRT') only. A tenant is required to move an application under Section 17 before the DRT for asserting his rights under such a registered document.”
Case Title: Regional Stressed Asset Recovery Branch Bank Of Baroda V. State Of U.P And 9 Others [WRIT - C No. - 33632 of 2024]
Case citation : : 2025 LiveLaw (AB) 397
The Allahabad High Court has held that under Section 26-E of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Section 31B of the Recovery of Debts and Bankruptcy Act, 1993, the debts of the secured creditors will take precedence over all over debts including crown debts.
The bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held
“Upon a perusal of the judgments cited above, the first principle that emerges is that a secured crediter shall always have precedence over an unsecured creditor. Seconly, in cases where two enactments refer to secured creditors having charge over the property, the later enactment would prevail.”
Bombay High Court
Case Title: Manoj Lalwani v. Reserve Bank of India & Ors.
The Bombay High Court dismissed a writ petition filed by Manoj Lalwani, Director of Ritu Automobiles Pvt. Ltd., challenging HDFC Bank's recovery proceedings under the SARFAESI Act, terming the plea as an "attempt to stall the auction" of secured assets.
The division bench of Justices M.S. Karnik and N.R. Borkar found that the petitioner had no locus to file the petition, as the company was already under liquidation following the commencement of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). “Once liquidation has been initiated, all powers of the board of directors vest with the liquidator. The petitioner, as a former director, has no statutory authority to pursue the writ,” the Court noted.
Case Name: Mrs Manisha Nimesh Mehta v. Technology Development Board & ors.
The Bombay High Court bench, comprising Justice Suman Shyam and Justice Manjusha Deshpande, has held that the lending bank is obligated to consider the MSME revival scheme for classification of account as NPA only if it has been claimed by the MSME in response to the demand notice under Section 13(3A) of the SARFAESI Act.
The petitioner's MSME unit took certain loans from ICICI Bank and the Technology Development Board (TBD). The ICICI Bank classified its account as NPA on February 29th, 2020, with a retrospective effect and also issued notices under the SARFAESI Act.
Banks Cannot Be Directed To Accept OTS Proposals Or Disclose Evaluation Criteria: Bombay High Court
Case Title: Archana Wani v Indian Bank
The Bombay High Court recently affirmed that it cannot compel banks to accept One Time Settlement proposals or disclose the internal benchmarks used to evaluate such proposals, emphasizing that these decisions rest within the commercial wisdom of the bank.
A division bench of Justices Anil S Kilor and Rajnish R Vyas in an order passed on October 17, 2025, observed,
"It is clear that no specific policy of the bank has been brought on record by the petitioner to show that for any particular period for particular amount at particular stage OTS scheme is made applicable. Just because borrower has submitted the proposal for OTS which from time to time is taken into consideration and rejected by giving reason that it does not match benchmark, will not create semblance of right in favour of the borrower."
Case Title: Arrow Business Development Consultants Pvt Ltd vs Union Bank of India & Ors
The Bombay High Court on Wednesday held that a secured creditor cannot proceed with a SARFAESI sale once an interim moratorium under the Insolvency and Bankruptcy Code comes into force. It rulled that the Union Bank of India was not entitled to accept balance payments or issue a sale certificate after the personal insolvency process against the borrower had commenced.
In an order passed on December 10, Justices R I Chagla and Farhan P Dubash held that “the secured creditor could not have continued with the proceedings under the SARFAESI Act and could not have accepted the balance payment after the commencement of the interim-moratorium under Section 96 of the IBC.”
Calcutta High Court
Case Name: ARCL Organics Ltd. Versus Stressed Asset Stabilization Fund.
The Calcutta High Court has ruled that a scheme of arrangement/compromise sanctioned under section 391 of the Companies Act, 1956, cannot be unilaterally frustrated by a secured creditor by invoking the provisions of the SARFAESI Act, 2002.
The application was filed, praying for the execution of an order sanctioning a scheme of arrangement/ compromise under section 391(2) of the Companies Act, 1956, as a deemed decree within the meaning of CPC, 1908. The applicant also requested the Hon'ble High Court to direct the respondent to issue “No Objection Certificate” for release of all charges on assets and properties of the applicant
Case Title: VIJAY PRAKASH BOHRA VS STATE OF WEST BENGAL AND ORS
The Calcutta High Court bench of Justices Debangsu Basak and Md. Shabbar Rashidi has held that a secured creditor can seek physical possession of an immovable property under section 14 of the SARFAESI Act even after the sale of that property to a purchaser.
The present appeal has been filed against an order passed by the Single Judge in a Writ Petition by which the SBI was refused physical possession of an immovable property.
Delhi High Court
Case Title: Bhadra International India Pvt. Ltd. & Ors. v. Punjab national Bank & Ors.
Citation: 2025 LiveLaw (Del) 823
The Delhi High Court has dismissed a petition while upholding that if a borrower has already approached the Debt Recovery Tribunal (DRT) under the SARFAESI Act, for a one-time settlement, a writ seeking the same relief under Article 226 of the Constitution is not maintainable.
Title: RAJIV SAREEN v. M/S DIVYANSHU ENTERPRISES AND OTHERS
Citation: 2025 LiveLaw (Del) 1492
The High Court of Delhi, while clarifying the limits of the jurisdictional bar under section 34 of the SARFAESI Act, has held that a civil suit seeking cancellation of a registered Sale Deed is maintainable before a civil court, even where the property is simultaneously subject to proceedings under the SARFAESI Act, 2002. The ruling reinforces that DRTs cannot adjudicate disputes concerning the validity or cancellation of registered conveyances, which continue to lie exclusively within the domain of civil courts.
Himachal Pradesh High Court
Allegations Of Fraud Can't Be Decided Under SARFAESI Act: Himachal Pradesh High Court
Case Name: UCO Bank and another v/s Smt. Manjana Verma Sahni and another
Citation:2025 LiveLaw (HP) 242
The Himachal Pradesh High Court has dismissed a writ petition filed by UCO Bank, which challenged a trial court order rejecting an application under Order VII Rule 11 of the Civil Procedure Code.
Justice Ajay Mohan Goel noted that: “This Court is of the considered view that the first relief which has been prayed for by the petitioners by no stretch of imagination can be granted under Section 17 of the 2002 Act and for the grant of that relief obviously the Fora is the Civil Court.”
Jammu & Kashmir and Ladakh High Court
Case-Title: Mst. Sundri and Ors Vs J&K Bank &Anr
Citation: 2025 LiveLaw (JKL) 284
The Jammu & Kashmir High Court held that a secured creditor is not required to issue a fresh notice to the legal heirs of a deceased borrower before invoking Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.
Case Title: M/s Gogi Motor Store Vs Citizen's Co-operative Bank
Citation: 2025 LiveLaw (JKL) 310
Reaffirming of the legal bar under the amended Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the High Court of Jammu & Kashmir and Ladakh has held that a borrower's right to redeem a secured asset stands extinguished the moment the Auction Notice is published, if dues are not cleared before such publication.
Case Title: Vikas Bharti Vs Punjab National Bank
Citation: 2025 LiveLaw (JKL) 329
Deploring the growing tendency of defaulting borrowers to misuse judicial remedies to stall recovery of public money, the High Court of Jammu & Kashmir and Ladakh held that such conduct strikes at the very purpose of the SARFAESI Act.
Karnataka High Court
SARFAESI Charge Created Before GST Charge Takes Precedence Over It: Karnataka High Court
Case Title: The Canara Bank v. The State of Karnataka
Case Number: WRIT PETITION NO. 103730 OF 2025 (GM-RES)
Citation No: 2025 LiveLaw (Kar) 349
The Karnataka High Court held that a SARFAESI charge created prior in time takes precedence over a GST Charge.
Justice Suraj Govindaraj stated that if there is a conflict between the GST Act and the SARFAESI Act (or the RDB Act), the priority of the charge must be determined based on the order in which the charges were created. If the charge under the GST Act was created prior to that under the SARFAESI Act, the GST Act will prevail, and vice versa.
Case Title: State Bank of India AND M/s Swait Agencies & Others
Case No: WRIT PETITION NO. 105775 OF 2025
Citation No: 2025 LiveLaw (Kar) 310
The Karnataka High Court has said that once the property is said to be a secured property (secured asset), it would be subject to Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) and cannot be made subject to rights of any third parties.
The court said that any person having any interest in the secured interest cannot agitate that claim before the magistrate exercising powers under Section 14, but he has to avail remedy under Section 17 by filing appeal before the Debts Recovery Tribunal.
Kerala High Court
Case Title: HDB Financial Services Limited v The Sub Registrar and Others
Citation: 2025 LiveLaw (Ker) 140
The Kerala High Court held that attachment under the Banning of Unregulated Deposit Schemes Act (BUDS Act) does not have precedence over proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) or the Insolvency and Bankruptcy Code (IBC).
Section 13 of the BUDS Act says that an order of provisional attachment passed by the Competent Authority shall have precedence and priority over any other attachment. However, the section starts with the expression, 'Save as otherwise provided in the SARFAESI Act or IBC Code, an attachment passed by the Competent Authority, shall have precedence and priority..'. Justice Gopinath P. held that this could only mean that the action/ proceedings under the SARFAESI Act and IBC were saved from the provision providing precedence to the BUDS Act.
Case Title: Ashok Harry Pothen Vs. The Authorised Officer, M/S. Indian Bank
Citation: 2025 LiveLaw (Ker) 148
The Kerala High Court bench of Justice Gopinath P. has held that a bank can initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to recover outstanding dues if it was not a party to the resolution plan approved under the Insolvency and Bankruptcy Code, 2016. The Court clarified that the bar against claims outside a resolution plan does not extend to third parties merely associated with the corporate debtor through agreements such as joint ventures.
Case Title: South Indian Bank Ltd. v Jahfer M
Citation: 2025 LiveLaw (Ker) 204
The Kerala High Court reiterated that while a Magistrate exercising jurisdiction under Section 14 of the SARFAESI Act does not adjudicate on creditor's application for taking possession of the secured assets, they are required to clearly apply mind since it can have drastic consequences. The Court stated that this is the reason why the Parliament has empowered high officials like Chief Judicial Magistrate or District Magistrates under Section 14 to assist the secured creditor in taking possession of secured assets.
Justice Gopinath P. observed that an order under Section 14 cannot be issued in printed format by merely filling in necessary details without application of mind.
Case Title: The Federal Bank Limited v. Chief Judicial Magistrate, Kozhikode and others
Citation: 2025 LiveLaw (Ker) 284
The Kerala High Court has reiterated that the Chief Judicial Magistrate (CJM) cannot exercise adjudicatory powers in the proceedings for securing assets under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI) 2002.
Justice P. Gopinath passed the order while hearing a Writ Petition filed by the petitioner Bank challenging the maintainability of a plea filed by the 2nd respondent before the CJM arguing that the issues raised in the plea before the CJM cannot be decided by the magistrate.
Case Title: J.C. Flowers Asset Reconstruction Pvt. Ltd v. State of Kerala and others
Citation: 2025 LiveLaw (Ker) 294
The Kerala High Court recently held that there is no omnibus or complete exemption on stamp duty provided under S. 8F of the Indian Stamp Act, read with S.5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) for asset reconstruction agreements.
The Court looked into the Amendment Act that brought in S. 5(1A) of SARFAESI Act and added S.8F to the Indian Stamp Act, 1899. It rejected the contention of the petitioners that no stamp duty is applicable as per the non obstante clause in S.8F.
Justice T. R. Ravi went on to apply the golden rule of interpretation along the Supreme Court's rulings on the subject of interpretation of non obstante clauses to find that there is no complete exemption from levy of stamp duty.
Case Title: Moideen Koya & Ors. v. M/S.Pegasus Assets Reconstruction Co. Pvt. Ltd. & Anr.
Citation: 2025 LiveLaw (Ker) 351
The Kerala High Court has recently held that there is no bar under the SARFAESI Act against preferring a consolidated Securitisation Application by tenants under different lease deeds if they are challenging the same secured creditor's action.
The judgment was passed by Justice Mohammed Nias C.P. while considering an Original Petition preferred against the order (Exhibit P8) passed by the Registrar of the Debts Recovery Tribunal (DRT), Ernakulam.
Case Title: Kerala Bank and Anr v Jishith Kumar
Citation: 2025 LiveLaw (Ker) 648
The Kerala High Court reaffirmed that the interference of the High Court in commercial matters under Article 226 was not maintainable when an effective statutory remedy is available before the Debts Recovery Tribunal (DRT) under Section 17 of the SARFAESI Act.
The Division Bench comprising Justice Anil K Narendran and Justice Muralee Krishna S were delivering the judgment in a writ appeal filed by Kerala Bank against a single judge decision which allowed an instalment relief and return of possession of a mortgaged property under SARFAESI Act.
Case Title: Mini Zakir v M/S Phoenix Arc Private Limited
Citation: 2025 LiveLaw (Ker) 678
The Kerala High Court has held that “debt due” under the proviso to Section 18(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) includes not only the amount claimed in the demand notice issued under Section 13(2), but also interest accruing thereafter up to the date of filing the appeal.
Justice Mohammed Nias C.P. delivered the judgment in a petition challenging orders of Debt Recovery Appellate Tribunal rejecting his application for waiver of pre-deposit and consequently dismissing the statutory appeal.
Case Title: M/S Thiruvonam Industries and Others v Hero Fincorp Ltd
Citation: 2025 LiveLaw (Ker) 688
The Kerala High Court has observed that a litigant cannot use the constitutional remedy of writ petitions as an alternative to avoid approaching the Tribunal under the SARFAESI Act, which would require the payment of fees.
A Division Bench of the Kerala High Court comprising Justice Anil K. Narendran and Justice Muralee Krishna S was considering a writ petition challenging proceedings initiated by Hero Fincorp Ltd., a private Non-Banking Financial Company (NBFC) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
Case Title: Glenny C.J. and Anr. v. Authorised Officer, Canara Bank and Anr.
Citation: 2025 LiveLaw (Ker) 729
The Kerala High Court recently held that there is no mandate under law that the pre-deposit amount should always be 50% of the debt due, while entertaining appeals under Section 18 SARFAESI [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest] Act, challenging the order of the Debts Recovery Tribunal.
Justice C Jayachandran, while delivering the judgement clarified that the Debt Recovery Appellate Tribunal (DRAT), while determining the amount to be deposited, shall take into consideration the subject matter of the appeal.
Case Title: South Indian Bank Ltd. and Anr. v. Rahim H K and Anr.
Citation: 2025 LiveLaw (Ker) 787
The Kerala High Court has held that the High Court cannot invoke its writ jurisdiction under Article 226 of the Constitution to reschedule payments to be made by a borrower under One Time Settlement (OTS).
A Division Bench comprising Justice Anil K. Narendran and Justice Muralee Krishna S. thus sett aside a Single Judge order that had granted borrowers the facility to clear loan arrears in instalments and restrained coercive recovery under the SARFAESI Act.
Case Title: M/S Esthappan Infrastructure Pvt. Ltd. and Ors. v Reserve Bank of India and Ors.
Citation: 2025 LiveLaw (Ker) 793
The Kerala High Court has recently observed that when a party deliberately withholds certain claims or issues in one proceedings with the intention to raise them in a subsequent litigation disguised as a distinct or separate remedy or proceeding from the initial one, such subsequent litigation will fall under the 'Henderson Principle'.
The Division Bench comprising Justice Anil K. Narendran and Justice Muralee Krishna S. dismissed an appeal preferred by M/s M.D. Esthappan Infrastructure Pvt. Ltd. against SARFAESI proceedings initiated by Dhanlaxmi Bank.
Case Title: Abhijith B. v. Bank of Maharashtra and Ors.
Citation: 2025 LiveLaw (Ker) 854
The Kerala High Court, in a recent judgment, held that the statutory right of a bank to recover dues from a borrower under the SARFAESI Act becomes absolute once the demand notice is duly served during his lifetime and the mandatory 60-day period expires without the liability discharged.
There was no need for the bank to issue fresh notices under the Act for the legal heirs of the deceased borrower, it was held.
Justice Basant Balaji was considering a plea preferred by the legal heir of a deceased person, who had stood as a guarantor for a loan advanced by a bank to a firm.
Madhya Pradesh High Court
Case Name: Capri Global Housing Finance Ltd. v. State of Madhya Pradesh & Ors.
Citation: 2025 LiveLaw (MP) 171
A division bench of Madhya Pradesh High Court, comprising Justice Anand Pathak and Justice Hirdesh, has allowed an appeal and upheld that a district magistrate can re-execute possession orders u/s 14 of the SARFAESI Act after illegal re-entry by the borrower. The Court directed the respondent authorities to provide necessary assistance to the petitioner to dispossess the borrower from the mortgaged property.
Punjab and Haryana High Court
Title: STATE BANK OF INDIA v. SUB REGISTRAR, SUB TEHSIL NIGHDU KARNAL AND OTHERS
Observing that post-notification of Section 26E of the SARFAESI Act on 24.01.2020, debts due to secured creditors must be accorded statutory priority over all other dues, the Punjab & Haryana High Court has clarified that in all cases where the charge was created after the said date, secured creditors will rank above State revenue claims.
The Court noted that numerous litigations are pending on this issue and expressly reaffirmed the legal position before parting with the judgment.
Section 26E of the SARFAESI Act (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) establishes priority for secured creditors, meaning debts owed to them must be paid before other debts, including government revenues, taxes, cesses, and local authority dues, after the security interest is registered. Introduced by the 2016 Amendment, the section overrides other laws, giving registered secured creditors a "first charge" on the secured assets, ensuring their recovery rights prevail over statutory dues of the government
Rajasthan High Court
Title: Au Small Finance Bank Ltd v Atmaram Bishnoi and Others And Batch
Citation: 2025 LiveLaw (Raj) 49
Expressing surprise and alarm, the Jodhpur bench of the Rajasthan High Court directed the District Collector and Sri Ganganagar's Superintendent of Police to take stern action against a loan defaulter who took unlawful forcible possession of his mortgaged property that was taken over by a bank under the SARFAESI Act.
Justice Vinit Kumar Mathur highlighted that despite the petitioner– AU Small Finance bank approaching the authorities, no action was taken by them. It thus warned that if the authorities do not act it will result in lawlessness which is to be viewed seriously. The court said this after noting that the defaulter had used his "muscle power" to take back possession of the mortgaged property and that nothing had been done till date.
Title: Shekharchand Sacheti & Anr. v S.M.F.G. India Home Finance Company Limited & Anr.
Citation: 2025 LiveLaw (Raj) 205
Rajasthan High Court ruled that since the respondent was already aware of and was not taken by surprise regarding petitioner's invocation of arbitration clause, their plea that the application for appointment of arbitrator was not maintainable since no notice was served under Section 21 of the A&C Act 1996, lacked merit.
The bench of Justice Anoop Kumar Dhand also reiterated the principle laid down in the case of M.D. Frozen Foods Exports Private Limited & others v. Hero Fincorp Limited that the SARFAESI Proceedings were in the nature of enforcement while arbitration was an adjudicatory proceedings. Hence, both could proceed parallel.
Title: Sammaan Capital v District Magistrate & Ors.
Citation: 2025 LiveLaw (Raj) 252
The Rajasthan High Court has expressed displeasure over the order by a District Magistrate, who, while allowing an application under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the “SARFAESI Act”), attached a condition of non-execution in case of any dispute regarding title/possession over the property.
While terming it “totally unwarranted”, Justice Anoop Kumar Dhand opined that in light of clear orders being issued in earlier cases to all the Chief Metropolitan Magistrates/District Magistrates, it was expected that in future, such orders shall be followed without any adventure in their interpretation.
Title: Bank of Baroda v U.N Automobiles Pvt Ltd.
Citation: 2025 LiveLaw (Raj) 294
The Rajasthan High Court held that the Debts Recovery Tribunal (“DRT”) had no jurisdiction to rewrite/modify the terms and conditions of the One-time Settlement (“OTS”)/Settlement, in relation to an application filed after disposal of the matter based on a Consent Recovery Certificate.
The bench of Justice Anoop Kumar Dhand was hearing a petition against the order of the DRT wherein an application filed by the respondent seeking more time to repay the amount was allowed, after the matter under SARFAESI Act was already disposed of by the DRT by passing a Consent Recovery Certificate based on OTS reached between the Parties.
While ruling that a post-disposal application for modification and clarification of the order of disposal shall lie only in rare cases, the Court held that DRT became functus officio after passing the Consent Recovery and the Amended Consent Recovery, and nothing remained to be decided by it on the same subject matter. Hence, it had no jurisdiction to entertain the respondent's application contrary to the OTS.
Title: Kishan Lal Sharma & Ors. v Laxmi India Fineleasecap Pvt Ltd
Citation: 2025 LiveLaw (Raj) 298
The Rajasthan High Court has set aside the order of the Debt Recovery Tribunal (“DRT”) where a Securitisation Application (“SA”) submitted by the petitioner was rejected, after being initially entertained, on the ground that not all the borrowers had signed the SA. The court opined that it was not mandatory for all the applicants to sign the same or the supporting affidavit.
Justice Anoop Kumar Dhand observed that once the petition was entertained at the threshold in 2020 and an interim order was passed, the same should have been decided on merits after being kept pending for more than 5 years, instead of being rejected on such technical counts.
Title: Tyger Home Finance Private Limited v State Of Rajasthan and Ors
Citation: 2025 LiveLaw (Raj) 362
The Rajasthan High Court ruled that a Magistrate cannot direct a secured creditor to deposit expenses for police assistance while taking possession of a secured asset under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).
A single-judge bench of Justice Ashutosh Kumar made the ruling while setting aside a condition imposed by the Chief Judicial Magistrate (CJM), Alwar in a dispute between a finance company and its borrowers,
“There is no provision under Section 14 of the 'Act of 2002' which may authorize the learned Magistrate to direct the secured creditor to deposit any expenses of police assistance in taking possession of the secured asset.”, it said.