Non-Borrowers Can Approach DRT If Affected By SARFAESI Action, Writ Not Maintainable: Rajasthan High Court

While rejecting the writ petition filed by a flat purchaser which was declared a secured asset, the Rajasthan High Court held that even if a person was not a borrower or a guarantor, s/he was entitled to approach Debts Recovery Tribunal (DRT) if their rights were affected by the notice issued under the SARFAESI Act, and they were “aggrieved person”.The bench of Justice Sunil Beniwal was hearing a petition field by observed that while considering the scope of Section 17, SARFAESI Act, the Supreme Court had included borrower, guarantor, or any other person who may be affected, in the list of those who could approach the DRT. The petitioner purchased a flat from a developer who had mortgaged it with a financing company. Eventually the flat was declared a secured asset, and while the petitioner was residing therein, a notice was served upon him under Section 13(4) of the SARFAESI Act. After receiving this notice, the petitioner also filed an FIR against the developed alleging forgery. The petitioner filed a writ petition before the Court, challenging the notice under the Act on the ground that since he was neither the borrower nor the guarantor, no proceedings could be initiated against him under the Act. Further, it was argued that since he was neither a borrower, nor a guarantor, he did not have the alternative remedy of approaching the DRT. After hearing the contentions, the Court firstly opined that no writ petition was maintainable against since the financing company was a private institution.Furthermore, it was held that the notice could be questioned by availing the remedy under Section 17 of the Act by approaching DRT. Reference was made to the Supreme Court case of United Bank of India vs. Satyawati Tondon and Ors. which held that borrower, guarantor or any person who may be affected could approach the Tribunal. In this light, the Court opined, “Although, the petitioner is neither a borrower nor a guarantor, however, since his rights are grievously affected by the impugned notice, he is an aggrieved person and can very well approach the Debt Recovery Tribunal”.It was held that the petitioner had an alternative remedy before the Tribunal under Section 17 of the Act, and accordingly, the petition was dismissed. Title: Rajeev Bhandari v Jodhpur Development authority & Ors. Citation: 2026 LiveLaw (Raj) 40Click Here To Read/Download Order

Non-Borrowers Can Approach DRT If Affected By SARFAESI Action, Writ Not Maintainable: Rajasthan High Court

Nupur Agrawal

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