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Supreme Court: No Writ Petition will be maintainable in cases where remedy lies under the SARFAESI Act to approach DRT

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A Division bench of the Hon’ble Supreme Court of India (SC), comprising of Mr. Justice MR Shah and Ms. Justice BV Nagarathna, in their order dated 12.01.2022 in Phoenix ARC Private Limited v. Vishwa Bharati Vidya Mandir & Ors. (Civil Appeal Nos. 257-259 of 2022), held that a borrower, aggrieved by any of the action(s)/proceedings initiated/proposed to be initiated by a secured creditor under the provisions of SARFAESI Act, 2002 (“SARFAESI Act”), has to avail the remedy under the SARFAESI Act, and no writ petition would lie and/or is maintainable and/or entertainable against the secured creditor.

The SC, while opining that filing of the writ petitions by the borrowers before the Hon’ble Karnataka High Court (HC) under Article 226 of the Constitution of India was an abuse of process of the Court, observed that the HC had erred in entertaining the writ petitions and passing an ex-parte, ad-interim order mechanically, directing the Appellant herein to maintain status quo with respect to the possession of the secured properties, especially in view of the statutory, efficacious remedy available under Section 17 of the SARFAESI Act.


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