Sanchayita Lahkar

The High Court of Kerala, Division Bench of Justice Anil K. Narendran and Justice Muralee Krishna S. held that the High Court’s interference in commercial matters under Article 226 of the Constitution is unwarranted when an effective statutory remedy exists before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. Allowing the writ appeal filed by Kerala Bank, the Bench set aside a Single Judge’s order that had granted instalment relief and directed the return of a mortgaged property to a borrower. The Court held that the borrower should pursue the statutory remedy before the Tribunal instead of invoking the writ jurisdiction.

The case arose from a dispute between Kerala State Co-operative Bank, Kakkodi Branch, and borrower Jishith Kumar, who had availed a business loan of Rs.16,00,000 on March 13, 2019, by mortgaging 20.5 cents of land in Chelannur Village. Following default in repayment, the Bank initiated recovery proceedings under the SARFAESI Act and took possession of the secured property on March 17, 2025.

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The borrower subsequently approached the High Court through a writ petition, seeking a direction to the Bank to allow repayment of the entire liability in easy monthly instalments after waiving interest and penal charges, and for release of physical possession of the mortgaged property. On June 19, 2025, the Single Judge granted interim relief directing the petitioner to remit Rs.5,00,000 by July 18, 2025, staying coercive proceedings in the meantime.

When the matter was heard on July 31, 2025, the Single Judge disposed of the writ petition, granting the borrower permission to repay the overdue amount of Rs.13,06,696 in instalments. The judgment directed the Bank to return possession of the property upon payment of Rs.4,00,000 by September 1, 2025, and allowed the balance to be paid in twelve equal monthly instalments starting from October 1, 2025. The borrower was further required to continue regular EMIs, and in case of default, the Bank was allowed to resume recovery proceedings.

Aggrieved by these directions, Kerala Bank filed the present writ appeal challenging the maintainability of the writ petition itself and the legality of the order to return possession of the secured asset.

The Bench recorded: “Since the loan account has already been recalled, without clearing the entire overdue amount together, the Bank is neither in a position nor under any legal obligation to return possession of the secured asset to the debtor.”

The Court noted that as of August 9, 2025, the total outstanding in the account was Rs.26,55,605, including expenses and charges, while the overdue amount stood at Rs.18,06,135. It found that the Single Judge had erred in granting the borrower possession of the property merely upon partial payment, observing that “the direction contained in the judgment of the learned Single Judge to return possession of the secured asset to the debtor will cause serious prejudice to the Bank.”

Citing Section 14 and Section 17 of the SARFAESI Act, the Bench stated that the proper course for an aggrieved borrower is to approach the Debts Recovery Tribunal (DRT) under Section 17 rather than invoking the writ jurisdiction of the High Court. The Court referred extensively to the Supreme Court’s judgement in South Indian Bank Ltd. v. Naveen Mathew Philip [(2023) 17 SCC 311], reiterating the settled principle that High Courts should refrain from interfering in SARFAESI proceedings where statutory remedies are available.

Quoting the Supreme Court, the Bench observed: “When a statute prescribes a particular mode, an attempt to circumvent that mode shall not be encouraged by a writ court. A litigant cannot avoid the non-compliance of approaching the Tribunal, which requires the prescription of fees, and use the constitutional remedy as an alternative.” The Court further noted that “when the legislature has provided a specific mechanism for appropriate redressal, the powers conferred under Article 226 are to be exercised only in extraordinary circumstances.”

The Bench also noted that the borrower and his mother had earlier approached the Court in another writ petition, W.P.(C) No.1609 of 2025, and that the Bank had subsequently extended the benefit of a One Time Settlement Scheme, which the borrowers failed to comply with. Consequently, the Bank had taken lawful possession of the property on March 17, 2025. The Court found that neither the possession notice under Section 13(4) nor the order of the Chief Judicial Magistrate under Section 14 had been challenged before the DRT, observing: “Without raising a valid challenge against the possession notice issued by the Bank under Section 13(4) of the SARFAESI Act, the respondent-petitioner cannot invoke the writ jurisdiction of this Court seeking interference.”

Relying on precedents including Punjab National Bank v. O.C. Krishnan [(2001) 6 SCC 569], State Bank of Travancore v. Mathew K.C. [(2018) 3 SCC 85], and Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir [(2022) 5 SCC 345], the Bench reiterated that writ jurisdiction cannot be used to bypass the statutory framework established for financial disputes. It concluded that the Single Judge’s order effectively undermined the purpose of the SARFAESI Act, which provides for expeditious recovery of secured debts through a specialised mechanism.

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Setting aside the Single Judge’s decision, the Division Bench held: “In the above circumstances, we find no reason to sustain the judgment dated 31.07.2025 of the learned Single Judge. The writ appeal is allowed by setting aside the said judgment, and the writ petition is accordingly dismissed as not maintainable.”

“However, the dismissal of the writ petition is without prejudice to the right of the petitioner to invoke the statutory remedy provided under Section 17 of the SARFAESI Act against the coercive steps initiated by the Bank and its Authorised Officer.”

Advocates Representing the Parties

For the Appellants: Shri. P.C. Sasidharan, Standing Counsel for Kerala State Co-operative Bank.

For the Respondent: Shri. Anilkumar V. (Vazharambil), Counsel for the Petitioner.

Case Title: Kerala Bank & Anr. v. Jishith Kumar
Neutral Citation: 2025: KER:71280
Case Number: W.A. No.2036 of 2025
Bench: Justice Anil K. Narendran and Justice Muralee Krishna S.