SARFAESI proceedings may continue despite pending civil suits; writ challenge to a section 13(2) notice is premature.

The SARFAESI remedy may be invoked even when civil recovery suits are pending, because section 37 makes that remedy additional to other laws and the doctrine of election does not bar parallel recourse. A notice under section 13(2) is only a demand-cum-show-cause notice, so writ challenges at that stage are premature; objections must be considered first, and any later measures under section 13(4) can be challenged before the Debts Recovery Tribunal under section 17. The limitation objection also failed because the secured claim was found to be within time. Third-party purchasers and persons claiming under borrowers likewise could not maintain a writ challenge at the section 13(2) stage.

---

---

Issues: (i) Whether the secured creditors could invoke section 13(2) of the SARFAESI Act, 2002 while civil suits for recovery were already pending, without first withdrawing those suits; (ii) whether writ petitions under Article 226 were maintainable against notices issued under section 13(2) of the SARFAESI Act, 2002; (iii) whether the plea of limitation could invalidate the impugned notices; and (iv) whether third-party purchasers or persons claiming under the borrowers could maintain the challenge at the stage of a section 13(2) notice.

Issue (i): Whether the secured creditors could invoke section 13(2) of the SARFAESI Act, 2002 while civil suits for recovery were already pending, without first withdrawing those suits.

Analysis: Section 37 of the SARFAESI Act, 2002 makes the remedy under that Act additional to and not in derogation of other laws. The remedy under the SARFAESI Act is a special, summary mechanism distinct from the ordinary civil suit remedy, which proceeds through a lengthier process. The Court held that the ambit and scope of the two remedies are essentially different, and therefore the doctrine of election does not bar recourse to the SARFAESI Act merely because civil suits are pending. The requirement in section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 concerns withdrawal of applications before the Debts Recovery Tribunal and does not govern the present situation where no such tribunal proceedings were pending.

Conclusion: The secured creditors were entitled to proceed under section 13(2) of the SARFAESI Act, 2002 without withdrawing the pending civil suits.

Issue (ii): Whether writ petitions under Article 226 were maintainable against notices issued under section 13(2) of the SARFAESI Act, 2002.

Analysis: A notice under section 13(2) is only a demand-cum-show-cause notice and does not, by itself, take possession or finally determine rights. The borrowers and other affected persons were required to submit their objections, which had to be considered before any action under section 13(4) could follow. If measures under section 13(4) were later taken, the statute provides a remedy under section 17 before the Debts Recovery Tribunal. In that framework, challenges at the stage of section 13(2) were premature and the writ jurisdiction was not to be invoked.

Conclusion: The writ petitions were not maintainable at the stage of section 13(2) notices.

Issue (iii): Whether the plea of limitation could invalidate the impugned notices.

Analysis: The Court found from the materials that the charge had been created within the relevant limitation period and that action had been initiated in time. Section 36 of the SARFAESI Act, 2002 requires the secured creditor's claim to be within the period prescribed by the Limitation Act, 1963, and on the facts the claim was not barred. Accordingly, the notices could not be quashed on limitation grounds.

Conclusion: The challenge based on limitation failed.

Issue (iv): Whether third-party purchasers or persons claiming under the borrowers could maintain the challenge at the stage of a section 13(2) notice.

Analysis: The Court held that questions relating to the validity of mortgage, the status of purchasers, and whether particular assets constituted secured assets could be examined in proceedings under section 17 after measures under section 13(4) were taken. At the stage of section 13(2), such third parties could not sustain a writ challenge as if their rights had already been finally affected. The statutory appellate mechanism was treated as an adequate remedy.

Conclusion: The third-party purchasers and similarly placed petitioners could not maintain the writ challenge at that stage.

Final Conclusion: The Court upheld the availability of the SARFAESI remedy notwithstanding pending civil suits, treated the section 13(2) notices as premature for writ interference, and left the statutory remedy under section 17 open after any further measures under section 13(4).

Ratio Decidendi: The SARFAESI Act provides an additional and independent enforcement remedy that may be pursued despite pending civil recovery proceedings, and a challenge to a section 13(2) notice is premature because the Act contemplates consideration of objections followed by statutory redress under section 17 after action under section 13(4).

---