Statutory remedy under SARFAESI Section 17 remains effective, allowing borrowers to challenge all legal infirmities in creditor action.

The amended Section 17 of the SARFAESI Act was upheld as constitutionally valid, because the borrower's application remains an effective statutory remedy against measures taken under Section 13(4). The Court held that the Debt Recovery Tribunal is not confined to a narrow review of formal legality alone; the borrower may raise all legally sustainable objections, including limitation, incorrect adjustment of payments, non-compliance with the Act and rules, and other defects affecting the validity of the secured creditor's action. The amendment was therefore not treated as reducing the remedy to an empty formality or as unconstitutionally curtailing tribunal scrutiny.

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Issues: Whether the amended Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was unconstitutional on the ground that it curtailed the borrower's remedy and limited the Debt Recovery Tribunal's scrutiny to the legality of measures taken under Section 13(4).

Analysis: The amended scheme was examined in the light of the earlier upholding of the Act, except the erstwhile deposit condition, and the purpose of the remedy under Section 17. The Court held that the application under Section 17 continues to be an effective statutory remedy to question the secured creditor's measures under Section 13(4), and that the borrower may raise all grounds showing that the action is not permissible in law, including want of limitation, incorrect adjustment of payments, non-compliance with the Act and the rules, and other legal infirmities affecting the validity of the bank's action. The Court rejected the contention that the amendment merely reduced the remedy to an empty formality or that the Tribunal's jurisdiction was confined in an unconstitutional manner.

Conclusion: The amended Section 17 is constitutionally valid and the borrower is entitled to raise all legally sustainable objections before the Debt Recovery Tribunal.

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