Possession under SARFAESI can be restored only after a merits finding of illegality, not by interim equitable order.
A Debts Recovery Tribunal can restore possession of secured assets only after a merits-based finding that measures taken under Section 13(4) of the SARFAESI Act are not in accordance with law, and it cannot order interim redelivery on equitable grounds or by relying on the general procedure under the DRT Act. The phrase "as far as may be" in Section 17(7) does not override the Act's special scheme. The rule of alternative remedy is discretionary, so writ interference remains available where the impugned order is wholly without jurisdiction and unsupported by reasons. Engagement of security personnel and recovery of their expenses is authorised by Section 13(7) and Rule 8(4).
Issues: Whether the Debts Recovery Tribunal had jurisdiction to direct redelivery of possession of secured assets to the borrower during pendency of the securitisation appeal, and whether the existence of an alternative appellate remedy barred writ interference.
Analysis: The order of the Tribunal was passed without considering the objections filed by the secured creditor and without recording reasons. The writ court held that the rule of alternative remedy is one of discretion and not compulsion, and that interference was justified where the impugned order was wholly without jurisdiction and unsupported by reasons. On the substantive question, the Court construed Section 17(3) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as permitting restoration of possession only after the Tribunal, upon examination of the facts and evidence, concludes that the measures taken under Section 13(4) are not in accordance with law. The expression in Section 17(7), namely "as far as may be", was held not to override the special scheme of the Act. The Court also held that the Bank's engagement of security personnel and recovery of the related expenses was authorised by Section 13(7) of the Act and Rule 8(4) of the Security Interest (Enforcement) Rules, 2002.
Conclusion: The Tribunal had no jurisdiction to order redelivery of possession pending the appeal, and the writ petition was maintainable despite the availability of an alternative remedy.
Final Conclusion: The impugned order directing redelivery of possession was unsustainable and was quashed, with a direction to decide the main securitisation application on merits within a fixed time.
Ratio Decidendi: A Debts Recovery Tribunal can restore possession of secured assets only after a merits-based finding that the secured creditor's measures under Section 13(4) are contrary to the Act and Rules; it cannot grant interim redelivery of possession merely on equitable considerations or by invoking general procedure under the DRT Act.
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AI Drafter ✕
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