Cumulative recovery remedies and no enforceable right to force settlement or proportional release of secured assets

The remedies under the securitisation law and the debt recovery law are cumulative, so a secured creditor is not barred from proceeding under SARFAESI merely because it has filed an application under the debt recovery statute. RBI settlement guidelines must be shown to have been specifically breached before writ relief can be granted, and a court will not compel acceptance of a one-time settlement where the borrower failed to satisfy the payment conditions. Non-production of title deeds kept in the Tribunal's custody was not fatal because inspection mechanisms existed under the Tribunal rules. The borrower had no enforceable right to proportionate release of mortgaged assets or to insist on private treaty sale absent a bona fide buyer and compliance with settlement terms.

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Issues: (i) Whether a secured creditor is barred from proceeding under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 after filing an application under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993; (ii) whether the respondent-bank violated Reserve Bank of India guidelines on extension of the one-time settlement scheme; (iii) whether non-production of title deeds by the bank, on the ground that they were in the custody of the Debts Recovery Tribunal, was fatal; and (iv) whether the borrower was entitled to proportionate release of mortgaged properties or private treaty sale for repayment of the debt.

Issue (i): Whether a secured creditor is barred from proceeding under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 after filing an application under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis: The statutory scheme treats the two enactments as cumulative and not mutually exclusive. Section 37 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 makes the remedy under that Act additional, while the first proviso to Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 is enabling and does not create a bar merely because action under the securitisation law had earlier been taken. The doctrine of election does not apply because the remedies are not inconsistent or repugnant, and the creditor may proceed under both enactments concurrently.

Conclusion: The secured creditor was not disabled from continuing action under the securitisation law.

Issue (ii): Whether the respondent-bank violated Reserve Bank of India guidelines on extension of the one-time settlement scheme.

Analysis: Reserve Bank of India directions are binding where they create enforceable norms, but the borrower must still show a clear breach of the applicable policy. The petitioners did not establish that the respondent-bank transgressed any binding guideline requiring the relief sought. They had, in fact, been extended a settlement facility that was more favourable than the outstanding principal and interest position, but they failed to comply with the payment conditions. A writ court will not compel acceptance of a settlement offer or substitute its view for the bank's commercial decision in the absence of a demonstrated violation of binding policy.

Conclusion: No violation of Reserve Bank of India guidelines was established.

Issue (iii): Whether non-production of title deeds by the bank, on the ground that they were in the custody of the Debts Recovery Tribunal, was fatal.

Analysis: The title deeds had already been deposited and were in the custody of the Tribunal in the recovery proceedings. The applicable Tribunal rules provided a mechanism for inspection of records through the Presiding Officer or the Registrar, and nothing prevented the petitioners from seeking inspection under those rules. In the absence of an application to the Tribunal and in the absence of identified prospective buyers, the bank's inability to physically produce the documents was not a legal infirmity.

Conclusion: The bank's failure to show the title deeds was not fatal.

Issue (iv): Whether the borrower was entitled to proportionate release of mortgaged properties or private treaty sale for repayment of the debt.

Analysis: The terms of the one-time settlement reserved discretion to the bank, and the borrower had no statutory right to demand piecemeal release of securities. Section 13(8) of the securitisation law protects the borrower's right of redemption before sale, but it does not compel the bank to sell by private treaty or to release assets proportionately on partial payment. The petitioners repeatedly defaulted, their cheques were dishonoured, and they did not demonstrate any bona fide buyer willing to pay a price sufficient to clear the dues. Judicial review does not permit the Court to impose commercial terms on the secured creditor.

Conclusion: The borrower was not entitled to proportionate release or private treaty sale.

Final Conclusion: The challenge to the bank's recovery measures and cancellation of the settlement failed, and the writ petitions were held to be without merit.

Ratio Decidendi: The remedies under the securitisation law and the debt recovery law are additional and can be pursued concurrently, while a borrower has no enforceable right in writ jurisdiction to compel a bank to grant one-time settlement terms, release securities proportionately, or alter its recovery mode absent violation of binding statutory or regulatory norms.

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