SARFAESI writ jurisdiction limited where NPA classification and possession measures can be challenged through the statutory remedy.

A writ petition challenging SARFAESI demand and possession notices was held not maintainable where the borrower's account had been classified as NPA under the statutory framework and RBI norms, and the secured creditor had followed the prescribed procedure. The Court held that disputes over the correctness of the NPA classification and alleged non-compliance with banking guidelines involved factual questions unsuited to writ adjudication, particularly because an efficacious statutory remedy under Section 17 was available. The challenge under Article 226 to measures taken under Sections 13(2) and 13(4) was therefore declined, and the petitioners were left to pursue the remedy before the Debts Recovery Tribunal.

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Issues: Whether the writ petition challenging the demand notice and possession notice issued under the SARFAESI Act was maintainable and whether the petitioners had made out any case for interference in writ jurisdiction.

Analysis: The petitioners questioned the invocation of the SARFAESI mechanism on the ground that their account had not validly become a non-performing asset and that the bank had not properly considered their objections. The Court noted that the borrowers had availed and fully utilized the credit facilities, had not serviced interest for more than 90 days, and had not made any payment even after the account was classified as NPA. It held that classification of an account as NPA is governed by the statutory framework and RBI norms, and that the secured creditor had followed the relevant procedure. The Court further held that disputed questions relating to the correctness of the classification and alleged non-compliance with banking guidelines could not be gone into in writ proceedings, especially when an effective alternative remedy was available under the SARFAESI Act. In these circumstances, the challenge to the notices under Sections 13(2) and 13(4) could not be entertained under Article 226.

Conclusion: The challenge to the SARFAESI notices was rejected and the petitioners were held not entitled to writ relief.

Final Conclusion: The proper course for the petitioners was to pursue the statutory remedy before the Debts Recovery Tribunal, and the writ petition was dismissed without adjudicating the disputed factual issues finally in writ jurisdiction.

Ratio Decidendi: Where a secured creditor has invoked the SARFAESI mechanism after classifying the account as NPA in accordance with the governing norms, and an efficacious statutory remedy under Section 17 is available, the High Court should ordinarily decline to interfere under Article 226 with the demand and possession measures taken under Section 13.

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