SARFAESI enforcement disputes cannot be recast as criminal cases when statutory recovery remedies are already available.

Measures taken by a secured creditor under the SARFAESI framework must be challenged through the statutory remedies provided under that enactment, including objections to valuation, sale, possession and other enforcement steps. Where the borrower has already pursued writ, DRT and DRAT remedies on the same grievance, resort to criminal law on substantially identical allegations is inappropriate. Continuation of the complaint, investigation order and FIR in such circumstances was treated as an abuse of process, and the Court held that inherent jurisdiction could be used to prevent re-litigation of matters already addressed in recovery proceedings.

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Issues: (i) Whether criminal proceedings initiated against bank officers in relation to measures taken under the SARFAESI framework could be sustained when statutory remedies under that enactment had already been invoked. (ii) Whether the complaint, the order directing investigation, and the FIR deserved quashing as an abuse of process of law.

Issue (i): Whether criminal proceedings initiated against bank officers in relation to measures taken under the SARFAESI framework could be sustained when statutory remedies under that enactment had already been invoked.

Analysis: The dispute arose from loan sanction, classification of the account as NPA, possession and auction of the secured asset, all of which were governed by the SARFAESI framework. The borrower had already challenged the auction in writ proceedings and had also pursued remedies before the DRT and DRAT. The statutory scheme provides a complete mechanism for objection to measures taken by the secured creditor, including challenge to valuation, sale and other enforcement steps. In that setting, resort to criminal law on essentially the same grievance was held to be inappropriate.

Conclusion: The criminal prosecution could not be sustained merely on allegations relating to SARFAESI enforcement measures, and the grievance had to be pursued in the statutory forum provided by law.

Issue (ii): Whether the complaint, the order directing investigation, and the FIR deserved quashing as an abuse of process of law.

Analysis: The Court found that the complaint was filed after earlier remedies had been pursued and failed, and that permitting investigation would amount to re-agitating matters already dealt with in writ and SARFAESI proceedings. The allegations were treated as an afterthought and intimidatory in nature, and continuation of criminal process was considered capable of unsettling the statutory and judicial determinations already rendered in the recovery proceedings. On that basis, inherent jurisdiction was held to be justified.

Conclusion: The complaint, the order referring the matter for investigation, and the FIR were quashed insofar as the appellants were concerned.

Final Conclusion: The decision reinforces that where a borrower's grievance concerns enforcement of security interest and adequate remedies exist under the SARFAESI regime, criminal process should not be used to bypass or litigate those remedies.

Ratio Decidendi: Where the grievance relates to measures taken under a complete statutory recovery mechanism and the aggrieved party has statutory remedies to challenge those measures, initiation or continuation of criminal proceedings on the same core allegations amounts to abuse of process and may be quashed in exercise of inherent jurisdiction.

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