RBI COVID-19 relief does not reopen pre-existing defaults or SARFAESI enforcement where statutory remedies are available.
RBI COVID-19 circulars and policy guidelines were treated as temporary relief measures for viable borrowers affected by the pandemic, not as a basis to reopen pre-existing defaults or completed enforcement steps under SARFAESI. Where default had begun before the pandemic, the account had already become an NPA, and secured creditor action including DRT proceedings had progressed, the one-time settlement could not be invalidated merely because payment conditions were not met. Writ relief was also considered unavailable where statutory remedies under the SARFAESI framework had already been invoked, since interference is ordinarily not warranted in contractual and enforcement disputes with an efficacious alternative remedy.
Issues: (i) Whether the petitioners were entitled to relief under the RBI COVID-19 circulars and policy guidelines so as to invalidate the revocation of the one-time settlement and obtain further time to pay the settlement amount; (ii) whether writ relief was available in a matter arising from SARFAESI proceedings where statutory remedies had already been invoked.
Issue (i): Whether the petitioners were entitled to relief under the RBI COVID-19 circulars and policy guidelines so as to invalidate the revocation of the one-time settlement and obtain further time to pay the settlement amount.
Analysis: The defaults were long pre-existing and had commenced in 2018, well before the COVID-19 pandemic. The account had already been classified as a non-performing asset, possession of secured properties had been taken, and the challenge to the SARFAESI measures had already failed before the DRT. The RBI circulars and policy guidelines were meant to provide temporary relief to viable borrowers affected by the pandemic, not to reopen settlement disputes where default and enforcement had already occurred. The one-time settlement itself was only an in-principle proposal subject to conditions, including payment by a fixed date, which was not met.
Conclusion: The petitioners were not entitled to any relief under the RBI circulars or policy guidelines, and the revocation of the one-time settlement was not liable to be quashed.
Issue (ii): Whether writ relief was available in a matter arising from SARFAESI proceedings where statutory remedies had already been invoked.
Analysis: The dispute arose out of secured creditor action already pursued under the SARFAESI framework, including proceedings before the DRT. The petitioners had an available statutory remedy, and the matter was essentially contractual and enforcement-based in nature. In such circumstances, interference in writ jurisdiction was not warranted, especially where the petitioners had repeatedly failed to comply with undertakings and had not shown any legal basis for bypassing the statutory mechanism.
Conclusion: Writ relief was not available, and the petitioners could not circumvent the SARFAESI remedy structure.
Final Conclusion: The petition was dismissed, and the respondent was left free to proceed in accordance with law.
Ratio Decidendi: RBI COVID-19 regulatory measures do not afford relief against pre-existing defaults and completed enforcement action, and writ jurisdiction will ordinarily not be exercised to interfere with SARFAESI proceedings where an efficacious statutory remedy exists.
TaxTMI 
AI Drafter ✕
TaxTMI 
