Alternate remedy under SARFAESI bars Article 226 writ relief against secured creditor action absent exceptional grounds.

A writ petition under Article 226 was not ordinarily maintainable against a private asset reconstruction company's proposed action under the SARFAESI regime because Section 17 provided an efficacious statutory remedy. The Court applied the rule of alternate remedy and self-imposed restraint in recovery matters, and found no basis to treat the company as performing a public function merely from its commercial recovery role. It also held that continued ex parte interim protection against dues far exceeding the deposit was unjustified. The writ petitions were therefore dismissed and the interim orders vacated.

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Issues: Whether a writ petition under Article 226 was maintainable against a private asset reconstruction company in respect of proposed action under the SARFAESI regime, and whether the High Court ought to have entertained the writ petition despite the statutory remedy under Section 17.

Analysis: The communication dated 13.08.2015 was treated by the borrowers as a possession notice, but the Court noted the appellant's case that it was only a proposed step under the SARFAESI mechanism. Even assuming it amounted to a measure under Section 13(4), the statute provided an efficacious remedy by way of application under Section 17. The Court applied the settled rule of self-imposed restraint under Article 226, particularly in matters concerning recovery of dues under special statutes, and held that the existence of an effective statutory forum ordinarily bars writ intervention. The Court also held that the appellant, being an asset reconstruction company acting in a commercial recovery context, was not shown to be performing a public function so as to justify writ interference on that ground. The continued ex parte interim protection, granted against dues of about Rs. 117 crores on a much smaller deposit, was found unjustified and an abuse of process.

Conclusion: The writ petitions ought not to have been entertained and the interim protection could not be sustained.

Final Conclusion: The appeals succeeded, the writ petitions were dismissed, and the interim orders were vacated.

Ratio Decidendi: Where the SARFAESI Act provides an efficacious statutory remedy under Section 17, a writ petition under Article 226 should not ordinarily be entertained against proposed or alleged enforcement action by a secured creditor, including an asset reconstruction company, absent a recognized exception to the rule of alternate remedy.

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