Breach of undertakings can end equitable restraint under SARFAESI, allowing recovery action to proceed

Repeated breach of court-recorded undertakings and dishonour of the promised payment instrument can defeat a borrower's claim to continued equitable restraint under the SARFAESI regime. Where prior indulgence and time to clear dues have already been granted, but the borrower fails to make the agreed payments and does not mount any substantive challenge to the bank's recovery action, further protection against possession or other coercive steps is not justified. The bank is then free to proceed with enforcement in accordance with law.

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Issues: Whether the petitioner was entitled to continued restraint and extension of time against enforcement action under the SARFAESI regime despite repeated defaults in complying with court-recorded undertakings and dishonour of the payment instrument.

Analysis: The petitioner's request for protection against possession and further coercive steps was premised on successive undertakings to clear the dues within stipulated timelines. The record showed repeated non-compliance, including failure to make the agreed payments, dishonour of the cheque issued towards the promised amount, and no substantive challenge to the bank's action under the SARFAESI framework. The relief sought in the petition had already been accommodated by prior indulgence of the Court, but the petitioner did not avail that opportunity. In these circumstances, the claimed restraint against the bank could not survive.

Conclusion: The petitioner was not entitled to the restraint or further extension sought, and the issue was decided against the petitioner.

Final Conclusion: The writ petition failed because the petitioner lost the benefit of equitable indulgence by repeated default and breach of undertakings, leaving the bank free to proceed in accordance with law.

Ratio Decidendi: A party that secures interim restraint on the basis of solemn undertakings, but fails to honour those undertakings, cannot insist on continued equitable protection against lawful recovery proceedings.

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