Statutory alternative remedy under SARFAESI and superseding restructuring arrangement limited writ relief and refund claims

An efficacious statutory remedy under the SARFAESI Act, including appeal against measures under Section 13(4), ordinarily bars writ intervention where substantially identical relief is already being pursued before the Debts Recovery Tribunal. A later accepted arrangement dated 11.11.2021 was treated as substituting the earlier restructuring letter dated 28.06.2021, so the earlier terms could not be enforced for specific performance or refund. Delay in approaching the writ court, coupled with parallel remedies, also weighed against discretionary relief. The writ appeal was allowed, the writ court's reliefs were vacated, and the parties were left to pursue statutory remedies before the appropriate forum.

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Issues: (i) whether the writ petition was maintainable in view of the statutory remedy under the SARFAESI Act, 2002 after issuance of measures under Section 13(4); (ii) whether the earlier restructuring letter dated 28.06.2021 survived after the subsequent arrangement dated 11.11.2021, so as to sustain a direction for specific performance and refund; and (iii) whether the writ petitioner was entitled to relief despite delay and simultaneous pursuit of parallel remedies.

Issue (i): whether the writ petition was maintainable in view of the statutory remedy under the SARFAESI Act, 2002 after issuance of measures under Section 13(4).

Analysis: The availability of an efficacious statutory appeal under Section 17 against measures taken under Section 13(4) was central to the maintainability question. The writ petition had been filed after the borrower had already been classified as an NPA and after the statutory measures were initiated. The same or substantially similar reliefs were also pursued before the Debts Recovery Tribunal. In such circumstances, the rule of exhaustion of alternative remedy applied with full force.

Conclusion: The writ petition ought not to have been entertained on the question of SARFAESI measures, and the challenge to maintainability succeeded in favour of the appellant.

Issue (ii): whether the earlier restructuring letter dated 28.06.2021 survived after the subsequent arrangement dated 11.11.2021, so as to sustain a direction for specific performance and refund.

Analysis: The record showed that the borrower later accepted the arrangement dated 11.11.2021, signed the relevant documents, and acted upon the revised terms. That subsequent arrangement revised the credit structure and was treated as a fresh contractual arrangement in substitution of the earlier restructuring. Once the later arrangement was accepted, the earlier arrangement no longer remained enforceable in the manner claimed.

Conclusion: The earlier restructuring letter was superseded by the later arrangement, and no direction for specific performance or consequential refund could be sustained in favour of the writ petitioner.

Issue (iii): whether the writ petitioner was entitled to relief despite delay and simultaneous pursuit of parallel remedies.

Analysis: The writ petition was instituted after the statutory measures had already been taken, and the borrower had also moved the Debts Recovery Tribunal for substantially identical reliefs. The delay in approaching the writ court and the parallel invocation of remedies weighed against grant of discretionary relief. The refund direction was also inappropriate in view of the pending statutory proceedings.

Conclusion: Discretionary writ relief was not warranted, and the ancillary refund direction could not stand.

Final Conclusion: The writ appeal succeeded, the impugned judgment was set aside, and the reliefs granted by the writ court were vacated, leaving the parties to work out their remedies before the statutory forum.

Ratio Decidendi: Where an efficacious statutory remedy under the SARFAESI Act is available and substantially identical relief is already pursued before the Debts Recovery Tribunal, the High Court should ordinarily decline writ relief, and a later accepted contractual arrangement will supersede an earlier restructuring arrangement.

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