Practice area

Banking, recovery and SARFAESI writs

Writ petitions by borrowers, guarantors and auction purchasers against bank action, including SARFAESI measures and fraud classification.

Banks and financial institutions have strong recovery powers, and borrowers have limited but real protections. Statutory remedies under the SARFAESI Act, 2002 and before the Debts Recovery Tribunal come first, and the High Court steps in where there is jurisdictional overreach or a breach of fairness.

What this work involves

• SARFAESI measures: challenges to demand notices, possession and auctions, usually after considering the appeal to the Debts Recovery Tribunal
• Auction purchasers: protecting rights after a valid auction
• Classification of accounts as fraud: the Supreme Court in State Bank of India v. Rajesh Agarwal (2023) held that the principles of natural justice must be followed before a borrower's account is classified as fraud
• Bank guarantees, invocation and injunctions
• Freezing and debit of accounts
• Settlement and one-time settlement disputes
• Writs against public sector banks where they act as State instrumentalities

Approach

Documents, notices and loan records are reviewed with an eye on limitation, procedure and the exact order challenged. Early advice decides whether the right forum is the Tribunal or the High Court.

Frequently asked questions

Can I challenge a SARFAESI notice in the High Court?

Usually the first remedy is an application to the Debts Recovery Tribunal. The High Court entertains writs in limited situations, such as a clear lack of jurisdiction.

Must a bank give a hearing before classifying an account as fraud?

According to the Supreme Court in the Rajesh Agarwal case, the principles of natural justice apply to that classification.

Related reading