Writ petitions challenging actions under the SARFAESI Act are not maintainable unless exceptional circumstances exist, and parties must exhaust statutory remedies available under the Act.

JUDGMENT :

Muralee Krishna, J.

This writ appeal is filed under Section 5 (i) of the KERALA HIGH COURT ACT , 1958, by the petitioners in W.P.(C)No.9263 of 2025, challenging the Judgment dated 04.04.2025 passed by the learned Single Judge in that writ petition. The 1^st appellant is the wife of the 2^nd appellant. They filed the writ petition under Article 226 of the Constitution of India, seeking the following reliefs:

“i. To issue a writ of Certiorari or any other appropriate writ, order calling for the records leading to Exhibit P3 Notice of Possession issued under Section 13 (4) of Securitisation and Reconstruction Assets of Financial and Enforcement of Security Interest Act, 2002 and under Rule 8 (1) of Security Interest (Enforcement) Rules, 2002 dated 22.10.2024 and quash the same holding that the same is in complete contravention of Securitisation and Reconstruction of Financial Assets and Enforcement of security interest Act, 2002 in the light of Ground A and rules framed thereunder and the steps taken by the 7^th and 8^th respondents are illegal, unjustified, erroneous, unwarranted, null and void and arbitrary; in the interest of justice.

ii. To direct the 2^nd respondent Reserve Bank of India to initiate enquiry against the 7^th respondent and like NBFCs for misusing the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for the debts less than threshold minimum not limited to the instant case; but in the identical cases.

iii. To issue a writ of Certiorari or any other appropriate writ, or order calling for the records leading to the Settlement Agreement signed between the petitioners and the 8^th respondent pursuant to the Lok Adalat of the 6^th respondent and quash the same as it is illegal, unjust and arbitrary.

iv. To issue a direction to the 1st respondent to extend the Debt Relief Schemes constituted under the Kerala Debt Relief Commission Act 2008 to the financial assistance availed by fisherfolk like the petitioners in the aftermath of natural calamities.”

2. According to the appellants, the 2^nd appellant is a fisherman and a member of the Kerala Fisherman Welfare Fund Board. The 2^nd appellant, along with the 1^st appellant, availed a housing loan of Rs.2/- Lakh from the 7^th respondent in the year 2018. They repaid a total sum of Rs.1,20,000/-. However, the office of the 8^th respondent issued Ext.P3 possession notice dated 22.10.2024 under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, in short), showing the total due amount as Rs.4,17,620/-. Though the 2^nd appellant was ready to remit a portion of the balance amount of Rs.70,000/-, the office of the 8^th respondent refused the same. On an evening in the month of December, some of the Officers of the 8^th respondent came to the residence of the appellants and directed them to attend the Lok Adalat to be held on the next day in Alappuzha Court. When the appellants attended the same, the lawyer who represented the 7^th respondent told them that their liability of Rs.4,17,620/- will be written off. The 1^st appellant signed in some documents from the Adalat. Thereafter, the appellants started receiving phone calls from the office of the 7^th respondent stating that an amount of Rs.1,70,000/- is still pending to be paid by them. The appellants understood that in the Lok Adalat the papers they signed were actually agreeing to repay an amount of Rs.1,70,000/- in two instalments, the first one on 22.12.2024 and the secon