Advocates:
Advocate Appeared:
For the Appellants : E.N. Vishnu Namboodiri, P. Sankaran Nampoothiri, Narayanan P. Potty, M.K. Saseendran

The legal document discusses the jurisdictional limitations of High Courts in intervening in proceedings initiated under the SARFAESI Act by private non-banking financial companies. The key points are as follows:

1. The High Court's jurisdiction under Article 226 of the Constitution is limited in matters involving proceedings under the SARFAESI Act, especially when an effective statutory mechanism exists for redressal and the parties are required to approach the Tribunal designated under the Act (!) (!) (!) .

2. The court emphasizes that interference should only occur in extraordinary circumstances and when there is a clear violation of legal procedures or statutory provisions. Non-compliance with interim orders and lack of bona fides on the part of the borrower can justify the dismissal of writ petitions or appeals (!) (!) .

3. The decision clarifies that private non-banking financial companies, such as Hero Fincorp Limited, do not generally fall under the category of instrumentalities or agencies of the State unless they perform a public function or are entrusted with statutory public duties. Therefore, courts are typically reluctant to entertain writ petitions against such private entities under Article 226, unless specific public law elements are involved (!) (!) (!) (!) (!) (!) (!) (!) .

4. Regarding the maintainability of the writ petition based on the amount overdue, the Court refers to statutory provisions that exclude proceedings where the overdue amount is less than 20% of the principal and interest, reinforcing that such proceedings are within the scope of the SARFAESI Act and are not subject to challenge in a writ petition unless other statutory conditions are violated (!) (!) (!) .

5. Ultimately, the Court dismissed the writ appeal, affirming that the proceedings initiated by the private financial institution were legally valid and that the High Court's intervention was unwarranted under the circumstances described (!) (!) .

In summary, the legal principles reinforce that courts should exercise restraint and adhere to statutory mechanisms when dealing with proceedings under the SARFAESI Act, particularly against private entities, and that the threshold for interference is high, especially when procedural compliance and bona fide conduct are lacking by the borrower.