The Court recognized that geographical and economic barriers hinder access to justice for borrowers under the SARFAESI Act, allowing for writ jurisdiction under Article 226 when the statutory remedy is deemed ineffective.

ORDER :

N. Kotiswar Singh, J.

1. An issue of seminal importance has arisen in this batch of 46 writ petitions where the actions of the Banks/Financial Institutions/Secured Creditors initiated under Sections 13 and 14 of “ SECURITIZATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT , 2002” (hereinafter referred to as “SARFAESI Act/Act”), have been questioned by the borrowers and the guarantors and aggrieved persons on the plea, amongst others, that though there is a statutory remedy available, it is of a limited nature and not efficacious and hence, they have been compelled to approach this Court by invoking jurisdiction under Article 226 of the Constitution of India. Naturally, the Banks/Financial Institutions have opposed this plea contending that since statutory remedy available is indeed efficacious and hence, these petitions are not maintainable.

2. It has been strenuously argued before us on behalf of the petitioners that, even though the statute provides an alternative remedy under Section 17 of the SARFAESI Act against actions initiated under Section 13 and 14 of the Act, in the facts and circumstances obtaining in these petitions, the same cannot be said to be an efficacious remedy and hence this Court may entertain these writ petitions.

3. As we proceed to examine this preliminary issue, a brief foot note may be added. In most of these petitions, this Court has granted ad interim reliefs to the petitioners directing the Banks/Financial Institutions not to take any coercive measures against the petitioners/borrowers subject to payment of certain amounts to the Bank. This Court passed an order on 06.09.2023 in WP (C) No.2232 of 2023 directing the Bank/Financial Institution not to take any coercive action against the petitioner borrower which would cover all the other cases including the writ petition, WP (C) No. 2429 of 2023(M/s Hotel Alpine Ridge and Ors. Vs Union of India and Ors.). We have been informed that as against the aforesaid interim order, an SLP has been preferred before the Hon'ble Supreme Court in SLP (Civil) Diary No. 8318 of 2024 in respect of WP (C) No. 2429 of 2023, “M/s Hotel Alpine Ridge and Ors. Vs Union of India and Ors.”. However, there was no stay order passed by the Hon'ble Supreme Court as against the aforesaid interim order passed by this Court, and the Hon'ble Supreme Court vide order dated 01.03.2024 directed the said SLP to be listed on 11.03.2024 and it was further directed that in the meanwhile, the High Court would be free to decide the preliminary objection. Subsequently, when the matter was listed on 11.03.2024, the Hon'ble Supreme Court issued notice and further directed the Union of India to explain why the Debts Recovery Tribunal under the Recovery of Debts and Bankruptcy Act, 1993 has not been established within the Union Territory of Jammu and Kahmir but the Hon'ble Supreme Court did not modify its earlier order enabling this Court to decide the preliminary objections. Accordingly, this Court proceeded to hear the matter on the preliminary issue as regards the maintainability of the writ petitions before this Court.

4. This Court, in spite of taking up the matter on a day-to-day basis, however, could not conclude the hearing earlier on the issue of maintainability as 46 writ petitions have been tagged together and all the counsel in these petitions were afforded opportunity of submitting their views on this issue and hearing could be concluded only on 22.03.20