IMPORTANT POINT
Recovery of debt – Action initiated by a private financial institution, is not amenable to writ jurisdiction.

ORDER

By way of the present writ petition, the petitioner has challenged the notice/order dated 24.09.2025 (Annexure-3) and has also sought quashment of all further proceedings initiated pursuant to the said notice. The petitioner has further prayed that the flat in question may not be put to auction and that any recovery sought to be made be effected from the original borrower.

2. The facts, in brief, as pleaded in the writ petition, are that the petitioner purchased Flat No. C-97(A) situated at Parshvanath City, Jodhpur (hereinafter referred to as “the purchased flat”) on 21.08.2018. The said flat was constructed by the developer on a plot, the sub-division whereof was approved by the Jodhpur Development Authority (JDA) on 30.08.2017. Since the purchase of the said flat, the petitioner has been residing therein along with his family.

2.1 On 24.09.2025 (Annexure-3), a notice came to be issued to the petitioner under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the Act of 2002”) by respondent No.2. Being aggrieved by the said notice, the petitioner also lodged an FIR against the developer (respondent No.5 herein) alleging commission of forgery.

2.2 The petitioner has preferred the present writ petition challenging the aforesaid notice on the ground that the same is illegal and that proceedings under Section 13(4) of the Act of 2002 could not have been initiated against him, as he is neither a borrower nor a guarantor.

3. Learned counsel for the petitioner submitted that the proceedings initiated by respondent No.2 are mandatorily required to follow the procedure prescribed under Sections 13(2) and 13(3) of the Act of 2002. However, in the present case, without adhering to the said statutory provisions, respondent No.2 has straightaway issued the impugned notice by invoking powers under Section 13(4) of the Act of 2002.

3.1 Learned counsel further contended that the petitioner has invoked the writ jurisdiction of this Court as no alternative efficacious remedy is available to him. It was submitted that the remedy of approaching the Debt Recovery Tribunal is not available, since the petitioner is neither a borrower nor a guarantor, and therefore, the impugned notice has rightly been challenged by way of the present writ petition.

3.2 Learned counsel placed reliance upon the judgment of the Hon’ble Supreme Court in the case of Central Bank of India & Anr. vs. Prabha Jain & Ors. [(2025) 4 SCC 38] and contended that the remedy of approaching the Debt Recovery Tribunal is not available in cases involving a title dispute, as is involved in the present writ petition.

4. Heard learned counsel for the petitioner and perused the material available on record.

5. This Court is of the considered view that the action initiated by respondent No.2, who is a private financial institution, is not amenable to the writ jurisdiction. Upon a specific query being raised, learned counsel for the petitioner was unable to satisfy this Court as to how respondent No.2 is amenable to the writ jurisdiction as it is not “State” within the meaning of Article 12 of the Constitution of India. The Apex Court in the case of Phoenix ARC Private Limited vs. Vishwa Bharati Vidya Mandir and Ors.; (2022) 5 SCC 345, has also taken this view while observing as under:—

“12. Even otherwise, it is required to be noted that a writ petition against the private financial institution-ARC-Appellant herein Under Article 226 of the Constitution of India against the proposed action/actions Under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transacti