2025 Supreme(Online)(Ker) 42547

IN THE HIGH COURT OF KERALA AT ERNAKULAM
MOHAMMED NIAS C.P., J
Divakar Kammath – Appellant
Versus
HDFC Bank Limited – Respondent
OP (DRT) NO. 10 OF 2025 | SA NO.469 OF 2024

The court upheld that actions taken against co-borrowers and guarantors under the SARFAESI Act remain valid post the principal borrower's death, reaffirming legal remedies available.

Headnote:(A) SARFAESI Act - Section 18 - Challenge to orders of the Debt Recovery Tribunal - Petitioners contend the principal borrower, their deceased father, had actions against secured assets deemed null and void. Bank argues co-borrower and guarantor status validifies proceedings - Petition disposed; appellate remedy remains open including limitations. (Paras 1-3)

(B) Law relating to co-borrowers and guarantors - Court examines classification under SARFAESI Act, recognizing validity of actions against living co-borrowers linked to principal borrower’s debt. Clarification regarding liabilities post-death of principal borrower considered. (Paras 2-3)

Facts of the case:
The petitioners challenge the Debt Recovery Tribunal's order, asserting actions taken against secured assets are void due to the principal borrower's death. They claim co-borrower and guarantor claims by the bank undermined their rights.

Findings of Court:
The court ruled that existing legal remedies under the SARFAESI Act were available to the petitioners, especially regarding their rights in response to the bank's actions.

Issues: The key issues centered on whether the actions against the petitioners were valid post the demise of the principal borrower and the effect of their status as co-borrowers/guarantors.

Ratio Decidendi: The court emphasized the importance and legality of proceeding against co-borrowers and guarantors under the SARFAESI Act, clarifying the necessity for legal avenues for appeal to be exhausted before petitioning under Article 227.

Result: Petition disposed.