The court clarified procedural compliance under the SARFAESI Act regarding the enforcement of mortgage and the proper grounds for granting a stay on proceedings.

BASANT BALAJI J ======================

OP (DRT) No. 148 of 2025 ========================

Dated 02^nd day of March 2026 JUDGMENT The petitioners challenge the order passed by the Debts Recovery Tribunal–I, Ernakulam, in I.A. No. 1425/2025 in S.A. No. 243/2025, whereby the application seeking stay of the proceedings initiated under Section 14 of the SARFAESI Act was dismissed. The 1st respondent, initiated recovery measures against the personal properties of the petitioners for the alleged dues of the 2nd respondent Company. According to the petitioners, while other assets of the 2nd respondent Company are available for recovery, and the action against their personal properties is arbitrary and unsustainable in law. Their specific contention before the Tribunal was that the mandatory statutory requirements under the SARFAESI Act were not complied with and that no legally enforceable mortgage exists over their properties. It is further alleged that the Tribunal dismissed the stay application without properly adverting to the pleadings and documents produced by the petitioners and without adequate consideration of the contentions raised. Aggrieved thereby, the petitioners have filed the present Original Petition (DRT).

2. An interim order was initially passed on 13.05.2025, whereby the respondents were restrained from dispossessing the petitioners, if they were in possession of the property. Subsequently, by order dated 19.05.2025, the said interim order was modified and it was directed that status quo as on that date shall be maintained. The petitioners are aggrieved by the sale of the property pursuant to Ext.P16 insofar as it relates to Property No.7. The other properties covered by the proceedings belong to the other Directors as well as to the Company.

3. Since the challenge in the present proceedings is made only by one of the Directors and is confined to Property No.7 alone, it is clarified that the status quo order passed by this Court shall operate only in respect of Property No.7. Needless to say, the respondent Bank is at liberty to proceed in accordance with law for recovery of the amounts due, insofar as the other properties are concerned.

The original petition is disposed of as above.

Sd/-