Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Remedy for Dispute over Possession between Two Banks - When a dispute arises regarding possession of secured assets, the primary remedy available is under the SARFAESI Act, particularly Sections 13(4), 17, and 18, which provide a structured process for banks and financial institutions to take possession, sell secured assets, and seek recovery without court intervention. The Act empowers banks to exercise these powers, and remedies such as appeals under Section 17 can be exercised once possession is taken or contested. The courts have held that such statutory remedies are exclusive and should be pursued before approaching higher courts under Article 226 or 227 Rachna Mahawar vs The District Magistrate - Madhya Pradesh, VINU THOMAS vs SOUTH INDIAN BANK LIMITED - Kerala, M/S DIAMOND ENTERTAINMENT TECHNOLOGIES PVT. LTD. & ORS. Vs RELIGARE FINVEST LIMITED THROUGH ITS AUTHORISED OFFICER - Delhi, Vishal Maheshwari vs The State Of Madhya Pradesh - Madhya Pradesh, THE AUTHORISED OFFICER Vs RAJESHWARI B SHETTY - Karnataka, M/S JAYVEER INDUSTRIES V/s M/S CFM ASSETS RECONSTRUCTION PVT. LTD. - Gujarat, SUPERTECH URBAN5 HOME BUYERS ASSOCIATION (SUHA) FOUNDATION Vs UNION OF INDIA & ORS. - Delhi, Neelkanth Yarn v. Punjab National Bank - Himachal Pradesh, SRI. J. KAMATCHI PANDIAN vs THE AUTHORIZED OFFICER - Karnataka, JOBIMOL ABRAHAM vs FEDERAL BANK - Kerala.
Legal Framework and Judicial Approach - The SARFAESI Act was enacted to facilitate quick recovery of dues by enabling banks to take possession of secured assets without court proceedings. The courts have emphasized that the remedy under the Act is exclusive, and the High Court's jurisdiction under Articles 226 or 227 should be exercised judiciously, mainly to prevent injustice, and not as a substitute for statutory remedies Rachna Mahawar vs The District Magistrate - Madhya Pradesh, Vishal Maheshwari vs The State Of Madhya Pradesh - Madhya Pradesh, Neelkanth Yarn v. Punjab National Bank - Himachal Pradesh, M/S JAYVEER INDUSTRIES V/s M/S CFM ASSETS RECONSTRUCTION PVT. LTD. - Gujarat.
Dispute Resolution and Court Interventions - Disputes related to valuation, classification of NPA, or contractual issues between borrowers and builders are generally considered contractual or civil matters. Courts have exercised discretion to prevent injustice but have consistently held that statutory remedies should be exhausted first. Intervention under constitutional jurisdiction is limited and should be exercised only in exceptional cases where statutory remedies are inadequate or have been improperly denied THE AUTHORISED OFFICER Vs RAJESHWARI B SHETTY - Karnataka, M/S JAYVEER INDUSTRIES V/s M/S CFM ASSETS RECONSTRUCTION PVT. LTD. - Gujarat.
Conclusion - In cases of possession disputes between two banks, the primary remedy is under the SARFAESI Act, through possession and sale of secured assets, with appeals available under Section 17. Courts advise exhausting statutory remedies before seeking constitutional or civil relief, emphasizing the importance of following the prescribed legal process for effective resolution All references.
Summary:The statutory framework under the SARFAESI Act provides specific remedies for disputes over possession, primarily through the exercise of powers by banks and the availability of appeals. Courts advocate for the exhaustion of these remedies and exercise judicial discretion judiciously to prevent injustice, but generally refrain from intervening in disputes that are procedural or contractual unless statutory remedies are inadequate.
In the high-stakes world of banking and financial institutions, disputes over possession of secured assets can arise, especially when two banks claim rights to the same property. Imagine a scenario where Bank A has initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), only for Bank B to challenge the possession. If there is a dispute between two banks with regard to possession, what remedy can be exercised?
This question is increasingly relevant as non-performing assets (NPAs) mount, and banks seek swift recovery. Generally, such disputes are resolved through specialized statutory mechanisms rather than civil courts or writ petitions. This blog post explores the legal framework, key judicial precedents, and practical recommendations, drawing from established case law. Note: This is general information and not specific legal advice. Consult a qualified lawyer for your situation.
The SARFAESI Act, 2002, was enacted to enable banks and financial institutions to recover dues expeditiously without court intervention. It provides a complete code for enforcement of security interests, including taking possession of secured assets under Section 13(4). The SARFAESI Act is a complete code by itself, providing for expeditious recovery of dues Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542.
Key provisions include:- Section 13(4): Empowers secured creditors to take possession and sell assets.- Section 17: Allows aggrieved persons (including other banks) to appeal to the Debt Recovery Tribunal (DRT) against measures under Section 13(4).- Section 18: Provides for appeals to the Debt Recovery Appellate Tribunal (DRAT).
These sections form the backbone for resolving possession disputes, ensuring disputes do not derail the recovery process Bank Of India VS Sri Nangli Rice Mills Pvt. Ltd. - 2025 0 Supreme(SC) 902.
When two banks clash over possession, the DRT holds primary jurisdiction. Courts have consistently ruled that the jurisdiction to decide disputes between banks over possession is vested in the Debt Recovery Tribunal (DRT) under Sections 17 and 18 of the SARFAESI Act Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542.
In Authorized Officer, State Bank of Travancore and Others v. Mathew K.C., the Supreme Court clarified that the remedy of appeal by the aggrieved under Section 17 before the Debt Recovery Tribunal is the appropriate forum for resolving such disputes Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542. This statutory route is preferred for its speed and expertise in financial recovery matters.
Additional judicial insights reinforce this: In catena of judgments, disputes regarding possession of secured assets fall within the SARFAESI framework, with appeals under Section 17 available once possession is contested THE AUTHORISED OFFICER Vs RAJESHWARI B SHETTY - Karnataka. Courts emphasize exhausting these remedies first Rachna Mahawar vs The District Magistrate - Madhya PradeshVINU THOMAS vs SOUTH INDIAN BANK LIMITED - Kerala.
Civil courts and High Courts typically refrain from entertaining such disputes. Courts have consistently held that disputes between banks concerning possession are to be resolved via statutory remedies, and courts or High Courts should refrain from entertaining such disputes unless exceptional circumstances exist Bank Of India VS Sri Nangli Rice Mills Pvt. Ltd. - 2025 0 Supreme(SC) 902.
The principle is clear: Neither the statute nor any interpretation thereof suggests that DRTs were established even for the purpose of any dispute that arises amongst the banks Bank Of India VS Sri Nangli Rice Mills Pvt. Ltd. - 2025 0 Supreme(SC) 902. High Courts under Articles 226/227 exercise jurisdiction judiciously, only to prevent grave injustice, not as a substitute for DRT proceedings Rachna Mahawar vs The District Magistrate - Madhya PradeshVishal Maheshwari vs The State Of Madhya Pradesh - Madhya Pradesh.
For instance, disputes that arise amongst banks or financial institutions relating to securitization, reconstruction or non-payment of any amount due including interest are not to be entertained in civil courts or through writ petitions unless exceptional circumstances are demonstrated Bank Of India VS Sri Nangli Rice Mills Pvt. Ltd. - 2025 0 Supreme(SC) 902. This approach ensures the SARFAESI Act's objectives—quick recovery—are not undermined.
While statutory remedies are generally exclusive, exceptions exist in rare cases:- Gross violation of natural justice principles South Indian Bank Ltd. VS Naveen Mathew Philip & Anr. Etc. Etc. - 2023 0 Supreme(SC) 706.- Fundamental breach of statutory procedure Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542.- Inadequacy of DRT remedies, though this is narrowly interpreted M/S JAYVEER INDUSTRIES V/s M/S CFM ASSETS RECONSTRUCTION PVT. LTD. - Gujarat.
Courts have cautioned: The courts have cautioned against entertaining disputes between banks over possession unless there is a gross violation of procedure or principles of natural justice South Indian Bank Ltd. VS Naveen Mathew Philip & Anr. Etc. Etc. - 2023 0 Supreme(SC) 706. Even then, intervention requires detailed justification, and parties are often directed back to DRT.
Related disputes, like NPA classification or asset valuation, also fall under SARFAESI appeals, with High Courts exercising discretion sparingly THE AUTHORISED OFFICER Vs RAJESHWARI B SHETTY - KarnatakaM/S DIAMOND ENTERTAINMENT TECHNOLOGIES PVT. LTD. & ORS. Vs RELIGARE FINVEST LIMITED THROUGH ITS AUTHORISED OFFICER - Delhi.
Facing a possession dispute? Consider these steps:1. Initiate DRT Proceedings: File under Section 17 promptly after possession notice under Section 13(4).2. Exhaust Statutory Appeals: Proceed to DRAT under Section 18 if needed.3. Document Compliance: Ensure all SARFAESI procedures are followed to avoid challenges.4. Seek Interim Relief Sparingly: Approach High Courts only for exceptional patent illegality.5. Coordinate with Other Banks: Explore inter-bank agreements where possible, though statutory remedies prevail.
In case of a dispute between two banks regarding possession, the appropriate course is to initiate proceedings before the Debt Recovery Tribunal under Section 17 or Section 18 of the SARFAESI Act Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542.
Disputes between banks over possession are best resolved through the SARFAESI Act's robust framework, with DRT as the primary forum. Courts advocate restraint, directing parties to statutory remedies unless extraordinary circumstances demand intervention. This balances efficient recovery with fair dispute resolution.
By adhering to these principles, banks can navigate possession disputes effectively. Stay informed on evolving jurisprudence, as tribunals continue to streamline financial recoveries. For tailored guidance, engage legal experts familiar with SARFAESI proceedings.
References:1. Bank Of India VS Sri Nangli Rice Mills Pvt. Ltd. - 2025 0 Supreme(SC) 902 - Emphasizes statutory mechanisms for bank disputes.2. Rays Technologies India Pvt. Ltd. VS Indian Bank Rep. by its Chairman and Managing Director - 2022 0 Supreme(Telangana) 542 - Supreme Court on DRT jurisdiction.3. South Indian Bank Ltd. VS Naveen Mathew Philip & Anr. Etc. Etc. - 2023 0 Supreme(SC) 706 - On exceptions to court restraint.4. THE AUTHORISED OFFICER Vs RAJESHWARI B SHETTY - Karnataka, Rachna Mahawar vs The District Magistrate - Madhya Pradesh, and others reinforcing SARFAESI exclusivity.
#SARFAESIAct, #BankDisputes, #DRTRemedy
Submission of learned counsel for the petitioner is that against such an order the remedy of appeal under Section 17 of the Act is not available and that the power under Section 14 can be exercised ... Hence, the contention of the counsel for the petitioner in this regard is not accepted. 12. ... Hence, the power under Section 14 of the Act can be exercised by the Additional District Magistrate also. 9. ... That principle....
He does not dispute the fact that on the Advocate Commissioner actually taking possession of the secured asset, the petitioner will have a cause of action to approach the Tribunal. ... This is more so as the learned counsel appearing for the respondent Bank does not dispute that the petitioner will have a cause of action after the physical possession of the secured asset is actually taken by the Advocate Commissioner. In R....
There was no legal provision for facilitating securitization of financial assets of banks and financial institutions. Further, unlike International banks, the banks and financial institutions of India did not have power to take possession of securities and sell them. ... The NPA Act sets out an expeditious, procedural methodology enabling the financial institutions to take possession and sell secur....
In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. ... Learned counsel for the petitioners submits that S.A.No. 193/2022 under Section 17 of the SARFAESI Act is pending before the DRT since last two years. He further submits that inspite of availing remedy under SARF....
In catena of judgments, the Apex Court has held that any grievance in regard to classifying the accounts as NPA or a dispute in regard to valuation of property or any discrepancies in auction are all brought within the ... Therefore, she would submit to this Court that having regard to the facts and circumstances, the learned Single Judge has exercised the discretion judiciously and as such, ....
In the present case, the facts are not in dispute. The discretionary jurisdiction under Article 226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. ... The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for alternative remedy contained in the Act. ... In the present case, the facts are not in dispute#H....
It is the case of respondent No. 5- HDFCL that the delay in handing over the possession in time bound manner is a dispute between homebuyers and the respondent-builder, which is purely contractual in nature. The homebuyers have remedy against the builder. ... The possession clause is subject to the timely payment of all installments and other dues by the Allottee/s and the Allottee/s agrees to strictly abide by the same in....
In the present case, the facts are not in dispute. ... The discretionary jurisdiction under Art.226 is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. ... Statute prescribed this course having regard to accumulation of debts to banks stifling the banking / financial sector. It is in public interest to fast track the recovery of dues by banks / fina....
is available to be exercised by the taxes, cess, fees, other types of public money and been considered by the co-ordinate bench of this Court objections mainly contending that the writ petition filed of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks
, cess, fees, other types of public money and the dues of banks and other financial institutions. ... There cannot be any dispute to the proposition laid down by the Apex Court that the High Court, in exercise of jurisdiction under Article 226 of the Constitution of India should not stay the proceedings under the SARFAESI Act and ordinarily the petitioner should be asked to avail statutory remedy provided ... The learned Single Judge #HL_ST....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
