The High Court of Madhya Pradesh has issued a significant directive ensuring that a borrower’s right to housing remains protected when statutory forums are rendered inaccessible due to administrative failures. In a ruling concerning an intra-court appeal , the Division Bench commanded IIFL Housing Finance Limited to immediately remove locks from a residential property, emphasizing that a litigant should not be deprived of judicial remedies because of a vacant post at the Debt Recovery Tribunal ( DRT ).

The dispute stems from a housing loan of ₹13,61,902 taken by the appellant, Vinod Dwivedi, in April 2017 . Although the appellant maintained a consistent repayment schedule for several years, the economic impact of the national lockdown and subsequent personal tragedies disrupted his financial stability. The appellant’s circumstances were complicated by the loss of his wife to cancer and his own ongoing recovery from a cardiac event in October 2024 . Despite these hardships, the appellant asserted that he remained committed to settling his outstanding dues, which he quantified at ₹2,60,712.

Recovery Proceedings and Lack of Recourse

The conflict escalated when IIFL Housing Finance Limited initiated recovery proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 . An ex-parte order from the Chief Judicial Magistrate in Indore authorized the bank to take possession of the residential property. According to the appellant, the bank acted without providing proper notice or an opportunity for a hearing. The situation culminated on April 28, 2026 , when the bank locked his residence while he was attending to a family matter out of town.

The appellant previously sought relief through a writ petition that led to an order requiring him to deposit ten percent of the outstanding amount. In compliance, he deposited ₹1,16,000 in two installments. While the High Court had directed the DRT in Jabalpur to hear his plea for interim relief , the proceedings stalled entirely because the post of the Presiding Officer remained vacant. With no forum available to adjudicate his grievances, the appellant’s subsequent petition was dismissed by a Single Judge, prompting this appeal before the Division Bench led by Justice Subodh Abhyankar and Justice Jai Kumar Pillai.

Judicial Intervention and The Principle of Equity

The Division Bench found the dismissal of the initial writ petition unsustainable, noting that it ignored the practical realities faced by the appellant. The court highlighted that the administrative lapse concerning the vacancy at the DRT had created a situation where the borrower was left entirely without legal recourse, despite his attempts to comply with financial obligations.

In its order, the High Court observed, "In the present case, the Tribunal has done nothing, and the application for interim relief remains pending without any fault of the appellant. A litigant cannot be made to suffer merely because the Forum created by law is temporarily vacant." This observation underscores the judiciary's commitment to ensuring that administrative bottlenecks do not supersede the fundamental right to an effective hearing during recovery actions.

Conditions for Interim Protection

The court granted interim protection, ordering the bank to restore possession to the appellant immediately. However, this relief is contingent upon specific procedural safeguards. The appellant is required to file a formal written undertaking before the Registry of the High Court within three working days. This undertaking must explicitly clarify that if the DRT eventually declines the appellant’s plea for interim relief , the protection granted by the High Court will automatically expire, and the appellant will be required to surrender possession of the property to the bank without further delay.

The Bench further clarified the scope of its intervention, stating, "It is made clear that this order shall not be taken as a precedent in other matters. It is being passed strictly because it is an exceptional case, looking to the fact and circumstances of the case of the appellant as the wife of the appellant expired during her treatment of Cancer."

The ruling serves as a reminder that while banks possess legal mechanisms for recovering public money, the execution of these powers under the SARFAESI Act remains subject to the principles of natural justice . As the court set aside the order of the Single Judge, it expressed an expectation that the DRT will hear and resolve the pending interim applications as soon as it becomes functional, acting strictly in accordance with the law. For now, the appellant has regained access to his home while his case awaits a final determination by the tribunal, providing a temporary stay against the enforcement of the recovery order.