Article 226 Writ Petition Not Maintainable For Release Of Title Deeds If Efficacious Statutory Remedy Under SARFAESI Act Available: Allahabad High Court

"According to us, the DRT is well equipped and sufficiently empowered to pass directions to the Bank for release of the title documents, in that regard," High Court of Judicature at Allahabad (Lucknow Bench), in a significant decision, held that a writ petition under Article 226 of the Constitution of India cannot be entertained for the release of title deeds when an efficacious statutory remedy exists before the Debts Recovery Tribunal (DRT).

A bench comprising Justice Shekhar B. Saraf and Justice Abdhesh Kumar Chaudhary observed that the DRT is sufficiently empowered under the Recovery of Debts and Bankruptcy Act, 1993, to pass necessary directions for the return of documents following a loan settlement.

The petitioners, a partnership firm and its partners, had approached the High Court seeking a direction to Canara Bank to return original title deeds and issue a No Dues Certificate after an alleged settlement of their loan accounts for Rs. 70 Lacs. The petitioners also sought compensation of Rs. 5,000 per day for the delay in releasing the documents, citing Reserve Bank of India (RBI) circulars. The Bank had resisted the release, contending that the settlement did not cover all existing loan accounts and that the DRT lacked the power to unilaterally extend payment timelines.

The primary legal issue before the Court was whether a writ petition under Article 226 is maintainable for the release of title deeds when proceedings under the SARFAESI Act, 2002, are either pending or available as an alternative remedy. The Court was also called upon to determine if the DRT possesses the statutory authority to direct a secured creditor to return mortgaged documents once a settlement is purportedly reached.

Court Emphasizes Rule Of Exhaustion Of Alternative Remedy

The Court began its analysis by reiterating the settled position of law regarding the exercise of discretionary jurisdiction under Article 226. Citing the landmark Supreme Court judgment in United Bank of India v. Satyawati Tondon (2010), the bench noted that the High Court must ordinarily insist that a person exhaust remedies available under the relevant statute before approaching the writ court. This rule applies with greater rigour in matters involving the recovery of public dues and bank taxes.

The bench observed that the SARFAESI Act and the RDB Act constitute a comprehensive code for the redressal of grievances. The Court noted that while the powers under Article 226 are wide and without express limitation, the rule of self-imposed restraint must be observed. It held that it is difficult to fathom any reason why the High Court should entertain a petition ignoring the fact that the petitioners can avail an effective alternative remedy particularly contained in the legislation.

Disputed Questions Of Fact Not To Be Entertained In Writ Jurisdiction

Addressing the factual controversy, the Court noted that there were clear disputes regarding the quantum of interest and the legality of the extension of the deposit period granted by the DRT. The Bank contended that the settlement only applied to one out of four loan accounts, whereas the petitioners claimed it covered the entire liability. The Court remarked that these issues have factual implications and are to be decided before a proper forum.

"This Court, while exercising its jurisdiction under Article 226 of the Constitution of India, does not wish to enter into any disputed questions of fact."

The bench clarified that the release of title documents is an act subsequent to the issuance of a No Objection Certificate (NOC) or pleadings admitting settlement. In the absence of such clear admissions from the Bank, and given that the Bank’s appeal against the DRT's extension order was pending before the Debts Recovery Appellate Tribunal (DRAT), the High Court found it inappropriate to interfere.

DRT Empowered To Secure Ends Of Justice Under RDB Act

A crucial observation made by the Court pertained to the statutory powers of the DRT. The bench highlighted Section 17(7) of the SARFAESI Act, which makes the provisions of the Recovery of Debts and Bankruptcy Act, 1993, applicable to the Tribunal. Specifically, the Court pointed toward Section 19(25) of the RDB Act, which contains residuary powers for the Tribunal to pass orders necessary to give effect to its directions.

"The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice."

The Court found that there were no cogent reasons as to why the petitioners chose to bypass the DRT for the release of documents and rushed to the High Court. The bench held that the DRT is well-equipped and sufficiently empowered to pass directions to the Bank for the release of title documents if the loan has been fully settled in accordance with the Tribunal's directions.

Settled Precedents On SARFAESI Remedies Bind High Courts

The judgment referred to recent Supreme Court rulings in South Indian Bank Ltd. v. Naveen Mathew Philip (2023) and Celir LLP v. Bafna Motors (Mumbai) (P) Ltd. (2024). These cases emphasized that High Courts should not ignore the availability of statutory remedies under the RDB Act and SARFAESI Act. The Court noted that these precedents expose a consistent proposition that statutory remedies must be exhausted first.

The Court concluded that since an alternative remedy was not only available but the underlying DRT order was already under challenge before the Appellate Tribunal, the writ petition was not maintainable. The bench dismissed the petition but granted liberty to the petitioners to file an appropriate application before the DRT for the release of the title documents.

"In case, if the petitioners file any such application(s), the Tribunal shall decide the same on its own merits, in accordance with law, uninfluenced by any of the observations made by this Court."

Date of Decision: June 04, 2026