Entertaining Writ Despite Section 18 Remedy Is In Teeth Of Supreme Court Law: Allahabad High Court Restores DRT Order In SBI SARFAESI Dispute

“High Courts Must Exercise Greater Caution, Care and Circumspection” – In a significant pronouncement reinforcing judicial restraint in SARFAESI matters, the High Court of Judicature at Allahabad set aside a Single Judge’s order that had quashed an interim order of the Debt Recovery Tribunal (DRT), Lucknow.

Division Bench comprising Hon’ble Rajan Roy, J. and Hon’ble Abdhesh Kumar Chaudhary, J., held that the writ petition was wrongly entertained despite the availability of a statutory appeal under Section 18 of the SARFAESI Act, 2002. The Court observed that the impugned order of the Single Judge was “in the teeth of repeated pronouncements of Hon’ble the Supreme Court” and therefore unsustainable.

The Bench restored the DRT’s interim order and granted liberty to the borrowers to avail the appellate remedy under Section 18.

Interim Relief Rejected, Writ Allowed Same Day

The controversy arose from proceedings under Section 17 of the SARFAESI Act. The borrower, M/s G.S.M. Bricks and Tiles, had challenged measures taken by the State Bank of India including auction of the secured asset. An interim application seeking restraint against taking possession was rejected by the DRT, Lucknow on 20.09.2025 after hearing all parties and recording reasons.

The property had already been auctioned and a Sale Certificate issued in favour of the auction purchaser. Instead of filing an appeal under Section 18, the borrowers invoked Article 226. On mention, the writ petition was taken up and allowed on the very first day. The Single Judge quashed the DRT’s interim order holding it to be a “non speaking order” and exercised powers under Article 227.

The Bank challenged this decision in Special Appeal.

“Special Appeal Is Maintainable” – Rule 5 Does Not Bar Appeal

Addressing maintainability, the Division Bench referred to earlier precedents and held that DRTs are constituted under Entry 45 of List I relating to banking. Therefore, the exclusionary clause in Chapter VIII Rule 5 of the Allahabad High Court Rules, 1952 did not apply.

The Court unequivocally declared that the special appeal was maintainable against the Single Judge’s order in a SARFAESI matter.

“Order Is Not Non Speaking” – Division Bench Disagrees With Single Judge

The only ground on which the writ petition had been entertained was that the DRT’s order was non-speaking. After perusing the DRT’s order, the Division Bench rejected this reasoning.

The Court observed that the DRT had “noticed contentions of the parties and the factual aspects in detail” and thereafter recorded its conclusions that statutory compliances were made and that the Sale Certificate had been issued, entitling the auction purchaser to possession.

The Bench held in clear terms that the order “can not be said to be a non speaking order” and whether the reasons were justified was a matter to be tested in appeal under Section 18, not in writ jurisdiction.

“High Court Should Not Entertain Writ When Effective Remedy Exists”

The Division Bench placed heavy reliance on United Bank of India v. Satyawati Tondon and subsequent Supreme Court authorities including Phoenix ARC, South Indian Bank, PHR Invent Educational Society, Celir LLP and the recent decision in Leelawati N.

Quoting the Supreme Court’s stern reminder, the Bench reproduced the caution that it is “a matter of serious concern that despite repeated pronouncement of this Court, the High Courts continue to ignore the availability of statutory remedies under the DRT Act and the SARFAESI Act and exercise jurisdiction under Article 226.”

The Allahabad High Court held that the present case did not fall within any of the recognised exceptions such as lack of jurisdiction, violation of natural justice, or challenge to vires. The borrowers were heard before the DRT, and no statutory violation was demonstrated.

The Court concluded that entertaining and allowing the writ petition on the very first day was contrary to binding precedent.

“Writ Allowed Without Notice To Auction Purchaser” – Procedural Impropriety Noted

The Division Bench also expressed concern that the writ petition was allowed without issuing notice to the auction purchaser, despite issuance of a Sale Certificate.

The Court found merit in the submission that allowing the writ without affording opportunity to the auction purchaser was improper and prejudicial to vested rights.

“Order Passed Without Jurisdiction” – Article 227 And Roster Allocation

An equally significant finding was on jurisdiction. Although the writ petition was filed under Article 226, the Single Judge exercised powers under Article 227.

The Division Bench examined the roster dated 31.07.2025 issued by the Chief Justice and found that Article 227 jurisdiction in such matters was assigned to other Benches, not to the Court which passed the impugned order.

The Bench held that the learned Single Judge “did not have jurisdiction to decide a matter under Article 227” on the relevant date and that the order was therefore unsustainable on this ground as well.

Holding that the impugned judgment was contrary to settled Supreme Court law, without jurisdiction, and passed in disregard of statutory remedy under Section 18, the Division Bench quashed the Single Judge’s order.

However, in keeping with principles of fairness, liberty was granted to the borrowers to file an appeal under Section 18 of the SARFAESI Act and seek appropriate relief in accordance with law.

The judgment is a powerful reiteration that SARFAESI proceedings constitute a self-contained statutory mechanism and that writ jurisdiction cannot be invoked to bypass the appellate framework. By restoring the DRT’s order and emphasizing judicial discipline, the Allahabad High Court has once again echoed the Supreme Court’s warning that High Courts must exercise “greater caution, care and circumspection” in matters involving recovery of public dues by banks.

Date of Decision: 23/02/2026