The Bombay High Court has firmly rejected a last-minute writ petition filed one day before a secured creditor was due to take physical possession of a mortgaged asset, holding that such tactics undermine the statutory framework of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The Court emphasized that borrowers cannot exploit judicial sympathy by delaying remedies until the eve of enforcement.
Background & Facts
The Dispute
The petitioner, Shree Durga Katelshwari Enterprises, is a borrower who defaulted on its loan obligations to the respondent, Piramal Capital and Housing Finance Limited (formerly Dewan Housing Finance Ltd.). The respondent, as a secured creditor, initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to enforce its security interest over the mortgaged property.
Key Facts
- The loan account became non-performing prior to 2023
- On 10.03.2023, a Competent Magistrate passed an order under Section 14 of the SARFAESI Act, authorizing the respondent to take possession of the secured asset
- Despite this order, the petitioner took no meaningful action to challenge the proceedings for over three years
- On 05.03.2026, the Debt Recovery Tribunal-II, Mumbai (DRT) rejected the petitioner’s interim application seeking stay of possession
- On 17.03.2026, the respondent issued a possession notice under Section 13(4) of the SARFAESI Act, fixing 07.04.2026 as the date for taking physical possession
- The petitioner filed an appeal before the Debts Recovery Appellate Tribunal (DRAT) only on 30.03.2026
- The petitioner filed the present writ petition before the Bombay High Court on 04.04.2026, one day before the scheduled possession
- The petitioner claimed a calculation error in the outstanding amount and alleged repayment of sufficient sums, but provided no documentary evidence to substantiate this
Procedural History
- 10.03.2023: Magistrate’s order under Section 14 of the SARFAESI Act passed
- 05.03.2026: DRT rejected petitioner’s interim application for stay
- 17.03.2026: Possession notice issued by respondent, fixing 07.04.2026 for physical possession
- 30.03.2026: Petitioner filed appeal before DRAT
- 04.04.2026: Writ Petition No. 4435 of 2026 filed before Bombay High Court
- 06.04.2026: Hearing before Bombay High Court; petition mentioned for urgent consideration
Relief Sought
The petitioner sought ad-interim relief to restrain the respondent from taking physical possession of the secured asset on 07.04.2026, pending disposal of the DRAT appeal and the writ petition.
The Legal Issue
The central question was whether a writ petition under Article 226 of the Constitution can be entertained to grant ad-interim relief against enforcement of possession under the SARFAESI Act when the petitioner has deliberately delayed approaching the statutory forum (DRAT) and filed the petition only one day before the scheduled possession.
Arguments Presented
For the Petitioner
The petitioner’s counsel argued that the respondent had miscalculated the outstanding dues and that sufficient payments had been made. He contended that the DRAT appeal was pending and no hearing had been granted, creating a vacuum of remedy. He urged the Court to intervene on grounds of equity and to prevent irreparable harm.
For the Respondent
The respondent’s counsel submitted that the petitioner had remained inactive for over three years after the Magistrate’s order under Section 14. The delay in filing the DRAT appeal - nearly three weeks after the DRT order - and the last-minute filing of the writ petition were deliberate tactics to stall enforcement. He emphasized that the SARFAESI Act is a self-contained code and writ jurisdiction should not be invoked to circumvent statutory remedies.
The Court's Analysis
The Court observed a recurring pattern in SARFAESI cases where borrowers approach writ courts at the eleventh hour to create an illusion of urgency. It noted that the petitioner had ample opportunity to approach the DRAT immediately after the DRT’s order dated 05.03.2026 but chose to delay until 30.03.2026. The filing of the writ petition on 04.04.2026, one day before possession, was deemed a calculated move to invoke judicial intervention under the guise of emergency.
"We find that nothing prevented the petitioner from moving the DRAT immediately after the order dated 05.03.2026 was passed by the DRT... filing this petition on 04.04.2026... is, prima facie, found to be a tactic adopted by the petitioner to somehow create a sense of contrived urgency."
The Court held that the SARFAESI Act provides a comprehensive and time-bound mechanism for enforcement of security interests. The remedy of appeal before DRAT is adequate and efficacious. Writ jurisdiction under Article 226 is not meant to be a substitute for statutory remedies, especially when delay is unexplained and tactical.
The Court further rejected the petitioner’s claim of calculation error as unsubstantiated and lacking in documentary proof. It emphasized that courts must not be used as instruments to frustrate legitimate enforcement actions by secured creditors under a statute designed to expedite recovery.
The Verdict
The petition was dismissed insofar as the prayer for ad-interim relief is concerned. The Court rejected the request to restrain possession on 07.04.2026. The writ petition was kept pending for hearing on 17.04.2026, with the respondent directed to file a reply affidavit. The petitioner was granted liberty to file a counter-affidavit. No stay was granted on the possession.
What This Means For Similar Cases
Delay in Statutory Remedies Bars Writ Intervention
- Practitioners must advise clients to file appeals before DRAT immediately upon receipt of an adverse DRT order
- Delay beyond 30 days without explanation will be viewed as acquiescence or tactical delay
- Writ petitions filed within 24 - 48 hours of scheduled possession will be treated with extreme skepticism
SARFAESI Enforcement Is Not Subject to Equitable Discretion
- Courts will not grant interim relief based on vague claims of calculation errors without supporting documents
- The burden lies on the borrower to prove payment or error at the earliest opportunity
- Secured creditors may proceed with possession if statutory procedures are followed, even if a writ petition is pending
Procedural Compliance Trumps Last-Minute Urgency
- Filing a writ petition the day before possession does not constitute legal urgency
- Courts will not entertain emergency applications that bypass statutory timelines
- The SARFAESI Act’s 30-day appeal window is mandatory and must be respected
