SARFAESI Leading Cases Digest I: Validity and Remedies

Twelve Supreme Court decisions settle how far SARFAESI is valid and where a borrower must go to challenge it. This digest reduces each to its issue and holding, in date order, and then groups them by the question they answer. Each case has its own full note in this series; this is the revision sheet. Part II (Topic 89) covers possession, sale, tenants and guarantors.

1. The Cases, 2004 to 2011

Validity, parallel remedies and the forum

Figure 1: Validity, parallel remedies and the forum

2. The Cases, 2013 to 2025

Civil courts, writs and coverage

Figure 2: Civil courts, writs and coverage

3. By Question

Is the Act valid? Yes: Mardia (2004), with the s.17(2) deposit struck and s.13(3A) read in; Keshavlal (2015) on the NPA definition; Pandurang (2020) on co-operative banks (Topics 7, 83)
Can the lender use both routes? Yes: SARFAESI and the RDB Act run together, Transcore (2008) (Topic 51)
Where does the borrower go? The DRT under s.17, from symbolic possession onwards (Hindon Forge) and against a s.14 order (Kanaiyalal), with a full remedy (Ashok Saw Mill) (Topics 35, 56, 57, 68)
Writ or civil suit? Writ ordinarily refused (Satyawati Tondon) and not available against a private lender (Phoenix ARC); civil suit barred (Jagdish Singh) except for relief beyond the DRT, such as title (Prabha Jain) (Topics 46, 66, 73)
Appeal deposit. Narayan Chandra Ghosh (2011): the s.18 deposit is mandatory, reducible to 25% (Topic 39)

⚠ Exam trap

Keep the forum cases in one line: the remedy is s.17 before the DRT, whether the grievance is symbolic possession (Hindon Forge), a s.14 order (Kanaiyalal) or the whole enforcement (Ashok Saw Mill). A writ is the exception (Satyawati Tondon) and does not lie against a private ARC (Phoenix ARC). The s.34 civil court bar yields only where the DRT cannot grant the relief (Prabha Jain 2025).

4. Frequently Asked Questions

Which Supreme Court cases upheld the validity of SARFAESI?

Mardia Chemicals v Union of India (2004) upheld the Act, struck down the seventy-five per cent deposit for a Section 17 application and read in the hearing that became Section 13(3A). Keshavlal Khemchand v Union of India (2015) upheld the definition of non-performing asset, and Pandurang Ganpati Chaugule (2020), a Constitution Bench, upheld its application to co-operative banks under Entry 45 of the Union List.

Can a borrower file a writ petition against SARFAESI action?

Ordinarily not. In United Bank of India v Satyawati Tondon (2010) the Supreme Court held that High Courts should not entertain writ petitions where the effective remedy under Section 17 before the Debt Recovery Tribunal is available, save in exceptional cases. In Phoenix ARC (2022) it added that a writ does not lie against a private asset reconstruction company or bank enforcing a security interest, since it performs no public function.

5. Related Topics

Topic 89: Leading Cases Digest II. Possession, sale, tenants and guarantors.
Topic 83: Constitutional Validity. The validity cases in depth.