Allahabad High Court says pending SARFAESI writ did not stop bank's DRT recovery case

The Allahabad High Court has dismissed a writ petition by two borrowers challenging a sale notice issued by U.P. Gramin Bank in Barabanki. In its judgment of 14 October 2026, the Lucknow bench held that no provision prevents a bank from filing a recovery case before the Debts Recovery Tribunal while it is also taking action under the SARFAESI Act, the law that lets lenders enforce security without going to court.

What Happened

According to the judgment, the borrowers took a loan from the bank, mortgaged properties and defaulted, after which the bank began SARFAESI proceedings. The borrowers challenged an order of 2 March 2024 in an earlier writ petition, in which the bank was named as Aryavart Gramin Bank. Notices were issued in that petition, but no interim protection was granted and it remained pending.

The borrowers then challenged a sale notice dated 7 September 2026. They argued that, while the earlier petition and the SARFAESI action were pending, the bank could not also file an Original Application before the Debts Recovery Tribunal under the Recovery of Debts and Bankruptcy Act, 1993, and that the resulting recovery certificate and sale notice should be quashed.

The court held that there is no provision preventing the bank from starting proceedings under Section 19 of the 1993 Act. It noted that the tribunal had already passed a judgment, which the borrowers had not challenged. Because the borrowers have an adequate statutory remedy against that judgment, the court declined to hear the writ petition and dismissed it. It ordered the earlier 2024 petition to be delinked and listed before the appropriate court.

What It Means

For borrowers, the ruling shows that a pending writ petition without an interim order did not, in this case, stop the bank from moving the Debts Recovery Tribunal as well. The court held that a challenge to a tribunal's judgment must go through the appeal or other remedy under the 1993 Act.

The court made clear that it dismissed the petition only because a statutory remedy exists and did not examine the merits. If the borrowers use that remedy, it will be considered on its own merits.

Source: High Court judgment