Kerala High Court declines to stop SBI's SARFAESI auction, points borrower to DRT

The Kerala High Court on 27 October 2026 dismissed a writ petition by Impel Machines Private Limited that sought to stop a State Bank of India sale notice under the SARFAESI Act, a day before the e-auction of the secured asset was due. The court held that the company should seek relief from the Debts Recovery Tribunal (DRT), where its challenge was already pending.

What Happened

The company challenged a sale notice dated 16 September 2026 issued by SBI for the sale of movable assets, with the e-auction set for 28 October 2026. It also asked the court to direct the bank to file an updated statement of accounts showing the adjustment of Rs 9,37,60,000 that it said had been realised from the auction of a property in Coimbatore.

According to the bank's counsel, the loan account was classified as a non-performing asset in 2018, the bank filed a recovery application before the DRT in 2019, and the company's appeal against the SARFAESI proceedings, filed in 2021, is pending before the DRT. The bank also told the court that an earlier writ petition by the company was dismissed for not complying with an interim direction to make a lump-sum payment.

The court said it is settled law that a High Court should not interfere with SARFAESI proceedings under Article 226 of the Constitution, citing several Supreme Court rulings on the point. Noting that the company was in effect pursuing the same challenge before the DRT and the High Court at the same time, it dismissed the petition without prejudice to the company's right to seek appropriate remedies before the DRT.

What It Means

For borrowers, the ruling repeats a point the courts make often: a challenge to a bank's SARFAESI action, including a sale notice, belongs before the Debts Recovery Tribunal, not the High Court, and a last-minute writ petition is unlikely to stop an auction. The SARFAESI Act lets banks take over and sell assets pledged as security for a loan without first going to a civil court.

Borrowers who dispute how a bank has accounted for sale proceeds can ask the bank in writing for a statement of account. Complaints about a bank's service can be filed with the RBI at https://cms.rbi.org.in.

Source: High Court judgment