Madras High Court rejects borrower's writ against SBI possession order, points to DRT

The Madras High Court on 8 October 2026 dismissed a writ petition filed by a borrower against a possession order obtained by State Bank of India under the SARFAESI Act, the law under which banks enforce security for loans. A bench headed by the Chief Justice held that the borrower's remedy lies before the Debts Recovery Tribunal (DRT), not in a writ petition before the High Court.

What Happened

The borrower had challenged an order dated 18 February 2026 passed by the Chief Metropolitan Magistrate, Egmore, Chennai, under Section 14 of the SARFAESI Act. The petition also sought to quash all related proceedings under Sections 13 and 14 of the Act and to restrain the bank from taking possession of the borrower's property.

The court relied on the Supreme Court's ruling in Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, which held that the remedy against an order under Section 14 is under Section 17 of the Act before the DRT, and that a writ petition is not maintainable. The extract quoted by the court records the Supreme Court's view that the appeal remedy under Section 17 is both expeditious and effective. It also says High Courts should ordinarily not entertain writ petitions where an effective remedy exists, a rule that applies with greater rigour to the recovery of dues of banks and financial institutions.

Following that law, the court dismissed the petition and left it open to the borrower to work out their rights before the appropriate forum. No costs were imposed, and the connected miscellaneous petitions were closed.

What It Means

For borrowers whose secured property is the subject of a possession order under Section 14 of the SARFAESI Act, the ruling is a reminder that the High Court will ordinarily send them to the DRT under Section 17 rather than hear a writ petition directly. The Supreme Court ruling relied on also says High Courts should be extremely careful in granting stays in cases involving recovery of the dues of banks, financial institutions and secured creditors.

The order does not decide whether the bank's action was right or wrong on the facts. It settles only the forum, leaving the borrower free to pursue their rights before the appropriate authority.

Source: High Court judgment