If proceedings are initiated under the SARFAESI Act and the borrower is aggrieved by any of the actions of the private Bank/Bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition is maintainable/entertainable – Phoenix ARC Pvt. Ltd. Vs. Vishwa Bharati Vidya Mandir & Ors. – Supreme Court
January 13, 2022
Hon’ble Supreme Court holds that in view of the statutory remedy available under Section 17 of the SARFAESI Act, the writ petitions against the notice under Section 13(4) of the SARFAESI Act was not required to be entertained by the High Court. Even otherwise, it is required to be noted that a writ petition against the private financial institution – ARC – appellant herein under Article 226 of the Constitution of India against the proposed action/actions under Section 13(4) of the SARFAESI Act can be said to be not maintainable. In the present case, the ARC proposed to take action/actions under the SARFAESI Act to recover the borrowed amount as a secured creditor. The ARC as such cannot be said to be performing public functions which are normally expected to be performed by the State authorities. During the course of a commercial transaction and under the contract, the bank/ARC lent the money to the borrowers herein and therefore the said activity of the bank/ARC cannot be said to be as performing a public function which is normally expected to be performed by the State authorities. If proceedings are initiated under the SARFAESI Act and/or any proposed action is to be taken and the borrower is aggrieved by any of the actions of the private bank/bank/ARC, borrower has to avail the remedy under the SARFAESI Act and no writ petition would lie and/or is maintainable and/or entertainable.