SARFAESI And DRT: Object Vs Ground Reality
No one defends willful defaulter. SARFAESI Act 2002 was made for speedy recovery and to reduce NPA. Supreme Court upheld validity and said Banks must act fairly. Initially borrowers challenged even 13(2) in High Court. Later Courts said DRT under Section 17 is proper forum and extended its scope to cover all 13(4) actions.
But in practice many borrowers feel DRT is not effective. It is seen as Bank-friendly forum under Finance Ministry control. Technical objections by "section office", delay, absence of Presiding Officer, and Bank completing sale during pendency make borrowers helpless. Civil Court is barred. Appeal to DRAT needs heavy deposit. So question arises: when can High Court intervene.
Tribunal Vs Court: Judicial Power Can Be Transferred
Supreme Court in Associated Cement Companies Ltd Vs P.N.Sharma AIR 1965 SC 1595 said both Courts and Tribunals discharge judicial functions. State can transfer part of judicial power to Tribunals for specialized disputes. In Union of India Vs Delhi HC Bar Association 2002 4 SCC 275, 2-judge Bench held DRT may not be "judiciary" under Article 50, but it is effective part of justice delivery system. No absolute right to demand Civil Court. Presiding Officers are qualified District Judges or above. Orders are subject to Article 226/227 review. So DRT is valid. But that does not mean DRT is final or beyond scrutiny.
Why Borrowers Say Section 17 Relief Is Not Effective
5 practical problems come up. First, section office returns papers on technical grounds. Second, while borrower runs for filing, Bank proceeds and sells asset. Third, no Presiding Officer for months. Fourth, matters kept pending without stay. Fifth, DRAT demands 25-50% deposit. When borrower with good case goes to High Court, Bank says "go to DRT". But if DRT cannot give timely relief, remedy becomes illusory. In such cases Article 226 is the only door.
When High Court Intervention Is Justified In SARFAESI
High Court must exercise restraint, but not refuse in all cases. Intervention is justified where there is clear arbitrariness, violation of natural justice, statutory violation, or when DRT remedy is ineffective. Examples: Bank sells without 13(2)/13(4) notice, sells at throwaway price with collusion, DRT refuses stay and Bank completes sale, or DRAT adjourns endlessly. In such cases High Court can and should interfere briefly stating reasons. This does not encourage defaulters. It only protects bona fide borrower from abuse of power.
Conclusion
DRT sarfaesi high court intervention alternative remedy is settled as "DRT first, High Court sparingly". But "sparingly" does not mean "never". If Section 17 fails in reality, Article 226 must step in. At Nathan & Associates we first approach DRT, but we keep writ option ready for arbitrariness and urgent injustice. That balances Bank’s right and borrower’s right.
