In an appeal filed before the Madras High Court under Clause 15 of the Letters Patent to set aside an order dated 04-09-2025 passed by a Single Judge whereby the appellant’s prayer to direct the Indian Overseas Bank, Guindy, Chennai, to release the original title deeds and other revenue documents was declined, a Division Bench of the Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan found no infirmity in the impugned order and dismissed the appeal, while granting liberty to the appellant to raise his defences before the Debt Recovery Appellate Tribunal (DRAT).
The appellant deposited the original title deeds of his agricultural land measuring 37.5 acres towards security for various credit facilities availed by Jain Granites and Projects India Limited. Upon default by the principal borrower, Indian Overseas Bank initiated recovery proceedings before the Debts Recovery Tribunal (DRT). The application was allowed ex parte and a Recovery Certificate dated 11-01-2019 was issued.
The appellant moved the writ court seeking return of his documents contending that he was neither a borrower nor a guarantor and that the demand and possession notices issued under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) were defective. However, Indian Overseas Bank contended that the appellant had executed a valid Guarantee Agreement on 23-09-2015, establishing a co-extensive liability with the principal borrower, legally permitting the bank to exercise a lien over the secured assets until the outstanding dues were satisfied.
The Court noted that the appellant’s primary challenge was to the recovery mechanism initiated by the bank and said that where a complete self-contained statutory framework exists, an aggrieved person cannot bypass the designated appellate forum to seek an extraordinary remedy under Article 226. The Court stated that the appropriate legal course against a DRT order or actions linked to asset enforcement lies in invoking the statutory right of appeal before the DRAT.
While reiterating Section 18 of the SARFAESI Act, the Court stated that the right is explicitly tethered to a strict pre-deposit requirement as per which no appeal would be entertained by the DRAT unless the borrower person deposits 50% of the amount debt due from him, as claimed by the secured creditors or determined by DRT, whichever is less. It was said that permitting the appellant to bypass this forum and seeking a writ of mandamus would effectively circumvent the mandatory pre-deposit checkpoint and that extraordinary jurisdiction could not be invoked to dilute explicit statutory prerequisites.
The Court stated that determining whether a guarantee was validly executed and interpreting the chronological alignment of separate loan accounts requires a comprehensive analysis of documentary evidence and that the writ court cannot turn itself into a court of first instance to unravel contractual disputes.
Thus, the Court opined that the Single Judge had rightly observed that an efficacious alternative statutory remedy remained open to the appellant before the DRAT and dismissed the appeal, finding no infirmity in the impugned order.
