In Brief
An assets reconstruction company (ARC) assigned a non-performing loan of approximately Rs. 117 crores sought to take possession of mortgaged properties. The borrowers filed a writ petition in the High Court challenging alleged procedural violations under the Security Interest Enforcement Rules. The High Court entertained the petition and granted interim relief restricting possession on condition of nominal deposits (Rs. 3 crores total). The Supreme Court allowed the ARC's appeal, holding that writ petitions against ARCs are not maintainable when statutory remedies (Section 17 of SARFAESI Act) are available. The Court found that granting interim relief severely prejudiced the creditor's rights and was unjustified, particularly given the massive disparity between the dues and deposits.
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