Authority: Madras High Court (Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan)

Order Date: 12 June 2026

Case Overview

  • Parties:
  • Petitioner: Sri Murali Krishnan and Co., represented by partner Khimji M. Patel, tenant of Sri Krishna Saw Mill No.9.
  • Respondents: 1) Punjab National Bank Asset Recovery Management Branch (ARMB); 2) Sri Krishna Saw Mill No.9.
  • Nature of Petition: Writ petition under Article 226 of the Constitution seeking a mandamus directing the bank to return all materials withheld in the godown that belong to the petitioner, as detailed in the schedule to the petition.
  • Background:
  • The petitioner stored imported and locally purchased wooden logs and timber in the godown as a tenant of the second respondent (the borrower/defaulter).
  • The petitioner filed S.A.No.466 of 2024 before the Debt Recovery Tribunal (DRT)‑III, Chennai, challenging the bank’s action.
  • On 25 July 2024, the DRT granted the petitioner time until 15 September 2024 to relocate and remove its movables and directed the bank to defer taking physical possession until that date.
  • The petitioner failed to remove the materials within the extension, relying on an alleged One‑Time Settlement (OTS) proposal being finalised with the bank.
  • On 6 March 2026, the authorized officer of the bank and the Advocate Commissioner took physical possession of the secured asset and removed the movables.
  • Petitioner’s Contentions: The seized movables belong strictly to the petitioner, were never hypothecated to the bank, and the seizure is therefore illegal and high‑handed.
  • Bank’s Contentions: The petitioner is merely a tenant acting on behalf of the borrower; possession was taken in accordance with law; the sale has been confirmed, third‑party rights created, and a third party is now in possession. The bank relied on Supreme Court judgment in N. Sankaranarayanan v. Chairman, Tamil Nadu Housing Board to argue that the civil dispute is not maintainable under Article 226.
  • Legal Framework Cited: The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) provides a complete code for resolving enforcement disputes. Supreme Court precedents state that High Courts should not entertain writ petitions where an effective alternative remedy exists.
  • Court’s Reasoning: The petitioner did not avail the latitude granted by the DRT and failed to remove the movables within the stipulated time. Determination of ownership of the seized movables requires detailed factual examination (invoices, stock registers, physical verification) which cannot be adjudicated in a summary proceeding under Article 226. The appropriate forum is the Debt Recovery Tribunal.

Final Outcome

  • The writ petition is dismissed in its entirety.
  • The Court emphasizes that the SARFAESI Act and the DRT provide the exclusive remedy; the petitioner may pursue statutory remedies accordingly.
  • No costs are awarded to either party.
  • The interim application is closed.
  • The Court expressly states it has not expressed any opinion on the merits of the petitioner’s claim over ownership of the movables.

Topics: Banking Enforcement, Writ Petition Dismissal