Calcutta High Court Declines to Interfere with Bank’s Rejection of One-Time Settlement under SARFAESI

Background of the Dispute

In Sk. Halim Vs Bank of Baroda (Calcutta High Court), the assessee (borrower) approached the Calcutta High Court invoking its writ jurisdiction under Article 226 of the Constitution of India. The challenge was directed against measures taken by Bank of Baroda (erstwhile Dena Bank) under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter, “the 2002 Act” / “SARFAESI Act”).

The petitioner also questioned the Bank’s refusal to accept a one-time settlement (OTS) of the outstanding dues and requested the Court to command the Bank to revisit and reconsider the rejected OTS proposal.

Additionally, the petitioner sought protection against coercive measures for taking possession of a residential property that had been offered as security for the loan.

Reliefs Sought in the Writ Petition

The writ petition, registered as WPA 25935 of 2026, primarily sought:

  • A challenge to the SARFAESI measures initiated by Bank of Baroda in relation to the secured asset;

  • A direction requiring the Bank to reconsider the petitioner’s one-time settlement proposal; and

  • A writ of mandamus restraining:

    • The District Magistrate, Howrah,
    • The Superintendent of Police, and
    • Local Police authorities,

    from proceeding to take physical possession of the petitioner’s residential property in furtherance of the Bank’s actions under the 2002 Act.

The petitioner alleged that the Bank had acted arbitrarily in rejecting the OTS and proceeding with enforcement under SARFAESI.

Undisputed Factual Matrix

Borrower–Bank Relationship

It was not in controversy before the Court that:

  • The petitioner was a borrower of Bank of Baroda (erstwhile Dena Bank);
  • Certain credit facilities had been extended by the Bank; and
  • The petitioner had allegedly defaulted in repayment, leading to classification of the account and subsequent invocation of remedies under the 2002 Act.

Proceedings Before Debts Recovery Tribunal

The record annexed to the writ petition clearly showed that the petitioner had already taken recourse to the statutory remedy available under the SARFAESI Act. Specifically:

  • An application under Section 17 of the 2002 Act had been filed before Debts Recovery Tribunal – I, Kolkata;
  • This securitization application had been registered as SA/189/2026; and
  • The SARFAESI measures undertaken by the Bank were already under scrutiny before the Tribunal.

Thus, the secured creditor’s actions were not left unchallenged; rather, they were pending adjudication before the appropriate forum prescribed by the statute.

Earlier Round of Writ Litigation

The Court also took note that the same petitioner had earlier invoked writ jurisdiction:

  • The earlier writ petition had been registered as WPA 18107 of 2025;
  • In that petition, the petitioner had assailed an auction notice dated July 07, 2025 issued by the Bank in relation to the secured assets;
  • That earlier writ petition had not resulted in any interference with the Bank’s steps but had been disposed of by the High Court granting liberty to the petitioner to:
    • Work out his remedies and
    • Challenge the proposed sale before the concerned Debts Recovery Tribunal.