Karnataka High Court Mandates Exhaustion of Statutory Remedies in SARFAESI Disputes
The Karnataka High Court has recently delivered a pivotal decision reinforcing the principle that extraordinary writ jurisdiction cannot be invoked to challenge recovery measures initiated by financial institutions when a dedicated statutory framework exists. In a definitive ruling, the Court dismissed a writ petition challenging a bank's e-auction notice, directing the aggrieved party to utilize the specialized grievance redressal mechanisms established under the SARFAESI Act.
This judicial summary explores the factual background, the statutory provisions involved, and the binding Supreme Court precedents that guided the High Court's refusal to interfere in the bank's recovery proceedings.
Factual Matrix of the Dispute
The legal proceedings were initiated before the Karnataka High Court in the matter of Jaya Coffee Works Vs Canara Bank. The petitioner, M/s Jaya Coffee Works, acting through its proprietor Sri Thamaya M.D., approached the judiciary by filing Writ Petition No. 25288 of 2026.
The primary objective of the petition was to challenge the recovery actions undertaken by the respondent, Canara Bank. Specifically, the petitioner sought a writ of certiorari to invalidate and quash the impugned sale notice/e-auction No. ARM/MNG/F628/490/2026-27 dated 14.07.2026. According to the contested notice, the e-auction of the secured asset was scheduled to be executed on 21.08.2026.
The petitioner invoked the High Court's extraordinary and supervisory jurisdiction under Article 226 and Article 227 of the Constitution of India, attempting to halt the authorized officer's possession and subsequent sale of the property.