Rights of Non-Borrower Occupants Under Section 17 of the SARFAESI Act: What the DRT Can Actually Do

Introduction: A Structural Problem in SARFAESI Practice

A recurring and underexamined problem persists in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). When a person who is not the borrower — a spouse residing in the matrimonial home, a tenant, a legal heir, or any family member in occupation — approaches the Debts Recovery Tribunal under Section 17 of the SARFAESI Act after enforcement action begins, a curious contradiction emerges. The Tribunal acknowledges the applicant's standing as a "person aggrieved" under Section 17(1) at the threshold stage, but then proceeds to dismiss the matter on the ground that it lacks jurisdiction to adjudicate rights of anyone other than the borrower. The occupant is handed a key to a room that remains locked.

The order in Meenakshi Goel v. HDFC Bank Ltd., Misc. Appeal No. 66 of 2026, before the Debts Recovery Appellate Tribunal (DRAT) at Delhi, exemplifies this contradiction precisely. The central question it raises — if the Tribunal cannot protect anyone other than the borrower, why did Parliament use the phrase "any person" in Section 17(1) — demands a thorough legal answer.

This article argues that Parliament addressed this question on two separate occasions: first in 2002 by conferring standing on non-borrower persons, and then again in 2016 by aligning the remedial powers of the DRT with that standing. A considerable number of current orders are being decided on the basis of a version of Section 17 that no longer exists. This article also addresses the practical dimensions — how such applications should be structured, filed, argued, and pursued at the appellate stage.

The Facts in Meenakshi Goel: A Representative Case

The factual background of Meenakshi Goel v. HDFC Bank Ltd., Misc. Appeal No. 66 of 2026, is worth examining because it mirrors a pattern seen frequently in SARFAESI enforcement matters.

The appellant had been married to the second respondent since 1999 and resided with her three daughters at a property in East Punjabi Bagh, New Delhi, owned by her father-in-law. A partnership firm comprising her husband and father-in-law had availed a credit facility of ₹7.5 crore from HDFC Bank in September 2019, mortgaging the said property as collateral. Upon default, the Bank issued a demand notice under Section 13(2) in February 2024, followed by affixation of notices under Section 13(4) in May and November 2024.

The appellant had already obtained:

• An order dated 18.09.2024 from the Mahila Court, Tis Hazari, under Section 12 of the Protection of Women from Domestic Violence Act, 2005
• An order dated 28.09.2024 from a Civil Judge

Both orders restrained her husband and father-in-law from dispossessing her. She then filed a securitisation application before DRT-2, Delhi. A receiver appointed under Section 14(2) issued a possession notice. A Link Officer granted ad-interim protection on 28.11.2025. DRT-2, however, dismissed the interim application on merits on 17.04.2026, and the appeal before DRAT followed.

What DRAT Held

The Appellate Tribunal's rulings across its various paragraphs may be summarised as follows:

• Pre-deposit waiver (allowed): Relying on Manju Devi v. RBL Bank Ltd., W.P.(C) No. 11766 of 2016, decided on 01.02.2017, the DRAT held that the mandatory pre-deposit under Section 18 does not apply to an independent third party who has not obtained finance from the institution.
• Standing (paragraph 13): The appellant, being in physical possession and affected by measures under Section 13(4), was a "person aggrieved" within Section 17(1).
• Effect of domestic violence orders (paragraph 14): The injunctions bound her husband and father-in-law but not the Bank; the security interest could not be overridden by the Protection of Women from Domestic Violence Act, 2005.
• Ad-interim protection (paragraph 15): The Link Officer's order was purely ad-interim and did not constitute an adjudication of the interim application, so DRT-2 had not exceeded jurisdiction by deciding the matter afresh.
• Independent operation of statutes (paragraph 16): The two statutes operate in distinct fields; the creditor's rights were not displaced by the 2005 Act; the DRT could not adjudicate the appellant's right of residence.
• Prioritisation of security (paragraph 17): A third party cannot dictate the sequence or mode of recovery to the creditor.
• Outcome (paragraph 18): Appeal dismissed.

Taken as a whole, the order recognises the appellant's right to approach the Tribunal but concludes that nothing meaningful lies behind that right. That conclusion, when tested against the amended text of the Act, is difficult to sustain.

What Parliament Actually Enacted: Reading Section 17 as Written

The Core Language

Section 17(1) confers the remedy on "any person (including borrower)" aggrieved by any of the measures referred to in Section 13(4). The legislature did not restrict this to the borrower, or to the borrower and guarantor. It employed the widest possible formulation and added a parenthetical to clarify that the borrower is merely one instance within a broader class — not the class itself.

Treating "any person" as synonymous with "the borrower" renders the parenthetical surplusage, a result prohibited by standard canons of statutory interpretation.

The Proviso as Confirmation

The proviso to Section 17(1) authorises different fee scales for applications made by the borrower and by "the person other than the borrower." This is not mere procedural housekeeping. A legislature that prescribes a separate fee structure for the non-borrower applicant has necessarily concluded that such an applicant has an application to bring. One does not set an entry price for a room one intends to keep shut.

The Explanation to Section 17(1) uses the expression "the person (including borrower)" in the same inclusive register. Section 18 extends appellate rights to "any person aggrieved by any order made by the Tribunal." The framework is architecturally consistent from first instance to appeal.

The Supreme Court's Reading

In Jagdish Singh v. Heeralal, (2014) 1 SCC 479, the Supreme Court held at paragraph 19 that "any person" in Section 17 is of wide import, covering not only the borrower but guarantors and any other person affected by action under Section 13(4). At paragraph 20, it confirmed that Section 17 provides a remedy to any such person where the creditor takes measures against secured assets in which they claim an interest. The Court drew support from United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110.

Earlier, in Authorised Officer, Indian Overseas Bank v. Ashok Saw Mill, (2009) 8 SCC 366, the Court had held that the Tribunal's jurisdiction under Section 17 extends beyond examining initiation of measures to scrutinising every step taken after Section 13(4) and to restoring the status quo ante.

Three Forums — Two Are Closed, One Must Work

A persistent source of confusion in this area is that enormous judicial energy has been spent closing alternative forums, and the closure of those forums has been mistakenly read as a narrowing of the DRT's own powers.

The Magistrate Under Section 14: Ministerial, Not Adjudicatory

In Balkrishna Rama Tarle (Dead) through LRs v. Phoenix ARC (P) Ltd., (2023) 1 SCC 662 : 2022 SCC OnLine SC 1299, decided on 26.09.2022, the Supreme Court affirmed that the function of the Chief Metropolitan Magistrate or District Magistrate under Section 14 is ministerial. It involves no adjudicatory process and does not extend to resolving disputes between borrowers, secured creditors, or third parties in respect of the secured asset — with the aggrieved party directed instead to raise objections under Section 17. The same principle emerges from NKGSB Co-operative Bank Ltd. v. Subir Chakravarty, (2022) 10 SCC 286 : (2023) 1 SCC (Cri) 157, and R.D. Jain & Co. v. Capital First Ltd., (2023) 1 SCC 675. Earlier, Kanaiyalal Lalchand Sachdev v. State of Maharashtra, (2011) 2 SCC 782 had established that a person aggrieved by an order under Section 14 must take the Section 17 route.

The Civil Court: Barred by Section 34

Section 34 bars civil court jurisdiction over matters the Tribunal is empowered to determine. Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311 held at paragraph 50 that this bar extends to all matters of which the Tribunal could take cognizance, with a narrow exception at paragraph 51 only for fraud or a claim so absurd that no probe is needed. Jagdish Singh applied the bar at paragraphs 24 and 25. State Bank of Patiala v. Mukesh Jain, (2017) 1 SCC 53 restated it at paragraphs 16 and 17. Electrosteel Castings Ltd. v. UV Asset Reconstruction Co. Ltd., (2022) 2 SCC 573 confirmed that bare allegations of fraud without particulars will not open the civil court's door.

The Writ Court: Relegated to the Statutory Forum

From Satyawati Tondon (supra) through Phoenix ARC (P) Ltd. v. Vishwa Bharati Vidya Mandir, (2022) 5 SCC 345, Varimadugu Obi Reddy v. B. Sreenivasulu, (2023) 2 SCC 168, and down to PNB Housing Finance Ltd. v. Manoj Saha, 2025 INSC 847, decided on 15.07.2025, High Courts have repeatedly been instructed to redirect SARFAESI grievances — including those of non-borrower occupants — to the statutory forum.

If the DRT is the only available forum and then holds it cannot protect a non-borrower occupant, the result is not a narrow jurisdictional ruling — it is the complete elimination of any forum to test whether the eviction was lawful. That is not statutory interpretation; it is the abolition of a remedy by inference. The maxim ubi jus ibi remedium is not decorative, and where shelter is concerned, Article 21 of the Constitution of India is never far behind.