Interim Orders in Writ Petition Challenging SARFAESI Proceedings Should Generally Not be Passed Without Hearing the Secured Creditors: Supreme Court [READ JUDGMENT]

The Supreme Court in many cases had held that the High court should not grant stay or interim Orders in the cases relating to the recovery of the dues of banks and secured Creditors. Such orders of the High court prove to be harmful to the economy of the country because of the adverse impact caused to these financial bodies. 

It has held that the High court must resort to alternative remedies when those are available instead of granting interim orders which defeat the purpose of speedy recovery of public money. The High court had been made conscious of this fact several times but still it ignore the statutory remedies under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.

The Supreme Court comprising the bench of Justices L. Nageswara Rao, Hemant Gupta and Ajay Rastogi held that the High court must be aware of its jurisdiction in passing orders when alternative remedies are available and thus held that it should not pass such interim orders in writ petition challenging SARFAESI proceedings without hearing the secured creditors. The court cannot just say that the aggrieved has only the remedy for interim orders. 

[READ JUDGMENT]