A borrower who says Punjab National Bank backed out of a Rs 25.70 lakh settlement after he had already paid Rs 20 lakh cannot come straight to the High Court under Article 226, the Patna High Court has held, sending him to the forum provided under the SARFAESI Act.
Patna: The Patna High Court has refused to entertain a writ petition filed by a rice mill proprietor from Aurangabad seeking a direction to Punjab National Bank to act upon a loan settlement, holding that writ jurisdiction cannot be invoked in matters of recovery of bank dues when an effective alternative remedy is available under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [Sanjay Kumar Singh v. Punjab National Bank and Others].
Justice G. Anupama Chakravarthy disposed of the petition on October 1 with liberty to the petitioner to approach the appropriate forum, directing that the concerned authority shall also consider the aspect of limitation.
The case
The petitioner, Sanjay Kumar Singh, is the proprietor of M/s Shekhar Arwa Polisher Mill at Kutumba in Aurangabad district and a borrower of the bank’s Kutumba branch. According to his petition, a settlement was arrived at with the bank on December 29, 2021, under which his liability was fixed at Rs 25,70,000. He stated that, in pursuance of the settlement, he had already deposited Rs 20,00,000, was ready to pay the remaining amount, and had asked the bank to accept it, but the bank refused.
He sought a direction to the bank, through its General Manager, Regional Officer, Circle Officer and Branch Manager, to act upon the settlement, and a further direction to take a “lenient view” in recovering the amount, pointing to the difficulties faced by businesses during the Covid-19 pandemic.
Bank dues and the rule of alternative remedy
After hearing both sides, the Court did not enter into the merits of the settlement. It turned instead to the question of maintainability, relying on the Supreme Court’s decision in United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, which held:
“The High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions.”
The Court also extracted the Supreme Court’s observation in the same case that recovery laws enacted by Parliament and the State Legislatures are “a code unto themselves,” since they contain a comprehensive recovery procedure and set up quasi-judicial bodies to redress the grievances of aggrieved persons, and that the High Court “must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.”
The Court then referred to Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1, where the Supreme Court said:
“This court has time and again, reminded the high courts that they should not entertain petition under article 226 of the constitution if an effective remedy is available to the aggrieved person under the provisions of the SARFAESI ACT.”
Noting that the same principle was reiterated in PHR Invent Educational Society v. UCO Bank, 2024 INSC 297, the Court held that the writ petition was “not maintainable when an alternative and effective remedy is available to the petitioner.” It left the petitioner free to approach the appropriate forum and disposed of the petition.
What it means for borrowers
The ruling is a reminder to borrowers that disputes over the enforcement of settlements with banks, including one-time settlements, will ordinarily not be decided by the High Court in writ jurisdiction where the SARFAESI Act or the recovery law provides a remedy. The Supreme Court’s line of decisions, from Satyawati Tondon to Celir LLP and PHR Invent, treats these statutes as self-contained codes, and High Courts have been repeatedly cautioned against short-circuiting the statutory route.
Equally significant is the Court’s direction that the forum the petitioner now approaches “shall also consider the aspect of limitation.” The writ petition was filed in 2023 and decided in October 2026, and the direction ensures that the time spent in the High Court is weighed when the petitioner pursues his statutory remedy. The Court expressed no view on whether the bank was bound by the December 2021 settlement.
Case Title: Sanjay Kumar Singh v. Punjab National Bank and Others [CWJC No. 11035 of 2023]
Bench: Justice G. Anupama Chakravarthy, Patna High Court
Date of Judgment: October 1, 2026
Appearances: Advocate Jai Prakash Singh for the Petitioner; Advocate Mritunjay Kumar for the Respondent Bank