A 2-judge bench of the Supreme Court — *Altamas Kabir, J.* and *Cyriac Joseph, J.* — held on 16 July 2009 that the Debts Recovery Tribunal's jurisdiction under *Section 17* of the *SARFAESI Act 2002* is not confined to the moment a *Section 13(4)* measure is taken; it extends to every action by the secured creditor in furtherance of *Section 13(4)*, including post-possession sale, sale confirmation and consequential steps. The DRT may scrutinise such actions on substantive grounds, set them aside, and — where illegality is established — restore the status quo ante. The decision is the foundational authority on the substantive (rather than merely supervisory) character of *Section 17* review.
On 8 April 2004 a three-judge Constitution Bench of the Supreme Court upheld the constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 while striking down its Section 17(2) requirement that a borrower deposit 75% of the demand before access to the Debts Recovery Tribunal. The Bench also read into Section 13(3) a duty on the secured creditor to communicate, in writing, the reasons for non-acceptance of the borrower's representation — a safeguard that Parliament codified within months as Section 13(3A) by the 2004 Amendment Act.
On 29 November 2006, a two-judge bench of the Supreme Court held that the SARFAESI Act 2002 and the RDDBFI Act 1993 are complementary, not mutually exclusive: a secured creditor may simultaneously prosecute a Debts Recovery Tribunal Original Application under Section 19 of the 1993 Act and a Section 13 SARFAESI enforcement without first withdrawing the OA. The doctrine of election does not apply. The first proviso to Section 19(1) of the 1993 Act does not require withdrawal as a condition precedent — the Section 13(2) notice is a show-cause step, not 'action' within the meaning of the proviso. Section 13(4) 'possession' extends to physical possession.
On 26 July 2010 a two-judge bench of the Supreme Court held that the High Court should not ordinarily entertain a writ petition under Article 226 challenging measures taken under the SARFAESI Act 2002 where the borrower has an efficacious statutory remedy before the Debts Recovery Tribunal under Section 17. The alternative-remedy rule is self-imposed judicial restraint, applied with 'greater rigour' in tax, cess and bank-recovery matters. The Bench castigated the routine grant of interim relief in such writ petitions and held that the High Court was 'wholly unjustified' in entertaining the writ at the Section 13(4) stage.
On 9 January 2025, a two-judge bench of Justices J.B. Pardiwala and R. Mahadevan clarified the relationship between the Debt Recovery Tribunal's jurisdiction under Section 17 of the SARFAESI Act and the civil courts' residual jurisdiction over questions of title, partition, and the validity of pre-enforcement deeds. The judgment holds that the DRT's exclusive jurisdiction extends to the legality of Section 13(4) measures — and no further. Questions of ownership and the validity of deeds predating the bank's enforcement remain triable by civil courts under Section 9 of the CPC.
On 30 May 2022 a three-judge bench of the Supreme Court, in Kotak Mahindra Bank Ltd v. A. Balakrishnan, held that the liability arising from a Recovery Certificate issued by a Debts Recovery Tribunal under Section 19 of the RDDBFI Act is a 'financial debt' within the meaning of Section 5(8) of the IBC, that the holder of such a Certificate is a 'financial creditor' under Section 5(7) entitled to file a Section 7 application, and — most consequentially for limitation practice — that the Certificate creates a fresh cause of action so that limitation under Article 137 of the Limitation Act runs from the date of its issuance, not from the date of the original default. A close reading of the bench's reasoning, its extension of the Dena Bank v. C. Shivakumar Reddy line, and what the ruling has come to mean for banks, ARCs and corporate debtors at the s.7 admission stage.