SC/ST Provisions cannot be Invoked to Obstruct Banks’ Lawful Security Interest & Mortgage Rights u/ SARFAESI: Delhi HC [Read Order]

The Delhi High Court recently held that provisions of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 (SC/ST Act) cannot be invoked to frustrate a bank’s lawful exercise of security interest and mortgage rights under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

The Delhi High Court consequently passed an order by the staying summons issued by the National Commission for Scheduled Tribes (NCST) to the senior officers of Axis Bank while restraining the Commission from conducting further inquiry pending outcome of the present writ.

The petition arose from a loan facility of ₹16,68,99,098.28 sanctioned in 2013 to Sundev Appliances Ltd., secured by an equitable mortgage over a property in Vasai, Thane.

On non-payment of the credit facility, Axis Bank declared the account a Non-Performing Asset (NPA) in October 2017 and pursued possession under Section 13(4) of the SARFAESI Act. The possession was assented to by the District Magistrate, Palghar on January 19, 2024.

Thereafter a persian (respondent no.2 herein) filed a civil suit in Vasai claiming ownership by virtue of an Agreement to Sell dated July 27, 2016 and sought injunctions against the bank, and also separately lodged a representation before the NCST alleging atrocities by the bank.

The NCST then issued a sitting notice and subsequent summons on July 29, 2025 and October 6, 2025 calling for personal appearance of Axis Bank’s Managing Director and Chief Executive Officer, against which the Bank has filed the present writ petition.

The petitioner was represented by Satvik Varma, Manmeet Singh, Alok Shanker, Anugrah Robin Frey, -Shantanu Parmar, Ajay Raj and Balram submitted on behalf of the petitioner that the NCST had no jurisdiction to initiate the impugned proceedings while civil remedies and statutory SARFAESI actions were in place.

It was further claimed that the representation before the NCST suppressed material facts and that summons to senior executives were issued without any recorded necessity.

The NCST had meanwhile directed status reports from the Collector and the Superintendent of Police and issued an order on September 22, 2025 asking for an action report and restraining the bank from auctioning the property until complete clarity is obtained qua the ownership rights of tribal persons.

A single-judge Bench of Justice Sachin Datta directed that notices be issued to all respondents and rejoinders from their end.

The Court noted that prima facie, the provisions of Sections 3(1)(f) and (g) of the Atrocities Act are not attracted and that the same cannot be invoked to preclude/ prevent the exercise of mortgage right/security interest of the petitioner.

Notably, the Delhi High Court referred to its own decision in State Bank of India and Anr. v. National Commission for Scheduled Castes and Anr (2013) and the Supreme Court decision in State of Uttar Pradesh and Ors. Vs Jasvir Singh and Ors. (2011) to note that the summons issued by the NCST for the appearance of the MD & CEO of Axis Bank was without any rationale and devoid of jurisdiction.

Accordingly, the Delhi High Court stayed the NCST proceedings and the summons dated July 29 and October 6, 2025 till the next date of hearing.

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