The Division Bench comprising of the Chief Justice N. Kotiswar Singh and Justice Wasim Sadiq Nargal while hearing batch of 46 writ petitions where the specific issue was raised as to whether the statutory alternative remedy available under Section 17 of the SARFAESI Act, in the context of the litigants residing in the UTs of J&K and Ladakh is efficacious or not since the forum in the form of Debts Recovery Tribunal (DRT) is distantly located in Chandigarh, it does not offer efficacious remedy, observed that unless the adjudicating forum is readily, easily and regularly available, it can prejudicially affect their right to easy access to justice which appears to be in the position in the present cases where a large number of petitioners have approached this Court alleging irregular/malafide/illegal acts on the part of the Banks/financial institutions by violating provisions of the SARFEASI Act.  The Court held, “Though the grounds of challenge made by the debtors ultimately may be found to be without merit, yet if such challenges are genuine and valid and if no effective redressal mechanism is readily, regularly and easily available, it can cause grave prejudices and injustices to such borrowers/debtors. Therefore, providing a redressal forum which is easily, readily and regularly available to the borrowers/aggrieved persons is sine qua non for effective and just implementation of SARFAESI Act.” The court as such held the writ petitions to be maintainable. 

However, the Court only decided on the preliminary issue of maintainability of the petitions, with the decision on merits as also on the requirement of intervention under Article 226 left to be decided individually for each case.

The petitioners in these petitions, being borrowers and guarantors, had called in question the actions of the Banks/Financial Institutions/Secured Creditors initiated under Sections 13 and 14 of “Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002” (hereinafter referred to as “SARFAESI Act/Act”), on the plea, amongst others, that though there is a statutory remedy available, it is of a limited nature and not efficacious and hence, they have been compelled to approach High Court by invoking jurisdiction under Article 226 of the Constitution of India. The petitioners urged that they are residents of the Union Territory of Jammu & Kashmir, and the properties involved/secured assets are also located within Jammu and Kashmir. Moreover, the transactions were primarily undertaken within the jurisdiction of the Union Territory of Jammu & Kashmir. Thus, almost the entire cause of actions arose within the territory of UT of Jammu & Kashmir. The case of the petitioners further was that “access to justice” is a fundamental right, and absence of these elements in the present cases amounts to denial of access to justice, thereby infringing upon the fundamental right to life. It was also contended that, access to justice being a facet of right to life as guaranteed under Article 21 of the Constitution, Division Bnech of the Court has the jurisdiction to intervene in these matters, even if these relate to the SARFEASI Act.

The Division Bench while analysing the submissions made and the precedents relied upon by the parties observed that the pain and disappointment of the litigants in the UT of Jammu and Kashmir and UT of Ladakh in depriving the domestic courts of jurisdiction under the SARFAESI Act at present are quite palpable as expressed through the voice of the counsel of the petitioners, after having experienced the conveniences and ease of judicial proceedings under familiar surroundings as available earlier when Section 17-A and Section 17-B were in the SARFAESI Act. The Court noted that as provided under Section 17-A, the litigants could approach the respective courts of District Judges if they were aggrieved by any order passed under Sections 13 or 14 of the SARFAESI Act, which provision has now been withdrawn after the  enactment and enforcement of Jammu and Kashmir Reorganization Act, 2019 and now the litigants are compelled to approach the DRT located in a far off place encumbered with numerous difficulties, denying the comfort and convenience available to litigants where DRTs are established in their own States. The Court held it to be a legitimate expectation of the litigants/public in the UTs of J&K and Ladakh to have Debts Recovery Tribunals within the UT of Jammu and Kashmir and UT of Ladakh, especially considering that these Tribunals were functioning earlier. 

The court as such held “the non-availability of Debts Recovery Tribunal within the UT of Jammu and Kashmir and UT of Ladakh does appear to constitute a denial of easy access to justice, which is a facet of the fundamental right guaranteed under Article 21 of the Constitution”, and while relying upon the case of  Anita Kushwaha vs. Pushap Sudan, (2016) 8 SCC 509, the Court observed, “it is clearly evident that the alternative forum and mechanisms provided in the form of DRT at Chandigarh do not appear to provide reasonably accessible forum in terms of distance, time, costs and convenience. Access to adjudicatory process for litigants does not appear to affordable and efficacious for the reasons discussed above. Non fulfilment of these conditions invariably has adverse consequence on the other two facets of the concept of access to justice.” Under the circumstances, the Division Bench held that inspite of existence of alternative redressal forum under Section 17 of the Act, which is located at Chandigarh, the same cannot be considered to be an efficacious alternative forum, and hence the litigants would have the legitimate right to approach this Court to invoke the jurisdiction under Article 226 of the Constitution of India in matters relating to actions taken under the SARFAESI Act.