In Short
Banking and finance disputes center on debt recovery — enforcing security under the SARFAESI Act, recovery suits before the Debt Recovery Tribunal, and restructuring stressed loans. S&S Co. represents both lenders (banks, NBFCs, ARCs) and borrowers across Noida, Delhi NCR and Kolkata.
What This Practice Covers
Banking and finance litigation deals principally with the recovery of secured and unsecured debt. Where a loan is secured, the SARFAESI Act, 2002 gives banks and financial institutions a fast-track enforcement mechanism — issuing a demand notice, and on default, taking possession of and selling the secured asset without first obtaining a civil court decree. Unsecured recovery, and challenges to SARFAESI action, are routed through the Debt Recovery Tribunal (DRT) under the RDDBFI Act, with appeals to the Debt Recovery Appellate Tribunal (DRAT).
The Supreme Court has recently reinforced that SARFAESI's procedural safeguards are not mere formalities: in 2026 rulings on Rule 9 of the Security Interest (Enforcement) Rules, the Court confirmed that payment timelines governing auction sales are mandatory, not directory — a deviation can vitiate the sale and revive the borrower's redemption rights under Section 13(8).
Forums We Appear Before
Debt Recovery Tribunal (DRT) — Delhi
Debt Recovery Tribunal (DRT) — Kolkata
Debt Recovery Appellate Tribunal (DRAT)
Delhi High Court — banking writ matters
Calcutta High Court — banking writ matters
NCLT — for IBC-linked recovery
Our Banking & Finance Services
- SARFAESI enforcement — advising lenders on Section 13(2)/13(4) notices, possession and sale of secured assets.
- Borrower defence — Section 17 applications before the DRT challenging defective or premature SARFAESI action.
- DRT recovery suits — representing banks and NBFCs in original-side recovery proceedings.
- DRAT appeals — appellate representation from adverse DRT orders.
- Debt restructuring — advising on one-time settlements, restructuring packages, and negotiated resolutions outside formal insolvency.
- Guarantee enforcement — pursuing or defending claims against personal and corporate guarantors.
- Auction and Rule 9 compliance — advising on procedurally sound SARFAESI auctions to withstand later challenge.
SARFAESI Enforcement Process
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Demand Notice
On default, the lender issues a Section 13(2) demand notice giving the borrower 60 days to repay.
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Possession & Symbolic Takeover
If unpaid, the lender can take possession of the secured asset under Section 13(4), symbolically or physically.
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Valuation & Auction
The asset is valued and sold through auction, following the Rule 9 timelines the Supreme Court has confirmed are mandatory.
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Borrower Challenge (If Any)
A borrower aggrieved by the process can file a Section 17 application before the DRT, which can set aside a defectively-conducted sale.
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Sale Confirmation & Recovery of Shortfall
Once confirmed, sale proceeds are appropriated toward the debt; any shortfall may be pursued through further recovery proceedings.
Illustrative Scenarios
The following are hypothetical, illustrative scenarios prepared for educational purposes. They are not descriptions of actual client matters, and no outcome is guaranteed in any specific case.
Illustrative Scenario
Bank Enforcing Security Against a Defaulting Noida Business
A Noida-based business defaults on a secured term loan. A properly issued Section 13(2) notice, followed by procedurally correct possession and a Rule-9-compliant auction, gives the lender a materially faster recovery path than a civil suit — provided every procedural safeguard is documented and followed.
Illustrative Scenario
Borrower Challenging a Rushed Auction in Kolkata
A Kolkata borrower's mortgaged property is auctioned without adherence to the Rule 9 payment-timeline safeguards. A Section 17 application before the DRT, grounded in the Supreme Court's confirmation that Rule 9 timelines are mandatory, can set aside the sale and revive the borrower's redemption rights.
Illustrative Scenario
Lender Pursuing a Personal Guarantee After a Corporate Default in Ghaziabad
A bank forecloses on a Ghaziabad company's secured loan but recovers only part of the outstanding amount through SARFAESI sale. Pursuing the personal guarantor separately for the shortfall — rather than treating the SARFAESI recovery as the end of the matter — is often necessary to achieve full recovery.
Illustrative Scenario
Borrower Negotiating a One-Time Settlement Before SARFAESI Possession
A Kolkata business facing an imminent Section 13(4) possession notice proactively approaches its lender with a one-time settlement proposal backed by a credible repayment source. Lenders frequently prefer a negotiated OTS over a contested, time-consuming SARFAESI sale process, provided the proposal is realistic and front-loaded with partial payment.
Notable Judgments
Supreme Court2026
M.R. Vasumathi & E. Muthurathinasabathy — SARFAESI Rule 9 Judgments
Rule 9 Payment Timelines Under the SARFAESI Enforcement Rules Are Mandatory, Not Directory
The Supreme Court held that the payment timelines prescribed under Rule 9 of the Security Interest (Enforcement) Rules, 2002 — governing deposit of sale consideration following a SARFAESI auction — are mandatory. A secured creditor's failure to strictly enforce these timelines, or a purchaser's failure to comply with them, can vitiate the auction sale, directly affecting borrowers' redemption rights under Section 13(8) of the SARFAESI Act.
Key Takeaway — Banks, ARCs and auction purchasers must treat Rule 9 deposit deadlines as strict and non-negotiable — non-compliance now carries a real risk of the entire sale being set aside.
Supreme CourtJul 2026
PIL on Public Sector Bank-ARC Settlements — Notice Issued
SC Flags Bank–ARC–Borrower Nexus Over Deep-Discount Loan Settlements
A bench led by the Chief Justice issued notice to the Centre, the RBI, and other respondents on a plea alleging that ₹1,537 crore owed to public sector banks was settled through two asset reconstruction companies for only ₹73.50 crore. The Court flagged mis-utilisation of public money as its central concern while acknowledging limits on its role in second-guessing banks' commercial wisdom on stressed-loan resolution.
Key Takeaway — Banks and ARCs handling stressed public-sector debt should expect intensified scrutiny of settlement valuations and haircuts going forward.
RBI — Second AmendmentJun 15, 2026
RBI (NBFC — Responsible Business Conduct) (Second Amendment) Directions, 2026
RBI Introduces Comprehensive New Chapter Governing NBFC Marketing & Third-Party Product Sales
The RBI notified a new chapter under its 2025 Directions governing how NBFCs (including housing finance companies) advertise, market, and sell both their own and third-party financial products and services — tightening disclosure, suitability, and conduct standards for cross-selling arrangements.
Key Takeaway — NBFCs and HFCs must urgently review third-party product distribution and marketing arrangements for compliance with the new conduct standards.
Supreme CourtMay 2026
Fraud Account Classification — Forensic Audit Disclosure Requirement
Banks Need Not Grant a Personal Hearing Before Classifying an Account as Fraud, But Must Share the Forensic Audit Report
The Supreme Court held that banks are not obligated to grant customers a personal oral hearing before classifying their accounts as fraud, accepting submissions that individual hearings are impractical given the scale of fraud cases. However, before such classification, banks must furnish the customer with the forensic audit report underlying the decision.
Key Takeaway — Banks must build forensic-audit-report disclosure into fraud classification workflows even though oral hearings remain optional — omission of disclosure risks the classification being struck down.
See all Legal Updates for this practice area →
Our Approach to Banking & Finance
- Both lender and borrower-side experience — we understand SARFAESI from both sides of the transaction.
- Dual-city DRT coverage — direct representation before DRT Delhi and DRT Kolkata.
- Integrated with our IBC and real estate practices for matters spanning secured lending, insolvency and mortgaged property.
- Founders with 20 years combined experience across commercial litigation, arbitration and regulatory practice.
Frequently Asked Questions
What is SARFAESI and how does it help banks recover dues?
The SARFAESI Act, 2002 lets banks and financial institutions enforce security interests without first obtaining a court decree, by issuing a demand notice and, if unpaid within 60 days, taking possession and selling the secured asset.
Can a borrower challenge a SARFAESI action?
Yes — a borrower aggrieved by measures under Section 13(4) can approach the DRT under Section 17; civil courts generally have no jurisdiction to entertain such challenges directly.
What happens if a bank does not follow the Rule 9 auction timelines?
The Supreme Court has held Rule 9 payment timelines are mandatory, not directory — deviation can vitiate the auction sale and affect the borrower's redemption rights under Section 13(8).
What is the difference between DRT and DRAT?
The DRT is the first-instance forum for bank recovery suits and SARFAESI challenges; the DRAT hears appeals from DRT orders.