Allahabad High Court
KAILASH CHANDversusSTATE OF U.P. AND 5 OTHERS
- Decided
Holding
The Court conditionally stayed the SARFAESI proceedings, directing the petitioner to pay Rs. 1.5 lakh and furnish an undertaking, with the stay remaining effective only upon compliance.
Summary
The petitioner, a borrower, challenged an order of a financial institution under the SARFAESI Act, seeking time to clear outstanding dues of Rs. 3,24,882.46. The bank agreed to accept an initial payment of Rs. 1.5 lakh by 6 June 2026 and the balance in two bimonthly installments, provided the petitioner executed a notarized undertaking. The State respondents argued that the matter was solely between the borrower and the bank. With the consent of both parties, the Court directed the petitioner to make the initial payment, furnish the undertaking, and thereafter pay the remaining amount in stipulated installments, staying any SARFAESI proceedings conditionally. The Court clarified that failure to comply would lift the protection and the bank could invoke Sections 13 and 14 of the SARFAESI Act, and no further writ petitions would be entertained.
Issues considered
- Whether the High Court can conditionally stay the bank's SARFAESI proceedings against the petitioner upon payment of a part of the dues and an undertaking.
- Whether the State authorities have any role in the bank's recovery actions under the SARFAESI Act.
Legislation cited
- SARFAESI Act, 2002 — s. 13, 14
Subjects
- SARFAESI Act
- bank loan recovery
- stay of execution
- conditional relief
- installment payment
- writ petition
Judgment
HIGH COURT OF JUDICATURE AT ALLAHABAD
WRIT - C No. - 17751 of 2026
Kailash Chand
.....Petitioner(s)
Versus
State Of U.P. And 5 Others
.....Respondent(s)
Counsel for Petitioner(s) : Arnav Rai, Hemant Kumar Rai, Swati
Pandey
Counsel for Respondent(s) : C.S.C., Sachin Mishra
Court No. - 1
HON'BLE AJIT KUMAR, J.
HON'BLE INDRAJEET SHUKLA, J.
1. Heard Sri Arnav Rai, learned counsel for the petitioner, Sri Sachin
Mishra, learned counsel for the respondents and perused the records.
2. Petitioner who has assailed the order dated 18.03.2026 passed by
respondent no. 3, submits that he is ready to pay the entire amount
provided he is given some time for clearing the dues.
3. Upon a pointed query being made learned counsel appearing for the
respondent bank submits that as per the instructions received from Bank,
the total outstanding dues is Rs. 3,24,882.46 as on 04.05.2026 and it is
ready to accept the amount if the petitioner pays Rs. 1.5 lacs within 30
days i.e. by 6th June, 2026 and further pays remaining amount in two
bimonthly installments.
4. Learned Standing Counsel appearing for the State respondents submits
that if the financial institution is agreed to the request made by the
borrower then it is the financial institution who is to only support and the
State authority has nothing to do in the matter.
5. In view of the above and with the consent of parties, namely, the
petitioner and the financial institution through his counsel, we dispose of
this petition with the following directions:-
(i) Petitioner shall be depositing Rs. 1.5 lacs by 6th June, 2026 with the
respondent no. 6 and shall furnish an undertaking on a notarized affidavit
WRIC No. 17751 of 2026
2
that he will be depositing the above amount by 6th June, 2026 and further
the entire remaining dues in two bimonthly equal installments. The
undertaking shall be furnished to the bank within ten days from today.
(ii) In the event, petitioner furnishes above undertaking and makes deposit
as directed herein above, the Bank-financial institution, namely,
respondent no. 6 shall supply the statement of account regarding dues to
be paid by the petitioner in four bimonthly equal installments. The
statement of account shall be provided within a week of deposit of
amount.
(iii) After receiving the statement of account, the petitioner would be
depositing the entire remaining dues within two bimonthly installments to
begin with from 10th July, 2026.
6. In the event petitioner complies with the aforesaid directions by making
deposit of Rs. 1.5 lacs by 6th June, 2026 and furnishing an affidavit, no
proceeding shall be pursued by the respondent financial institution as per
the undertaking given by its counsel, under the SARFAESI Act, 2002.
7. However, we may clarify that in the event petitioner fails to make
deposit of Rs. 1.5 lacs and fails to furnish an affidavit with respondent no.
6 and/or further fails to pay back the dues as directed herein above, the
protection granted under this order shall cease to operate and respondent
no. 6 shall be at liberty to pursue the remedies available to it by taking
measures under Section 13 read with Section 14 of the SARFAESI Act,
2002 and no second writ petition would be entertained in any
circumstances, nor any modification application for modification of this
order shall be entertained.
(Indrajeet Shukla,J.) (Ajit Kumar,J.)
May 6, 2026
IrfanUddin
Digitally signed by :-
IRFAN UDDIN SIDDIKI
High Court of Judicature at Allahabad
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