Supreme Court limits DRT's power to restore possession under SARFAESI
· Reported by TaxGuru
The Supreme Court held that Section 17 of the SARFAESI Act lets a Debts Recovery Tribunal restore possession only to whoever held it before the bank's enforcement action, not hand possession to a claimant who was never in possession. A third party with an independent title or inheritance claim against the mortgaged property must go to civil court instead, so a clean SARFAESI file can still be sitting on top of a possession dispute the tribunal cannot touch.
What this changes for a title check
For a title check on a property that passed through SARFAESI enforcement, a lawyer must now confirm which forum is deciding any competing possession claim tied to the property. Central Bank of India v. Prabha Jain (2025) 4 SCC 38 confirms the DRT under Section 17 can only put back whoever it displaced when it enforced the mortgage; it cannot adjudicate or grant possession to someone who was never in possession, such as a co-owner or heir asserting the underlying sale to the mortgagor was itself void. That means a clean DRT order in the file does not close the title question if there is a parallel civil suit challenging the sale deed or mortgage's validity; the search must ask for the civil suit status separately, since the DRT record alone will not show it.
Checking title on a property in India? Run a LegiScore title report and get the encumbrance, registration and revenue records read together.