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ARTICLE · 04 NOVEMBER 2026

Supreme Court: A DRT Decree Does Not Bar SARFAESI Action

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The relationship between the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act“) and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDDB Act“) has long been a source of litigation, with borrowers seeking to characterise the two statutes as mutually exclusive. In K.K Praveen v. J.M Financial Asset Reconstruction Company Pvt. Ltd. & Ors. (Writ Petition (Civil) No. 1091/2026), the Supreme Court was confronted with the contention that the doctrine of transit in rem judicatam whereby a cause of action merges with the decree upon adjudication precluded SARFAESI enforcement after a DRT decree.

IndiaFinance and Banking
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The relationship between the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act“) and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDDB Act“) has long been a source of litigation, with borrowers seeking to characterise the two statutes as mutually exclusive. In K.K Praveen v. J.M Financial Asset Reconstruction Company Pvt. Ltd. & Ors. (Writ Petition (Civil) No. 1091/2026), the Supreme Court was confronted with the contention that the doctrine of transit in rem judicatam whereby a cause of action merges with the decree upon adjudication precluded SARFAESI enforcement after a DRT decree. The Court rejected this argument, holding that Section 35 of the SARFAESI Act confers an overriding effect notwithstanding any other law.

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