Can A Borrower Be Left Remediless When The Debt Recovery Tribunal Has No Presiding Officer? MP HC Says No

The Madhya Pradesh High Court at Indore has held that a borrower cannot be left unprotected merely because the Debt Recovery Tribunal (DRT) has no presiding officer, directing a bank to unlock and hand back a family home it had taken over under the SARFAESI Act.

A Division Bench of Justice Subodh Abhyankar and Justice Jai Kumar Pillai allowed a writ appeal filed by Vinod Dwivedi and set aside a Single Judge’s order dated August 17, 2026, which had dismissed his plea for interim relief.

The question before the bench was simple: where does a borrower go for urgent relief when the forum meant to hear him is not functioning?

Dwivedi, who runs a transport business, took a housing loan of Rs 13,61,902 from IIFL Housing Finance Limited in April 2017. He paid regularly until 2020, when the Covid-19 lockdown hit his business and instalments were missed. His wife, Ranjana Dwivedi, was battling cancer and passed away on February 22, 2024. He suffered a heart attack in October 2024 and says he is still under treatment.

The bank initiated proceedings under the SARFAESI Act, and the Chief Judicial Magistrate, Indore, passed an ex-parte order on December 16, 2025 directing possession of the house. Dwivedi claimed he never received the demand notice. A notice to vacate was pasted on his house on February 27, 2026. On April 28, 2026, while he was out of station for his daughter’s marriage, the bank locked the residence.

He first approached the High Court in W.P. No. 18463/2026. On May 15, 2026, the court asked him to deposit ten percent of the dues and directed the DRT, Jabalpur, to hear his interim relief application without any coercive action in the meantime. He deposited Rs 1,16,000. However, his case before the DRT (S.A. 599/2026) was never heard because the post of Presiding Officer was vacant. His fresh writ petition, W.P. No. 32763/2026, was dismissed by the Single Judge.

Before the Division Bench, advocate Anil Kumar Namdev, appearing for Dwivedi, argued that no proper notice was served, that the outstanding instalment amount was only Rs 2,60,712, and that his client was ready to settle the loan account. With the DRT non-functional, he said, the appellant was left “without any remedy”.

Government Advocate Amit Bhatia appeared for the State and advocate Rohit Saboo appeared for respondent No. 4. The respondent bank opposed the appeal, submitting that demand notices were issued by registered post, the dues were not cleared in time and the Magistrate’s order was legal.

What the court said

The bench noted it was admitted that Dwivedi had deposited the required amount. It observed that the Tribunal “has done nothing, and the application for interim relief remains pending without any fault of the appellant.”

“A litigant cannot be made to suffer merely because the Forum created by law is temporarily vacant,” the court said.

It held that the Single Judge erred in dismissing the petition without considering the “severe practical difficulty” faced by the appellant. The bench added that the exceptional medical history of his family, particularly his wife’s cancer, was not given due weightage.

Concluding that Dwivedi “deserves protection till the final order is passed by the Tribunal,” the court directed the bank to immediately open the lock and hand over possession. The relief is conditional: he must file a written undertaking before the High Court Registry within three working days.

The undertaking must state that if the Tribunal declines interim relief, the protection will automatically stand vacated and he will return vacant possession to the bank without delay.

The bench also made it clear that the order “shall not be taken as a precedent in other matters” and was passed only because it was an exceptional case. The DRT is expected to decide the pending interim applications strictly in accordance with law, as soon as it becomes functional, without being influenced by the observations made.

Case Title: Vinod Dwivedi vs. Principal Secretary and Others

Order Date: October 7, 2026

Bench: Justice Subodh Abhyankar and Justice Jai Kumar Pillai