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Judgments
Patna High Court Quashes SARFAESI Sale
Loan Restructuring Without Guarantor Consent Extinguishes Liability. In a watershed precedent establishing strict limits on arbitrary banking powers under the SARFAESI Act, 2002, the Patna High Court has set aside the e-auction and sale certificate of a residential mortgaged flat conducted by Canara Bank. The verdict reasserts a cardinal tenet of banking jurisprudence: when a secured creditor restructures debt or sanctions fresh accommodation on revised terms without the express written renewal or consent of the existing guarantor, the surety stands discharged, and the bank forfeits all foundational jurisdiction to enforce against the guarantor's assets.
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High Court Slams Bank for Illegally Liquidating Widow's FD to Recover Husband's Loan: Imposes Punitive Costs
In a strongly worded decision against predatory banking recovery tactics, a Division Bench of the High Court has delivered a severe reprimand to the State Bank of India for unilaterally encashing the fixed deposit of a widow to recover outstanding personal loan dues left by her deceased husband[cite: 2]. Labeling the bank's conduct as an "abominable process" and an "anathema to banking practice," the Court underscored that banks are mere custodians holding public deposits in trust[cite: 2]. They possess no authority to unilaterally expropriate private funds belonging to non-contracting family members without establishing legal liability through due process of law[cite: 2].
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