Himachal Pradesh HC: Fraud Allegations Cannot Be Decided Under SARFAESI

The Himachal Pradesh High Court ruled that fraud allegations raised by borrowers or lenders cannot be adjudicated within SARFAESI proceedings, which are summary in nature and intended only for swift secured asset recovery. The Court clarified that complex issues like fraud require full civil trial or criminal proceedings as appropriate. SARFAESI authorities lack jurisdiction to determine such disputed facts. The decision protects procedural rights of parties and delineates the boundary between summary recovery mechanisms and substantive adjudication. It has significant implications for banks, NBFCs, and borrowers involved in enforcement actions.