SC/ST Act cannot be used to block banks from exercising mortgage rights: Delhi High Court
Court stays proceedings against Axis Bank; says Atrocities Act sections on land dispossession not applicable to secured lending
The Delhi High Court has held that provisions of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 cannot be invoked to restrict banks from exercising legitimate mortgage rights under the SARFAESI Act. Justice Sachin Datta made the observation while staying proceedings initiated by the National Commission for Scheduled Tribes (NCST) against Axis Bank, its Managing Director, and CEO.
The Commission had summoned Axis Bank’s senior officials after receiving a complaint alleging wrongful possession of land belonging to a member of the Scheduled Tribe community. However, the Court found that Sections 3(1)(f) and 3(1)(g) of the Act — which penalize wrongful occupation or dispossession — were not applicable to enforcement of valid security interests.
The dispute arose from a ₹16.69 crore loan given by Axis Bank in 2013, secured by a property in Vasai, Maharashtra. After the borrower defaulted, the bank acted under the SARFAESI Act to recover dues, prompting the complaint to the NCST. The Court held that the Commission lacked jurisdiction to summon senior bank executives and stayed the proceedings, observing no justification had been recorded for such directives.
The matter is next scheduled for hearing on February 5, 2026.