Madras HC rules that a SARFAESI property dispute under DRT cannot stall a college’s provisional affiliation process.
SARFAESI Proceedings Don’t Halt Educational Affiliation
The Madras High Court has ruled that an ongoing SARFAESI recovery process and an associated stay on property auction by the Debt Recovery Tribunal (DRT) do not justify delaying the provisional affiliation of a college. The court observed that educational interests must not be compromised due to financial disputes involving the management’s assets.
The bench directed the relevant educational authority to complete the inspection for provisional affiliation within two weeks. It reasoned that the institution’s academic viability is distinct from the financial encumbrance on its premises. The petitioner had argued that the affiliation process was stalled due to the bank’s enforcement action under SARFAESI, but the court found no legal bar to proceeding with inspections.
This ruling reinforces the principle that public interest in education outweighs private financial disputes. Practitioners handling educational institutions under financial stress should note that regulatory processes for academic operations can proceed independently of SARFAESI enforcement.
Citations
- SARFAESI Act, 2002
- DRT Act, 1993
