Jsel Securities Ltd. v. Reliance Asset Reconstruction Company Ltd.

DRT24 Jul 2026SA/551/2026

Case brief

AI extract

What is this about?

The Tribunal analyzed disputes between financial institutions under the SARFAESI Act. Quoting the Supreme Court, it held that Section 11 mandates statutory arbitration for disputes involving securitization, reconstruction, or non-payment of dues. Consequently, the Tribunal dismissed the matter and directed the parties to resolve their dispute via Section 11 arbitration.

What did the court decide?

The applicant's application was disposed of; parties directed to resolve the dispute by way of Arbitration in terms of Section 11 of the SARFAESI Act.

Jsel Securities Ltd. versus Reliance Asset Reconstruction… — Specific Performance | DRT (2026)

¶1

Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

¶2

Item No. 41

¶3

Case No.SA/551/2026

¶4

JSEL SECURITIES LTD Vs RELIANCE ASSET RECONSTRUCTION COMPANY LTD

¶5

Date: 24.07.2026. Proceedings through hybrid mode Present:

¶6

Shri Rahul Joshi, Counsel for the Applicant

¶7

Shri Vishal Chhabra, Counsel for the Respondent Bank/FI

¶8

In the above matter the dispute relates to inter-se financial institutions and as per judgment of Hon’ble Supreme Court passed in the matter of Bank of India vs M/S Sri Nangli Rice Mills Pvt. Ltd on 23 May,2025 Hon’ble Supreme Court has held as under:

¶9

G. FINAL CONCLUSION

¶10

124. We summarize our final conclusion as under:

¶11

(I) Section 11 of the SARFAESI Act deals with resolution of disputes relating to securitisation, reconstruction or non-payment of any amount due between the bank or financial institution or asset reconstruction company or qualified buyer.

¶12

(II) In order to attract the provision of Section 11 of the SARFAESI Act, twin conditions have to be fulfilled being; first, the dispute must be between any bank or financial institution or asset reconstruction company or qualified buyer and secondly, the dispute must relate to securitisation or reconstruction or non-payment of any amount due including interest. Where the aforesaid two conditions are found to be prima-facie satisfied, there the DRT will have no jurisdiction and the proper recourse would only be through Section 11 of the SARFAESI Act read with the Act, 1996.

¶13

(III) The expression “non-payment of any amount due, including interest” used in Section 11 of the SARFAESI Act is of wide import and would include a various range of scenarios of ‘disputes’ connected to unpaid amounts including those arising due to third-party defaults, such as indirect defaults of the borrowers.

¶14

(IV) Any dispute between two banks, financial institutions, asset reconstruction companies or qualified buyers etc., where the jural

¶15

¶16

Court of the Presiding Officer Debts Recovery Tribunal, Jaipur

¶17

relation between the two is of a lender and borrower, then Section 11 of the SARFAESI Act will have no application whatsoever. The use of the phrase “any person” in the definition of ‘borrower’ in Section 2(f) of the SARFAESI Act, makes it abundantly clear that even a bank, financial institution or asset reconstruction company or qualified buyer can be considered a borrower, if they receive financial assistance from a bank or financial institution etc by providing or creating a security interest. Thus, a lender-turned-borrower would also fall within the scope of a “borrower” under the SARFAESI Act and shall be governed by the same statutory framework as any ordinary borrower.

¶18

(V) Section 11 of the SARFAESI Act, provides for a statutory arbitration for any dispute mentioned therein between any of the parties enumerated thereunder. There is no need for an explicit written agreement to arbitrate between such parties in order to attract Section 11 of the SARFAESI Act. The said provision creates a legal fiction as regards the existence of an arbitration agreement notwithstanding whether such agreement exists or not in actuality.

¶19

(VI) Section 11 of the SARFAESI Act is mandatory in nature. The use of the word “shall” therein, the mandate of the said provision cannot be bypassed or subverted by the parties by seeking recourse elsewhere. 125. Thus, for all the foregoing reasons, we have reached the conclusion that there is no infirmity in the impugned order passed by the High Court, directing the appellant and the respondent banks to resolve their dispute by way of arbitration in terms of Section 11 of the SARFAESI Act.

¶20

Accordingly, SA stands disposed of and parties are directed to resolve their disputes by way of Arbitration in terms of section 11 of the SARFASAI Act.

¶21

The period for which the pleadings were filed and till date shall not be counted for limitation.

¶22

Files be consigned to record as per rules. Copy of order be uploaded on website.

¶23

(Vimal Gupta) Presiding Officer Debts Recovery Tribunal, Jaipur

¶24

Jsel Securities Ltd. v. Reliance Asset Reconstruction Company Ltd.

Case brief

What is this about?

What did the court decide?

Jsel Securities Ltd. v. Reliance Asset Reconstruction Company Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Yes Bank versus Ripu Daman Bhatnagar

Yes Bank versus Narayn Lal

Bank of Baroda versus Poonam Devi

Punjab National Bank versus Shri Bhairav Lime Indus

Skytek Pipes Pvt. Ltd. versus State Bank of India

Satyanarayan Dadhich versus Svatantra Micro Housing Finance Corporation Ltd.