Delhi High Court Rules SC/ST Act Cannot Be Used to Obstruct Bank Recovery Rights

New Delhi: The Delhi High Court has held that the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 (SC/ST Act) cannot be invoked to impede the financial recovery rights of banks. The court observed that the provisions of the SC/ST Act cannot be applied to override or delay the enforcement of banks’ lawful claims over mortgaged properties.

The judgment was delivered by Justice Sachin Dutt in a petition involving Axis Bank and its Managing Director and Chief Executive Officer. The case arose after the National Commission for Scheduled Castes initiated proceedings against the bank, alleging violation of Sections 3(1)(f) and 3(1)(g) of the SC/ST Act, which penalise unlawful dispossession or eviction of members of Scheduled Castes and Scheduled Tribes from their land.

The Commission had issued summons directing the bank officials to appear personally. However, the bank had established its claim over assets worth Rs. 16.69 crore, which had been mortgaged as security against unpaid loans. The court stayed the Commission’s proceedings, holding that the Commission had acted beyond its jurisdiction in interfering with the bank’s rightful possession and recovery process.