In a significant judgment, the Delhi High Court has ruled that the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 (SC/ST Act) cannot be invoked to prevent banks from enforcing their lawful mortgage or security rights. The court, led by Justice Sachin Datta, made this observation while staying the proceedings initiated by the National Commission for Scheduled Tribes (NCST) against Axis Bank, its Managing Director, and Chief Executive Officer.
The case originated from a 2013 loan of approximately ₹16.69 crore granted by Axis Bank to M/s Sundev Appliances Ltd, secured by a property mortgage in Vasai, Maharashtra. When the borrower defaulted, the bank declared the account a Non-Performing Asset (NPA) in 2017 and invoked its rights under the SARFAESI Act to recover dues. A civil dispute later arose regarding ownership of the mortgaged land, during which one party approached the NCST, alleging that the bank’s recovery actions violated Sections 3(1)(f) and 3(1)(g) of the SC/ST Act, which concern wrongful occupation or dispossession of land belonging to SC/ST individuals.
Justice Datta, however, observed that these provisions were “not attracted in the present case”, stating that they could not be invoked to obstruct or preclude the exercise of a bank’s mortgage rights. The court emphasized that financial institutions operate under lawful security interests and such protections cannot be undermined by broad interpretations of the Atrocities Act.
The High Court also criticized the NCST for issuing summons to Axis Bank’s MD and CEO, calling it beyond the commission’s jurisdiction and lacking justification. Consequently, the court stayed all proceedings against the bank and its executives, terming the Commission’s order “without jurisdiction.”
This ruling references earlier judgments, including State Bank of India v. National Commission for Scheduled Castes (2013) and the Supreme Court’s decision in State of Uttar Pradesh v. Jasvir Singh (2011), both of which upheld that the SC/ST Act should not be misused to interfere with legitimate mortgage enforcement.
Legal experts have hailed the judgment as a landmark clarification, ensuring that banking operations and mortgage recoveries remain safeguarded from misuse of social justice laws. The matter has been scheduled for the next hearing on February 5, 2026.