New Delhi, Oct. 3 -- Under fire from the Supreme Court over what it termed "gross" misconduct and "collusion" in loan recovery proceedings, the Punjab National Bank (PNB) has now barred its branches and zonal offices from directly approaching high courts in matters under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act. The bank has also advised for the withdrawal of all writ petitions already pending before high courts across the country in such cases. The instructions, recorded in an affidavit placed before a bench of justices JB Pardiwala and KV Viswanathan, mark a direct fallout of the apex court's strong rebuke last month when it pulled up the bank for simultaneously pursuing a Lok Adalat settlement with a borrower even as it had already auctioned off the borrower's property. The court, in a series of hearings, described the episode as a "sorry state of affairs" and pressed PNB's top brass to take corrective policy measures at the earliest. In compliance, PNB's law division issued a series of advisories between September 9 and 16, requiring zonal and circle heads to seek prior approval from the head office before filing any writ petition or appeal in high courts. A separate advisory specifically directed that in Sarfaesi proceedings, the bank should confine itself to remedies available before the Debt Recovery Tribunal (DRT) and the Debt Recovery Appellate Tribunal (DRAT), and desist from invoking writ jurisdiction in high courts unless specifically authorised by the head office for legally sustainable reasons. A circular issued on September 16 further reminded field officers of the 2016 amendment to Section 13(8) of Sarfaesi and the Supreme Court's ruling in Celir LLP v. Bafna Motors, reiterating that once an auction notice is published and succeeds, the borrower's right of redemption stands extinguished, making settlements thereafter impermissible. In the Celir LLP judgment of 2023, the Supreme Court had clarified that a borrower's right to redeem a mortgaged property under the Sarfaesi Act extinguishes the moment an auction notice is published, since a third-party interest is created once the auction process begins. Notably, the significance of the changes lies in reinforcing sanctity and credibility of the auction process under Sarfaesi....