Case Note & Summary
The petitioner, Radhika Rajesh Agarwal, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the sale of two flats (Nos. 801 and 802) in Shivtapi Building, Gamdevi, Mumbai, along with two car parking spaces, by Respondent No.2 Bank in favour of Respondent Nos.3 and 4 as the highest bidders in an e-auction conducted on 15 September 2020. The petitioner was the second highest bidder. The petitioner alleged that the bidding process was compromised due to collusion and connivance between the bank and Respondent Nos.3 and 4, and that a system malfunction at 17:57 hrs prevented her from bettering the highest bid of Rs.9,23,00,000.00. The facts reveal that on 20 August 2020, the bank invited bids with a combined reserve price of Rs.8,50,00,000.00 and an EMD of 10%. The petitioner, through her brother Ujwal Agarwal, submitted a physical form on 14 September 2020 and deposited the EMD of Rs.85,00,000.00 on 15 September 2020. Initially, 12 bids were received, of which 4 were rejected. During the e-auction, the system stopped functioning at 17:57 hrs, at which point Respondent Nos.3 and 4 had bid Rs.9,23,00,000.00 and the petitioner had bid Rs.9,22,00,000.00. The petitioner claimed she could not better the bid due to the malfunction. On 16 September 2020, she learned that Respondent Nos.3 and 4 were obtaining a housing loan for the flats. The Court, however, did not delve into the merits of the allegations. Instead, it noted that the petition was being discussed on the ground of alternate remedy and dismissed it without issuing a rule. The Court held that since an efficacious alternate remedy is available under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), the writ petition should not be entertained. The petitioner was directed to approach the Debts Recovery Tribunal (DRT) for redressal of her grievances.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternate Remedy - Article 226 of the Constitution of India - The Court held that when an efficacious alternate remedy is available under the SARFAESI Act, the writ petition should not be entertained. The petitioner was directed to approach the Debts Recovery Tribunal (DRT) for redressal of grievances regarding the e-auction process. (Paras 2-3) B) Banking Law - E-Auction - Collusion - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) - The petitioner alleged collusion between the bank and the successful bidders and system malfunction during the e-auction. The Court did not adjudicate on merits due to availability of alternate remedy and dismissed the petition. (Paras 3-4)
Issue of Consideration
Whether the High Court should entertain a writ petition challenging an e-auction sale when an alternate statutory remedy is available under the SARFAESI Act.
Final Decision
The writ petition is dismissed on the ground of alternate remedy. Petitioner is directed to approach the Debts Recovery Tribunal (DRT) for redressal of grievances.
Law Points
- Alternate remedy
- Writ jurisdiction under Article 226
- SARFAESI Act
- E-auction process
- Collusion in bidding
