Case Note & Summary
The petitioner, Buniya Devi Chauhan, through her power of attorney holder Dharmendra Shambhunath Chauhan, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging the auction sale of her property conducted by the Central Bank of India (Respondent No. 1) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The property was sold to Respondent No. 3, an auction purchaser. The petitioner alleged that the bank did not give adequate publicity to the auction sale and that the property was sold at a grossly undervalued price. The petitioner sought to set aside the auction sale and the sale certificate issued in favor of the auction purchaser. The respondents opposed the petition, arguing that the petitioner had an alternative efficacious remedy under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal (DRT), and that the writ petition was not maintainable. The court, after hearing the parties, held that the writ petition was not maintainable as the petitioner had an alternative remedy under Section 17 of the SARFAESI Act. The court noted that the petitioner had already availed the remedy under Section 17 by filing an application before the DRT, which was pending. The court further observed that no exceptional circumstances such as fraud or collusion were alleged or made out to justify interference under Article 226. The court dismissed the writ petition, leaving it open to the petitioner to pursue her remedy before the DRT. The court also clarified that the auction purchaser's title would be subject to the outcome of the DRT proceedings.
Headnote
A) Constitutional Law - Writ Jurisdiction - Alternative Remedy - Article 226 of the Constitution of India - Maintainability of writ petition when alternative statutory remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) is available - Held that the writ petition is not maintainable as the petitioner has an efficacious alternative remedy before the DRT under Section 17 of the SARFAESI Act, and no exceptional circumstances such as fraud or collusion were made out (Paras 5-7).
B) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Auction Sale - Section 13(4) read with Rule 9 of the Security Interest (Enforcement) Rules, 2002 - Challenge to auction sale on grounds of inadequate publicity and undervaluation - Held that such factual disputes cannot be adjudicated in writ jurisdiction and must be raised before the DRT under Section 17 (Paras 4-6).
C) Limitation Act, 1963 - Section 29A - Applicability to proceedings under SARFAESI Act - Not mentioned in judgment - Not applicable.
Issue of Consideration
Whether the writ petition under Article 226 of the Constitution of India is maintainable to challenge the auction sale conducted under the SARFAESI Act, 2002, when the petitioner had an alternative efficacious remedy under Section 17 of the Act before the Debts Recovery Tribunal (DRT).
Final Decision
The Bombay High Court dismissed the writ petition, holding that the petitioner had an alternative efficacious remedy under Section 17 of the SARFAESI Act before the DRT, and no exceptional circumstances were made out to justify interference under Article 226. The court left it open to the petitioner to pursue her remedy before the DRT, and clarified that the auction purchaser's title would be subject to the outcome of the DRT proceedings.
Law Points
- SARFAESI Act
- Section 13(4) possession
- Section 14 magistrate assistance
- Section 17 DRT appeal
- Section 29A limitation
- Article 226 writ jurisdiction
- auction sale confirmation
- sale certificate
- fraud
- collusion
- alternative remedy
Case Details
2025 LawText (BOM) (10) 1
Writ Petition No. 9743 of 2024
Mr. Chhangur S. Chauhan for Petitioner, Mr. T.N. Tripathi a/w. Ms. Somya Tripathi for Respondent Nos. 1 and 2, Mr. Vipul Patil i/by Mr. Prashant Aher for Respondent No. 3
Buniya Devi Chauhan Through Power of Attorney Holder Dharmendra Shambhunath Chauhan
The General Manager, Central Bank of India and Ors.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition under Article 226 of the Constitution of India challenging the auction sale of property conducted under the SARFAESI Act, 2002.
Remedy Sought
Petitioner sought to set aside the auction sale and the sale certificate issued in favor of the auction purchaser (Respondent No. 3).
Filing Reason
Petitioner alleged that the bank did not give adequate publicity to the auction sale and that the property was sold at a grossly undervalued price.
Issues
Whether the writ petition under Article 226 is maintainable when the petitioner has an alternative efficacious remedy under Section 17 of the SARFAESI Act before the DRT.
Whether the auction sale conducted under the SARFAESI Act can be challenged on grounds of inadequate publicity and undervaluation in writ jurisdiction.
Submissions/Arguments
Petitioner argued that the bank did not give adequate publicity to the auction sale and that the property was sold at a grossly undervalued price, warranting interference under Article 226.
Respondents argued that the petitioner had an alternative efficacious remedy under Section 17 of the SARFAESI Act before the DRT, and that the writ petition was not maintainable. They also submitted that the petitioner had already filed an application under Section 17 before the DRT, which was pending.
Ratio Decidendi
A writ petition under Article 226 of the Constitution of India challenging an auction sale conducted under the SARFAESI Act is not maintainable when the petitioner has an alternative efficacious remedy under Section 17 of the Act before the Debts Recovery Tribunal, unless exceptional circumstances such as fraud or collusion are alleged and made out.
Judgment Excerpts
Heard Mr. Chauhan, learned Advocate for Petitioner, Mr. Tripathi, learned Advocate for Respondent Nos.1 and 2 and Mr. Patil, learned Advocate for Respondent No. 3.
Petitioner Buniya Devi Chauhan through her Power of Attorney Holder Dharmendra Shambhunath Chauhan has filed the present Petition under Article 226 of the Constitution of India challenging the auction sale conducted by Respondent No. 1 Bank under the SARFAESI Act, 2002.
It is not in dispute that the Petitioner has an alternative efficacious remedy under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal.
In the present case, the Petitioner has already availed the remedy under Section 17 by filing an application before the DRT, which is pending.
No exceptional circumstances such as fraud or collusion have been alleged or made out in the present case to justify interference under Article 226.
The writ petition is dismissed. It is open to the Petitioner to pursue her remedy before the DRT in accordance with law.
The auction purchaser's title shall be subject to the outcome of the DRT proceedings.
Procedural History
The petitioner filed a writ petition under Article 226 before the Bombay High Court challenging the auction sale conducted by the bank under the SARFAESI Act. The respondents opposed the petition on the ground of alternative remedy. The court heard the parties and dismissed the petition, allowing the petitioner to pursue the pending remedy before the DRT.
Acts & Sections
- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002: Section 13(4), Section 14, Section 17
- Security Interest (Enforcement) Rules, 2002: Rule 9
- Constitution of India: Article 226
