Case Note & Summary
The writ petition was filed by auction purchasers who had purchased a secured asset in an e-auction conducted by respondent No.2 bank under the SARFAESI Act. The property, land and structure at Gat No.2126, Survey No.101, Hissa No.4A, Village Nagaon, Taluka Alibag, District Raigad, was mortgaged by respondent No.3 as borrower, who defaulted on a term loan of Rs. 1.35 crores. After declaring the account as NPA, the bank took symbolic possession under Section 13(4) and sold the property to petitioner No.1 on 29.06.2021. A sale certificate was issued on 26.07.2021 and registered on 15.12.2021. Despite this, physical possession was not handed over. The borrower and guarantor (respondent Nos.3 and 4) filed a securitisation application before DRT on 11.08.2021, after the sale certificate issuance, seeking to declare the bank's actions illegal. The DRT did not grant any interim order. Meanwhile, the bank obtained an order from the District Magistrate under Section 14 on 02.02.2022 for physical possession, but it was not executed. The DRT proceedings saw repeated delays and dilatory conduct by the borrower, including belated applications. The DRT dismissed an interim application with costs in 2023 and rejected an amendment plea in 2024. A chain of litigation ensued, with the borrower appealing to DRAT and the petitioners filing writ petitions for expeditious disposal. Finally, on 29.05.2026, the DRT dismissed the securitisation application in its entirety, holding against the borrower on all issues. The borrower then filed an appeal before the DRAT, but again no interim stay operated. In this context, the petitioners filed the present writ petition seeking directions to the State authorities and the bank to hand over physical possession. The main legal issues were whether an auction purchaser can maintain a writ petition for possession and whether the right of redemption survived after the sale certificate and the amendment to Section 13(8). The petitioners argued that as holders of a registered sale certificate and a Section 14 order, they were entitled to possession, and that the Supreme Court's decisions in Celir LLP v. Bafna Motors and M. Rajendran v. KPK Oils clarified that redemption right extinguishes. They also contended that the borrower's dilatory tactics and the absence of any stay order necessitated the court's intervention. The borrower contested maintainability, citing ITC Ltd. v. Blue Coast Hotels, asserting that only the secured creditor could seek enforcement of the Section 14 order. The bank supported the petitioners. After hearing arguments, the court's order was not included in the provided text. (Note: The judgment extract ends mid-argument; the final decision is not available.)
Headnote
A) SARFAESI Act - Auction Purchaser's Rights - Maintainability of Writ Petition for Possession - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, Sections 13, 14 - Auction purchaser with registered sale certificate and Section 14 order sought physical possession; borrower argued only secured creditor can file such petition; petitioners cited ITC Ltd. v. Blue Coast Hotels Ltd. (2018) 15 SCC 99 and submitted that auction purchasers are not barred. (Paras 14, 18, 21) B) SARFAESI Act - Right of Redemption - Section 13(8) - Redemption after sale certificate - Petitioners relied on Celir LLP v. Bafna Motors (2024) 2 SCC 1 and M. Rajendran v. KPK Oils (2026) 3 SCC 505 to argue that right of redemption extinguishes upon issuance of sale certificate, especially after amendment to Section 13(8). (Paras 16-17) C) SARFAESI Act - Dilatory Conduct of Borrower - Effect on Possession - Securitisation Application No. 76 of 2021 dismissed by DRT on 29.05.2026 after observing dilatory tactics; despite no interim order, borrower continued in possession, and petitioners sought enforcement of Section 14 order. (Paras 6-8, 11-12) D) Constitutional Law - Writ Jurisdiction - Expediting Tribunal Proceedings - High Court in WP No. 15640 of 2025 directed DRT to decide securitisation application by 26.02.2026, noting no interim order operated; DRT dismissed the application on 29.05.2026 after extensions. (Paras 10-11)
Issue of Consideration
Whether an auction purchaser under the SARFAESI Act is entitled to maintain a writ petition seeking physical possession of the secured asset in view of the registered sale certificate and the Magistrate's order under Section 14, especially when the borrower's securitisation application has been dismissed and an appeal is pending?
Law Points
- Auction purchaser's right to seek possession under SARFAESI
- maintainability of writ petition by auction purchaser
- extinguishment of right of redemption after sale certificate
- enforcement of Magistrate's order under Section 14
