Judicial review of secured asset sales is limited where a transparent process secures the best price and no mala fides are shown.

A State Financial Corporation's sale of secured assets under section 29 was upheld where the process was transparent, aimed at securing the best price, and conducted without statutory violation, mala fides, or manifest unreasonableness. Judicial review under article 226 does not permit the High Court to act as an appellate authority over the Corporation's commercial choice of sale method, and public auction is not the only permissible mode; tender or negotiation may also be used. On the facts, the Corporation had advertised the sale, continued efforts over time, and gave the borrower an opportunity to match the purchaser's offer, but the borrower did not comply within time. The High Court's direction to redo the sale process was therefore set aside.

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Issues: Whether the State Financial Corporation's sale of the borrower's unit under section 29 was bona fide and legally valid, and whether the High Court could direct a fresh sale process on the ground of non-compliance with earlier sale guidelines.

Analysis: The statutory power under section 29 permits the Corporation, upon default, to take over and sell the secured assets to realise its dues. In judicial review under article 226, the High Court does not function as an appellate authority over the Corporation's commercial decisions, and interference is confined to cases of statutory violation, mala fide action, or unreasonableness. The governing principle is to secure the best price through a transparent process with maximum possible public participation; public auction is not the only permissible mode, and tender or negotiation may also be adopted. The earlier guidelines relied on by the High Court had been displaced by later decisions, which emphasised the limited scope of interference in such matters. On the facts, the Corporation had issued advertisements, pursued the sale over time, and afforded the borrower an opportunity to match the purchaser's offer, but the borrower failed to comply within time. In those circumstances, the sale in favour of the purchaser could not be invalidated merely because the High Court preferred a different approach to the sale process.

Conclusion: The Corporation's action was held to be bona fide, and the sale in favour of the purchaser was held valid and legal. The High Court's direction to redo the sale process was set aside.

Ratio Decidendi: In judicial review of a financial corporation's sale of secured assets under section 29, interference is permissible only for statutory violation, mala fide action, or manifest unreasonableness, and a sale made through a transparent process aimed at obtaining the best price will not be disturbed merely because another method might have been preferable.

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