Statutory remedy bars writ challenge to secured asset sale; undervaluation alone did not make the transaction a nullity.

An efficacious statutory remedy under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ordinarily bars writ intervention in challenges to secured asset sales based on undervaluation, especially where disputed factual questions arise; the petitions were therefore not maintainable and the parties were left to pursue the statutory mechanism. A sale conducted under the Securitisation Act was also not rendered a nullity merely because a Gujarat High Court ruling on section 23 of the Contract Act had reached a different result on materially distinct facts involving assignment of debts. The alleged undervaluation did not invalidate the sale, while claims to participate in sale proceeds were preserved under the pari passu distribution mechanism.

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Issues: (i) Whether the writ petitions were maintainable in view of the efficacious statutory remedy available under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (ii) Whether the sale of the secured assets was a nullity in law or rendered unlawful by the Gujarat High Court decision based on section 23 of the Indian Contract Act, 1872.

Issue (i): Whether the writ petitions were maintainable in view of the efficacious statutory remedy available under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: The petitions challenged the sale on the ground of undervaluation, but the petitioners had already invoked, or were entitled to invoke, the statutory mechanism under the Securitisation Act. The existence of that remedy, coupled with the fact that the grievance related to disputed questions of fact, weighed against the exercise of extraordinary writ jurisdiction. The Court treated the statutory remedy as adequate for examining the sale challenge.

Conclusion: The writ petitions were not maintainable on this ground and the petitioners were left to pursue the statutory remedy.

Issue (ii): Whether the sale of the secured assets was a nullity in law or rendered unlawful by the Gujarat High Court decision based on section 23 of the Indian Contract Act, 1872.

Analysis: The Gujarat decision concerned a different transaction involving assignment of debts and the Court found that the factual and legal setting there was materially distinct from the present sale under the Securitisation Act. The present transaction involved enforcement and sale of mortgaged assets under the statutory framework, so the reasoning that had led to the finding under section 23 of the Contract Act did not govern the present facts. The alleged undervaluation did not make the sale void or a nullity.

Conclusion: The impugned sale was not a nullity and the Gujarat High Court ruling did not assist the petitioners.

Final Conclusion: The petitions failed on maintainability and on merits, while the workers' claim to participate in the sale proceeds remained preserved in accordance with the statutory pari passu distribution mechanism and the Official Liquidator was directed to process such claims expeditiously.

Ratio Decidendi: Where an efficacious statutory remedy exists under the Securitisation Act, a writ petition challenging a secured asset sale on valuation grounds will ordinarily not be entertained, and a transaction conducted under that statutory scheme is not rendered void merely because a different assignment-based precedent under the Contract Act was decided on distinguishable facts.

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