Private treaty sale under SARFAESI requires written terms and valid consent; noncompliance can justify writ relief and restitution.

Writ jurisdiction under Article 226 was held maintainable despite the SARFAESI remedy because the challenge concerned alleged non-compliance with statutory sale procedure and natural justice, and the jurisdiction objection had not been effectively raised earlier. A private treaty sale of secured assets was invalid where no written terms or valid written consent/authorisation was established, and the sale certificate issued on that basis also failed. As the sale could not be sustained, restitutionary relief was granted by directing refund of the purchase amount with interest and return of possession to the bank upon refund, while substantially upholding the single judge's view on invalidity.

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Issues: (i) Whether the writ petition was maintainable under Article 226 of the Constitution of India notwithstanding the remedy under the SARFAESI Act; (ii) Whether the alleged private treaty sale and issuance of the sale certificate were valid in the absence of written terms and proper consent under the SARFAESI Rules; (iii) Whether the auction purchasers were entitled to consequential restitutionary relief.

Issue (i): Whether the writ petition was maintainable under Article 226 of the Constitution of India notwithstanding the remedy under the SARFAESI Act.

Analysis: The existence of an alternative remedy does not, by itself, bar writ jurisdiction where the secured creditor is alleged to have acted without following the statutory procedure and in breach of natural justice. The challenge was not merely to a recovery step in the abstract, but to the manner in which the sale certificate was issued and the private sale was concluded. The Court also noted that the jurisdiction objection had not been effectively raised before the writ court.

Conclusion: The writ petition was maintainable and the objection based on alternative remedy was rejected.

Issue (ii): Whether the alleged private treaty sale and issuance of the sale certificate were valid in the absence of written terms and proper consent under the SARFAESI Rules.

Analysis: Sale by private treaty is permissible only when the terms are settled between the parties in writing. The materials did not establish any written treaty or valid written authorisation by the borrowers for the sale as concluded by the bank. The record showed the borrowers' presence before the bank on the relevant date, and the reliance on an alleged agent was not proved. The procedural requirements governing sale of secured assets were therefore not complied with.

Conclusion: The private treaty sale and the consequent sale certificate were held to be invalid.

Issue (iii): Whether the auction purchasers were entitled to consequential restitutionary relief.

Analysis: Since the sale in favour of the purchasers could not be sustained, the Court moulded relief to prevent unjust enrichment and to restore the parties to the extent possible by directing refund of the purchase amount with interest and delivery of possession to the bank upon refund.

Conclusion: Consequential restitutionary relief was granted in favour of the auction purchasers.

Final Conclusion: The judgment of the single judge was substantially upheld on the invalidity of the private treaty sale, but was modified to provide restitution to the auction purchasers, resulting in a partial allowance of the appeal.

Ratio Decidendi: A private treaty sale of secured assets is valid only when the terms are settled between the parties in writing and the statutory procedure is strictly followed; where such compliance is absent, writ jurisdiction may be invoked despite an alternative remedy.

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