Dismissal of Writ Petition for Sale Certificate Challenge under SARFAESI Act

The High Court of Madras dismissed the Writ Petition challenging a Sale Certificate issuance, as the petitioner failed to exhaust the remedy of appealing under Section 17 of the SARFAESI Act. The Court emphasized the necessity of utilizing statutory remedies before resorting to Writ Petitions, citing relevant precedents and a recent Supreme Court decision. The dismissal was in line with established legal principles, highlighting the importance of adhering to statutory procedures before seeking judicial intervention.

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Issues:
Challenge to Sale Certificate due to pending insolvency petition. Entertaining Writ Petition without exhausting SARFAESI Act appeal remedy.

The High Court of Madras, comprising Hon'ble Mrs. V.K. Tahilramani, Chief Justice, and Hon'ble Mr. Justice M. Duraiswamy, addressed a Writ Petition seeking the quashing of a Sale Certificate issued by the 2nd respondent in favor of the 3rd respondent. The petitioner contended that the Sale Certificate should be set aside due to a pending Insolvency Petition filed by the 1st respondent. The property was auctioned and the Sale Certificate issued for defaulting on a loan repayment to the 2nd respondent bank.

The Court noted that the petitioner failed to challenge the Sale Certificate before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act. Citing precedents, including judgments by the Supreme Court in cases like Authorized Officer, State Bank of Travancore vs. Mathew K.C., and Agarwal Tracom Pvt. Ltd. vs. Punjab National Bank, it was highlighted that aggrieved parties must exhaust appeal remedies before resorting to Writ Petitions under Article 226 of the Constitution of India.

Referring to a recent Supreme Court decision in ICICI Bank Ltd. vs. Umakanta Mohapatra, the Court reiterated that High Courts should not entertain matters falling under the SARFAESI Act without exhausting statutory remedies. The Supreme Court emphasized that filing a Writ Petition without utilizing the available remedies under the SARFAESI Act and Recovery of Debts Due to Banks and Financial Institutions Act is not maintainable.

Consequently, the High Court of Madras, in line with the Supreme Court's directives and legal principles, dismissed the Writ Petition as the petitioner failed to exhaust the alternate remedy by appealing under Section 17 of the SARFAESI Act. The Court emphasized adherence to the established legal principles and declined to entertain the petition, resulting in the dismissal of the Writ Petition without costs. Subsequently, the connected miscellaneous petitions were closed.

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