SARFAESI transfer after notice is void; bank may proceed with possession and e-auction despite the challenged sale deed.

A sale deed executed after initiation of proceedings under the SARFAESI Act was treated as void because Section 13(13) bars transfer of secured assets without the secured creditor's prior written consent, so no right, title or interest passed to the transferee. On that basis, the DRT ought not to have entertained the securitisation application or restrained the bank's recovery steps, as the transferee had no locus to challenge proceedings founded on a void transaction. The District Magistrate's possession order under Section 14 was found unobjectionable, and the bank's symbolic and physical possession supported its right to proceed with the e-auction. The alternative appeal remedy was considered unavailable in the circumstances, so writ jurisdiction was exercised and the DRT order was quashed.

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Issues: Whether a transferee who purchased mortgaged property after initiation of SARFAESI proceedings could maintain a securitisation application and obtain interim restraint against the secured creditor from proceeding with auction, and whether the writ petition deserved interference despite an asserted alternative remedy.

Analysis: The secured asset had been mortgaged to secure the bank's dues, notice under section 13(2) had already been issued, and the subsequent sale in favour of the transferee was executed thereafter without the secured creditor's prior written consent. In such a situation, section 13(13) prohibited transfer of the secured asset after receipt of the demand notice, and any such transfer was treated as void and incapable of conferring rights on the transferee. The Court also found that the challenge to the bank's measures was not available at the instance of a transferee claiming under a void post-notice sale, and the Tribunal had erred in granting interim protection against auction. The objection based on alternative remedy was also rejected in the facts of the case, and writ jurisdiction was exercised.

Conclusion: The transferee had no enforceable right to restrain the secured creditor from auctioning the mortgaged property, and the interim order of the Tribunal was quashed while the bank was permitted to proceed with the auction.

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