Exclusive SARFAESI remedy bars company court challenge to sale; grievance must be taken to the Debts Recovery Tribunal

Where a secured asset is sold under the SARFAESI Act, the official liquidator must be informed at the relevant stages, but any challenge to irregularity in the sale has to be taken under the statutory remedy before the Debts Recovery Tribunal. The special remedy under section 17 is exclusive, so the company court cannot be invoked to set aside or confirm the sale when that remedy is available. The text also notes that limitation was not pressed against the official liquidator for filing the tribunal appeal.

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Issues: Whether the official liquidator could seek setting aside of the SARFAESI sale before the company court, or was required to challenge the sale before the Debts Recovery Tribunal under the statutory remedy.

Analysis: The sale of the secured assets was undertaken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The decision follows the settled principle that, where a sale is conducted under that special statute, the official liquidator must be informed at the relevant stages, but any grievance regarding irregularity in the sale has to be pursued through the statutory appellate mechanism under section 17 of that Act. The remedy under the special enactment is exclusive, and the company court cannot be invoked to set aside the sale or its confirmation when that statutory remedy is available. The Court also accepted the request that limitation would not be pressed against the official liquidator for filing the appeal before the Tribunal.

Conclusion: The official liquidator was relegated to the Debts Recovery Tribunal and could not maintain a direct challenge to the SARFAESI sale before the company court.

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