Statutory remedy under SARFAESI bars writ challenge to auction, and a void agreement to sell cannot defeat sale completion.

Writ jurisdiction under Article 226 was not to be used to challenge SARFAESI measures under Section 13(4) when an efficacious statutory remedy under Section 17 was available, so the auction challenge could not be sustained in writ proceedings. A claimant under an agreement to sell executed during pending tribunal proceedings, without permission of the bank or tribunal and treated as void, could not invoke Section 13(8) to obstruct a completed auction. The auction purchaser's entitlement to completion of sale was upheld, and the amounts deposited by the writ petitioner were directed to be returned with interest.

---

---

Issues: (i) Whether a writ petition under Article 226 of the Constitution of India was maintainable against an auction notice issued in exercise of powers under Section 13(4) of the SARFAESI Act, 2002 when a statutory remedy under Section 17 of that Act was available. (ii) Whether an agreement to sell holder could invoke Section 13(8) of the SARFAESI Act, 2002 to obstruct the auction, especially where the underlying transaction was entered into without the permission of the Bank or the Tribunal and had been treated as void.

Issue (i): Whether a writ petition under Article 226 of the Constitution of India was maintainable against an auction notice issued in exercise of powers under Section 13(4) of the SARFAESI Act, 2002 when a statutory remedy under Section 17 of that Act was available.

Analysis: The challenge before the High Court was to measures taken by the Bank under Section 13(4) of the SARFAESI Act, 2002. The statutory scheme provided an efficacious remedy under Section 17 before the Debts Recovery Tribunal. The auction had already taken place and the writ petition was filed thereafter, yet the High Court entertained it. In the presence of the special remedy under the SARFAESI Act, recourse to writ jurisdiction was not warranted on the facts of the case.

Conclusion: The writ petition ought not to have been entertained and the challenge to the auction notice could not be sustained in writ jurisdiction.

Issue (ii): Whether an agreement to sell holder could invoke Section 13(8) of the SARFAESI Act, 2002 to obstruct the auction, especially where the underlying transaction was entered into without the permission of the Bank or the Tribunal and had been treated as void.

Analysis: The agreement to sell in favour of the original writ petitioner was executed during pending proceedings before the Tribunal, with knowledge of those proceedings, and without prior permission of the Bank or the Tribunal. The Tribunal had already recorded that such transaction was void. The Court also noted that the auction purchaser had participated in the sale and deposited the required amount, while the original writ petitioner had not secured any valid right to defeat the auction by relying on Section 13(8). The Court further held that the benefit of a void transaction could not be claimed by the writ petitioner or his heirs.

Conclusion: Section 13(8) did not assist the agreement to sell holder, and the auction could not be stalled on that basis.

Final Conclusion: The High Court's order was unsustainable; the auction purchaser was entitled to completion of the sale upon payment of the balance consideration, and the amounts deposited by the writ petitioner were directed to be returned with interest.

Ratio Decidendi: Where an efficacious statutory remedy exists under the SARFAESI Act, writ jurisdiction should not be used to challenge measures under Section 13(4), and a person claiming only under a void agreement to sell cannot invoke Section 13(8) to defeat a completed auction process.

---