Writ jurisdiction and auction-payment delay relief applied where a one-day default did not justify forfeiture or cancellation.

Availability of an alternate remedy under Section 17 of the SARFAESI Act was not treated as an absolute bar to writ jurisdiction where the petition had already been entertained at the interim stage and pleadings were complete, so the objection was rejected. Rule 9(3) of the Security Interest (Enforcement) Rules was regarded as mandatory, but a one-day delay in depositing the balance sale consideration was relieved against in light of Covid-19 disruption, the equities of recovery, and the absence of any better realisation from cancellation. The forfeiture of earnest money and cancellation of the auction sale were therefore set aside, and the petitioner was directed to complete payment with interest.

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Issues: (i) Whether the writ petition was liable to be rejected on the ground of availability of an alternative remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. (ii) Whether the one-day delay in depositing the balance sale consideration under Rule 9(3) of the Security Interest (Enforcement) Rules, 2002 justified forfeiture of the earnest money and cancellation of the auction sale.

Issue (i): Whether the writ petition was liable to be rejected on the ground of availability of an alternative remedy under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Analysis: The writ petition had already been entertained at the interim stage and pleadings were exchanged. In that situation, relegating the petitioner to the statutory remedy at the final stage was held to be inequitable. The availability of the alternative remedy was therefore not treated as an absolute bar to the exercise of writ jurisdiction on the facts of the case.

Conclusion: The objection based on alternate remedy was rejected.

Issue (ii): Whether the one-day delay in depositing the balance sale consideration under Rule 9(3) of the Security Interest (Enforcement) Rules, 2002 justified forfeiture of the earnest money and cancellation of the auction sale.

Analysis: Rule 9(3) was treated as mandatory, but the Court balanced that mandate against the extraordinary conditions created by the Covid-19 pandemic and the surrounding disruption. The delay was only of one day, and the Court found that the equities of the case, the public financial institution's interest in recovery, and the absence of any likelihood of a better realisation justified relief rather than forfeiture. The sale was therefore not sustained as cancelled on account of the short default, and interest was directed on the delayed balance amount as a balancing measure.

Conclusion: The forfeiture and cancellation were set aside and relief was granted to the petitioner, subject to payment of the balance amount with interest.

Final Conclusion: The petition succeeded on merits, with the impugned forfeiture and sale notice quashed and the petitioner directed to complete payment within the time fixed by the Court along with interest.

Ratio Decidendi: A short and bona fide delay in complying with the auction-payment timeline may be relieved against in writ jurisdiction where exceptional circumstances and the balance of equities justify intervention, even though the underlying rule is mandatory in terms.

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