SARFAESI sale disclosure duties: writ review may be available where a secured creditor fails to reveal encumbrances and title defects.

A writ petition may be entertained despite an available Debts Recovery Tribunal remedy where the grievance concerns a secured creditor's failure to follow mandatory SARFAESI sale procedure rather than the core enforcement dispute. The note explains that, for sale of immovable secured assets, the creditor must disclose known encumbrances and material title defects even when the property is sold on an "as is where is" basis. It also states that non-disclosure, inadequate due diligence, and defective certification can justify writ intervention, particularly where the purchaser acted in good faith and suffered prejudice.

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Issues: (i) Whether the writ petition was maintainable despite the availability of proceedings before the Debts Recovery Tribunal under the SARFAESI framework. (ii) Whether the secured creditor failed to comply with the mandatory disclosure and sale requirements governing sale of immovable secured assets, justifying quashing of the sale certificate and consequential reliefs.

Issue (i): Whether the writ petition was maintainable despite the availability of proceedings before the Debts Recovery Tribunal under the SARFAESI framework.

Analysis: The dispute concerned the auction purchaser's grievance against the secured creditor for selling a property without disclosing material encumbrances and for continuing to enforce loan obligations despite failure to deliver clear title and possession. The proceedings before the Debts Recovery Tribunal related to competing claims between financial institutions over the secured asset and did not adjudicate the petitioner's grievance arising from the post-auction home loan transaction. The matter was held to fall outside the core enforcement proceedings under the SARFAESI framework. The case was also treated as falling within the exceptional category where writ jurisdiction may be exercised notwithstanding an alternate remedy, because the bank had acted contrary to the governing statutory procedure and in disregard of mandatory obligations.

Conclusion: The writ petition was maintainable, and the objection based on alternate remedy failed.

Issue (ii): Whether the secured creditor failed to comply with the mandatory disclosure and sale requirements governing sale of immovable secured assets, justifying quashing of the sale certificate and consequential reliefs.

Analysis: The auction notice and sale certificate showed that the property was offered on an "as is where is" basis, but the bank was still required to disclose known encumbrances and any other material information affecting the purchaser's judgment. The record showed that the petitioner was sold a property already claimed by another purchaser and that the sale notice did not adequately disclose the existing encumbrance or title defect. The mandatory sale conditions under the Security Interest (Enforcement) Rules required disclosure of encumbrances, due diligence before sale, and proper certification of the status of the property. The bank's failure to do so was treated as a serious procedural lapse causing prejudice to the petitioner and resulting in unjust enrichment at his expense.

Conclusion: The sale certificate was quashed, the amount paid by the petitioner was directed to be refunded with interest, the loan account was directed to be foreclosed, the account freeze was directed to be removed, and costs were awarded against the bank.

Final Conclusion: The petitioner succeeded in obtaining writ relief because the secured creditor's sale process was found to be materially defective and non-compliant with the mandatory disclosure obligations governing sale of secured assets.

Ratio Decidendi: A writ court may intervene despite an alternate remedy where the secured creditor's sale of an immovable secured asset is vitiated by failure to disclose known encumbrances and to comply with the mandatory sale procedure, especially when the purchaser has acted in good faith and suffered prejudice as a result.

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