A pending Section 17 challenge does not bar possession delivery to a registered SARFAESI auction purchaser.

Canara Bank sold the disputed property through a SARFAESI e-auction, and respondent no. 10 claimed to be the successful bidder. A registered sale deed was executed in her favour on 3 July 2020.

After proceedings under Section 14 of the SARFAESI Act, she sought physical possession through a writ petition. The Single Judge allowed the petition and directed the District Magistrate to facilitate possession, notwithstanding the appellant’s pending challenge before the Debts Recovery Tribunal (DRT).

The appellant challenged that order, alleging defects in the auction process and disputing whether his residential property had been validly mortgaged; he also relied on the pending S.A. No. 40 of 2020 before the DRT.

1. Whether the Single Judge’s direction to facilitate delivery of physical possession to the auction purchaser suffered from illegality, perversity, or infirmity warranting appellate interference

2. Whether the appellant’s challenges to the SARFAESI proceedings and auction sale should be examined in the appeal, despite the pending statutory proceedings before the DRT

Section 14 of the SARFAESI Act provides a mechanism for a secured creditor to seek the District Magistrate’s assistance in obtaining possession of secured assets. Section 17 provides a statutory remedy before the DRT to challenge measures taken under the Act.

In ITC Ltd. v. Blue Coast Hotels Ltd., (2018) 15 SCC 99, the Supreme Court considered the Section 14 possession mechanism. In Celir LLP v. Bafna Motors (Mumbai) Pvt. Ltd., (2024) 2 SCC 1, the Supreme Court held, among other things, that writ jurisdiction should not ordinarily be exercised where borrowers have availed the alternative remedy under Section 17, and addressed the rights arising from a confirmed SARFAESI sale.

The Court treated the appeal as concerning the direction for delivery of possession, not the merits of the underlying SARFAESI action. It noted that the sale had culminated in a registered sale deed in favour of the auction purchaser and regarded possession as consequential to that sale.

The appellant’s objections—including the validity of the mortgage and auction—were already before the DRT and could be pursued through the Section 17 remedy. The Court therefore declined to determine those matters in the appeal and found no basis to interfere with the Single Judge’s possession direction.

The Letters Patent Appeal was dismissed, and any pending applications were disposed of.