Writ jurisdiction cannot adjudicate disputed title and fraud claims arising from SARFAESI auction sales.

The appellants participated in an e-auction conducted by Canara Bank on 17 February 2024 and were declared successful bidders for property offered on an “as is where is” and “what is where is” basis.

After payment of ₹1,49,95,000/-, the Bank issued a sale certificate dated 26 February 2024, which was registered on 18 April 2024.

Subsequently, while seeking municipal mutation, the appellants discovered that the borrower’s title was allegedly defective and that the property had previously been conveyed to Respondent No. 8 by a registered deed dated 7 June 2019.

The learned Single Judge dismissed the writ petition, holding that the SARFAESI Act provided an efficacious alternative remedy before the Debts Recovery Tribunal and that the dispute involved mixed questions of law and fact.

Whether the learned Single Judge erred in refusing to exercise jurisdiction under Article 226 of the Constitution on the ground that the appellants had an alternative remedy under Section 17 of the SARFAESI Act.

Whether the appellants’ entitlement to refund required adjudication of disputed questions concerning the borrower’s title, the validity of the equitable mortgage, the Bank’s authority to conduct the auction, and the alleged fraud or misrepresentation.

Whether the discrepancies between the descriptions of the properties in the relevant conveyances and the auction documents prevented determination of title and identity of the property in writ proceedings.

Whether the appellants’ delay in approaching the writ court, despite issuance and registration of the sale certificate in 2024, justified dismissal of the writ petition.

The Court applied the principle that the SARFAESI Act is a complete statutory code and that Section 17 provides an alternative remedy before the Debts Recovery Tribunal to a person aggrieved by measures taken under the Act; writ jurisdiction under Article 226 should ordinarily not be exercised where adjudication requires evidence and determination of disputed questions of law and fact.

The Court relied on United Bank of India v. Satyawati Tondon, Agarwal Tracom Pvt. Ltd. v. Punjab National Bank, Whirlpool Corporation v. Registrar of Trade Marks, Godrej Sara Lee Ltd. v. Excise and Taxation Officer, State of U.P. v. Mohammad Nooh, Mr. Mandava Krishna Chaitanya v. UCO Bank and K.C. Ninan v. Kerala State Electricity Board concerning the limits and exceptions of writ jurisdiction where an alternative statutory remedy exists.

It further applied the principles that a registered conveyance carries a presumption of validity and cannot ordinarily be cancelled or declared invalid in writ proceedings; municipal mutation does not create or establish title; and the “as is where is” stipulation places the auction purchaser on notice that the secured creditor does not assume responsibility for the property’s condition, title or attached liabilities.

The Court held that the appellants’ claim for refund could not be decided without first determining whether Respondent No. 7 acquired valid title under the registered deed dated 25 November 2021, whether Respondent No. 8 had a superior title under the earlier conveyance, and whether the Bank obtained a valid security interest.

These questions required examination of the competing conveyances and other evidence, which was beyond the proper scope of writ jurisdiction.

The Court also found material discrepancies in the descriptions of the property: one deed described a residential flat, another described commercial space, while the auction documents referred to a larger parcel of homestead land.

Consequently, the Court could not determine in summary proceedings whether the properties were identical or whether the mortgage and auction sale were void.

The allegation of fraud likewise required evidence and could not be inferred merely from the appellants’ assertions.

Further, the appellants approached the writ court approximately two years after issuance of the sale certificate and nearly two years after its registration, without explaining the delay or showing that their possession had been disturbed by Respondent No. 8.

The “as is where is” clause and the availability of the statutory remedy under Section 17 reinforced the conclusion that the dispute should not be adjudicated in writ proceedings.

It held that the writ petition involved disputed questions of title, identity of the property, validity of the mortgage, legality of the auction sale and alleged fraud, all of which required adjudication on evidence before the appropriate statutory forum.

The learned Single Judge was therefore correct in declining to exercise Article 226 jurisdiction on account of the alternative remedy under Section 17 of the SARFAESI Act and the unexplained delay.

The impugned order was upheld, and the appeal along with the connected application was dismissed.