Writ jurisdiction is unavailable where SARFAESI provides an effective alternative remedy.

The respondent Bank issued an e-auction notice under the SARFAESI Act, 2002, for sale of immovable property measuring six dhurs in Begusarai, with the auction scheduled for 23 March 2020.

The petitioner emerged as the highest bidder for ₹13,12,000 and deposited 25% of the bid amount, i.e., ₹3,28,000.

He failed to deposit the remaining 75% within the stipulated 15-day period, attributing the default to the COVID-19 pandemic; consequently, the auction sale was cancelled.

The Bank treated the deposited amount as forfeited under Rule 9(5) of the Security Interest (Enforcement) Rules, 2002.

The petitioner sought refund through a representation dated 22 September 2021, but the amount was not refunded, leading him to invoke Article 226 of the Constitution seeking refund and penal interest.

Whether the petitioner was entitled to a writ directing the Bank to refund ₹3,28,000 deposited towards the e-auction sale.

Whether the writ petition under Article 226 was maintainable when an alternative statutory remedy was available under the SARFAESI framework.

Whether the petitioner could be permitted to approach the appropriate statutory forum, subject to consideration of limitation in accordance with law.

Rule 9(3) of the Security Interest (Enforcement) Rules, 2002 requires the successful auction purchaser to deposit 25% of the sale price, inclusive of the earnest money deposit; Rule 9(4) requires payment of the balance sale consideration within the prescribed period; and Rule 9(5) permits forfeiture of the deposited amount upon failure to comply.

The Court relied on United Bank of India v. Satyawati Tondon, (2010) 8 SCC 110, which holds that the High Court should ordinarily decline Article 226 relief where an effective statutory remedy exists, particularly in matters concerning bank dues and recovery of public money.

It further relied on Celir LLP v. Bafna Motors (Mumbai) (P) Ltd., (2024) 2 SCC 1, and PHR Invent Educational Society v. UCO Bank & Ors., 2024 INSC 297, reiterating that writ jurisdiction should not ordinarily be exercised where an effective remedy is available under the SARFAESI Act.

The Court noted that the Bank’s counter-affidavit disclosed that the petitioner had failed to deposit the remaining 75% of the sale price within the period prescribed under Rule 9(4), and that the Bank had consequently forfeited the amount under Rule 9(5).

However, rather than adjudicating the petitioner’s substantive entitlement to refund, the Court focused on the availability of an alternative statutory remedy.

Since the dispute arose out of the Bank’s SARFAESI auction process and involved a private dispute between the petitioner and the Bank, the principles in Satyawati Tondon, Celir LLP, and PHR Invent Educational Society applied against the exercise of writ jurisdiction.

The Court therefore held that the petitioner should first approach the appropriate statutory forum.

The Court disposed of the petition without granting the refund or penal interest sought, while granting the petitioner liberty to approach the appropriate forum.

The concerned authority was directed to consider the issue of limitation in accordance with law.