G. VIKRAM KUMAR versus STATE BANK OF HYDERABAD & ORS.

Citation: [2023] 5 S.C.R. 624 · Decided: 02-05-2023 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2023] 5 S.C.R.
   [2023] 5 S.C.R. 624
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G. VIKRAM KUMAR
v.
STATE BANK OF HYDERABAD & ORS.
(Civil Appeal Nos.3152–3153 of 2023)
MAY 02, 2023
[M. R. SHAH AND C. T. RAVIKUMAR, JJ. ]
Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 : ss. 13, 17 –
Enforcement of security interest – Application against measures
to recover secured debts – On facts, initiation of proceedings u/
s 13 by the Bank against the borrower and attachement of the
properties of the borrower – Tribunal allowed the Bank to go
ahead with the sale excluding seven flats identified by the
borrower – However, Flat No.6401 was not amongst the said
seven flats – Borrower entered into an agreement to sale of Flat
No.6401 with the respondent no. 1 without informing tribunal
and the Bank – Thereafter, properties of borrower including Flat
no. 6401 subjected to e-auction by Bank – Borrower sought stay
on all proceedings of Bank, however, the tribunal rejected the
same – E-auction conducted by the Bank – Appellant declared
successful bidder with respect to Flat No.6401 and paid 25% of
the bid amount – Writ petition by the respondent no. 1 challenging
the e-auction notice as regards flat No. 6401, after the auction
was conducted – High Court stayed the auction qua Flat No.
6401 subject to respondent no. 1 paying the required amount to
the Bank – Appellant then sought setting aside of sale in favour
of respondent no. 1, however, the High Court allowed the writ
petition in favour of respondent no.1 – Review application there
against dismissed – On appeal, held: Against any steps taken by
the Bank u/s.13(4), the aggrieved party has a remedy under the
SARFAESI Act by way of appeal u/s. 17 to approach the DRT –
In view of the availability of the alternative statutory remedy
available by way of proceedings/appeal u/s. 17, the High Court
erred in entertaining the writ petition u/Art. 226 in which the e-
auction notice was under challenge – Moreover, the transaction
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in favour of the respondent no. 1 with respect to Flat no.6401
was already held to be void by the DRT – If the respondent no. 1
would have approached the DRT against the e–auction notice he
would have been non-suited in view of the earlier order passed by
the DRT – Therefore, calculatively the respondent no. 1 filed the
writ petition before the High Court challenging the e-auction notice
and that too after conducting of the e-auction and the sale in favour
of the appellant was confirmed – Respondent no. 1 and/or his heirs
cannot be permitted to get the benefit of his own wrong and cannot
be permitted to get the benefit of a void transaction – Thus, the
impugned judgment and order passed by the High Court is
unsustainable – Constitution of India – Art. 226.
Allowing the appeals, the Court
HELD: 1.1 What was challenged before the High Court by
respondent no.1 in a writ petition under Article 226 of the
Constitution of India was the e–auction notice which was pursuant
to the action initiated by the Bank in exercise of powers under
Section 13(4) of the SARFAESI Act. Against any steps taken by
the Bank under Section 13(4) of the SARFAESI Act the aggrieved
party has a remedy under the SARFAESI Act by way of appeal
under Section 17 of the SARFAESI Act to approach the DRT.
Therefore, in view of the availability of the alternative statutory
remedy available by way of proceedings/appeal under Section 17
of the SARFAESI Act, the High Court ought not to have
entertained the writ petition under Article 226 of the Constitution
of India in which the e-auction notice was under challenge.
Therefore, the High Court has committed a very serious error in
entertaining the writ petition under Article 226 of the Constitution
of India challenging the e-auction notice issued by the Bank in
exercise of power under Section 13(4) of the SARFAESI Act.
[Para 8][635-B, C-E]
1.2. The flat in question namely Flat No.6401 was not the
seven flats identified by the borrower to be kept out of the
auction proceedings. At the relevant time the flat in question
was not sold amongst the seven flats mentioned before the
tribunal. That thereafter during the pendency of the S.A.
G. VIKRAM KUMAR v. STATE BANK OF HYDERABAD &
ORS.
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SUPREME COURT REPORTS
[2023] 5 S.C.R.
No.253 of 2012 and without obtaining prior approval and/or
intimation to the DRT and even the bank, the borrower entered
into the sale agreement with the resp

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