LexGBJ HOTELS PRIVATE LIMITED versus SRIHARAN SRIPATHMANATHAN & ORS.
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[2025] 4 S.C.R. 2444 : 2025 INSC 585 GBJ Hotels Private Limited v. Sriharan Sripathmanathan & Ors. (Special Leave Petition (C) No. 7301 of 2025) 28 April 2025 [Dipankar Datta and Manmohan, JJ.] Issue for Consideration During the proceedings before the High Court, the Court accepted a better price for the creditor. The offer of the GRT Hotels was accepted by Edelweiss ARCL and it was agreed that the amount deposited of GBJ Hotels would be returned. Aggrieved, GBJ Hotels filed this petition primarily on the ground that sanctity of the auction under the SARFAESI Act has been breached in the process. Headnotes† Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – Debt Recovery – Auction – Respondents no.1 and 2 committed default in repayment of their dues – Respondents owed Rs.135 crore approx. to Edelweiss ARCL – In proceedings under the SARFAESI Act, 2002, an auction was conducted – Bid of GBJ Hotels for a sum of Rs.108 crores was accepted by Edelweiss ARCL – Before the High Court, a third party (GRT Hotels) offered to pay Rs.120 crores – High Court instructed GBJ Hotels to obtain instruction as to whether it was willing to improve its offer – However, GBJ Hotels refused to raise the offer – Edelweiss agreed to accept the offer of GRT Hotels – Correctness: Held: Both GBJ Hotels and GRT Hotels were invited to improve their bids – The same was done in exercise of the inherent power to fetch the best of offers when the secured asset was reportedly worth much more than what was offered before the High Court – GRT Hotels improved it to Rs.153 crore, which was Rs.17 crore more than GBJ Hotels – GRT Hotels deposited in the Registry a sum of Rs.33 crore – GRT Hotels was declared to be the successful bidder – It was also recorded that Rs.27 crore had been returned by Edelweiss ARCL to GBJ Hotels – This Court directs that the sum of Rs.27 crore which was to be returned to GBJ Hotels, shall [2025] 4 S.C.R. 2445 GBJ Hotels Private Limited v. Sriharan Sripathmanathan & Ors. carry interest at the rate of 18% per annum – Sale certificate was issued in favour of GRT Hotels by Edelweiss ARCL – All other consequential steps to be taken by Edelweiss ARCL in accordance with law. [Paras 5-10, 14, 16, 17] List of Acts Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. List of Keywords Financial Assistance; Debt; Default in repayment of dues; Auction; Successful auction purchaser; Inherent power to fetch best offers; Secured asset; Awarding interest. Case Arising From CIVIL APPELLATE JURISDICTION: Special Leave Petition (C) No. 7301 of 2025 From the Judgment and Order dated 06.03.2025 of the High Court of Judicature at Madras in WP No. 1001 of 2025 Appearances for Parties Advs. for the Petitioner: G. Balaji, Neeleshwar Pavani, Ms. Arzu Paul. Advs. for the Respondents: Rajeeve Mehra, Rajiv Shakdher, Shyam Divan, S. Ravi, Satish Parasaran, Sr. Advs., Anush Raajan, Pradyumn Yadav, Jose John, Ms. Surekha Raman, M. Narendran, D. Prajesh, Shreyash Kumar, Karan Khetani, Ms. Maithili Moondra, Jonathan Ivan Rajan, M/S. K J John and Co., Mrs. Indu Mathi Ravi, R. Sanjeev, V. Ramasubramanian, Vishnu Mohan, Ravi Raghunath. Judgment / Order of the Supreme Court Order 1. GBJ Hotels Private Limited1 is the petitioner in this special leave petition, which impugns an order dated 6th March 2025 passed by 1 GBJ Hotels 2446 [2025] 4 S.C.R. Supreme Court Reports the High Court of Judicature at Madras2 on a writ petition3 presented by the respondents 14 and 2.5 2. Respondents 1 and 2 had received financial assistance provided by Edelweiss Finvest Limited. The debt was then assigned to Edelweiss Asset Reconstruction Company Limited, respondent no.3.6 Respondents 1 and 2 committed default in repayment of their dues. As borrowers, the respondents 1 and 2 owed approximately Rs. 135 crore to the Edelweiss ARCL as on date the impugned order was passed (recorded in paragraph no.4 thereof). In the writ petition, the respondents 1 and 2 had challenged an order of the relevant Debts Recovery Appellate Tribunal, whereby they were ordered to deposit 50% of the sum due, i.e., a little less than Rs.36 crore. 3. Pertinently, in pursuance of proceedings under the SARFAESI Act, 2002, an auction was conducted. Bid of GBJ Hotels for a sum of Rs.108 crore was accepted by Edelweiss ARCL. 4. Prior to the impugned order, t
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