GM, SRI SIDDESHWARA CO-OPERATIVE BANK LTD. & ANR. versus SRI IKBAL & ORS.

Citation: [2013] 8 S.C.R. 532 · Decided: 22-08-2013 · Supreme Court of India · Bench: RAJENDRA MAL LODHA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
8 
[2013] 8 S.C.R. 532 
GM, SRI SIDDESHWARA CO-OPERATIVE BANK LTD. & 
ANR. 
v. 
SRI IKBAL & ORS. 
(Civil Appeal No(s). 6989-6990 of 2013 etc.) 
AUGUST 22, 2013 
[R.M. LODHA AND CHANDRAllllAULI KR. PRASAD, JJ.] 
Security Interest (Enforcement) Rules, 2002 - r. 9 -
C Auction of mortgaged property by lender~ Bank - For 
realization of loan amount from the borrower - Auction 
purchaser paid 75% of the sale consideration after the period 
specified in Sub-rule (4) of r.9 - Bank issued sale certificate 
in favour of auction-purchaser - Writ petition challenging the 
o confirmation of sale - High Court allowed the petition for non-
compliance of r.9 - Held: The period specified in sub-rule (4) 
of r.9 for payment of balance amount of sale consideration is 
not mandatory - The period is extendab/e if there is written 
agreement between the parties i.e. the bo"ower, lender and 
E auction purchaser- In the instant case, in view of the letter of 
the borrower giving consent that balance amount could be 
received from the auction-purchaser after the specified date, 
the letter having been accepted by the Bank and auction-
purchaser having made payment accordingly, the period can 
F be said to have been extended as per written agreement -
Thus, condition in r.9(4) has been substantially satisfied -
Even if a provision is mandatory it can be waived by the 
beneficiary of such provision - The borrower and the lender-
Bank being the beneficiaries can be said to have waived their 
G right in view of the letter of the bo"ower - Securitisation and 
Reconstruction of Financial Assets and Enforcement of 
Security Interest Act, 2002 - s.13(4). 
Constitution of India, 1950 - Article 226 - Jurisdiction 
under - Held: Availability of alternative remedy is not an 
H 
532 
GM, SRI SIDDESHWARA CO-OPERATLVE BANK 
533 
LTD. & ANR. v. SRI IKBAL & ORS. 
absol.ute bar to exercise of extraordinary jurisdiction u!Art. 226 
A 
- But where statute provides efficacious and adequate 
remedy, High Court should not entertain such petition -
Statutory procedures cannot be allowed to be circumvented 
on misplaced considerations - In the instant case, High Court 
erred in invoking jurisdiction u/Art. 226 as statutory remedy was 
B 
efficacious - Securitisation and Reconstruction of Financial 
Assets and Enforcement of Security Interest" Act, 2002 - s. 17. 
Words and Phrases - 'Written agreement' and 'parties' -
Meaning of, in the context of s. 9( 4) of Security Interest C 
(Enforcement) Rules, 2002. 
The property of the first respondent-borrower was 
mortgaged by the appellant-Bank under Securitisation 
and Reconstruction of Financial Assets and Enforcement 
of Security Interest Act, 2002, against the loan which he 
D 
failed to pay. Respondent No.3 purchased the property. 
The auction-purchaser made payment of 25% of the sale 
consideration, but was not able to make payment of 
remaining 75% of the sale consideration within 15 days 
of confirmation of sale. As the proceeds from the sale of E 
the mortgaged property fell short of the total outstanding 
amount against the borrower, the Bank moved the Joint 
Registrar of the Cooperative Societies for recovery of the 
outstanding amount, wherein ex-parte award, was 
passed against the borrower. The borrower filed writ 
F 
petition under Article 226 of the Constitution, challenging 
the sale certificate issued by the Bank to the auction-
purchaser and the notice which was issued by the Bank 
to the borrower whereby borrower was informed that his 
property would be sold on his failure to repay the loan 
G 
amount. Single Judge of the High Court quashed the sale 
certificate and the notice. The Bank as well as auction-
purchaser challenged the order. Division Bench of High 
Court held that on account of non-compliance of 
mandatory requirement of r.9 of Security Interest H 
534 
SUPREME COURT REPORTS 
[2013] 8 S.C.R. 
A 
(Enforcement) Rules, 2002, despite the availability of 
remedy u/s. 17 of the Act, a case was made out for 
interference. Hence he present appeals by the Bank as 
well as the auction-purchaser. 
8 
Allowing the appeals, the Court 
HELD: 1.1. Single Judge of the High Court was not 
justified in quashing the sale certificate dated 16.11.2006 
issued in favour of the auction purchaser and the notice 
dated 09.02.2007. The Division Bench also committed an 
C error in upholding the erroneous order of the Single 
Judge. In the facts of the present case, it is apparent that 
the borrower had been chroni
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