The court upheld the Recovery Officer's discretion in auction conduct, ruling that established legality and auction terms prevent invalidation due to later higher bids.

ORDER :

Farhan P. Dubash, J.

1. The present Writ Petition invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India, seeking issuance of a writ to quash and set aside the order dated 19^th November 2025 (impugned order) passed by the Debts Recovery Appellate Tribunal, Mumbai (DRAT) in Regular Appeal No. 18 of 2024 and Miscellaneous Appeal No. 27 of 2024, and further seeking a direction to the Recovery Officer, Debts Recovery Tribunal–II, Mumbai (DRT) to conduct a fresh valuation of the properties and for the entire process of auction/sale to be conducted afresh.

FACTS IN BRIEF

2. For a proper appreciation of the controversy involved, the relevant facts may briefly be set out hereunder:

(i) The Petitioner is the assignee of the debt of Global HiTech Industries Limited, having acquired the same from the State Bank of India, JM Financial Asset Reconstruction Company Limited, Invent Asset Securitization and Reconstruction Private Limited, and ARCIL Limited. The Petitioner presently holds 75.61% of the total secured lending availed by the borrower against the security of the mortgaged and/or charged properties.

(ii) The above-referred banks and financial institutions had filed Original Application (OA) No. 1381 of 2016 before the DRT, which came to be rejected vide an order dated 15^th January 2019. Pursuant thereto, recovery proceedings were initiated by the Recovery Officer of the DRT, being Recovery Proceedings No. 7 of 2019, which were subsequently re-numbered as Transfer Recovery Proceedings No. 01 of 2023.

(iii) Respondent No. 1 – Global HiTech Industries Limited is the principal borrower company, which is presently undergoing liquidation, and an Official Liquidator has been appointed by this Court.

(iv) Respondent Nos. 2 to 6 are the borrowers and guarantors (Collectively referred to as borrowers) in respect of the said credit facilities and were parties to the proceedings before the DRT in Original Application No. 1381 of 2016.

(v) Respondent No. 10 is the declared successful bidder of Lot No. 3, in whose favour the auction came to be confirmed for a consideration of Rs. 23.28 crores.

(vi) Respondent No. 11 is the service provider for the auction proceedings, and Respondent No. 12 is the Recovery Officer of DRT, who has confirmed the auction sale (Recovery Officer).

(vii) The lead bank had filed Original Application No. 1381 of 2016 before the DRT. Upon the said Original Application being allowed, a Recovery Certificate bearing RC No. 7 of 2019 came to be issued.

(viii) Pursuant to the recovery proceedings, the Recovery Officer initiated a public auction in respect of the secured assets by issuing a Sale Proclamation Notice dated 9^th February 2023. The secured assets were proposed to be auctioned lot-wise, as under:

-“Lot No. 1: Land and Building (Factory Premises) situated at Kanaiyebe, near Asian Motors Company, Bhuj–Bachau Road, Taluka: Bhuj, District: Kutch – 370140

-Lot No. 2: Plant and Machinery lying at the Land and Building (Factory Premises) situated at Kanaiyebe, near Asian Motors Company, Bhuj– Bachau Road, Taluka: Bhuj, District: Kutch –370140

-Lot No. 3: Land and Building (Factory Premises) situated at Kanaiyebe, near Asian Motors Company, Bhuj–Bachau Road, Taluka: Bhuj, District: Kutch – 370140, along with the Plant and Machinery lying at the said factory premises”

(ix) As per the Sale Proclamation Notice, the auction was scheduled to be held on 24^th March 2023 between 2.00 pm and 3.00 pm by way of e-auction through the website maintained by Respondent No. 11.

(x) The Recovery Officer