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2026 Supreme(Online)(Del) 879
IN THE HIGH COURT OF DELHI AT NEW DELHI
Avneesh Jhingan, J
Lakshmi Builders – Appellant
Versus
Devinder Lakra – Respondent
EX.P. 44/2016 | EX.APPL.(OS) 233/2016 | EX.APPL.(OS) 332/2017 | EX.APPL.(OS) 1110/2020 | EX.APPL.(OS) 168/2022
For the Appellants/Petitioners: Vikas Tiwari, Kumar Deepraj, Arushi Rathore, Palak Agrawal
For the Respondents: Ashok Jain, Amit Kasera, Rakesh Singh, Nikhil Chhoker
When properties are auctioned under the SARFAESI Act during execution proceedings, a decree holder must challenge the mortgage and auction through the specific remedial channels provided under Section 17 of the SARFAESI Act, 2002.
Headnote:The present proceedings involve an execution petition for the recovery of a decretal amount of Rs. 2.5 crores with interest, wherein certain properties of the judgment debtor were attached by court order. During the pendency of execution, a financial entity moved an application asserting prior mortgage rights over three of the attached properties. The court observed that it had already granted liberty to proceed under the SARFAESI Act, under which the mortgaged properties were subsequently auctioned. The core issue centered on the decree holder's remedy regarding properties already auctioned under the SARFAESI Act. The court reasoned that in view of the completion of the auction process under the special statute, the decree holder must pursue its grievances concerning the mortgage and auction in the forum prescribed under that Act. The court disposed of the application, granting the decree holder liberty to pursue remedies under the SARFAESI Act, including the filing of applications for condonation of delay.
| Table of Content |
|---|
| 1. remedies for decree holders regarding properties auctioned under sarfaesi act. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. obligation of the judgment debtor to disclose assets under the code of civil procedure. (Para 7 , 8 , 9) |
O R D E R
EX.APPL.(OS) 345/2017
1. This application was initially filed by the Allahabad Bank and later the M/S Encore Asset Reconstruction Co. Pvt. Ltd. (hereinafter “the Company”) stepped into the shoes of Allahabad Bank, the loan having been assigned to the Company. The Execution Petition is filed by the Decree Holder for execution of the decree dated 03.03.2016 whereby the plaintiff was held entitled to recover a sum of Rs. 2.5 crores alongwith interest at the rate of 18% per annum from 30.10.2012 till realization of the amount and the four properties of Judgment Debtor were attached. The attachment continued by the orders of this Court dated 03.03.2016 and 18.03.2016.
2. During the pendency of the Execution Petition, the present application was filed by the Allahabad Bank claiming that the three properties (as described in the application) out of the attached properties were mortgaged with the bank. On 14.11.2018, this Court clarified that the pendency of the execution shall not be an impediment for the bank to proceed under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘SARFAESI Act’). Thereafter, in proceedings under Section 14 of the SARFAESI Act, the three properties have been auctioned.
3. Learned counsel for the Company contends that the Decree Holder has a remedy under Section 17 of the SARFAESI Act to challenge the mortgage and the auction of the properties.
4. At this stage, learned counsel for the Decree Holder seeks liberty to avail remedies under the SARFAESI Act against the auction of the mortgaged properties and to file an application for extension of limitation/condonation of delay.
5. Keeping in view that the mortgaged properties have already been auctioned and the liberty has been sought to avail remedies under the SARFAESI Act to challenge the auction and the mortgage of the properties, at this stage no further orders are called for in the application.
6. The application is accordingly disposed of with liberty to the Decree Holder as prayed for.
EX.P. 44/2016
7. There is connectivity issue at the end of learned counsel for the Judgment Debtor appearing through video conferencing.
8. The Judgment Debtor, as identified by the Head Constable Rajpal, has appeared through video conferencing from Gurugram Jail and seeks time to file an affidavit detailing the assets of the Judgment Debtor in terms of Order XXI Rule 41(2) of the Code of Civil Procedure, 1908 before the next date of hearing.
9. Put on 25.03.2026.
