Writ court declines jurisdiction over SARFAESI auction disputes with factual issues; directs to DRT under Section 17.

JUDGMENT

The petitioner, who is represented by his power of attorney holder, is the auction purchaser in an e auction sale conducted by the 1st respondent, the authorized officer of UCO bank, under the SARFAESI Act . The property, which was sold by the 1^st respondent belonged to the 2^nd respondent, and is having an extent of 4.66 Ares in Re.Sy.No.44/6-2 in Block No.309, of Kollam West Village, Kollam Taluk, Kollam District. The 3^rd respondent is the borrower, who availed the credit facility from the 1^st respondent.

2. The petitioner participated in the auction sale after remitting 10% as EMD and he was declared as the successful bidder, for a sum of Rs.1,10,05,000/-. Then, the petitioner was informed through Ext.P3 that, he has to deposit 15% of the reserve price within 1 working day and the balance 75% has to be paid within 15 days. But, the petitioner could not pay the balance 75% of the e auction bid amount i.e., 82,53,750/-, on or before 10.09.2025 and he could deposit only Rs.10,00,000/- on 17.10.2025. The remaining amount of balance sale price to be paid was Rs.72,53,250/-.

3. Then, the petitioner approached the 1^st respondent, seeking extension of time and time was granted to the petitioner, upto 25.11.2025, to deposit the money. But, again the petitioner could not deposit the balance amount within the extended time and there was a delay of 7 days. Even though the petitioner took a demand draft for a sum of Rs.62,53,250/- in favour of the 1^st respondent and approached the bank requesting to accept the demand draft, along with the cheque for Rs.10,00,000/-, which was in its possession, the same was not accepted by the bank since, there is a delay of 7 days. In the meanwhile, the 1^st respondent informed the petitioner, as per Ext.P4 letter, that the sale is cancelled and the amount deposited by the petitioner is forfeited.

4. Things being so, the petitioner filed a petition for getting himself impleaded in the S.A No.650/2023, filed by the 2nd respondent, which was pending in the DRT, and also a petition to condone the delay in depositing the entire sale consideration with the 1^st respondent bank. While so, the 2^nd respondent in the S.A, withdrawing the petitions filed by him, challenging the sale held on 26.08.2025, pursuant to which the petitioner had purchased the property. It is in such circumstance, the petitioner approached this court by filing this writ petition, seeking the following reliefs:

“i. To issue a writ of mandamus or any other appropriate writ, order or direction to call for the records relating to issue of Exhibit P4 letter and quash the same as illegal and unsustainable in law.

ii. To issue a writ of mandamus or any other appropriate writ, order or direct the 1^st Respondent to accept the balance bid amount tendered by the petitioner and issue sale certificate in favour of the petitioner in accordance with law, in pursuance to Exhibit P3 sale confirmation.”

5. Heard the learned counsel for the petitioner,the learned Standing Counsel for the 1^st respondent and the learned counsel for the 2^nd respondent.

6. The learned counsel for the petitioner submitted that, even though the petitioner had approached the bank with the balance 75% amount, the same was not received by stating that the payment is made beyond the prescribed time period. He further submitted that, the petitioner had approached the bank with a demand draft of Rs.62,53,250/- and has requested the bank to encash the dishonoured cheque for Rs.10,00,000/-, which was in its possession and to account the entire amount towards the 75% of price to be paid. He, by relying on a decision of this court in Florican Prime Land LLP vs. The Recovery Officer and Others (W.P.(c) No.1667/2025), co