The Bombay High Court has reaffirmed that the availability of an alternative remedy does not automatically bar the exercise of writ jurisdiction when peculiar circumstances threaten irreparable harm. This judgment clarifies the threshold for judicial intervention under Article 226 in financial enforcement proceedings under the SARFAESI Act, particularly where longstanding interim protections are at risk of being nullified.
Background & Facts
The Dispute
The petitioner, Parvesh Constructions Pvt. Ltd., had paid Rs. 1.05 crore toward the purchase of a property in 2008. Despite this payment, the property was later subject to enforcement proceedings by TJSB Sahakari Bank Ltd. under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioner had obtained an ad-interim injunction in 2010, which was confirmed by a Single Judge of this Court in 2020. This interim order remained operative even after the suit was transferred to the City Civil Court as Suit No. 1706 of 2024.
Procedural History
- 2010: Ad-interim injunction granted in Suit No. 878 of 2010
- 2020: Single Judge confirmed the interim order
- 2024: Suit transferred to City Civil Court under revised pecuniary jurisdiction
- 2026: Bank filed Securitisation Application No. 38 of 2026 before DRT-Mumbai
- 12/02/2026: Auction conducted without disclosing auction purchaser details
- 20/02/2026: Sale certificate registered in favor of auction purchaser
- 25/02/2026: Writ petition urgently heard by Division Bench
Relief Sought
The petitioner sought immediate disclosure of auction purchaser details, quashing of the auction process, and direction to the DRT to decide its pending Interim Application No. 109/2026 expeditiously, to prevent a fait accompli that would render its long-standing interim protection meaningless.
The Legal Issue
The central question was whether the High Court could entertain a writ petition under Article 226 despite the availability of an alternative remedy before the Debts Recovery Tribunal and its Appellate Tribunal, particularly when the petitioner had enjoyed continuous interim protection for over 15 years and faced imminent loss of property rights.
Arguments Presented
For the Petitioner
The petitioner relied on S.P. Sampath Kumar v. Union of India and State of Haryana v. Bhajan Lal to argue that the writ jurisdiction is not ousted merely because an alternative remedy exists. It emphasized that the prolonged existence of an ad-interim injunction since 2010 created a legitimate expectation and that the bank’s failure to disclose auction purchaser details violated principles of natural justice. The petitioner contended that the auction, conducted without notice to the party protected by court order, amounted to a fraud on the process.
For the Respondent
The bank and auction purchaser argued that the petitioner’s remedy lay exclusively before the DRT and DRAT under Section 18 of the SARFAESI Act. They submitted that the writ petition was an abuse of process, as the petitioner had not exhausted statutory remedies. The auction purchaser further contended that the sale certificate had already been registered and third-party rights had vested, making any interference by the High Court inequitable.
The Court's Analysis
The Court examined the doctrine of alternative remedy and reaffirmed that it is a rule of prudence, not a bar to jurisdiction. The Bench observed that the petitioner’s interim protection had been in force for 16 years, spanning multiple judicial forums, and that the bank’s conduct in conducting the auction without disclosing the purchaser’s identity undermined the integrity of the judicial process.
"The Writ Court refusing to entertain the Writ on the ground of availability of alternative remedy is a rule of prudence and it is not a rule of law. In peculiar circumstances, a Writ Petition can be entertained."
The Court noted that the auction purchaser’s identity was withheld despite repeated requests, depriving the petitioner of the opportunity to challenge the auction’s legality before the DRT. The registration of the sale certificate without notice to the protected party was deemed procedurally flawed. The Court further held that the auction purchaser’s undertaking not to create third-party rights pending the DRT’s decision on the interim application was a sufficient safeguard to balance competing interests.
The Court declined to adjudicate the merits of the securitisation application, emphasizing that the DRT must decide the interim application independently. However, it exercised its writ jurisdiction to ensure procedural fairness and prevent abuse of process.
The Verdict
The petitioner succeeded. The Bombay High Court held that writ jurisdiction may be invoked despite an alternative remedy when peculiar circumstances, including long-standing interim protection and procedural opacity, threaten irreparable harm. The Court directed the DRT to decide Interim Application No. 109/2026 by 30 March 2026 and mandated the petitioner to implead the auction purchaser before the DRT.
What This Means For Similar Cases
Interim Relief Creates Legitimate Expectation
- Practitioners must argue that continuous interim protection for over 10 years establishes a legitimate expectation that cannot be nullified by unilateral enforcement
- Failure to disclose material facts (e.g., auction purchaser identity) during enforcement proceedings may constitute a breach of natural justice
- Courts may intervene even post-auction if the process was conducted in secrecy and the protected party had no opportunity to be heard
Alternative Remedy Is Not Absolute
- The SARFAESI Act’s statutory remedies do not oust writ jurisdiction when procedural irregularities undermine judicial authority
- Courts will examine whether the alternative forum can provide timely and effective relief - delay or opacity in DRT proceedings justifies High Court intervention
- Writ petitions remain viable tools to prevent a fait accompli when statutory remedies are slow or non-responsive
Auction Purchasers Must Be Made Parties
- Any auction purchaser who benefits from enforcement proceedings must be impleaded as a party before the DRT
- Undertakings given by auction purchasers to refrain from creating third-party rights pending adjudication are binding and enforceable
- Practitioners should immediately move to implead auction purchasers in pending DRT applications to preserve procedural fairness
