PHR INVENT EDUCATIONAL SOCIETY versus UCO BANK AND OTHERS

PHR INVENT EDUCATIONAL SOCIETY versus UCO BANK AND OTHERS

The High Court erred in entertaining and allowing the writ petition under Article 226 despite the availability of efficacious alternative statutory remedies under the SARFAESI Act and DRT procedure; the sale in favor of the auction purchaser had been confirmed and registered and, absent any allegation or proof of fraud or collusion, could not be reopened. Therefore the High Court order was quashed and the writ petition dismissed with costs.

Parties
Appellant (auction Purchaser): PHR Invent Educational Society; Respondent (secured Creditor / Bank): UCO Bank; Respondent (borrower): Dr. M.V. Ramana Rao
Jurisdiction
India
Judgment Date
10 April 2024
Procedural Posture
Civil Appeal (civil Appeal No. 4845 of 2024) / Appeal Against Division Bench Order of the High Court Dated 4 February 2022 in Writ Petition No. 5275 of 2021
Outcome
Appeal allowed
Legal Topics
Article 226, Alternative Remedy, Exhaustion of Statutory Remedies, Writ Jurisdiction, Auction Sale Confirmation and Registration, Recovery of Bank Dues, Quasi Judicial Remedies, Costs
Constitutional Law Banking and Finance Law Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 Debts Recovery / DRT Proceedings Article 226 Alternative Remedy Exhaustion of Statutory Remedies Writ Jurisdiction +4 more

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Parties

PHR Invent Educational Society

Appellant (auction Purchaser)

UCO Bank

Respondent (secured Creditor / Bank)

Dr. M.V. Ramana Rao

Respondent (borrower)

Procedural Posture

Civil Appeal (civil Appeal No. 4845 of 2024) / Appeal Against Division Bench Order of the High Court Dated 4 February 2022 in Writ Petition No. 5275 of 2021

Legal Issues

  1. 1 Whether the High Court ought to have entertained a writ petition under Article 226 when an efficacious alternative statutory remedy under the SARFAESI Act and the DRT/appeal mechanism was available
  2. 2 Whether the confirmed and registered auction sale could be reopened in absence of fraud or collusion
  3. 3 Whether the conduct of the borrower disentitled him to equitable relief

Ratio Decidendi

The High Court erred in entertaining and allowing the writ petition under Article 226 despite the availability of efficacious alternative statutory remedies under the SARFAESI Act and DRT procedure; the sale in favor of the auction purchaser had been confirmed and registered and, absent any allegation or proof of fraud or collusion, could not be reopened. Therefore the High Court order was quashed and the writ petition dismissed with costs.

Court Disposition

Appeal allowed

Orders

  • Impugned Division Bench order of the High Court dated 4 February 2022 in Writ Petition No. 5275 of 2021 is quashed and set aside
  • Writ Petition No. 5275 of 2021 is dismissed