Summary
The Supreme Court set aside a High Court judgment that, on a guarantor's writ petition, had annulled a 2007 SARFAESI auction because the sale notice did not give the full number of clear days. Since the auction purchaser had paid the price, received a sale certificate and developed the property over years, the Court held the High Court should have taken a practical, equitable view, as writ relief under Article 226 is discretionary and need not follow a mere technical infraction that caused no injustice.
Issues
- Whether the High Court, in writ jurisdiction, was justified in setting aside an auction sale held under the SARFAESI Act in 2007 solely on the ground that the sale notice did not give the required clear days before the sale.
- Whether relief under Article 226 must follow as a matter of course upon a finding of infraction of a statutory norm, even where no injustice has resulted.
Provisions considered
- Article 226, Constitution of IndiaRelying on Shiv Shanker Dal Mills v. State of Haryana, the Court treated the writ remedy as extraordinary and discretionary: even where an action is found illegal, the High Court may decline to upset it to do substantial justice, and must temper law with equity rather than act as an ordinary appellate court. The High Court erred in going strictly by the number of days of notice for an auction that had attained finality in 2007. (¶¶ 8, 9, 10)
- Auction sale of secured asset (notice period for sale), Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002The DRT and the High Court had invalidated the sale for want of the prescribed clear days between publication of the second sale notice and the sale, while the DRAT had upheld it. The Supreme Court did not decide the computation of the notice period, setting aside the High Court's order on equitable grounds instead. (¶¶ 3, 8, 11)
Held
- Interference by a writ court for a mere infraction of a statutory provision or norm, where the infraction has not resulted in injustice, is not a matter of course; the remedy under Article 226 is discretionary and the court may refuse to set aside even an illegal action in order to do substantial justice between the parties. (¶¶ 9, 10)
- The High Court should have taken a practical view: the auction purchaser had paid about Rs. 24 lakh, obtained a sale certificate on 30.11.2007, taken possession and spent about Rs. 1.5 crore on sanctioned construction, while neither the borrower nor the guarantor had objected until after the sale. Annulling the sale on a technical count of notice days years later was unjustified. (¶¶ 5, 7, 8)
- The Court found the guarantor responsible for dragging the auction purchaser into frivolous litigation on a technical point, though it refrained from imposing costs. (¶¶ 5, 12)
Result
Appeal allowed; High Court's judgment dated 15.06.2019 in WP No. 47721 of 2017 set aside; no order as to costs.