SARFAESI Sale Notice Can't Reopen Issue Already Considered In Earlier Writ: Kerala High Court

The Kerala High Court has held that a SARFAESI sale notice cannot be used to reopen an issue already considered in earlier writ proceedings when the relief sought later is a continuation of the original cause of action.

“We have also considered the implication of Order II Rule 2 of the CPC in proceedings under Article 226 of the Constitution of India and have categorically stated that, in the absence of any challenge to the proposed action of the Bank, the sale notice would not furnish another ground to reopen the issue, where it has been conclusively decided that the writ petitioners have an efficacious alternative remedy under Section 17 of the SARFAESI Act,” a bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. observed.

The bench dismissed a review petition filed by Soubhagye Road Builders and its proprietors against the court's September 1, 2026 judgment in a writ plea.

The review petitioners argued that the court had wrongly applied the principle of constructive res judicata. They contended that the court had wrongly held that the benefit of the MSME Notification dated May 29, 2015 ought to have been pleaded in the earlier writ petition.

They also argued that the subsequent writ petition was based on a fresh cause of action, namely the SARFAESI sale notice. They contended that there had been no occasion to challenge the sale notice in the earlier proceedings.

The court rejected the contention. It observed that the reliefs sought in the subsequent writ petition could not be read in isolation, as they formed a continuation of the original cause of action.

The court noted that it had already considered the petitioners' failure to challenge the Bank's jurisdiction in the earlier writ proceedings. It had also examined the application of Order II Rule 2 of the CPC to proceedings under Article 226 of the Constitution.

The review petitioners had argued that the MSME Framework for Revival and Rehabilitation applied to them. They contended that, in the absence of an Advisory Committee being constituted under the Framework, they could not have been relegated to the Debt Recovery Tribunal.

They therefore argued that the DRT did not have jurisdiction to decide the matter.

The court noted that the power of review under Order XLVII Rule 1 of the CPC is limited. It observed that an error warranting review must be apparent on the face of the record and capable of being discerned without further investigation or enquiry.

“The issue of finality is limited to the scope of interference and the exercise of discretion in a writ jurisdiction, and not on merits,” the bench observed.

“It is elementary that a judgment cannot be read as a statute, and it has to be read and understood in the context of the issues raised and not what can be logically deduced from it,” the bench further observed.

The bench referred to the Supreme Court's ruling in State of M.P. and Others v. Ramesh Chandra Bajpai, (2009) , where it was held that a decision is an authority for what it decides and not for what can logically be deduced from it.

It also referred to Indusind Media and Communications Ltd. v. Commissioner of Customs, New Delhi, (2019). It noted that the ratio of a decision must be culled out from the facts involved in a given case.

The bench found no reason to review its earlier judgment. The review petition was accordingly dismissed.

The order was passed on September 14, 2026.