Denying Auction Purchasers Writ Remedy To Enforce S.14, SARFAESI Orders Would Be 'Travesty of Justice': Bombay High Court

The Bombay High Court has held that auction purchasers under the SARFAESI Act can invoke the writ jurisdiction to seek enforcement of orders passed by a Magistrate under Section 14 of the Act.

Holding that auction purchasers have the locus to seek such relief, a division bench of Justices Manish Pitale and Shreeram V. Shirsat said refusing to entertain such petitions would erode public confidence in the rule of law.

"If the writ Court shuts its doors to the auction purchasers like the petitioners, it would be a travesty of justice and the State authorities would be free not to abide by the specific directions issued by the competent Magistrate under the provisions of the said Act. This has a bearing on the concept of rule of law also, which cannot be ignored. The faith of citizens in the rule of law would be adversely affected, if this Court were to hold that an order of the competent Magistrate is not being obeyed, but no writ or direction can be issued, as such a grievance can be examined only at the behest of the secured creditor. We find that the petitioners, as auction purchasers, do have locus standi to maintain the present writ petition", the court ruled.

The observations came while allowing a writ petition filed by auction purchaser Jasraj Restaurants Pvt. Ltd., which sought implementation of a District Magistrate's order directing the Tahsildar to take physical possession of a secured property and hand it over to the secured creditor.

The dispute arose after the borrower defaulted on a ₹1.35 crore term loan, leading the bank to initiate proceedings under the SARFAESI Act. Following five unsuccessful attempts, the property was sold in the sixth e-auction on June 29, 2021 where the petitioners emerged as successful bidders after paying ₹2.23 crore.

A sale certificate was issued on July 26, 2021 and registered on December 15, 2021. Although the District Magistrate, Raigad on February 2, 2022, directed delivery of physical possession under Section 14, the petitioners remained without possession despite the DRT dismissing the borrower's securitisation application on May 29, 2026.

The borrowers argued that only the secured creditor could maintain such a writ petition, relying on the Supreme Court's decision in ITC Ltd. v. Blue Coast Hotels. The Court however, rejected the objection, holding that the judgment did not bar auction purchasers from seeking writ relief.

"We find that the aforesaid objection pertaining to the locus of the petitioners for filing and pursuing the present writ petition, is without any substance. In the first place, we do not find any observation in the judgement of the Supreme Court in the case of ITC Limited vs. Blue Coast Hotels Limited and others."

The court held that auction purchasers are entitled to seek directions requiring State authorities to perform their statutory duty of implementing orders passed by the competent Magistrate under Section 14 of the SARFAESI Act.

Relying on a similar view taken by the Patna High Court, the bench noted that the petitioners had paid ₹2.23 crore for the property, obtained a registered sale certificate in July 2021, yet continued to await possession despite the Magistrate's order passed in February 2022.

Allowing the writ petition, the Court directed the Tahsildar, Alibag, to take physical possession of the property on August 13, 2026 and hand it over to the secured creditor, which would thereafter deliver possession to the auction purchasers.

It also directed the Superintendent of Police, Alibag, to provide adequate police assistance for execution of the order.

For Petitioner: Rohan Cama a/w. Janvi Joshi, Komal Patil, Manjula Chigari, Vijayvati Jaiswar, i/b. Manmohan Rao, Advocates

For Respondents: R. S. Pawar, AGP; Savita Nangar, Disha Shah, i/b. Law Focus, Mandar Soman a/w. Mukesh Dongarge, Aniket M. Phad