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HC cannot cancel auction sale

The Supreme Court has stated that high courts should not set aside auction sale conducted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFAESI Act) exercising its writ powers. In this case, GM, Sri Siddeshwara Co-operative Bank Ltd vs Sri Ikbal, the borrower of a housing loan was a "chronic defaulter" and therefore, the property was auctioned and it was sold in the presence of the borrower. After four years, the borrower challenged the sale certificate of the auction purchase in the Karnataka High Court in a writ petition.

 The high court quashed the auction sale and ordered a fresh auction. It further made certain observations against the bank officer and directed its registrar to refer the matter to the Superintendent of Lokayukta police at Bijapur for further action in accordance with law. The high court's view was that the mandatory rules were not followed. The bank and the auction purchaser moved the Supreme Court. While quashing the high court order, it stated that the Act provided a remedy for the borrower and there was no reason to bypass it and move the high court with a writ petition.

 Article referred:http://www.business-standard.com/article/opinion/hc-cannot-cancel-auction-sale-113090200004_1.html

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