Authority: High Court of Judicature at Bombay

Order Date: 14 October 2026

Case Overview

  • Petition: Writ Petition No. 13470 of 2026 filed by Bank of India (secured creditor) against M/s ASFA International (proprietor Shri Musheer Ahmed Khan) and others.
  • Respondents 1‑3: Borrowers (M/s ASFA International and two others) who filed a securitisation application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal‑III, Mumbai (DRT).
  • Respondents 4‑5: Successful auction purchasers who bid Rs 1,06,75,000 for the secured asset.
  • Timeline: Sale notice issued by Bank on 05 June 2026; auction conducted on 25 June 2026; initial 25% amount allegedly received on 26 June 2026 (holiday) and full amount deposited on 29 June 2026, satisfying Rule 9(3) of the Security Interest (Enforcement) Rules, 2002.
  • DRT Order: On 19 August 2026, DRT issued an ad‑interim direction restraining the Bank from issuing a sale certificate to the auction purchasers, based solely on the claim that only 25% of the amount had been received.
  • Bank’s Contentions: The Bank argued that the full amount was deposited by 29 June 2026, that the DRT order lacked any discussion of the three‑pronged test for interim relief (prima facie case, balance of convenience, irreparable loss), and was therefore ultra vires.
  • Respondents’ Position: Borrowers raised a preliminary objection regarding maintainability, suggesting the Bank could approach the Debts Recovery Appellate Tribunal (DRAT) as an alternative remedy.
  • Court’s Reasoning: The High Court held that when a tribunal order is manifestly erroneous and contrary to settled law, writ jurisdiction is appropriate. Citing East India Commercial Co. Ltd. v. Collector of Customs, Calcutta, the Court emphasized the need for a prima facie assessment before granting interim relief.

Final Outcome

  • The High Court quashed and set aside the DRT’s ad‑interim direction dated 19 August 2026.
  • An interim stay was granted, allowing the Bank of India to issue the sale certificate to the auction purchasers.
  • Respondents 1‑3 (borrowers) were directed to pursue their pending interim application before the DRT in accordance with law.
  • Notice was issued for returnable on 20 November 2026; reply affidavits to be filed by 5 November 2026; any rejoinder before the next listing date.

Topics: Debt Recovery, SARFAESI Act