Authority: Calcutta High Court

Order Date: 15 September 2026

Case Overview

  • Parties: Appellant – M/s. Kriti Commosales LLP & others; Respondents – Canara Bank (and others, including respondent No. 8 – M/s. Helios Infrapro Private Limited).
  • Proceedings: Appeal (FMA 628 of 2026, CAN No. 1 of 2026) against the judgment and order dated 8 April 2026 of a learned Single Judge in WPA No. 4060 of 2026, which dismissed the writ petition.
  • Background: The writ petition alleged that Canara Bank fraudulently sold a property at an e‑auction under the SARFAESI Act, despite the borrower lacking a valid security interest. The appellants, who were the successful auction bidders, sought a refund of the sale consideration of Rs 1,49,95,000 with interest at 18% per annum.
  • Key Dates & Transactions:
  • Borrower purchased the property on 25 November 2021 (deed of conveyance No. 160503170/2021).
  • Property classified as a Non‑Performing Asset on 17 April 2023.
  • E‑auction conducted by the bank on 17 February 2024; appellant submitted a bid of Rs 1,49,95,000 and was declared highest bidder.
  • Sale certificate issued on 26 February 2024; registration completed on 18 April 2024 (deed No. 190303010/2024).
  • Municipal records showed the property in the name of M/s. Helios Infrapro Private Limited (respondent No. 8), indicating a prior conveyance dated 7 June 2019.
  • Allegations: The appellants claimed the bank failed to conduct due diligence, sold a property over which no valid mortgage existed, and thus committed fraud. They argued the “as is where is” clause should not shift the burden of title verification to the purchaser.
  • Bank’s Position: The bank contended the sale was valid, the title had passed to the appellants, and the delay in filing the writ petition was unexplained. It relied on the “as is where is” clause and asserted the appellants had an alternative remedy before the Debt Recovery Tribunal under Section 17 of the SARFAESI Act.
  • Court’s Reasoning:
  • The writ court’s jurisdiction is limited; mixed questions of law and fact concerning title, security interest, and alleged fraud must be adjudicated by the Debt Recovery Tribunal.
  • The existence of an alternative statutory remedy under Section 17 precludes the writ court from granting equitable relief.
  • Discrepancies in property descriptions across the deeds (residential vs. commercial) and municipal records meant the court could not determine which party held superior title.
  • The petition was filed two years after the sale certificate, with no indication of possession disturbance, further weakening the claim.
  • Precedents (e.g., Whirlpool Corp. vs. Registrar of Trade Marks, Godrej Sara Lee Ltd. vs. Excise Officer) support the view that such matters are beyond writ court jurisdiction.

Final Outcome

  • The appellate court agreed with the Single Judge, upheld the dismissal of the writ petition, and affirmed that the matter should be pursued before the Debt Recovery Tribunal.
  • The appeal and the connected application were dismissed.
  • The order of the learned Single Judge was upheld.

Topics: Court Proceedings, Banking Regulation