The Gauhati High Court has directed the Industrial Cooperative Bank Ltd. and the Kamrup (Metro) district administration to take steps to recover and hand over possession of a property purchased through a SARFAESI auction more than 11 years ago.
Justice Devashis Baruah held that the pending civil suit and an injunction against the original owner could not prevent the bank or the District Commissioner from taking possession of the property and facilitating its delivery to the auction purchasers.
Background of the Case
The case was filed by Pradip Mazumdar and two others after they purchased the property in a bank auction. The property had been mortgaged by Naba Kumar Das to secure a loan. Following default, proceedings under the SARFAESI Act, 2002 were initiated, and physical possession was taken by the bank on December 13, 2013.
The petitioners later emerged as successful auction purchasers and paid the entire ₹55 lakh consideration on December 20, 2014. A Sale Certificate was issued on February 20, 2015, but possession was not actually delivered to them.
Meanwhile, Dimbeswar Kalita had filed a title suit claiming an agreement for sale with Das and obtained an injunction restraining Das from transferring the property. The suit and injunction proceedings remained pending.
Court’s Observation
The petitioners initially sought a refund of ₹55 lakh with interest. The High Court rejected that relief, holding that the sale certificate had to be cancelled through due process before any refund could arise.
"It is the opinion of this Court that the question of refund to the sale consideration cannot arise unless and until the Sale Certificate is cancelled by due process."
The Court also found that the documents showed that actual possession had not been delivered despite the Sale Certificate recording delivery. Referring to Rule 9(9) of the Security Interest (Enforcement) Rules, 2002, it held that the secured creditor remained responsible for delivering possession.
The High Court noted that the pending title suit was between Kalita and Das. The bank was not a party to that suit, the Sale Certificate issued to the petitioners had not been challenged, and the injunction was directed against Das.
"The said injunction, under no circumstances, would create any impediment or bar upon the Respondent Nos. 1 and 2 or even the District Commissioner or any other authority delegated by the District Commissioner to take possession of the property so that the possession can be handed over to the Petitioners."
Decision
The Court held that the February 20, 2015 Sale Certificate amounted to a valid sale and that the petitioners had right, title and interest in the property.
It directed the bank to forward the Sale Certificate to the Sub-Registrar and approach the District Commissioner, Kamrup (Metro), for taking possession under Section 14 of the SARFAESI Act. The District Commissioner was directed to take necessary steps and hand possession to the bank for eventual delivery to the petitioners.
The entire exercise was ordered to be completed within 60 days from the bank’s request.
The Court also clarified that neither the pending title suit nor its injunction would prevent these steps.
Case Details:
Case Title: Pradip Mazumdar & 2 Ors. v. The Industrial Cooperative Bank Ltd. & Ors.
Case Number: WP(C)/634/2023
Judge: Justice Devashis Baruah
Decision Date: 25 August 2026
