Protection of Auction Purchasers and Mandatory Arbitration for Inter Se Disputes Between Secured Creditors
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Case: MARIYAM RANGWALA AND ANR v. THE STATE OF MAHARASHTRA THR THE REGISTRAR CMM AND ORS
Court: Bombay High Court
Date: 30-06-2026
Law: Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Transfer of Property Act, Arbitration and Conciliation Act, Constitution of India.
Highlights of the Judgment:
- An analysis of the maintainability of writ jurisdiction under Article 226 despite the availability of an alternative statutory remedy under Section 17 of the SARFAESI Act.
- Interpretation of Section 13(6) regarding the absolute vesting of rights in an auction purchaser as if the transfer was made by the original owner.
- The legal consequences of a secured creditor remaining in "deep slumber" for eleven years after taking symbolic possession of a secured asset.
- Application of Section 11 of the SARFAESI Act as a mandatory mechanism for resolving inter se priority disputes between competing secured creditors through arbitration.
- The doctrine of exhaustion of security interest once a secured asset is sold to a bona fide purchaser for value.
- Analysis of Section 13(7) concerning the statutory trust created over auction proceeds for the benefit of other claimants.
- Distinction between the summary jurisdiction of the Debts Recovery Tribunal and the jurisdiction of Civil Courts regarding declarations of mortgage legality.