Mohammed Gafur vs Bank Of Baroda & Anr. .... Opposite Party ...
2025 Latest Caselaw 9609 Ori

Orissa High Court

Mohammed Gafur vs Bank Of Baroda & Anr. .... Opposite Party ... on 31 October, 2025

Author: Sanjeeb K Panigrahi

Bench: Sanjeeb K Panigrahi

                                                                 Signature Not Verified
                                                                 Digitally Signed
                                                                 Signed by: BHABAGRAHI JHANKAR
                                                                 Reason: Authentication
                                                                 Location: ORISSA HIGH COURT,
                                                                 CUTTACK
                                                                 Date: 07-Nov-2025 19:20:18




                  IN THE HIGH COURT OF ORISSA AT CUTTACK

                              W.P.(C) No.18224 of 2025

        (In the matter of an application under Articles 226 and 227 of the
        Constitution of India, 1950).

         Mohammed Gafur                              ....                  Petitioner(s)
                                          -versus-
         Bank of Baroda & Anr.                       ....       Opposite Party (s)

        Advocates appeared in the case through Hybrid Mode:
        For Petitioner(s)         :                 M/s. Swadha Rath, Adv.

         For Opposite Party (s)       :                   Mr. Gurudutta Kar, Adv.

                      CORAM:
                      DR. JUSTICE SANJEEB K PANIGRAHI

                       DATE OF HEARING:-23.09.2025
                      DATE OF JUDGMENT: -31.10.2025
      Dr. Sanjeeb K Panigrahi, J.

1. The Petitioner has filed the present Writ Petition assailing the impugned

letter/order dated 30.01.2025 issued by the Bank of Baroda, represented

through its Chief Manager, Regional Office, Sambalpur.

2. The Petitioner further prays for a direction to the Opposite Party-Bank

to refund the auction deposit amounting to ₹22,43,000/- (Rupees twenty-

two lakh forty-three thousand only) along with interest at the rate

applicable to fixed deposits.

I. FACTUAL MATRIX OF THE CASE:

3. The brief facts of the case are as follows:

(i) The Opposite Party-Bank had issued an advertisement dated 22.08.2024

inviting e-auction bids for the sale of immovable assets under the

provisions of the Securitisation and Reconstruction of Financial Assets

and Enforcement of Security Interest Act, 2002.

(ii) The Petitioner participated in the said e-auction held on 20.09.2024 and

submitted a bid for Property No. 1, corresponding to Khata No.

171/2566, Plot No. 266, measuring Ac. 0.200 dec., situated at Mouza-

Parmanadapur, P.S.-Bhawanipatna, Tahasil-Kalahandi, District-

Kalahandi, belonging to M/s Swaraj Automobiles.

(iii) The Petitioner's bid, being the highest, was accepted, and she was

accordingly declared as the successful bidder for the said property.

(iv) Prior to the auction, the Petitioner requested the Opposite Party-Bank

to furnish relevant documents of the property, including the map, for

verification. Pursuant thereto, a map dated 02.01.2020, prepared by the

Revenue Inspector, Medinipur, was supplied to the Petitioner. In the

said map, a road was shown as adjoining the property.

(v) On the basis of the documents furnished by the Bank, particularly the

aforesaid map showing road access, and relying on the representations

and assurances of the Bank authorities regarding delivery of physical

possession of the property, the Petitioner deposited the margin money

in good faith.

(vi) Acting on such representation, the Petitioner deposited earnest money

of ₹2,00,000/- (Rupees two lakh only). Upon being declared the highest

bidder, he further deposited 25% of the bid amount, as demanded by the

Bank, amounting to ₹14,23,625/- (Rupees fourteen lakh twenty-three

thousand six hundred twenty-five only). Thus, a total of ₹16,23,625/-

(Rupees sixteen lakh twenty-three thousand six hundred twenty-five

only) was paid to the Bank.

(vii) Thereafter, when the Petitioner visited the auctioned property to take

physical possession, she discovered to her utter dismay that the land

had no access road and was completely enclosed by adjoining plots,

obstructing ingress and egress. The purported road shown on the

southern side had, in fact, been acquired by the Railways for

construction of a rail line and was not open for private use.

(viii) The Petitioner then applied to the Revenue Inspector, Lanjigarh, seeking

the map relating to the Rail Link Project adjoining the auctioned land.

The map furnished by the Revenue Inspector confirmed that the plots

shown as a road on the southern side had already been acquired by the

Railways for the said Rail Link Project.

(ix) By this time, the Petitioner had already sought a refund of the entire

amount deposited with the Bank towards the purchase. However, by the

impugned letter dated 30.01.2025, the Opposite Party-Bank rejected the

request for refund, citing that the property was sold on an "As is where

is, as is what is, and whatever there is" basis, and consequently forfeited

the deposited amount.

(x) Upon verification from local residents, it was further revealed that no

road connected to the property and that the land was completely

landlocked. Comparison of the map furnished by the Bank with the

actual physical condition of the property confirmed that no road existed

adjoining the plot, contrary to the representation made by the Bank.

(xi) To ascertain the factual position, the Petitioner engaged an Amin to

conduct a field verification. The Amin's report and corresponding

sketch conclusively established that the auctioned land was surrounded

by other plots on all sides and had no access road for ingress or egress.

(xii) In the aforesaid circumstances, the Petitioner, having no other speedy,

effective, or efficacious remedy, has approached this Court by invoking

its extraordinary jurisdiction under Articles 226 and 227 of the

Constitution of India.

II. SUBMISSIONS ON BEHALF OF THE PETITIONER:

4. Learned counsel for the Petitioner earnestly made the following

submissions in support of his contentions:

(i) The present writ petition is maintainable, as the action of the Opposite

Party-Bank involves clear misrepresentation and violation of statutory

obligations under the Securitisation and Reconstruction of Financial

Assets and Enforcement of Security Interest Act, 2002, the Rules framed

thereunder, and the Transfer of Property Act, 1882. The Securitisation

and Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 does not provide any efficacious alternative remedy in

cases involving fraud or misrepresentation. In any event, Section 34 of

the Act expressly bars the jurisdiction of civil courts in respect of

measures taken by the Bank under the Act.

(ii) The Bank represented that the auctioned property had road access on its

southern side, inducing the Petitioner to participate in the e-auction.

Acting upon this assurance, the Petitioner deposited 40% of the bid

amount. However, after demarcation, the property was found to be

landlocked, without any approach road. Prior to making such deposit,

the Petitioner had repeatedly requested the Bank to verify the

demarcation, having noticed a Railway Line near the property during

inspection. The Bank officials assured her that the Railway Line did not

obstruct road access and that demarcation would clarify the issue. The

deposit was made in reliance on these assurances.

(iii) Such conduct amounts to fraud and misrepresentation, particularly

since a public sector bank is duty-bound to act fairly, transparently, and

with due diligence. The Bank's false representation regarding access

induced the Petitioner to deposit a total sum of ₹22,43,000/-, which it

now seeks to forfeit.

(iv) Maps prepared by the Amin on 04.04.2025 and by the Revenue Inspector

in connection with the Rail Link Project confirm that the property is

landlocked and encumbered. Under the SARFAESI Rules, 2002, the

Bank was bound to disclose such encumbrances but failed to do so. The

plea that the sale was conducted on an "As is what is, as is where is, and

whatever there is" basis is untenable, since the auction advertisement

itself described the property as having a road on its southern side, a

representation directly contradicted by the subsequent maps.

(v) The Bank relied on a Revenue Inspector's report purportedly of 2024,

whereas the report actually dated back to 2020, when the ground reality

was different. The road shown therein had since been acquired by the

Railways, a material fact not disclosed by the Bank. Moreover,

inconsistencies appear in the Bank's own records, as while the auction

notice referred to a southern road, a later sketch map dated 10.01.2025

depicted a road on the eastern side, revealing lack of verification and

due diligence.

(vi) Plot No. 274, shown as a road in the Bank's sketch map, has already been

acquired by the Railways for the Rail Link Project, as confirmed by the

Revenue Inspector, Lanjigarh, through a certified map dated 05.02.2025.

The Bank has not denied this fact in its counter affidavit, and under the

principle of non-traverse, the same stands admitted.

(vii) Reliance on a belatedly prepared sketch map and the justification for

forfeiture of the deposit are contrary to law and equity.

Misrepresentation regarding road access constitutes a material defect

rendering the auction sale voidable. Suppression of this vital fact,

coupled with contradictory records, evidences mala fide conduct on the

part of the Bank. Forfeiture of the Petitioner's deposit in such

circumstances is arbitrary, unjustified, and unsustainable in law.

(viii) The materials on record, including the auction advertisement, the

demarcated sketch map dated 10.01.2025, and the certified map issued

by the Revenue Inspector, Lanjigarh, dated 05.02.2025, conclusively

demonstrate that the property sold in auction is landlocked. The

advertisement described a road on the southern side of the plot, whereas

the later demarcation showed a road on the eastern side (Plot No. 274),

which had already been acquired by the Railways. Despite being aware

of this, the Bank failed to disclose the fact, thereby selling a property

with a material defect.

(ix) The objection regarding maintainability under Section 17 of the

Securitisation and Reconstruction of Financial Assets and Enforcement

of Security Interest Act, 2002 is misconceived. Section 17 confers

jurisdiction on the Debts Recovery Tribunal only in respect of measures

under Section 13(4) and does not extend to cases involving fraud,

misrepresentation, or mala fides by the secured creditor. It is a settled

principle that fraud vitiates all proceedings, and therefore the bar of

alternate remedy does not apply.

(x) The "As is where is, what is and whatever there is" clause cannot be

construed as a licence to mislead or conceal material defects. The clause

merely signifies that the property is sold in its existing physical

condition. It does not absolve the seller of its statutory duty of

disclosure. Under Section 55 of the Transfer of Property Act, 1882 and

Rule 8(6)(f) of the Security Interest (Enforcement) Rules, 2002, the Bank

was obligated to disclose encumbrances or material defects known to it.

Non-disclosure of the fact that the property had no approach road

constitutes a clear breach of that duty.

III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES :

5. The Learned Counsel for the Opposite Parties earnestly made the

following submissions in support of his contentions:

(i) The writ petition is not maintainable in fact or in law. An efficacious

alternative remedy lies under the Securitisation and Reconstruction of

Financial Assets and Enforcement of Security Interest Act, 2002 before

the Debts Recovery Tribunal. Under Section 17 of the Act, any grievance

against measures taken under Section 13(4), including auction sales, is

triable by the Debts Recovery Tribunal. Hence, the petitioner ought to

have invoked that forum rather than approaching this Court under

Article 226 of the Constitution.

(ii) The borrower's secured asset was proceeded against under the

Securitisation and Reconstruction of Financial Assets and Enforcement

of Security Interest Act, 2002 due to loan default. An e-auction notice

dated 22.08.2024 expressly stated that the property would be sold on an

"As is Where is," "As is What is," and "Whatever There is" basis.

(iii) The Bank fixed 16.09.2024 between 11:00 a.m. and 1:00 p.m. for

inspection and granted thirty days' notice to prospective bidders to

verify title, boundaries, access, and other particulars. The petitioner

voluntarily participated in the auction held on 20.09.2024, emerged as

the highest bidder, and deposited about 40 percent of the bid amount,

signifying full acceptance of the auction terms and the property's

condition.

(iv) The petitioner thereafter sought extensions to pay the balance amount,

first by letter dated 02.12.2024 citing a medical emergency and again by

letter dated 26.12.2024 citing illness of a family member. The Bank, by

communication dated 07.12.2024, granted the first request subject to the

condition that failure to comply would entail forfeiture of 25 percent of

the deposit.

(v) Having failed to pay within the extended period, the petitioner for the

first time on 06.01.2025 alleged that the property was landlocked and

sought demarcation and refund. This plea was clearly an afterthought

raised only after repeated defaults.

(vi) On 10.01.2025, the Revenue Inspector, Medinipur, furnished a

demarcated sketch map showing a road abutting the eastern boundary.

By reply dated 30.01.2025, the Bank enclosed this sketch, clarified that

the sale was conducted strictly in accordance with the SARFAESI Rules,

and again called upon the petitioner to pay the balance amount, failing

which forfeiture would follow. The Bank denies knowledge of any

railway acquisition affecting access and submits that the demarcation

confirms road connectivity on the eastern side.

(vii) Having had ample opportunity to inspect the property and having

participated with full knowledge of the "As is Where is" condition, the

petitioner cannot now resile from the terms accepted. The later plea of

absence of road access is belated and untenable. The sale process

complied with Rules 6(2), 8(6), and 9(1) of the Security Interest

(Enforcement) Rules, 2002.

(viii) The petitioner has suppressed material facts, including his two letters

seeking extensions and the Bank's conditional permission, and now

seeks to evade contractual obligations by alleging fraud or

misrepresentation.

(ix) In view of the lapse of more than ninety days after the auction and the

petitioner's failure to deposit the balance amount despite extensions, the

Bank rightly invoked forfeiture of 25 percent of the deposit in strict

conformity with the auction terms and applicable Rules.

(x) Allegations of mala fides are baseless. The Bank, a public institution,

acted bona fide, followed the statutory procedure, granted reasonable

indulgence, and furnished all relevant documents promptly.

(xi) The writ petition, filed to circumvent the consequences of default and

contractual forfeiture, is misconceived and not maintainable either on

jurisdictional grounds or on merits. The Bank therefore prays that the

petition be dismissed in limine with costs, leaving the petitioner free to

pursue any statutory remedy before the competent forum.

IV. EXAMINATION OF THE LEGAL MATRIX:

6. Heard learned counsel for the respective parties and duly perused the

materials placed on record.

7. The controversy in the present case centers on two key questions,

namely whether the writ petition is maintainable despite the availability

of an alternative remedy under Section 17 of the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest

Act, 2002 and whether the forfeiture of the petitioner's deposit pursuant

to the auction conducted by the Bank of Baroda is vitiated by

arbitrariness, misrepresentation, or non-disclosure of material facts.

8. Before adverting to the factual aspects of the case, it is necessary to

examine the legal position governing the maintainability of a writ

petition under Article 226 of the Constitution in matters arising under

the Securitisation and Reconstruction of Financial Assets and

Enforcement of Security Interest Act, 2002.

9. It is well settled that though the Act provides an alternative remedy

under Section 17 before the Debts Recovery Tribunal, the existence of

such remedy is not an absolute bar to the exercise of writ jurisdiction.

The High Court may still entertain a petition where the action of the

secured creditor is alleged to be vitiated by fraud, misrepresentation, or

lack of adherence to statutory obligations.

10. In this regard, the Supreme Court in Harbanslal Sahnia v. Indian Oil

Corporation Ltd1 observed that:

"7. ...the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies:

(i) where the writ petition seeks enforcement of any of the fundamental rights;

(2003) 2 SCC 107.

(ii) where there is failure of principles of natural justice; or

(iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged."

11. In the present case, the grievance of the petitioner is not directed against

any measure under Section 13(4) as such but against the conduct of the

Bank in allegedly misrepresenting a material aspect of the property. The

allegation of suppression of the fact that the property was landlocked,

followed by forfeiture of the deposit, if established, would strike at the

root of the Bank's statutory duty of disclosure and the integrity of the

auction process. The plea of alternative remedy therefore cannot defeat

maintainability.

12. Coming to the merits of the case, it is not disputed that the Bank had

published an auction notice dated 22.08.2024 describing the property as

having a road on its southern side. The petitioner participated in the

auction relying on this representation, deposited 40 percent of the bid

amount, and later discovered that the property had no access road, the

alleged road having been acquired by the Railways for a Rail Link

Project. The Bank has not denied the acquisition of Plot No. 274, shown

as the access road in its own sketch map, which stands confirmed by the

map issued by the Revenue Inspector, Lanjigarh, dated 05.02.2025.

13. The duty of fair disclosure is inherent in every statutory sale under the

SARFAESI framework, particularly when the secured creditor acts in a

fiduciary capacity while disposing of the borrower's property.

14. Section 55 of the Transfer of Property Act, 1882 obliges a seller to disclose

to the buyer any material defect in the property or title of which the

buyer is unaware and which could not be discovered with ordinary care.

Failure to disclose such a defect, including lack of access, constitutes

breach of that duty.

15. The "As is Where is" and "As is What is" clauses, though standard in

auction sales, merely indicate that the property is sold in its existing

condition and that the purchaser bears the risk of apparent defects

ascertainable by inspection. These clauses protect the creditor from

complaints regarding minor or discoverable imperfections but do not

dispense with the duty of fairness and disclosure.

16. The protection of these clauses cannot extend to concealment or

misrepresentation of material facts that go to the root of the purchaser's

ability to enjoy or use the property. They do not authorise a secured

creditor to rely on inaccurate information of its own making or to

disregard facts that ought reasonably to have been verified.

17. In Haryana Financial Corporation & Another v. Rajesh Gupta,2 the

Supreme Court considered a purchaser's claim for refund on the ground

that the seller had failed to disclose a material defect and the relevant

title documents. The Court rejected the defence that the sale was

conducted on an "As is Where is" basis and that the purchaser was

bound by his bid. It held that the seller, having failed to give a fair and

accurate description of the property, had not discharged its legal

obligations, and therefore could not take refuge behind the "As is Where

is" clause.

18. This principle, however, does not mean that every inaccuracy or

omission on the part of a secured creditor will vitiate an auction

(2010) 1 SCC 655.

conducted on an "As is Where is" basis. The application of the rule must

depend on the nature and gravity of the defect, the representations

actually made by the creditor, and the opportunity available to the

purchaser for independent verification. Where the description of the

property is general and no specific assurance is given, the purchaser is

expected to satisfy himself regarding its physical condition, access, and

boundaries. The secured creditor cannot ordinarily be faulted for defects

that were open to inspection or ascertainable through reasonable

diligence.

19. Ordinarily, the existence or absence of a road is a matter open to physical

inspection, and in an 'As is Where is' sale, the purchaser bears primary

responsibility to satisfy himself on such aspects. However, where the

secured creditor itself represents in official documents that the property

abuts a public road, it assumes a limited obligation to ensure that such

representation corresponds with the factual and legal position as on the

date of sale. The omission to verify this, even if inadvertent, constitutes

a lapse affecting the fairness of the auction process. The 'As is Where is'

clause protects the Bank against undisclosed or minor physical

imperfections but does not extend to inaccuracies in particulars officially

published by the Bank

20. In view of these circumstances, the forfeiture of the petitioner's deposit

cannot be sustained. The Bank, as a statutory creditor vested with public

trust, was expected to exercise due diligence and ensure accuracy of the

information published in the auction notice. Having failed to do so, it

must bear the consequences of that lapse. The Bank is accordingly

directed to refund the amount deposited by the petitioner, together with

interest at the rate applicable to fixed deposits, within eight weeks from

today.

21. Accordingly, the Writ Petition stands allowed to the extent indicated

above.

22. Interim order, if any, passed earlier stands vacated.

(Dr. Sanjeeb K Panigrahi) Judge

Orissa High Court, Cuttack, Dated the 31st Oct., 2025/