11. Learned Senior Counsel contended that the impugned order passed
by the learned DRAT in Appeal No.20 of 2024 sets a dangerous precedent
of curtailing the powers of the adjudicatory Tribunal, in direct
contravention of judicial discipline, and a Division Bench of this Court in
M/s.Pochiraju Industries Vs. Punjab National Bank and others2
categorically held that a reserve price in the e-auction sale notice based on
a valuation report published prior to such sale notice cannot be sustained
and that under Rule 8(5) of the Rules, the Authorised Officer must obtain a
valuation report from an approved Valuer immediately before the proposed
sale, which was not done in the present case. He thus contends that non-
compliance of the said binding precedent constitutes an error apparent on
the face of the record. It is therefore contended that the impugned order of
the learned DRAT is liable to be set aside.
12. Learned Senior Counsel further relied upon the judgments of East
India Commercial Co. Ltd., Calcutta Vs. Collector of Customs, Calcutta3
as well as State of Rajasthan and another Vs. Surendra Mohnot and
others 4, Malleeswari Vs. K.Sugnuna 5 to contend that the learned DRAT
passed an order ignoring the existing binding precedent constituting a
2018 SCC Online Hyd 121
1962 SCC Online SC 142
(2014) 14 SCC 77
2025 SCC Online SC 1927
manifest and palpable error, which, if not rectified in exercise of review
jurisdiction or jurisdiction of recall, would lead to grave miscarriage of
justice.
13. On the other hand, Sri B.Shiva Ram Sarma, learned counsel
appearing on behalf of the respondent-Bank contended that order passed in
S.A.No.87 of 2021 and TSA No.4 of 2021 dated 22-05-2023 has attained
finality since no statutory appeal is filed by the petitioners as mandated
under Section 18 of the Act and the learned DRAT has rightly set aside the
order of the review petition by categorically holding that there is no
mistake or error apparent on the face of the record and the view taken by
the learned DRT is erroneous.
14. Learned counsel further contended that the learned DRAT further
held that none of the grounds taken by the review petitioners are covered
under the head of the mistake or error apparent on the face of the record or
any sufficient reason or discovery of new and important matter or
evidence, and therefore, the contention of the petitioners before the learned
DRT in S.A.No.87 of 2021 and TSA No.4 of 2021 as well as the grounds
in the Review Petition No.3 of 2023 are similar in nature and the said
review application ought not to have been entertained at the first instance.
15. Learned counsel for the Bank further contended that when the
petitioners submitted proposal for One Time Settlement (OTS) on the basis
of the valuation report dated 24.08.2020, they rejected it and proceeded
with the auction sale of schedule - 'A' and 'K' properties and at the time
of considering the OTS proposal, no objections were made regarding the
valuation report, and hence, the said fact itself speaks that the petitioners
have accepted the valuation report without protest and since, the OTS
proposal has been rejected by the Bank, the petitioners have now turned
back to contend that the valuation report is wrong, which by itself shows
the mala fide intention of the petitioners only with a view to defeat the
very purpose of the Act.
16. Learned counsel for the Bank further contended that schedule-'A'
property since the time it was mortgaged in 2003, is only 10 sq. yards and
throughout these 15 years, valuation reports clearly indicate the property
value was never above Rs.20.00 lakhs and that when a property is
sold/auctioned, only land value along with construction cost per square feet
is taken into account, but not the rental value or its temporary structures
and the valuation report of 2020 is correct, and that the valuation report of
the year 2016, which the petitioners seek to rely on, is arrived on wrong
calculation method and inadvertently rent factor was taken into
consideration and hence, mistake in a valuation report cannot be taken as
advantage by the petitioners since valuation report of the year 2020 is
based on factual scenario existing till then and no wrongful loss is caused
to the petitioners. Therefore, it is contended that considering the above
facts, the learned DRAT has rightly allowed the appeal by setting aside the
order in Review Petition No.3 of 2023 and there is no infirmity in the order
passed and the same does not call for any indulgence of the Court.
17. On the other hand, Sri Sharad Sanghi, learned counsel appearing on
behalf of auction purchaser vehemently contended that pursuant to the
e-auction sale with respect to Schedule 'A' property as described in the
Appeal on 30.03.2021, the 2nd respondent in W.P.No.15369 of 2025
became the highest bidder for a total sum of Rs.19,32,000/- and thereafter
paid the entire amount, within the stipulated period under the Act and the
Rules, to the respondent Bank. The Bank executed and registered a sale
certificate on 09.04.2021 in favour of the auction purchaser; however,
physical possession of the property has not yet been delivered. In the
meanwhile, the auction purchaser came to know that owners of the
property filed S.A.No.87 of 2021 before the learned DRT and obtained an
interim order. Thereafter, the auction purchaser herein got himself
impleaded in S.A.No.87 of 2021, which was later dismissed on
22.05.2023. The principal borrowers filed a Review Application in
R.A.No.3 of 2023 along with an application for stay of all further
proceedings. The learned DRT vide order dated 21.06.2023 granted status
quo till filing of the counter and the same was extended from time to time.
As such, the auction purchaser knocked the doors of this Court by filing
W.P.No.32067 of 2023, wherein this Court vide orders dated 22.11.2023
directed the learned DRT to dispose of the Review Petition R.A.No.3 of
2023 within a period of 6 weeks.
18. Learned counsel for the auction purchaser further contended that the
learned DRT passed an order dated 08.01.2024 in Review Application
No.3 of 2023 in S.A.No.87 of 2021 setting aside the e-auction held on
30.03.2021 respect of Schedule 'A' and 'K' properties. Being aggrieved
by the said orders, the auction purchaser filed W.P.No.6296 of 2024,
wherein this Court while disposing the said Writ Petition by order dated
13.03.2024 granted liberty to file appeal under Section 18 of the Act.
Accordingly, an appeal was filed before the learned DRAT, which was
Appeal No. 20 of 2024, and the said appeal was allowed on
05.02.2025 by setting aside the order dated 08.01.2024 passed by the
learned DRT.
19. Learned counsel further contended that the principal borrower filed
W.P.No.15369 of 2025 aggrieved by the orders passed by the learned
DRAT wherein initial stay was granted on 28.05.2025, which was not
extended subsequently. Thereafter the auction purchaser approached the
respondent-Bank requesting to deliver physical possession of the property
purchased under e-auction. However, the Bank issued letter on
21.07.2025 assuring delivery of possession to the auction-purchaser, but
the same is not delivered. Therefore, having no alternative remedy, the
auction purchaser filed the W.P.No.24372 of 2025.
20. Learned counsel for the auction-purchaser further contended that the
review petition filed by the principal borrower is not maintainable and it is
only to circumvent Section 18 of the Act where there is no Appeal against
the final order, Appeal against the Review is not maintainable. In this
regard, he placed reliance on the citation in Bussa Overseas and
Properties Private Limited and another Vs. Union of India 6 wherein at
para-30, the Hon'ble Apex Court held that the decisions pertaining to
maintainability of special leave petition or for that matter appeal have to be
seemly understood. Though the decision in Shanker Motiram Nale Vs.
(2016) 4 SCC 696
Shiolalsing Gannusing Rajput 7 the two-Judge Bench referred to Order 47
Rule 7 of the Code of Civil Procedure that bars an appeal against the order
of the court rejecting the review, it is not to be understood that the Court
has curtailed the plenary jurisdiction under Article 136 of the Constitution
by taking recourse to the provisions of the Code of Civil Procedure. It has
to be understood that the Court has evolved and formulated a principle that
if the basic judgment is not assailed and the challenge is only to the order
passed in review, this Court is obliged not to entertain such special leave
petition. The said principle has gained the authoritative status and has been
treated as a precedential principle for more than two decades.
21. Sri Sharad Sanghi, learned counsel further contended that under the
Act, the proceedings are summary in nature, the review is governed by
Section 22(2)(e) of the RDB Act 93 and Rule 5-A of the DRT Rules, and
therefore contended that the Review Court has erroneously interfered with
the initial order passed on 22.05.2023. In this regard, learned counsel
relied upon the judgment in Sanjay Kumar Agarwal Vs. State Tax Officer
(1) and another 8, wherein the Apex Court held that an error which is not
self-evident and has to be detected by a process of reasoning, can hardly be
(1994) 2 SCC 753
(2024) 2 SCC 362
said to be an error apparent on the face of record justifying the court to
exercise its power of review. In exercise of jurisdiction under Order 47
Rule 1 CPC, it is not permissible for an erroneous decision to be 'reheard
and corrected'. A review petition has a limited purpose and cannot be
allowed to be 'an appeal in disguise'.
22. Learned counsel for the auction-purchaser further relied upon a
decision in S.Tirupathi Rao Vs. M.Lingamaiah and others 9 wherein the
Apex Court held that an error apparent on the face of the record has to be
self-evident. Where, conceivably, two opinions can be formed in a given
set of facts and circumstances and one opinion of the two has been formed,
there is no error apparent on the face of the record. However, disabusing
our mind of such an impression, we have looked into each of the grounds.
Not a single ground served consideration to embark on an exercise to
review the judgment and order dated 16.08.2018 even on the basis of
discovery of new and important matter or evidence. Therefore, the Hon'ble
Supreme Court declined to interfere with the findings in the Review.
23. Learned counsel for the auction-purchaser further contended on the
ground of valuation that the valuation is a fact which cannot be assailed in
2024 SCC Online SC 1764
a Writ Petition under Article 226 of the Constitution of India since there is
no rival valuation by the borrowers and it is only agitating that the value
taken, which is not worthy of being accepted. In this regard, he relied upon
judgment of the Apex Court in Chilamkurti Bala Subrahmanyam Vs.
Samanthapudi Vijaya Lakshmi and another 10, Anil Kumar Srivastava
Vs. State of Uttar Pradesh11 and Kayjay Industries (P) Ltd Vs. Asnew
Drums (P) Ltd.12
24. Learned Counsel for the auction-purchaser further contended that
the stage of objection is at Rule 9(1) or Rule 8(6) and not after auction
completed. In this regard, he relied upon the judgment in M.Janardhan
Vs. The Debt Recovery Tribunal, Chennai and others 13.
25. Learned counsel further contended that unless there is any fraud
alleged or substantiated, the sale cannot be set aside. It is further
contended that the common orders passed in 3 Review Applications, filing
of Appeal against one cause of action is hit by the principle of res judicata.
(2017) 6 SCC 770
(2004) 8 SCC 671
AIR 1974 SC 1331
MANU/TN/4080/2021
In this regard, he relied upon the decision in Sri Gangai Vinayagar
Temple Vs. Meenakshi Ammal14.
26. It is finally contended that the order passed by the learned DRT in
S.A.No.87 of 2021 dated 22.05.2023 has attained finality and that the
learned DRT ought not to have reviewed its common order by the
impugned order dated 08.01.2024 in R.A.No.3/2023, and sought for a
direction to deliver physical possession of the property being Shop No.20
situated at ground floor of 'Bhagyalaxmi Commercial Complex'
admeasuring 162.50 sq. ft. situated at Gulzar Houz, Hyderabad in favour
of the auction purchaser.
27. We have given out earnest consideration to the various contentions
vehemently raised by the parties, and perused the record.
28. This Court finds that the principal borrowers do not dispute the
availment of loan facilities or creation of mortgages. Their representation
to the demand notice was duly considered, and though they approached the
Banking Ombudsman, the complaint was closed and no further challenge
was pursued. The plea regarding fixation of reserve price on an outdated
valuation report of 2016 is also untenable, as the DRT itself recorded that a
(2015) 3 SCC 624
fresh valuation dated 24.08.2020 was relied upon, proximate to the auction
notice.
29. Regarding the petitioner's contention on collusion between the bank
and auction purchaser, the DRT held that under the amended Rule 9(4)
(effective from 04.11.2016), the extension of time for payment of the 75%
balance purchase price is solely between the secured creditor and the
auction purchaser, and the borrower has no role in this. Since the extension
was granted within the permissible 90-day period (till 30.06.2021, as per
the letter dated 05.04.2021), and there was no violation of Rule 9(3) or
9(4), no rights of the principal borrowers were infringed, nor was any
prejudice caused. Therefore, the DRT found no merit in the petitioner's
contentions and held that they failed to establish grounds to set aside the
Bank's actions under the Act.
30. The only issue pressed in review was that the valuation preceded the
possession notice and thereby violated Rule 8(5) of the Rules. The DRT,
while entertaining the review, proceeded to reassess the valuation and set
aside the auction. The DRAT correctly held that such an exercise
amounted to re-appreciation of evidence and exceeded the narrow limits of
review jurisdiction. Questions relating to adequacy of valuation and
compliance with Rule 8(5) are matters for appeal under Section 18
SARFAESI, not review.
31. This Court concurs with the reasoning of the DRAT, which relied on
binding precedents including Sanjay Kumar Agarwal v. State Tax Officer
and another 15, wherein the Hon'ble Supreme Court held as under :
"Then gist of the afore-stated is that:
(i) A judgment is open to review inter alia if there is a mistake or an
error apparent on the face of the record.
(ii) A judgment pronounced by the Court is final, and departure from
that principle is justified only when circumstances of a substantial and
compelling character make it necessary to do so.
(iii) An error which is not self-evident and has to be detected by a
process of reasoning, can hardly be said to be an error apparent on the
face of record justifying the court to exercise its power of review.
(iv) In exercise of the jurisdiction under Order 47 Rule 1 CPC, it is not
permissible for an erroneous decision to be 'reheard and corrected'.
(v) A Review Petition has a limited purpose and cannot be allowed to
be 'an appeal in disguise'.
(vi) Under the guise of review, the petitioner cannot be permitted to re-
agitate and reargue the questions which have already been addressed
and decided.
(vii) An error on the face of record must be such an error which, are
looking at the record should strike and it should not require any long-
drawn process of reasoning on the points where there may conceivably
be two opinions.
(2024) 2 SCC 362
(viii) Even the change in law or subsequent decision/judgment or a co-
ordinate or larger Bench by itself cannot be regarded as a ground for
review."
32. This Court observes that DRT, while entertaining Review Petition
No.3/2023, went into questions already decided in SA No.87/2021 and
TSA No.4/2021. The so-called violation of Rule 8(5), even if arguable,
involves appreciation of evidence and interpretation of law, which falls
outside the narrow compass of "error apparent on the face of the record."
As held in Sanjay Kumar (supra), review cannot be an appeal in disguise.
33. The Borrowers relied heavily on Pochiraju Industries(Supra). No
doubt, the precedent emphasizes the need for valuation immediately before
sale. However, the applicability of such precedent goes to merits of the
case, and can be canvassed in an appeal under Section 18 SARFAESI. It
cannot be treated as an "error apparent" for purposes of review. DRT
exceeded its review jurisdiction by re-appreciating valuation evidence.
34. However, the principal borrowers ought to have knocked the doors
of appellate authority under Section 18 of the Act within a period of 30
days. Without availing the appropriate efficacious remedy, hurriedly filed
review petition and ultimately buried the justice. Since, so much water has
flown, the auction purchasers are at liberty to take possession of the subject
property.
35. Once the sale certificate is issued and registered, the auction
purchaser acquires vested right, and unless fraud or illegality is proved, the
sale cannot be disturbed. Since DRAT has already restored the DRT's
original order and set aside the review, the auction purchaser is entitled for
the possession.
36. In view of the above discussion, W.P.No.15369 of 2025 filed by the
principal borrowers is dismissed. W.P.No.24372 of 2025 filed by the
auction-purchaser is allowed. Since, the interim order granted on
28.05.2025 has not been extended subsequently, I.A.No.2 of 2025 in
W.P.No.15369 of 2025 shall stand closed.
37. As a sequel, miscellaneous petitions pending if any shall stand
closed. There shall be no order as to costs.
________________________________
MOUSHUMI BHATTACHARYA, J
___________________________
GADI PRAVEEN KUMAR, J
Date: 26.09.2025
Vsv
