Introduction
The Madras High Court, in M/s Lucky Footwear Components &
Ors. v. Indian Bank & Ors1 reaffirmed the
limited scope of judicial interference under Article 227 of the
Constitution of India in cases arising from the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI Act). The Division Bench held that
technical irregularities in the auction process cannot vitiate a
valid sale unless borrowers demonstrate substantial prejudice,
fraud or collusion.
Factual Background
The petitioners, M/s Lucky Footwear Components, represented by
its partners had availed financial facilities from Indian Bank.
Upon default in repayment, the bank initiated, recovery proceedings
under the SARFAESI Act. A notice under Section 13(2) was issued,
followed by symbolic possession under Section 13(4). The bank
thereafter conducted a public auction on 10 August 2022, where the
secured asset was sold, and a sale certificate
