Article 226 | Writ Court Can Refuse Action Against Illegality To Do Substantial Justice : Supreme Court

“It has been rightly observed that legal formulations cannot be enforced divorced from the realities of the fact situation of the case. While administering law it is to be tempered with equity and if the equitable situation demands after setting right the legal formulations not to take it to the logical end, the High Court would be failing in its duty if it does not notice equitable consideration and mould the final order in exercise of its extraordinary jurisdiction. Any other approach would render the High Court a normal Court of Appeal, which it is not.”

"It is a settled principle of law that the remedy under Article 226 of the Constitution of India is discretionary in nature and in a given case, even if some action or order challenged in the petition is found to be illegal and invalid, the High Court while exercising its extraordinary jurisdiction thereunder can refuse to upset it with a view to doing substantial justice between the parties."

The Bench of Justices J.B. Pardiwala and R. Mahadevan added that the power of High Courts to issue certain writs under Article 226 of the Constitution is discretionary. Thus, even if the challenged order is invalid, the High Court can refuse to interfere to do substantial justice between the parties.

In the present case, the appellant was the auction purchaser of a property mortgaged by the borrower in lieu of receiving a loan from a bank. As the borrower defaulted in repaying the loan amount, the property was put to auction by the bank. The auction was conducted in 2007 and the appellant was the successful bidder. Though the borrower did not challenge the validity of the auction proceeding, the respondent guarantor did.

Subsequently, a writ petition before was filed by the present respondent and the same was allowed by the High Court. It reasoned that that 15 days' notice was not issued by the Bank for putting the property in question to auction. Thus, the auction was illegal. Aggrieved thus, the appellant approached the Supreme Court.

At the outset, the Court held the respondent wholly responsible for dragging the appellant to a very frivolous litigation and on a very technical point. However, it refrained from imposing the cost on the respondent.

Elaborating, the Court said that though the auction was completed in 2007 and even a sale certificate was issued, the same was not questioned. It was only in 2008 when the guarantor challenged the auction proceedings.

“It all started in 2007. The appellant paid the entire sale consideration towards the sale of property which was put to auction, i.e., an amount of Rs.24,00,000/- (Approx.) on 30-11- 2007 and a sale certificate also came to be issued. Till that point in time, neither the borrower nor the guarantor said anything in this regard. It was sometime in March 2008 that the guarantor conceived the idea of challenging the auction proceedings before the DRAT.”

It also noted that further construction was put up by the appellant who has already spent about Rs.1.5 Crore.

“When the High Court took up the Writ Petition for hearing in 2019 it went strictly by the number of days necessary for the issuance of auction notice. The High Court should have taken a practical view of the matter considering that the auction had attained finality way back in the year 2007.,” the Court said.

In view of this, the Court allowed the present appeal and set aside the impugned judgment of the High Court.

Case Name: M.S. SANJAY v. INDIAN BANK & ORS., CIVIL APPEAL NO.1188/2025

Citation : 2025 LiveLaw (SC) 193

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