The petitioner, an assignee, contested the DRAT’s order dated June 24, 2024, which upheld the earlier decision by the Debts Recovery Tribunal-I, Ahmedabad (DRT), affirming a sale notice issued on September 24, 2021. The primary contention was that the Recovery Officer had failed to obtain a valuation report from an approved valuer before fixing the reserve price for the auction of an immovable property. The assignee argued that such compliance was mandatory and crucial to ensure that the property fetched a fair market price.

Shri Ashish Kamat, the senior advocate representing the assignee, emphasized that the requirements of Regulation 37(1) were not just procedural but integral to the auction process, asserting that the Recovery Officer had neglected to follow these mandatory steps.

The assignee's counsel highlighted a clear directive from the High Court requiring DRAT to consider the implications of not adhering to Regulation 37(1). The argument hinged on the notion that the failure to obtain a valuation report undermined the integrity of the auction process, leading to a sale at a potentially undervalued price. The counsel cited various precedents to bolster the claim that regulatory compliance was essential.

In contrast, Dr. Abhinav Chandrachud, representing the auction purchaser, contended that the assignee failed to raise these objections during the earlier stages of the proceedings. He pointed out that the assignee participated in the auction process without contesting the reserve price initially, which indicated a waiver of their rights to contest later. Additionally, the delay in raising the objection was highlighted as a significant factor, suggesting that the auction purchaser had a right to rely on the proceedings that had already taken place.

Upon reviewing the arguments and the documentary evidence, the High Court concluded that the DRAT did not err in dismissing the assignee’s appeal. Several key points emerged from the Court's analysis:

Lack of Timely Objection: The assignee's failure to object to the reserve price during the initial proceedings was pivotal. Despite multiple opportunities to contest the valuation, the assignee did not raise concerns about the alleged non-compliance with Regulation 37(1) until much later.

Waiver of Rights: The Court noted that the requirements of Regulation 37(1) were designed for the benefit of creditors, and such rights could be waived through conduct. Given the assignee's inaction, the Court inferred that the assignee had effectively waived the right to challenge the auction.

Nature of the Regulation: Even if the provisions of Regulation 37(1) were deemed mandatory, the Court suggested that compliance could be waived, as evidenced by the conduct of the assignee throughout the proceedings.

Finality of Auction Sale: The Court observed that rights had accrued in favor of the auction purchaser post-sale confirmation, making it inappropriate to disturb the auction process at such a late stage.

The Court acknowledged that while the DRAT may not have fully addressed the implications of non-compliance with Regulation 37(1), the overall dismissal of the appeal was justified based on the assignee’s conduct and the procedural history of the case.

The High Court ultimately dismissed the writ petition, affirming the lower tribunals' decisions and reiterating the importance of timely objections in legal proceedings. The case underscores the criticality of adherence to procedural regulations in debt recovery processes, while also highlighting the implications of waiver through inaction.

This ruling serves as a reminder for stakeholders in the debt recovery domain to remain vigilant and proactive in raising objections to ensure compliance with regulatory frameworks, thereby safeguarding their interests in secured asset auctions.