Supreme Court Directs DRT Pune to Expedite Decision in Viorica Hotels Auction Dispute.


09 October 2025 Civil Appeals >> Civil & Consumer Law  

The Supreme Court of India, in M/s Viorica Hotels Pvt. Ltd. & Ors. v. Union of India & Ors. (Civil Appeal of 2025, arising from SLP (Civil) No. 29698 of 2024), has directed the Debt Recovery Tribunal (DRT), Pune, to decide the challenge to auction proceedings concerning a luxury hotel property by November 14, 2025.

The dispute involves a loan of Rs. 42 crore—later rising to over Rs. 51 crore—taken by Viorica Hotels (the borrower) with appellants No. 2 and 3 as guarantors. The loan account was declared a non-performing asset (NPA) in March 2021, prompting action under the SARFAESI Act. Physical possession of the mortgaged hotel was taken, and the property was auctioned. Respondent No. 11 emerged as the successful bidder, paying Rs. 105 crore—amounts which cleared the bank dues and left a surplus for the appellants.


 

 

The appellants challenged the auction sale before the DRT, Pune (S.A. No. 147/2024), and sought an interim injunction to restrain the purchaser from demolishing the hotel. The DRT refused relief, and the Debt Recovery Appellate Tribunal (DRAT) imposed a 50% pre-deposit condition for appeal. The Bombay High Court subsequently dismissed their writ petition on December 5, 2024, allowing demolition to proceed.

On December 11, 2024, the Supreme Court ordered status quo, noting arguments that the hotel was constructed before incorporation into municipal limits in 2021 and should not be judged under current building laws. However, the auction purchaser claimed legal rights to alter or rebuild the property.

When the matter was heard again, the bench of Justice Surya Kant and Justice Joymalya Bagchi found the auction proceedings still under challenge and directed the DRT to decide the case by November 14, 2025, even if parties fail to appear. Interim protection ordered by the Court on December 11, 2024, will remain until the DRT’s decision, but will automatically lapse if the appellants’ objections to the auction are rejected.

The Court further ordered all parties to cooperate with the DRT and appear on October 14, 2025, emphasising that final resolution of the auction dispute should end uncertainty over the purchaser’s title. All pending applications were disposed of.