Bombay High Court
Harbour Heights Flat Owner Association vs Sub Registrar Of Assurances on 24 December, 2025
Author: R.I. Chagla
Bench: R.I. Chagla
2025:BHC-OS:26662-DB
908. WPL 36757-IAL. 41331-WPL 36781.2025
CFM Asset Reconstruction vs. Sub Registrar
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 36757 OF 2025
CFM Asset Reconstruction Private Limited ... Petitioner
V/s.
Sub-Registrar of Assurances and Anr. ... Respondents
WITH
INTERIM APPLICATION (L) NO. 41331 OF 2025
IN
WRIT PETITION (L) NO. 36757 OF 2025
Harbour Heights Flat Owner Association ... Applicant
an Association of Persons (HHFOA) (Third Party)
IN THE MATTER BETWEEN
CFM Asset Reconstruction Private Limited ... Petitioner
V/s.
Sub-Registrar of Assurances and Anr. ... Respondents
WITH
WRIT PETITION (L) NO. 36781 OF 2025
Shree Naman Estate Project Private Limited ... Petitioner
V/s.
Sub-Registrar of Assurances and Ors. ... Respondents
_______________________________________
Mr. Ashish Kamat, Senior Counsel with Mr. Munaf Virjee, Mr. Tirtha
Mukherjee and Ms. Shruti Salian i/b. AMR Law for the Petitioner in WPL
36757/2025 and for Respondent No.2 in WPL 36781/2025
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Order dated 24TH December 2025
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908. WPL 36757-IAL. 41331-WPL 36781.2025
CFM Asset Reconstruction vs. Sub Registrar
Mr. Nitin Thakker, Senior Counsel with Mr. Vishnu Shriram, Ms. Aaria Parekh
and Ms. Fatema Kinkhabwala i/b. Khaitan & Co. for Petitioner in WPL
36781/2025 and for Respondent No.2 in WPL 36757/2025
Ms. Fatima Lakdawala, AGP for Respondent Nos. 1 and 3 in WPL
36757/2025
Ms. Nazia Sheikh, AGP for Respondent Nos. 1 and 3 in WPL 36781/2025
Mr. Rohan Agrawal with Mr. Zulfiqar Jariwala and Mr. Shabbir Jariwala for
Intervener/Applicant in IAL 41331/2025
Mr. Aaqib B. Kazi with Ms. Samreen Allana for Intervener- Complainant
(DeFacto) in FIR No. 67 of 2024
_______________________________________
CORAM : R.I. CHAGLA AND
FARHAN P. DUBASH, JJ.
RESERVED ON : 19TH DECEMBER 2025
PRONOUNCED ON : 24TH DECEMBER 2025
ORDER (Per Farhan P. Dubash J.) :
1. The refusal on the part of the Sub-Registrar of Assurances to register a sale certificate when issued in favour of a successful auction purchaser under the SARFAESI regime has resulted in the filing of the captioned Writ Petitions. The refusal is occasioned on account of a letter addressed by the Economic Offences Wing (EOW) informing the Sub- Registrar of Assurances not to register any document that would result in the creation of any third party rights in the subject property, without the prior order of the Special Sessions Court (MPID Court) and without prior intimation to the EOW.
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar
2. Two Writ Petitions have been filed in this Court challenging the said letter dated 16th June 2025 addressed by the EOW (impugned letter) and the subsequent (in)action on the part of the Sub-Registrar of Assurances viz. Writ Petition (L) No. 36757 of 2025 has been filed by CFM Asset Reconstruction Private Limited (CFM-ARC), who is the secured creditor/mortgagor of the subject property 1 whereas, Writ Petition (L) No. 36781 of 2025 has been preferred by Shree Naman Estate Project Private Limited (Shree Naman), who is the successful auction purchaser2 of the subject property viz. land admeasuring 38,881.58 sq. mtrs. (46,502 sq. yards) bearing CTS No. 525 at Mazgaon, Raey Road, Mumbai - 400 010 (Secured Property).
3. There is also an Intervention Application taken out by a third party viz. Harbour Heights Flat Owners Association, which is stated to be an Association of Persons comprising of 65 flat purchasers who are stated to have purchased residential flats in the residential project known as ' Harbour Heights' (earlier Burhani Park) from Radius Sumer Developers Pvt. Ltd. (Borrower) during the period, from 2006 till 2018, who have sought to intervene in Writ Petition (L) No. 36757 of 2025, and oppose the reliefs sought therein.
1 pursuant to an assignment of the debt and underlying security interests, by Standard Chartered Bank and Punjab National Bank Housing Finance Limited (Original Lenders) of Radius Sumer Developers Private Limited, under two registered assignment agreements dated 31st March 2024. 2 pursuant to an auction conducted by CFM-ARC on 19th August 2025 Page 3 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar
4. Upon due consideration of the entire factual matrix, some notable facts stand out, which we believe are required to be highlighted. They are set out hereunder:
(a) In or about 2016, Punjab National Bank Housing Finance Limited and Standard Chartered Bank (Original Lenders) are stated to have extended credit facilities to the tune of Rs. 600 crores to the Borrower, pursuant to a registered mortgage created in respect of the Secured Property.
(b) On account of a default made by the Borrower, the Original Lenders are stated to have issued separate Demand Notices on 1st April 2020 and 27th March 2020, under Section 13(2) of the SARFAESI Act, 2002 for repayment of the outstanding amounts due to them.
(c) Pursuant thereto, CFM-ARC (who had by then, stepped into the shoes of the Original Lenders after executing the two assignment agreements), issued a Possession Notice under Section 13(4) of the SARFAESI Act, 2002, which was published in two newspapers on 14th July 2024.
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar
(d) On 26th February 2025, Shree Naman is stated to have submitted its irrevocable offer of Rs. 430 crores for acquisition of the Secured Property by way of swiss challenge auction process.
(e) Pursuant thereto, on 2nd March 2025, CFM-ARC issued a Sale Notice specifying the terms of auction of the Secured Property by way of swiss challenge auction process, in which, the bid of Shree Naman held as the anchor bid. However, no challenging bids were received by CFM-ARC in the said auction, which resulted in them issuing a fresh Sale Notice for conducting the auction on 24th May 2025, on the same terms and conditions. Here again, no challenging bids were received which resulted in the auction being rescheduled from time to time and ultimately, it was scheduled to take place on 19 th August 2025.
(f) Yet again, on 19th August 2025 no challenging bids were received by CFM-ARC and as a result, Shree Naman was declared as the successful highest bidder.
(g) Accordingly, the next day, viz. on 20th August 2025, Shree Naman deposited 25% of the purchase consideration Page 5 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar aggregating Rs. 107.50 crores, in compliance with Rule 9(3) of the Security Internet (Enforcement) Rules, 2002 with CFM-ARC and thereafter, on 29th August 2025, requested them for a 90 day extension to pay the balance 75% of the purchase consideration amount. This request was accepted by CFM-ARC, who extended the period for payment of the balance 75% of the purchase consideration till 17th November 2025.
(h) By orders passed by this Court in the captioned Writ Petitions, the time for making payment of the balance 75% of the purchase consideration has been extended from time to time and by our order dated 19th December 2025, the same stands extended till 23rd /24th December 2025.
(i) During this interregnum period, the impugned letter dated 16th June 2025 came to be issued by the EOW directing the Sub- Registrar of Assurances (Respondent No. 1 in both Writ Petitions) not to register any document that would have the effect of creating any third-party rights in respect of the Secured Property (described therein, as the Harbour Heights property) without prior intimation to them and without obtaining an order from the MPID Court.
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar
(j) The impugned letter resulted in the parties' exchanging internal communication between themselves on the topic as to whether the Sale Certificate, when issued by CFM-ARC and upon payment of the balance 75% of purchase consideration by Shree Naman, would be registered by the Sub-Registrar of Assurances, or not. However, despite repeated requests, no clarification came to be issued either by the Sub-Registrar of Assurances or the EOW. Hence, the captioned Writ Petitions have been filed in this Court.
5. Mr. Ashish Kamat, learned Senior Counsel who appears on behalf of the Petitioner has taken us through the events that have transpired in the matter. He points out that, save and except for the directions contained in the impugned letter, which he submits are issued without any authority of law, till date, no order(s) have been passed against/in respect of the Secured Property under Section 4 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act) interalia attaching it and thereby, making it beyond the reach of secured creditors viz. his client in the present case, who seek enforcement of their statutory rights under the SARFAESI Act, 2002 by selling the Secured Property. He submits that in the absence of such an (attachment) order, Page 7 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar there is no provision under the MPID Act, that would otherwise authorize or empower the EOW to issue the impugned letter and inform the Sub-Registrar of Assurances not to register any document that would result in the creation of any third party rights in the subject property, without the prior order of the MPID Court and without prior intimation to them, as has illegally been done, in the present case.
6. Mr. Kamat submits that the SARFAESI Act, 2002 prescribes statutory guidelines which empower his client to realize its dues by attaching and selling the Secured Property, which has been done by them. Accordingly, he points out that the Secured Property has been agreed to be sold to Shree Naman for a sum of Rs. 430 crores, of which, CFM-ARC has already received Rs.107.50 crores but is unable to receive the remaining amount, due to the illegal restrictions imposed by the impugned letter. He therefore seeks to quash the impugned letter and a further direction to the Sub-Registrar of Assurances to proceed and register the sale certificate which, CFM-ARC would be issuing in favour of Shree Naman, immediately upon payment of the balance 75% of the purchase consideration.
7. Mr. Nitin Thakkar, learned Senior Counsel who appears on behalf of Shree Naman, supports the submissions made by Mr. Kamat. He Page 8 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar adds that his client has been ready and willing, since 17 th November 2025 (and even prior thereto), to deposit the balance 75% of the purchase consideration but has only not done so, on account of the embargo placed on registration of the sale certificate by the impugned letter. He states that Shree Naman is ready and willing to make this payment even today and seeks the same reliefs sought for by CFM-ARC.
8. Ms. Fatima Lakdawala, learned AGP who appears on behalf of EOW invites our attention to the affidavit dated 9 th December 2025 filed in reply to the Writ Petitions which contain details of complaints filed by various flat purchasers who have invested their monies with the Borrower in the 'Harbour Heights' project on the Secured Property. She submits that C.R. No. 660 of 2024 that was filed by one of the complainants under Section 43 and 420 of the Indian Penal Code, 1860 and registered with the Bandra- Kurla Complex Police Station has subsequently been allotted for further investigation to the EOW being C.R. No. 67 of 2024. She points out that pursuant to such investigation and application by the said investors before the Sessions Court - MPID Court to invoke Sections 3 and 4 of the MPID Act and carry out further investigation, an order came to be passed on 21 st March 2025 allowing the said application. She submits that the investigation undertaken by the EOW till date, reveals that a sum of approximately Rs. Page 9 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar 210 crores has been identified as "cheated amount" relating to 90 investors in the 'Harbour Heights' project and which amount expected to increase since the investigation is still underway.
9. She further points out that it was during the course of such investigation that the EOW addressed the impugned letter dated 16 th June 2025 to the Sub-Registrar requesting them not to register any document without seeking prior permission from the MPID Court and without prior intimation to them. She states that the EOW have since, also submitted their proposal vide letter dated 18 th June 2025 to the Collector, Mumbai Suburban District requesting for seeking necessary approval from the (State) Government to notify the 'Harbour Heights' project, which proposal, is still pending from the (State) Government. She states that upon receipt of necessary approval, the same would have the effect of attachment of the Secured Property and therefore, till then, she submits that the registration of the sale certificate ought not to be permitted by this Court.
10. She submits that the Petitioner had full knowledge of the impugned letter but yet, went ahead with the auction on 19 th August 2025 and sold the Secured Property to Shree Naman and in the bargain, intentionally avoided approaching the MPID Court for taking the necessary Page 10 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar orders. She therefore submits that the reliefs sought in the Writ Petitions ought not to be granted by this Court.
11. Mr. Roshan Agrawal, learned Counsel appears on behalf of the Intervener and submits that his client is an Association of Persons comprising of 65 flat purchasers who have purchased residential flats in the ' Harbour Heights' project on the Secured Property from the Borrower and in the bargain, parted with huge sums of money. He seeks to question the actions adopted by CFM-ARC in conducting the auction sale and selling the Secured Property to Shree Naman. He submits that the said transaction is not above board and is contrary to law. He also submits that there is a hidden nexus between CFM-ARC, Shree Naman and the Borrower and this transaction has been done in furtherance thereof and only to defeat the rights of his client/flat purchasers. He therefore seeks to intervene in the captioned Writ Petition and oppose the reliefs sought therein.
12. We have heard all the parties and perused the record that is available before us. It is indeed surprising to note that despite there being no order of attachment passed by the MPID Court under Section 4 of the MPID Act or any other form of attachment of the Secured Property under the provisions of the MPID Act (or for that matter, under any other Act also), the Page 11 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar EOW has addressed the impugned letter dated 16 th June 2025 informing the Sub-Registrar of Assurances not to register any document that would result in the creation of any third party rights in the subject property, without the prior order of the MPID Court and without prior intimation to them.
13. Upon enquiry by this Court, Ms. Lakdawala, learned AGP fairly admits that till date, no approval from the (State) Government has been received pursuant to the said proposal dated 18 th June 2025 nor has any order been passed by the MPID Court under Section 4 or any other provision of the MPID Act, attaching the Secured Property and/or preventing CFM- ARC from exercising its statutory rights under the SARFAESI Act, 2002 and selling it. Pursuant to the recent decision of the Supreme Court in National Spot Exchange Limited vs. Union of India3, it has been held that the provisions of the MPID Act would override any claim for priority of interests by the secured creditors in respect of the properties which have been attached under the MPID Act. Thus, it is clear that restrictions are imposed under the MPID Act, only after an order of attachment has been passed (under Section 4 thereof) and not in anticipation of any such order, as has been done in the present case (by relying on the said proposal dated 18 th June 2025). This is wholly impermissible. In these circumstances, we fail to 3 (2025) SCC Online SC 1137 Page 12 of 14
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar see how the EOW could have taken law into their own hands and addressed the impugned letter. Such action on their part is contrary to the provisions of the MPID Act and could never have been done.
14. Under these circumstances, whilst this Court may sympathize with the Interveners, their intervention in the captioned Writ Petitions is wholly unwarranted inasmuch as, they have got no locus standi to do so. Additionally, their interests are required to be adjudicated in an appropriate forum and till this is done, they cannot oppose the reliefs sought in the Writ Petitions. Upon enquiry from this Court, Mr. Agrawal was unable to point out any proceedings or orders passed by any competent Court which prevented CFM-ARC from selling the Secured Property to Shree Naman and/or the Sub-Registrar of Assurances, from thereafter registering the sale certificate. This Court cannot wait endlessly, and in anticipation that the said proposal dated 18th June 2025 would be accepted and an order of attachment under Section 4 of the MPID Act would be passed, thereby preventing alienation of the Secured Property and/or registration of the sale certificate.
15. Accordingly, the captioned Writ Petitions are disposed of in terms of the following order :
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908. WPL 36757-IAL. 41331-WPL 36781.2025 CFM Asset Reconstruction vs. Sub Registrar : ORDER :
(i) The impugned letter dated 16th June 2025 issued by the EOW is hereby quashed and set aside.
(ii) This Court hereby extends the time to the parties to complete the transaction which shall be done on or before 31st January 2026 before which date, Shree Naman Estate Project Private Limited shall make payment of balance 75% of the purchase consideration to CFM Asset Reconstruction Private Limited and pursuant to which, the sale certificate shall be issued.
(iii) The Sub-Registrar of Assurances, Mumbai-2 is directed not to act upon or give effect to the impugned letter and shall register the sale certificate when issued by CFM Asset Reconstruction Private Limited in favour of Shree Naman Estate Project Private Limited for sale of the Secured Property.
(iv) The Interim Application seeking intervention is hereby disposed of as rejected.
(iv) There shall be no order as to costs. (v) All parties shall act on a copy of this order duly authenticated/digitally
signed and uploaded by the P.S./P.A. of this Court.
( FARHAN P. DUBASH, J. ) ( R.I. CHAGLA J. )
Jyoti Pawar
908. WPL 36757-IAL. 41331-WPL 36781.2025
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