Allahabad HC Quashes DRAT Order, Cancels Auction Sale Under SARFAESI Act As Debtor Was Not Informed [Read Judgment]

The Allahabad High Court has quashed proceedings initiated post notice under Section 13(4) of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as the said notice was issued without duly informing the debtor about the auction of property and subsequent sale.Justice Mahesh Chandra Tripathi was hearing a petition filed by one Ashok Kumar who sought quashing of an order by the Debt Recovery Appellate Tribunal(DRAT) dated March 6, 2013 wherein...

DRT Allows Banks To Recover Rs.6,203 Cr From Vijay Mallya, His Firms [Read Order]

Mallya’s claim of banks coercing him to execute guarantee can add a bit of humour value in this otherwise serious claim for recovery of thousands of Crores of public money, the Tribunal said.The Debt Recovery Tribunal (DRT), Karnataka, has allowed banks to recover Rs.6,203 crore from Vijay Mallya, Kingfisher Airlines and associated companies.Presiding Officer K Srinivasan also held that service tax charge over schedule properties shall be receivable only after satisfaction of all claims of...

Appeal Before DRT Maintainable Even If Amount Involved Is Less Than Rs 10 Lakh: SC [Read Judgment]

The Supreme Court in State Bank of Patiala vs. Mukesh Jain, has held that the Debt Recovery Tribunal (DRT) has jurisdiction to entertain an appeal as per Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, even if the amount involved is less than Rs 10 lakh.A bench comprising Justice Anil R Dave and Justice L Nageswara Rao, however, clarified that appellate jurisdiction need not be misunderstood with the original jurisdiction of...

Partial deposit before DRAT under Section 18 of SARFAESI Act refundable, reiterates SC [Read Judgment]

Reiterating the dictum laid down in in Axis bank vs. SBS Organics Private Limited, the Supreme Court in KUMAR ALUMINIUM LTD. VS. ASSET RECONSTRUCTION COMPANY INDIA has set aside a Delhi High Court Judgment which had refused to interfere with DRAT order which turned down the prayer for refund of the amount deposited in compliance of the requirement of the second proviso to section 18(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,...

Partial Deposit before DRAT is neither a secured asset, nor a secured debt; It is refundable to the appellant after disposal of Appeal: SC [Read Judgment]

The Supreme Court in Axis bank vs. SBS Organics Private Limited has held that the partial deposit before the Debt Recovery Appellate Tribunal (DRAT) as a pre-condition for considering the appeal on merits in terms of Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), is neither a secured asset, nor a secured debt, and hence refundable to the appellant on disposal of appeal.Apex Court Bench comprising of Justices...

Provisions of SICA prevail over the provision for recovery of debts under RDDB Act : Supreme Court [Read the Judgment]

A three judge benchof the Supreme Court, consisting of Chief Justice of India HL Dattu, Justice Bobde and Justice Sapre pronounced that "the provisions of SICA, in particular Section 22, shall prevail over the provision for the recovery of debts in the RDDB Act."The appeal had first come up before the Bench of Justice Thakker and Justice Altamas Kabir, who had a difference of opinion regarding interpretation of Section 34 of the...

SARFAESI Amendment 2004 Unconstitutional: Gujarat HC

The Gujarat High Court delivered an important judgment, wherein it held unconstitutional an amendment in securitization laws and restored the Reserve Bank of India (RBI) as the watchdog of banks and non-banking financial institutes across the country as far as their non-performing assets (NPA) period was concerned. A division bench of Chief Justice Bhaskar Bhattachrya and Justice J B Pardiwala has ruled that a 2004 amendment in the Securitization and Reconstruction of Financial Assets and...