Interest Loss Not Ground For Condonation Of Delay: DRAT Kolkata Rejects ASREC Appeal Filed After 910 Days

The Debts Recovery Appellate Tribunal at Kolkata has refused to condone a delay of 910 days in filing an appeal, holding that the explanation offered by the appellant did not disclose sufficient cause to justify condonation of such an inordinate delay. The tribunal also observed that delay cannot be condoned merely on the ground that the claimants were deprived of interest during the period of delay. The observations were made by Chairperson Justice Anil Kumar Srivastava while deciding an...

High Courts Can Examine Valuation, Reserve Price In Recovery Proceedings Under Supervisory Jurisdiction: Supreme Court

The Supreme Court on Friday observed that high courts may invoke their supervisory jurisdiction to examine valuation and reserve price fixation in recovery proceedings where credible issues are raised regarding the adequacy of valuation or the fairness of the process. A bench of Justices J.B. Pardiwala and R. Mahadevan made the observation while dismissing an appeal filed by an auction purchaser challenging a Madras High Court judgment dated February 6, 2020, which had remitted the matter to...

Educational Institutions Should Not Be Shut Down For Debt Recovery When Other Options Exist: DRAT Kolkata

The Debts Recovery Appellate Tribunal (DRAT) at Kolkata has recently observed that educational institutions should not be shut down or their management taken over by secured creditors when other lawful modes of recovery are available, while partly allowing an appeal filed by Kotak Mahindra Bank against an interim order passed by the Debts Recovery Tribunal, Kolkata.Chairperson Justice Anil Kumar Srivastava observed, “Educational Institutions are not to be shut down or their Management should...

Agricultural Officer Certificate Not Enough To Claim SARFAESI Exemption For Agricultural Land: DRT Ernakulam

The Debts Recovery Tribunal at Ernakulam has recently held that a certificate issued by an Agricultural Officer is not sufficient by itself to prove that a secured property is agricultural land exempt from recovery under the SARFAESI Act, reiterating that the burden lies on the borrower to establish the nature of the land at the time the loan was availed.Presiding Officer Sovan Kumar Dash dismissed a securitization application filed by borrowers challenging recovery proceedings initiated by...

Bank Cannot Attach Deposits Pending Recovery Proceedings Without Show Cause Notice Under RDB Act: DRAT Chennai

The Debts Recovery Appellate Tribunal (DRAT), Chennai has held that a bank cannot attach or exercise lien over deposits during the pendency of recovery proceedings unless the procedure prescribed under the Recovery of Debts and Bankruptcy Act is followed. It also ruled that such relief cannot be granted when the original application does not contain a specific prayer seeking recovery against the concerned party. Interim directions, the tribunal said, cannot travel beyond the scope of the main...

SARFAESI Notice To Dead Guarantor Was Invalid Even If Received By Borrower's Wife: DRT Ernakulam

The Debt Recovery Tribunal (DRT) in Kerala has set aside recovery proceedings initiated by South Indian Bank Ltd. under the SARFAESI Act after finding that one of the demand notices had been issued to a guarantor who had died several years earlier. Presiding Officer Sovan Kumar Dash, while partly allowing a securitization application filed by borrower Shijo Jose, observed that a demand notice issued to a deceased person is void from the outset and cannot be validated merely because it was...

Establishment Of Kolhapur Bench No Ground To Say Mumbai Seat Lost Jurisdiction Over Writ Against DRAT Order: Bombay High Court

The Bombay High Court has recently ruled that the creation of the Kolhapur Circuit Bench does not divest the Principal Seat at Mumbai of jurisdiction over a writ petition challenging an order of the Debts Recovery Appellate Tribunal, even where the dispute originates in Kolhapur district. A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat made the observation while hearing a writ petition challenging a September 19, 2024 order of the Debts Recovery Appellate Tribunal (DRAT) in...

ACJM Not Subordinate To CJM In Judicial Functions In SARFAESI Possession Proceedings: Bombay High Court

The Bombay High Court has held that an Additional Chief Judicial Magistrate is competent to entertain applications under Section 14 of the SARFAESI Act, ruling that the magistrate exercises judicial powers at par with a Chief Judicial Magistrate. Section 14 allows a secured creditor (bank/financial institution) to seek assistance from a magistrate to take physical possession of secured assets when a borrower defaults.A coram of Justice Urmila Joshi Phalke dismissed a criminal application filed...

SARFAESI Action Does Not Bar Civil Court From Hearing Partition Suit: Bombay High Court

The Bombay High Court has held that civil courts retain jurisdiction to adjudicate partition suits involving secured assets, observing that the Debts Recovery Tribunal cannot grant such relief even where proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) have been initiated. A Single Bench of Justice N.J. Jamadar observed that, “The Tribunal, thus, cannot transgress its jurisdictional limits and delve into the...

Auction Of Pledged Gold Not Governed By SARFAESI: J&K and Ladakh High Court

The High Court of Jammu & Kashmir and Ladakh on Wednesday dismissed writ petitions challenging Axis Bank's proposed auction of pledged gold ornaments, observing that such action does not fall within the ambit of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) since pledges of movable property are excluded under Section 31(b) of the statute. A division bench of Justice Sindhu Sharma and Justice Shahzad Azeem was dealing...

Single Judge Cannot Disregard Rulings Of Division Bench Under Guise Of Reference: Kerala High Court

The Kerala High Court on Wednesday held that a Single Judge is bound by decisions of Division Benches and Full Benches and cannot question or disregard a binding Division Bench ruling under the guise of making a reference. A Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M was dealing with a reference arising from a writ petition filed by Grids Engineers and Contractors, challenging proceedings initiated by Union Bank of India under Section 14 of the SARFAESI Act. The Bench...

Bank Cannot Cancel Confirmed Auction Sale Due To Pending DRT Proceedings: Kerala High Court

The Kerala High Court on 3 March held that a bank cannot unilaterally set aside a confirmed auction sale merely because proceedings challenging the sale are pending before the Debts Recovery Tribunal (DRT). A Division Bench of Justice Anil K Narendran and Justice Muralee Krishna S was considering an appeal filed by the legal heirs of Vinod M.A., an auction purchaser. The Court stated: “It is trite that the authorised officer of the Bank cannot set aside the sale which was already confirmed in...