Tehsildar's Possession Letter Cannot Be Treated As SARFAESI 'Measure' For Computing Limitation: DRT Chandigarh

The Chandigarh Debts Recovery Tribunal (DRT) has recently held that a possession letter issued by a Tehsildar for execution of a Magistrate's possession order is not a "measure" under the SARFAESI Act. The tribunal held that such a letter cannot be used to compute the limitation period for filing a securitisation application. Presiding Officer Mridulesh Kumar Singh observed,“In sub-Section (4) of the Section 13 nowhere it is provided that a letter issued by Tehsildar cum Executive Magistrate in...

DRT Mumbai Dismisses Borrower's Review Plea Seeking To Reopen Issues Already Decided.

The Mumbai bench of the Debts Recovery Tribunal (DRT) has dismissed a borrower's review plea against Union Bank of India. The tribunal held that the applicant had failed to point out any patent error in its earlier order and was seeking to reopen issues that had already been decided. Presiding Officer Sreekala Suresh observed: “The application now filed against order dated 07.05.2024, which is seen to be a considered one, considering the rival contentions, where no patent error of omission as...

Evidence Of Person Without Direct Knowledge Insufficient In Cheque Bounce Case: Kerala High Court

The Kerala High Court has observed that a complainant in a cheque dishonour case cannot rely on evidence from a person who lacks direct knowledge of the transaction and execution of the cheque to prove those facts. “Indubitably such evidence shall be given by the person, who had direct knowledge regarding the transaction and execution of the cheque and the evidence of a person, who does not know the same is insufficient to prove the transaction and the execution of the cheque.” Justice A....

Calcutta High Court Holds No Title Passed Under Tenancy Created After SARFAESI Notice

The Calcutta High Court on Tuesday set aside a trial court order directing parties to maintain status quo in a tenancy dispute over a property. It held that a tenancy created after issuance of a demand notice under the SARFAESI Act could not confer any rights on the tenant. A Division Bench of Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya held that the tenancy relied upon by Julien Educational Trust had been created years after issuance of the demand notice and without any...

Bombay High Court Rules Section 18 SARFAESI Pre-Deposit Mandatory, Bars Complete Waiver By DRAT

On 8 June, the Bombay High Court held that borrowers cannot bypass the mandatory pre-deposit requirement under Section 18 of the SARFAESI Act while challenging orders of the Debts Recovery Tribunal, including orders refusing to condone delay, and reiterated that the statute permits only limited reduction of the deposit and not complete waiver. Justices Manish Pitale and Shreeram V Shirsat allowed writ petitions filed by HDFC Bank and auction purchaser Aloukik Construwell LLP and set aside...

DRAT Kolkata Holds Administrative Lapses Not 'Sufficient Cause', Dismisses Karur Vysya Bank Appeal

The Kolkata Bench of the Debts Recovery Appellate Tribunal (DRAT) on 20 May dismissed Karur Vysya Bank's appeal as time-barred and held that internal administrative issues such as officer retirement, departmental relocation, and procedural delays do not amount to “sufficient cause” under Section 5 of the Limitation Act, 1963 for condoning delay. A Bench comprising Chairperson Justice Anil Kumar Srivastava refused to condone a 194-day delay in filing the appeal. It observed: “Law is very well...

OTS Rejection Is Substantive Order, Pre-Deposit Mandatory Under SARFAESI: Calcutta High Court

The Calcutta High Court on 20 May held that rejection of a borrower's plea seeking implementation of a One Time Settlement (OTS) scheme constitutes a substantive adjudication affecting debt liability and not a mere procedural order. Justice Om Narayan Rai observed that any direction requiring a bank to implement an OTS scheme would amount to alteration of the borrower's outstanding liability. He held: “A direction to the bank to implement a scheme for one time settlement in support of a...

SARFAESI Sale Certificates Not Liable To Stamp Duty Upon Issuance: Kerala High Court [Full Bench]

The Kerala High Court has recently held that a sale certificate issued pursuant to an auction sale under the SARFAESI Act is not liable to stamp duty merely upon its issuance. The Court also held that a Registering Officer cannot refuse to file a copy of such certificate on the ground that it is unstamped. A Full Bench comprising Justices Sathish Ninan, T.R. Ravi and M.A. Abdul Hakhim answered a reference arising from conflicting Division Bench decisions on the issue. “It has been held that...

Magistrate Cannot Refer Parties To Mediation In SARFAESI Proceedings Under Section 14: Kerala High Court

The Kerala High Court has set aside an order referring a SARFAESI proceeding to mediation, holding that the role performed by a Magistrate in such proceedings is purely ministerial and does not involve any adjudicatory process. Justice P.V. Balakrishnan observed that a Chief Judicial Magistrate or Additional Chief Judicial Magistrate exercising powers under the SARFAESI Act does not perform any quasi-judicial function and has no discretion in the matter. “It cannot be disputed that the power...

Unauthenticated Alteration In Cheque Date Renders It Void: Kerala High Court

The Kerala High Court has recently held that an alteration in the date of a cheque that is not authenticated by the drawer's full signature amounts to a material alteration and renders the cheque void, while upholding an acquittal in a cheque dishonour case. Justice A. Badharudeen held: “When there is alteration of the date in the cheque which is not authenticated by putting the full signature of the drawer on the place of alteration, the same operates as a material alteration and the same...

Madras High Court Issues Statewide Directions For Timely Disposal Of SARFAESI Pleas Seeking Aid In Taking Possession

The Madras High Court on Friday issued a comprehensive set of statewide directions governing applications under Section 14 of the SARFAESI Act. The Court observed that delays by designated authorities defeat the legislation's objective of enabling expeditious recovery of secured assets and reducing non-performing assets (NPAs). Section 14 of the SARFAESI Act enables banks and other secured creditors to seek the assistance of a Chief Metropolitan Magistrate, Chief Judicial Magistrate or...

Madras High Court Upholds Forfeiture of 25% Bid Amount in SARFAESI Auction Case

On 4 June, the Madras High Court dismissed a writ petition and held that a defaulting auction purchaser cannot claim refund of the 25% deposit when he repeatedly fails to pay the balance sale consideration despite extensions, and the rules permit forfeiture of the amount in such circumstances. A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan rejected Kamal's challenge to the order of the DRAT Chennai, which had upheld the dismissal of his...