EPF Dues Get Priority Over Establishment Assets, Not Partner's Personal Property: Karnataka High Court

The Karnataka High Court has recently held that while the statutory first charge under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 takes priority over competing claims against the assets of an establishment, it does not automatically extend to the separate property of a partner of a partnership firm. Justice Anant Ramanath Hegde said Section 11(2) of the EPF Act expressly creates a first charge only over the assets of the establishment and not over the separate assets...

Settlement Preserving S.138 Proceedings Keeps Cheque Dishonour Liability Alive: Delhi High Court

On 1 July, the Delhi High Court held that assignment of debt to a sister concern under a settlement agreement does not extinguish liability under the Negotiable Instruments Act where the settlement expressly preserves cheque dishonour proceedings, and interpretation of such settlement terms involves disputed questions of fact unsuitable for adjudication in proceedings under Section 482 CrPC. Justice Amit Mahajan dismissed petitions filed by Flywheel Logistics Pvt. Ltd. and its directors, Anil...

SARFAESI Auction Purchasers Cannot Be Thrown On Streets On Account Of Dispute Between Banks: Bombay High Court

Successful auction purchasers holding a registered sale certificate under the SARFAESI Act cannot be thrown on the streets because of an inter se dispute between two secured creditors, the Bombay High Court held on Tuesday. "The petitioners, who are successful auction purchasers having registered sale certificate in respect of the said flat in their favour and who have been in valid and legal possession of the aforesaid flat for more than eight years, cannot be thrown on the streets, on the...

Wife Claiming Residence Rights In Mortgaged Property Need Not Make SARFAESI Pre-Deposit For Appeal: DRAT Delhi

A wife claiming a right to reside in a mortgaged property as her shared household is not required to make the statutory pre-deposit to pursue an appeal under the SARFAESI Act, the Delhi Bench of the Debts Recovery Appellate Tribunal (DRAT) has held. The tribunal, however, ruled that her claim under the Protection of Women from Domestic Violence Act, 2005, could not defeat HDFC Bank's right to enforce its security interest over the property. A tribunal headed by Chairperson Justice Sudhir...

DRAT Chennai Bars City Union Bank's Belated Challenge To Delayed Written Statement In ₹14 Crore Recovery Case

The Debts Recovery Appellate Tribunal (DRAT) at Chennai has recently set aside an order striking off a written statement filed by borrowers beyond the prescribed 45-day period in a recovery case initiated by City Union Bank for about ₹14 crore.It held that the bank lost its right to challenge the delayed filing after participating in the proceedings without objection and raising the issue only after the Madras High Court remanded the matter. A bench of Chairperson Justice G. Chandrasekharan...

DRAT Chennai Restores Civil Arrest In ₹15.14 Cr Kotak Mahindra Bank Recovery, Holds Insolvency No Bar

The Chennai Bench of the Debts Recovery Appellate Tribunal (DRAT) on 19 June held that an adjudication of a judgment debtor as an insolvent does not, by itself, grant immunity from civil arrest unless a protection order is obtained under Section 25 of the Presidency-Towns Insolvency Act, 1909, and that civil arrest can be sustained where statutory conditions are not met. A Bench led by Chairperson Justice G. Chandrasekharan allowed Kotak Mahindra Bank's appeal, set aside the order of the Debts...

Burden Shifts To Complainant Once Accused Proves Discharge In Cheque Bounce Case: Kerala High Court

The Kerala High Court on 30 June held that in a prosecution under Section 138 of the Negotiable Instruments Act, once the accused proves discharge of the underlying debt, and the complainant asserts that such repayments relate to a different transaction, the burden shifts to the complainant to establish that assertion. Justice A. Badharudeen dismissed an appeal filed by the complainant and upheld the acquittal of the accused passed by the Trial Court. He held: “Once plea of discharge is proved...

Kerala High Court Sets Aside KFC Auction Sale, Says Purchaser Cannot Be Financed Against Same Property

The Kerala High Court on 29 June held that the Kerala Financial Corporation (KFC) cannot finance the purchase of an auctioned property by advancing a loan against the security of the very same property, as such a course violates its statutory duty to secure the best possible price for the mortgaged asset. A Division Bench of Justices A.K. Jayasankaran Nambiar and Preeta A.K. set aside the auction sale conducted by KFC after finding material irregularities in the sale process, and directed it to...

DRAT Chennai Refuses To Condone Over 6-Year Delay In ₹115.39 Crore Recovery Appeal

The Chennai Bench of the Debts Recovery Appellate Tribunal (DRAT) has refused to condone a delay of more than six years (2417 days) in challenging a recovery order, finding that the appellant's plea of ignorance of the proceedings was untenable after notices were returned unclaimed and she later sought one-time settlements to secure the release of the mortgaged property.The tribunal, comprising Chairperson Justice G. Chandrasekharan, found that the appellant's claim that she had never been...

DRAT Allahabad Upholds Quashing Of SBI SARFAESI Auction Over First Sale At Distress Value

The Debts Recovery Appellate Tribunal (DRAT) at Allahabad has upheld an order setting aside a SARFAESI auction sale after finding that the State Bank of India fixed the reserve price of the secured asset at its distress value for what was legally the first sale. It also held that the bank failed to establish compliance with the mandatory requirements relating to service, affixation and publication of the auction notice. The tribunal was presided over by Chairperson Justice R. D. Khare. It...

Kerala High Court Dismisses Cholamandalam Appeal, Reiterates Threshold For Intra-Court Appeals

The Kerala High Court on 19 June dismissed a writ appeal filed by Cholamandalam Investment and Finance Company Limited after holding that a purely procedural interim order, which does not affect substantive rights or cause serious prejudice, cannot be appealed under Section 5(i) of the Kerala High Court Act, 1958. A Division Bench of Justices Anil K Narendran and Muralee Krishna S ruled that an intra-court appeal lies only against orders that substantially affect the rights or liabilities of...

DRAT Mumbai Rejects Bank Of Maharashtra's Appeal Over Failure To File Certified Copy Of The DRT Order

The Mumbai Bench of the Debts Recovery Appellate Tribunal (DRAT) has dismissed Bank of Maharashtra's appeal against a Debts Recovery Tribunal (DRT) order directing restoration of possession of mortgaged property to borrowers after holding that the appeal was not maintainable because the bank failed to file the certified copy of the impugned order. Chairperson Justice Vivek Bharti Sharma observed that, in the absence of the certified copy of the detailed DRT order, the appeal could not be...