Vijay Mallya Bought Ferrari 246 GTS; But Made No Deposit Before DRAT; Karnataka HC Dismisses His Plea Seeking Restoration Of Appeal Before DRAT [Read Order]

The Karnataka High Court has dismissed Vijay Mallya’s plea seeking restoration of his appeal filed before the Debt Recovery Appellate Tribunal (DRAT) that had dismissed his appeal as he did not deposit a sum of Rs 3,101 crore within prescribed time.The bench comprising Chief Justice Dinesh Maheshwari and Justice Krishna S. Dixit observed that the 2016 amendment to Section 21 of Recovery of Debts due to Banks and Financial Institutions Act, 1993 that restricted the power of DRAT to waive...

DRAT Has No Inherent Power To Take Suo Motu Cognizance In Public Interest, Reiterates Delhi HC [Read Order]

The Delhi High Court has expressed “surprise” over the Debts Recovery Appellate Tribunal (DRAT) exercising suo motu powers in public interest despite clear pronouncements of the Supreme Court that it has no such inherent power.A bench of Chief Justice Rajendra Menon and Justice V Kameswar Rao reiterated that the DRAT does not have any inherent power to take suo motu action in public interest.It said so while quashing a July 24 show cause notice issued by DRAT to Padam Singhee and others when...

‘Structure Of Debt Recovery Tribunals (DRTs) May Need Revisit’: SC Asks Centre To Look Into Suggestions Submitted By Amicus Curie

The Supreme Court has made an observation that the structure of Debt Recovery Tribunals (DRTs) may need revisit taking into account the suggestion for permanent cadre, autonomous selection procedure, autonomous accountability and disciplinary mechanism, finality subject only to jurisdiction of constitutional courts, to uphold the rule of law and independence of judiciary.The bench of Justice AK Goel, Justice RF Nariman and Justice Navin Sinha made this observation while perusing the suggestion...

No Application Can Be Filed Against Taking ‘Symbolic Possession’ Before DRT: Allahabad HC (FB) [Read Judgment]

The full bench of Allahabad High Court, in M/s N.C.M.L. Industries Ltd. through Director and another Vs. Debts Recovery Tribunal, Lucknow and others, has held that taking “symbolic possession” or issuance of possession notice, meeting with any resistance, cannot be treated as “measure”/s taken under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, and, therefore, the borrower at that stage cannot file an application under...

There Can Be Simultaneous Proceedings Under SARFAESI And Arbitration Act For Recovery Of Loan Arrears: Delhi HC [Read Order]

The Delhi High Court, on Thursday, held that arbitration and SARFAESI proceedings can be resorted to simultaneously for recovery of loan arrears."As the SARFAESI Act and the Arbitration /Debt Recovery Act are held to be complementary in nature and the doctrine of election has been held to be not applicable, it cannot be said that if a party has invoked one remedy, it is debarred from invoking the other during the pendency of the first one. Under the SARFAESI Act, specially under Section 13...

DRT Has No Power To Condone Delay In Filing Appeal: SC [Read Judgment]

The Supreme Court, in International Asset Reconstruction Company Of India Ltd vs The Official Liquidator Of Aldrich Pharmaceuticals Ltd And Others, has held that the prescribed period of 30 days under Section 30(1) of the Recovery of Debts and Bankruptcy (RDB) Act, 1993, for preferring an appeal against the order of the recovery officer cannot be condoned by application of Section 5 of the Limitation Act.In the instant case, an appeal was preferred by the aggrieved against the order of recovery...

SARFAESI: Allahabad HC Refuses To Entertain Borrower’s Loan Default Due To Demonetisation, GST [Read Judgment]

The Allahabad High Court has dismissed a writ petition challenging recovery proceedings initiated against a borrower firm, which challenged recovery proceedings on the ground that due to demonetisation and imposition of GST, it suffered loss in business and could not pay loan installments to the bank.The bench comprising Justice Bharati Sapru and Justice Siddharth passed the above order in a petition filed by LED bulb manufacturing firm, M/S Kanika Swami of Meerut.The issue before the division...

There Can Be Simultaneous Proceedings Under SARFAESI And Arbitration Act For Recovery Of Loan Arrears [Read Judgment]

The Supreme Court has held that NBFC is entitled to initiate both arbitration proceedings and SARFAESI proceedings with respect to a loan account, and that the ‘doctrine of election’ was not attracted in such a scenario. It was further clarified that there was no illegality  in an Non-Banking Financial Company(NBFC) invoking SARFAESI Act for recovery of loan arrears with respect to an account classified as Non-Performing Asset(NPA) before the NBFC got notified under the Act. It was also...

Borrower Can Prefer Appeal To DRT Even If Mortgaged Property Belongs To Guarantor: Chhattisgarh HC [Read Judgment]

It is nowhere provided that when secured asset belongs to the guarantor, only the guarantor can prefer an appeal and not the borrower, the court said.The Chhattisgarh High Court, in Manik Mehta vs. UCO Bank, has observed that even when the secured asset belongs to the guarantor, the borrower can also prefer an appeal to the Debt Recovery Tribunal (DRT).In the present case, the Debts Recovery Appellate Tribunal (DRAT) has found that under Section 17 of the Act, 2002, any person (including the...

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...