DRT Chandigarh Sets Aside Indian Bank Auction, Awards Rs 30 Lakh Compensation To Auction Purchasers

The Chandigarh Debts Recovery Tribunal (DRT) has set aside Indian Bank's auction of two mortgaged plots secured against credit facilities availed by S.G.K. Industrial Corporation. The tribunal held that auctioning the plots as a single unit prejudiced the borrowers. It also found that the auction notice was not published 15 days before the sale. The Tribunal also directed the bank to pay Rs 30 lakh compensation to the auction purchasers and refund the sale consideration with interest, stamp...

DRAT Kolkata Upholds Rejection of Bank-Borrower Settlement That Kept Auction Purchaser In the Dark

The Kolkata bench of the Debts Recovery Appellate Tribunal (DRAT) has upheld a DRT order refusing to accept a settlement between Indian Bank and its borrower. It found that the auction purchaser was kept in the dark despite being a party to the proceedings and despite a final order directing refund of the auction consideration having attained finality. Chairperson Justice Anil Kumar Srivastava observed: “When the order dated 07.03.2024 was passed by Learned DRT on merits setting aside the...

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...

Civil Courts Cannot Grant Injunctions Against SARFAESI Action: Karnataka High Court

The Karnataka High Court has set aside a Commercial Court order that had stopped lenders from taking action under the SARFAESI Act, holding that such directions cannot be issued by civil courts. Referring to Section 34 of the SARFAESI Act, which bars courts from granting injunctions in such matters, the Court said: “A plain reading of the said section indicates that it proscribes any Civil Court from issuing any injunction not only with respect to the action taken, but also to an action that...

Illegal NPA Classification For MSME Borrower Vitiates SARFAESI Proceedings: DRT Chandigarh

The Debts Recovery Tribunal at Chandigarh has held that proceedings under the SARFAESI Act cannot be sustained where the loan account was classified as a Non-Performing Asset without following the mandatory procedure applicable to MSME borrowers, rendering the NPA declaration illegal. The tribunal held that once the classification itself is contrary to law, all subsequent enforcement measures taken under the Act are liable to be quashed. Presiding Officer Mridulesh Kumar Singh made the...

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...

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...

SARFAESI Act | Correcting Wrong Date In District Magistrate's Section 14 Order Is Not Review: Allahabad High Court

The Allahabad High Court has upheld a District Magistrate's decision to correct a wrong date in a SARFAESI order passed to assist a bank in taking possession of mortgaged property, holding that fixing a typographical error does not amount to an impermissible review. Justice Subhash Vidyarthi held that the District Magistrate under Section 14 of the Act performs an administrative role while passing such orders and does not exercise judicial power. Because of this, the magistrate is permitted to...