DRT Registrar Can't Suo Motu Question Limitation, Maintainability Of SARFAESI Plea: Kerala High Court

The Kerala High Court has held that a Debts Recovery Tribunal (DRT) Registrar cannot suo motu refer a securitisation application filed under Section 17 of the SARFAESI Act to the DRT by examining questions of maintainability, limitation or locus standi. Justice P.V. Balakrishnan set aside the order of the Debt Recovery Tribunal-I, Ernakulam, rejecting an unnumbered securitisation application filed by Ramachandran P, and remitted the matter to the Registrar for consideration in accordance with...

SARFAESI Sale Notice Can't Reopen Issue Already Considered In Earlier Writ: Kerala High Court

The Kerala High Court has held that a SARFAESI sale notice cannot be used to reopen an issue already considered in earlier writ proceedings when the relief sought later is a continuation of the original cause of action.“We have also considered the implication of Order II Rule 2 of the CPC in proceedings under Article 226 of the Constitution of India and have categorically stated that, in the absence of any challenge to the proposed action of the Bank, the sale notice would not furnish another...

No Court Can Condon Delay In DRT Written Statements Beyond 45 Days: Delhi High Court

The Delhi High Court has ruled that delay beyond the maximum 45-day period for filing a written statement before a Debts Recovery Tribunal (DRT) under Section 19(5)(i) of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) cannot be condoned.“The delay beyond the maximum period 45 days prescribed under Section 19(5)(i) of the RDBA Act cannot be condoned by any Court,” a Division Bench of Justice Subramonium Prasad and Justice Renu Bhatnagar observed while dismissing a petition filed by...

Secured Creditor Cannot Seek Removal Of Disclosed Encumbrances Without Settling Dues: Madras High Court

The Madras High Court has held that priority given to secured creditors over government dues under the SARFAESI Act does not allow a bank or auction purchaser to seek removal of known encumbrances without complying with Rules 9(6) to 9(10) of the Security Interest (Enforcement) Rules, 2002.Rule 9(6) deals with confirmation of the sale and issuance of the sale certificate, while Rule 9(10) prescribes the contents/ form of the sale certificate, including the details of known encumbrances.A coram...

SARFAESI | Civil Court Must Lift Property Attachment If Mortgage Predates It: Kerala High Court

The Kerala High Court has ruled that a civil court cannot refuse to consider a secured creditor's request to lift an attachment over a mortgaged property merely because the attachment would otherwise be effaced after publication of a SARFAESI sale notice. The court held that where the mortgage predates the attachment, the attachment must be lifted. “Once the secured creditor approaches the Civil Court with an application for lifting the attachment in accordance with the principles laid down...

Karnataka High Court Refuses To Quash NI Case Over Cheque After Vijaya Bank Merger With Bank of Baroda

The Karnataka High Court on 17 September refused to quash proceedings against Bhadramma under Section 138 of the Negotiable Instruments Act, holding that the merger of Vijaya Bank with Bank of Baroda did not invalidate the cheque in question. Justice Suraj Govindaraj held that a cheque drawn on a bank that has merged with another bank cannot be treated as invalid merely because of the merger. The Bench observed: “….. a cheque which had been issued on a bank which has merged with another bank...

Delhi High Court Rejects Bank's Plea To Revive Cheque Case After Counsel Earlier Said Dues Were Fully Paid

The Delhi High Court has refused to revive a cheque dishonour complaint after Equitas Small Finance Bank Limited's counsel told a magistrate and the National Lok Adalat that the dispute had been settled and the bank had received full payment.The bank later claimed that its then counsel had misunderstood its instructions and erroneously represented that the dues had been settled and paid. It sought recall of the September 14, 2024 Lok Adalat award and restoration of the complaint.Justice Saurabh...

Madras High Court Directs Registry Not To Register Article 226 Pleas Against DRT, DRAT Orders

The Madras High Court has directed its Registry not to register petitions under Article 226 of the Constitution challenging orders passed by the Debts Recovery Tribunal (DRT) or Debt Recovery Appellate Tribunal (DRAT). A Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan permitted petitioner R. Ravi to withdraw his petition and dismissed it as withdrawn. The judges stated: “Registrar Judicial is directed to instruct the Registry not to register petition under...

Andhra Pradesh High Court Says Agricultural Land Outside SARFAESI Scope, Sets Aside Canara Bank Auction

The Andhra Pradesh High Court has held that properties which are agricultural lands fall outside the scope of the SARFAESI Act, and that banks must exercise due diligence before accepting such properties as security, particularly when registered documents describe them as agricultural lands. A Division Bench comprising Justices Battu Devanand and Sunitha Gandham allowed a writ petition challenging Canara Bank's sale notice and auction of two lands, holding that the properties were agricultural...

Personal Loans Cannot Be Treated As MSME Borrowings Merely Due To MSME Link: Karnataka High Court

The Karnataka High Court has ruled that personal loans taken by borrowers cannot be treated as MSME borrowings merely because they are connected with an MSME.“The benefit available to an MSME must be considered in relation to the enterprise and the credit facility covered by the framework. Independent personal borrowings do not acquire the character of MSME borrowings merely because the borrowers are also connected with an MSME,” Justice Lalitha Kanneganti observed.The court was dealing with a...

Lessee Can't Re-Litigate SARFAESI Grievance After Adverse DRT Order: Kerala High Court

The Kerala High Court on 15 September held that a lessee who has already invoked the statutory remedy before the Debt Recovery Tribunal and suffered an adverse order cannot subsequently maintain a civil suit raising the same grievance against proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Justice Easwaran allowed a petition filed by IFCI Limited and set aside the Sub Court, Nedumangad's order refusing to reject a suit...

Denying Borrower Access To DRT To Challenge SARFAESI Possession Measures Violate Article 300A: Rajasthan HC

The Rajasthan High Court has held that denying a borrower an opportunity to approach the Debt Recovery Tribunal (DRT) while challenging steps taken by a bank to obtain physical possession of mortgaged property could amount to ignoring the borrower's constitutional right to property under Article 300A.“To deny the borrower an opportunity to access or approach the DRT while questioning the steps taken by the secured creditor to get physical possession of the mortgaged assets, would tantamount to...