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 borrower), aggrieved by any of the measures referred to in sub-section (4) of Section 13 may prefer an appeal to the DRT, however, in the instant case, the property of the guarantor having been auctioned, the borrower is not an aggrieved party. The DRAT had upheld the DRT order, which held that the borrower for whose credit facility the property was mortgaged has the right to challenge the recovery proceedings since the mortgager has the right to proceed against the principal borrower to realize the money that he had to pay to liquidate the dues of the principal borrower. Setting aside the DRAT order, Justice Prashant Kumar Mishra observe...
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High Court of Bombay HDFC BANK LTD. v. ASHAPURA MINECHEM LTD. Amendment application should be normally granted unless by virtue of amendment, nature of suit changed or prejudice caused to Defendant Petitioner is objecting to the Order passed by Chairperson of Debt Recovery Appellate Tribunal rejecting appeal preferred by Petitioner-original applicant challenging the Order passed by the Debut Recovery Tribunal rejecting application seeking leave to amend the pleadings. Application tendered by the original applicant has been turned down by the Debt Recovery Tribunal by Order dated 6 October 2016, mainly on the ground that the proposed amendment under which the recovery of additional amount is claimed does not relate back to the date of presentation of original-application. Adverse order passed by Debt Recovery Tribunal was subject matter before Appellate Court where appeal has also been rejected. It is the case of Petitioner that, proposed amendment thus relates to the sub...
IN THE HIGH COURT AT CALCUTTA CONSTITUTIONAL WRIT JURISDICTION ORIGINAL SIDE PRESENT : Hon’ble Justice Dipankar Datta Judgment on: November 10, 2016 W.P. No. 862 of 2015 Metsil Exports Private Ltd. & anr. v. Punjab National Bank & anr. Section 13(2) – Demand notice published in the newspapers – What is the legal position regarding publication of a demand notice under section 13(2) of the Act in two newspapers having wide circulation with the photograph of a director/guarantor? Held, If a demand notice under section 13(2) of the Act is served on the borrower/guarantor in the manner statutorily provided for and there is no reason at all to believe that service has not been effected, question of publication thereof in the newspapers does not and cannot arise. It is only when an opinion could reasonably be formed that the borrower is evading service of the demand notice and that alternative modes of service have been exhausted without se...
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 the tribunal. The bench set aside an order by the trial court, which had rejected an application filed by debtor under Order VII Rule 11, wherein it had held that it was not open to the Debt Recovery Tribunal to entertain the matter as the amount claimed in the suit was less than Rs 10 lakh and that the suit was maintainable. The court observed that no civil court is having jurisdiction to entertain any suit or proceeding in respect of any matter which a Debt Recovery Tribunal or the appellate...
The Supreme Court in Axis bank vs. SBS Organics Private Limited has held that the partial deposit before the Debt Recovery Appellate Tribunal (DRAT) as a pre-condition for considering the appeal on merits in terms of Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), is neither a secured asset, nor a secured debt, and hence refundable to the appellant on disposal of appeal. Apex Court Bench comprising of Justices Kurian Joseph and R.F. Nariman made this observation while dismissing an appeal filed by Axis Bank against the Gujarat High Court Judgment wherein it was held that the deposit made before DRAT is refundable to the appellant therein. Section 18 of the SARFAESI Act states that, for the Tribunal to ‘entertain’ the appeal, the aggrieved person has to make a deposit of fifty per cent of the amount of debt due from him as claimed by the secured creditors or determined by the DRT, whichever is less. T...
Karnataka High Court in M/S Deepak Apparels Pvt Ltd vs City Union Bank Ltd has held that writ petition is not ordinarily maintainable against the order of the Debt Recovery Tribunal, passed in exercise of the jurisdiction under S.17 of the SARFAESI Act. Full Bench answering a reference held that it can be entertained only if the court is convinced that it falls within the exceptional categories recognized by Apex Court Single Bench has expressed his doubts about the correctness in decision of Hotel Vandana Palace case wherein it was held that a writ petition is maintainable without filing an appeal to the Appellate Tribunal as provided under S.18 of the Act, on the ground that the pre-deposit is required under S.18 of the SARFAESI Act and in such circumstances, it cannot be considered as an efficacious remedy. The Full Bench referring to various rulings of the Apex Court observed “When extraordinary writ remedy is invoked, despite the availability of an alternative remedy, the Court sh...
The debt recovery tribunal and the appellate tribunal "misdirected themselves" by pursuing the grandchildren of a guarantor when there was no evidence that they had inherited the estate of the guarantor, the Delhi High Court stated last week in the case, Rohini Kanoi vs Allahabad Bank. In this case, a firm took loan from Allahabad Bank which was not repaid. The bank took the firm and the guarantors to the tribunal. Since one guarantor had died, his grandchildren were also made parties by the tribunal. They challenged their impleadment, that too after ten years. The high court stated that the tribunal could not make the grandchildren suffer the trial on a "bald assertion", after a long delay, that the bank had learnt that they had inherited the estate of the guarantor.
High courts differ on DRT jurisdiction - Enforce also through RDDB - Section 16 of CPC not applicable
IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.73 OF 2014 GSL (India) Ltd. ... Petitioner v/s Asset Reconstruction Co. (India) Ltd. ... Respondents 46. We have carefully perused the reasoning of the Full Bench of the Delhi High Court in the case of Amish Jain1 and with the great respect and utmost humility, we are unable to agree with the view expressed therein. Firstly, we are unable to agree with the finding of t...
1) Allahabad Bank v. Canara Bank and another[1] 2) Rajasthan State Financial Corpn. and another v. Official Liquidator and another[2] 3) M. V. Janardhan Reddy v. Vijaya Bank and others 4) Damji Valji Shah v. LIC of India 5) Andhra Bank v. Official Liquidator and another 6) Jitendra Nath Singh v. Official Liquidator and others 7) International Coach Builders Ltd. v. Karnataka State Financial Corpn 8) A.P. State Financial Corpn. v. Official Liquidator 9) Jyoti Bhushan Gupta and others v. The Banaras Bank Ltd 10) Gada and another v. Central Bank of India and others IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2511 OF 2013 (Arising out of S.L.P. (C) No. 35627 of 2011) The Official Liquidator, U.P. and Uttarakhand ... Appellant Versus Allahabad Bank and others 17. In Rajasthan State Financial Corporation and another (supra), when the appeal came up for hearing before the two learned Judges, a submissio...
1) Satwant Singh Sawhney v. D.Ramarathnam. Asst. Passport Officer, 1967 (3) SCR 52 2) Menaka Gandhi v. Union of India, 1978 (1) SCC 248 3) Industrial Credit and Investment Corporation of India Ltd. v. Grapco Industries Ltd., (1994) 4 SCC 710 4) Suresh Nanda v. Central Bureau of Investigation, 2008 (3) SCC 674 5) Damji Valaji Shah & another Vs. L.I.C. of India & others [AIR 1966 SC 135] 6) Gobind Sugar Mills Ltd. Vs. State of Bihar & others [1999 (7) SCC 76] 7) Belsund Sugar Co. Ltd. Vs. State of Bihar and others [AIR 1999 SC 3125] 8) Sanjeev R.Apte v. I.F.C.I. Ltd., and others, 2008 (154) DLT 77 9) Smt.Annai Jayabharathi v. The Debt Recovery Tribunal & Anr., CDJ 2005 Ker HC 171 10) Allahabad Bank v. Radhakrishna Maity, AIR 1999 SC 3426 11) Ramalinga v. Radha, 2011 (4) CTC 481 12) Sinnaswami Chettiar v. Aligi Goundan and others, AIR 1924 Madras 893 (OVERRULED) 13) Nallagatti Goundan v. Ramana Gounda and others, AIR 1925...
Standard Chartered Bank Vs. Dharminder Bhohi and others [Civil Appeal No. 8486 of 2013 arising out of S.L.P. (C) No. 12292 of 2012] Dipak Misra, J. 1. Leave granted. 2. The present appeal depicts a factual score where this Court is constrained to say that delay in disposal of the application by the Debts Recovery Tribunal and the appeal by Debt Recovery Appellate Tribunal have the effect potentiality of creating a corrosion in the economic spine of the country. It exposits a factual expose' which is not only perplexing but usher in a sense of puzzlement which in the ultimate eventuate compels one to ask: "How long can the financial institutions would suffer such procrastination? How far the public interest be put to hazard because of small, and sometimes contrived individual interest? To what extent the defaulters are given protection in the name of balancing the stringent powers vested on the banks and the statutory safegurards prescribed in favour of loanees? Even...
Supreme Court of India Official Liquidator High Ct.Of ... vs Allahabad Bank & Ors on 12 March, 2013 Author: D Misra Bench: H.L. Dattu, Dipak Misra IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2511 OF 2013 (Arising out of S.L.P. (C) No. 35627 of 2011) The Official Liquidator, U.P. and Uttarakhand ... Appellant Versus Allahabad Bank and others J U D G M E N T Dipak Misra, J. Leave granted. 2. The spinal issue that has spiralled to this Court is whether the Company Judge under the Companies Act, 1956 (for short the 1956 Act) has jurisdiction at the instance of the Official Liquidator to set aside the auction or sale held by the Recovery Officer under the Recovery of Debts due to B...