The central legal point established in the judgment is the importance of upholding consent terms, the obligations of the parties, and preventing deliberate obstruction of recovery proceedings.

JUDGMENT :

V. G. Bisht, J.

1. Rule. Rule made returnable forthwith. By consent, heard finally at the stage of admission.

2. The petitioners, by way of Writ Petition (L) No.46 of 2022 under Article 226 of the Constitution of India, seek to quash and set aside the impugned order dated 8th December 2021 passed by the respondent no.1 (Registrar, Debts Recovery Appellate Tribunal) and vacate the stay imposed on conducting public auction.

3. Writ Petition No.2537 of 2021 is at the instance of Prashant K. Mehta and others under Article 226 of the Constitution of India, seeking direction against respondent no.9 (Recovery Officer, Debts Recovery Tribunal-I) and respondent no.2 (Phoenix ARC Pvt. Ltd.) not to take any steps to alienate, encumber, transfer, value and/or auction the Flat No.37, 18th floor, Usha Kiran, Carmichael Road, Mumbai- 400026, belonging to petitioner no.2, until the Debt Recovery Appellate Tribunal, Mumbai is functional and decides the petitioner’s appeal D No.369 of 2021.

4. The causes for inception of these petitions although have same echo, yet brief narratorial facts need to be outlined;

(A) Writ Petition (L) No.46 of 2022 :

The petitioner no.1 is a Securitisation and Asset Reconstruction Company and is an assignee of Oriental Bank of Commerce (hereafter the “OBC” for short) under a valid and subsisting Deed of Assignment dated 30th September 2013 and has stepped into the shoes of the said OBC and as such is judgment creditor of respondent nos.3 to 10 and is pursuing the Recovery proceedings pending in Debt Recovery Tribunal (hereafter the “DRT” for short), Mumbai. Originally, OBC advanced various credit facilities to various entities viz. Beautiful Diamonds Ltd. (subsequently known as Splendour Gems Ltd. (now in liquidation)), Beautiful Realtors Pvt. Ltd., Beautiful Jewellers Pvt. Ltd., and Crystal Gems (hereafter the “Beautiful Group” for short). Respondent no.1 is the Registrar, Debt Recovery Appellate Tribunal (hereafter the “DRAT” for short) while respondent no.2 is the Recovery Officer of DRT. Respondent no.5 is the borrower (in liquidation). Respondent nos.3, 4 and 6 to 10 are mortgagors/guarantors to the credit facilities granted, sanctioned and disbursed to respondent no.5.

5. In view of default committed by Beautiful Group, OBC filed different original applications before the DRT. Simultaneously, OBC took measures under the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereafter the “SARFAESI Act” for short) in respect of secured assets. By an order and judgment dated 24th July 2006, the original application filed against the respondent no.5 (in liquidation) and its guarantors being Original Application No.303 of 2002 was allowed and accordingly, recovery proceedings commenced. The said order and judgment was challenged by borrower before the DRAT. They also challenged the measures under the SARFAESI Act by filing applications under Section 17 of the SARFAESI Act before the DRT as well as by way of appeals under Section 18 before the DRAT.

6. According to petitioners in or around 2013, the promoters/guarantors of Beautiful Group approached the petitioners and indicated their desire to restructure its debts and to take over the debts of Beautiful Group from OBC. Accordingly, Deed of Assignment dated 30th September 2013 was executed between OBC and the petitioners whereby debts of Beautiful Group along with its underlying securities were assigned in favour of the petitioners. Pursuant to the said assignment, the petitioners and respondent nos.3 to 10 arrived at a settlement and executed consent terms dated 1st October 2013 which was filed before the DRAT, Mumbai in the pending appeals. They agreed to undertake that they would pay the petitioners a sum of Rs.27,31,04,000/- on or before 30th September 2014 (settlement amount). However, respondent nos.3 to 10 failed and neglected to pay the settlement amount as agreed and recorded under the consen