IMPORTANT POINT
Complete waiver of pre-deposit is not permissible.

B.P. Colabawalla, J.—Rule. Respondents waive service. By consent of parties, rule made returnable forthwith and heard finally.

2. This Writ Petition has been filed under Article 226 of the Constitution of India seeking a Writ of Certiorari or any other appropriate writ, order or direction, seeking to quash the orders dated 1 April, 2009 and 7 January, 2014 passed by the Debt Recovery Appellate Tribunal, Mumbai (“DRAT”) in Appeal No.79 of 2008. By the order dated 1 April, 2009 the DRAT granted a complete waiver of deposit under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the “SARFAESI Act”). By the order dated 7 January, 2014 the DRAT entertained the appeal filed by the borrower (Respondent No.1 herein) on merits and thereafter set aside the order and judgment dated 26 March, 2008 passed by the Presiding Officer, Debt Recovery Tribunal-I, Mumbai (“DRT”) in Securitization Application No. 17 of 2007.

3. The brief facts giving rise to the present controversy are as under:—

(a) The Petitioner is a company incorporated under the provisions of the Companies Act, 1956. It is an auction purchaser of a property being all that piece and parcel of land situate, lying and being at Villages: Dashak and Panchak, Nashik, together with structures standing thereon bearing Survey No.8, Hissa No.1, Survey No.8, Hissa No.2A, Survey No.8, Hissa No.2B and Survey No.8, Hissa No.3, admeasuring in aggregate 28,200 square meters (the “immoveable property”) from Respondent Nos.2 to 5. In addition to this immoveable property, the Petitioners, in the very same auction also purchased the moveable properties mortgaged by the 1st Respondent with Respondent Nos.2 to 5 (Banks). Cumulatively, the immoveable and moveable properties are hereinafter referred to as the “subject properties”. The subject properties were purchased by the Petitioners from Respondent Nos.2 to 5 under the provisions of the SARFAESI Act. Respondent No.1 is also a company incorporated under the provisions of the Companies Act, 1956 and is the borrower of Respondent Nos.2 to 5 who are banks within the meaning of the SARFAESI Act. As Respondent No.1 had defaulted in servicing its dues to Respondent Nos.2 to 5, the subject properties belonging to Respondent No.1, and which were mortgaged / charged to Respondent Nos.2 to 5, were sold by them in exercise of their powers under the provisions of the SARFAESI Act. This is how the Petitioners claim to have purchased the subject properties.

(b) The immoveable property originally belonged to one Citric India Ltd. who thereafter sold and transferred the same along with the structures thereon to Shree Vindhya Paper Mills Ltd. Thereafter, Respondent No.1 was incorporated on 19 November, 1991 and pursuant to a Scheme of Arrangement entered into between Respondent No.1 and the said Shree Vindhya Paper Mills Ltd., the immoveable property was transferred in favour of Respondent No.1. This Scheme of Arrangement was approved by this Court by its order dated 22 October, 1992.

(c) Thereafter, Respondent No.1 had availed of various financial facilities from Respondent Nos.2 to 5 for which Respondent No.1 had mortgaged / charged the subject properties in favour of the said Respondents. Since, Respondent No.1 defaulted in payment of its liabilities, Respondent No.2 acting for itself as well as on behalf of Respondent Nos.3 to 5 issued a notice dated 21 November, 2005 under Section 13(2) of the SARFAESI Act, inter alia calling upon Respondent No.1 to pay an amount of Rs.3.55 Crores along with interest thereon, failing which further action would be taken under the provisions of the SARFAESI Act.

(d) In reply to the aforesaid notice, Respondent No.1, by its letter dated 13 December, 2005 inter alia contended that action under the provisions of the SARFAESI Act could not proceed, in view of the fact that Respondent No.1 had made a reference to the Board for Industrial and