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2024 Supreme(Pat) 1058

IN THE HIGH COURT OF JUDICATURE AT PATNA
G. ANUPAMA CHAKRAVARTHY, J.
Smt. Satya Singh, W/o. Shri Pradeep Kumar Singh - Petitioner
Versus
Authorized Officer Cum Asst. General Manager and Ors. - Respondents
Civil Writ Jurisdiction Case No.17554 of 2013 with Civil Writ Jurisdiction Case No. 24742 of 2013 with Civil Writ Jurisdiction Case No. 24768 of 2013
Decided On : 26-11-2024

Advocates Appeared:
For the Petitioner: Mr. Arbind Kumar Jha, Adv.
For the Respondents: Mr. Sanjiv Kumar, Adv., M/s Manoj Kumar Ambastha, Santosh Kumar Mishra, Divit Vinod, Advs., M/s S.D. Sanjay, Sr. Adv., Alok Kumar Agrawal, Adv.

The Debt Recovery Appellate Tribunal exceeded its jurisdiction by allowing appeals without compliance with statutory requirements, and the tripartite agreement did not impose repayment obligations on a non-borrower.

Headnote:(A) Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Sections 13(2), 13(4)(d), 18(1) - Debt Recovery Tribunal Act, 1993 - Appeal against orders of Debt Recovery Tribunal - Writ petitions filed to quash the order of Debt Recovery Appellate Tribunal, which set aside the Tribunal's order without proper consideration of statutory provisions and facts of the case. (Paras 1, 66, 81)

(B) Jurisdiction of Debt Recovery Appellate Tribunal - The Appellate Tribunal exceeded its jurisdiction by allowing appeals without adherence to statutory requirements, including pre-deposit under Section 18(1) of the SARFAESI Act. (Paras 32, 66)

(C) Tripartite Agreement - The agreement between the borrower, bank, and Reliance Industries Limited does not impose liability on Reliance to liquidate the borrower's dues, as it was neither a borrower nor a guarantor. (Paras 74, 76)

(D) Enforcement of Security Interest - The bank's action under SARFAESI Act was valid, as the borrower defaulted, and the auction purchaser acquired rights through lawful proceedings. (Paras 78, 80)

Facts of the case:
The petitioner obtained a loan from the State Bank of India, secured by a mortgage on property leased to Reliance Industries Limited. The bank initiated SARFAESI proceedings due to default, leading to an auction sale. The petitioner challenged the appellate tribunal's order that set aside the DRT's ruling.

Findings of Court:
The court found that the Debt Recovery Appellate Tribunal acted beyond its jurisdiction and that the tripartite agreement did not impose repayment obligations on Reliance Industries Limited.

Issues: The main issues included the jurisdiction of the Debt Recovery Appellate Tribunal, the validity of the tripartite agreement, and the enforcement of security interest under the SARFAESI Act.

Ratio Decidendi: The court ruled that the Debt Recovery Appellate Tribunal exceeded its authority by allowing appeals without compliance with statutory requirements, and the tripartite agreement did not create liability for Reliance Industries Limited.

Result: Writ petitions dismissed.

JUDGMENT :

(G. Anupama Chakravarthy, J.)

1. These three Writ petitions are interlinked and interconnected were heard together and disposed of by a common order.

2. For better appreciation of the case, the reliefs prayed for in each of the Writ petition are quoted herein below:

    Re. CWJC No. 17554 of 2013

    “That the Writ petition is being filed for issuance of Writ of certiorari for quashing the order dated 9.7.2013 passed by Hon'ble Chairperson Debt Recovery Appellate Tribunal, Allahabad by which Learned Chairperson was pleased to quash the order dated 11.9.2012 passed by Learned Presiding Officer, Debt Recovery Tribunal, Patna, in ignorance of the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘Act) and Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as ‘Rule), without correctly stating the facts of the case, law governed the case declared by Apex Court and without considering the pleading/submissions made by counsel of the petitioner.

    The petitioner further prays for issuing Writ of mandamus to the respondents concerned from proceeding further and give effect to order passed in Appeal (T) 7/2013 (In Appeal No. 162/12) dated 9.7.2013.

    The petitioner further prays for declaration of law that unless the appeal is admitted after due compliance of the deposits U/s 18(1) second proviso of the Act, the Appeal cannot be heard and decided on merit.

    The petitioner further prays for issuance of any other appropriate Writ /Writs order/orders and/or direction/ directions for which petitioner may be found entitled.”

    Re. CWJC No. 24742 of 2013

    “That the Writ petition is being filed for issuance of Writ of certiorari for quashing the order dated 9.7.2013 passed by Hon'ble Chairperson Debt Recovery Appellate Tribunal, Allahabad by which Learned Chairperson allowed the Appeal (T) No. 12 of 2013 ( In Appeal No. 173/12) preferred by auction purchaser on the sole ground that “the counsel appearing for Reliance Industries Limited has undertaken that since the property has already been sold in auction therefore he will vacate the premises within 30 days from today.” The final order was passed without adhering to Section 18(2) of the SARFAESI Act, 2002 which prescribe that Appellate Tribunal shall as far as may be, dispose of appeal in acordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rule made thereunder and in the present appeal without any notice of the case as require by Act/Rule and opportunity to explain the case allowed the appeal on the submission of counsel for Reliance Industries Limited.

    The petitioner further prays for issuing Writ of mandamus to the respondent concerned from proceeding further and give effect to order passed in Appeal (T) No. 12/2013 (In Appeal No. 173/2012).

    The petitioner further prays for declaration of law that unless scrutiny of memorandum of appeal as per Rule 6 of Debt Recovery Tribunal (Procedure) Rule, 1994, a copy of memorandum of appeal and paper book shall be served on petitioner as per Rule 13 by Registered Post further one month time is given to reply the appeal from the date of service of notice under Rule 14 and date and place of hearing is notified as per Rule 16 and only after the completion of above formalities the appeal can be decided by the appeal is admitted after due compliance of the deposits U/s 18(1) second proviso of the Act, the Appeal cannot be heard and decided on merit.

    The petitioner further prays for issuance of any other appropriate Writ /Writs order/orders and/or direction/ directions for which petitioner may be found entitled.”

    Re. CWJC NO. 24768 of 2013

    “That the writ petition is being filed for declaration that in view of dismissal of Appeal (T) 11 of 2013 (In Appeal No. 13/2013) order dated 11th Sept., 2012 passed in SA 84 of 2011 has become final and the measures taken by the Secured Creditor Bank und

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