IMPORTANT POINTS
The provision of Section 13(4) does not contemplate any indication as to the quantum of debt to be shown in the possession notice necessarily meaning thereby that for the purpose of challenging the recovery proceedings made under Section 13(4), the demand made under Section 13(2) is alone relevant. Section 18 contemplates a further appeal to the Debts Recovery Appellate Tribunal by a person who is aggrieved by the orders of the Debts Recovery Tribunal. In that sense, the amount demanded under Section 13(2) alone has relevance, as the proceedings under Section 13(4) which was questioned under Section 17 are the proceedings which culminated into one of further appeal under Section 18 of the Act.

JUDGMENT :

Heard Advocates S.Easwaran, A.S.P. Kurup and Madhu Radhakrishnan for parties.

2. The petitioners in these two writ petitions assail the legality of orders made by the DRAT under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘Act 2002’ for short).

2.1 Appellants in AIR 690 of 2018 before the Debts Recovery Appellate Tribunal (‘DRAT’ for short) are the petitioners in W.P.(C) No.9331 of 2019. The petitioners assail order dated 21.03.2019 in I.A. No.1218 of 2019 (Ext.P4) as illegal and beyond the jurisdiction or discretion conferred on DRAT by Act 2002.

2.2 Respondents 1 and 2 in AIR 691 of 2018 before the DRAT are the petitioners in W.P.(C) No.11506 of 2019. The petitioners challenge the order dated 21.03.2019 in I.A.No.1218 of 2019 as illegal and amounts to entertaining appeal under Sec.18, without complying with the condition of pre-deposit of debt due from petitioners.

3. The parties for convenience are adverted to as arrayed in W.P.(C) No.9331 of 2019.

W.P.(C) No.9331 of 2019

4. The petitioners have availed financial assistance from respondent Nos. 1 and 2 herein. The petitioners have mortgaged immovable property as security for discharge of the loan availed by them. Respondent Nos.1 and 2, on 31.05.2006 by treating the petitioners as defaulters of loan account, issued notice under Section 13(2) of Act 2002 calling upon petitioners to discharge the liability in the loan account. Respondent nos.1 and 2, it is stated, on 14.08.2006 issued notice under Section 13(4) of Act 2002. On 29.08.2006 sale notice was issued proposing sale of mortgaged property. On 26.09.2006 the petitioners filed T.S.A. No.10 of 2016 (S.A. No.66 of 2006) before the Debts Recovery Tribunal (‘DRT’ for short) questioning the measures initiated under Section 13(4) of Act 2002. On 05.10.2006, sale of secured asset had taken place and sale was confirmed in favour of respondents 3 to 5. On 31.03.2007, respondents 3 to 5 credited Rs.138 lakh into the loan account. The events which have happened in quick succession between 31.5.2006 and 31.3.2007, have been the subject matters of litigation before this Court under Articles 226 and 227 of the Constitution of India and further appeal before the Supreme Court. For the purpose of disposing of these two writ petitions, the reference to anterior litigation between the parties in different Courts need not be adverted to. The parties in these writ petitions as already noted are aggrieved by the exercise of jurisdiction by DRAT, either in putting the petitioners on condition under Section 18, second proviso of Act 2002 or likewise not directing pre-deposit while entertaining appeal in AIR No.691 of 2019.

5. To continue the narration, it is noted that on 29.09.2018 respondents 3 to 5 herein filed I.A. No.179 of 2016 in T.S.A. No.10 of 2016 before the DRT, with a prayer to hear and decide the maintainability of T.S.A. No.10 of 2016 as a preliminary issue. DRT in the order dated 29.9.2018 framed the following issues for consideration.

5.1. Issue No.1, firstly, whether the S.A. was maintainable on the date of filing. Issue No.2, secondly, whether the S.A. is maintainable after the sale of secured asset held on 05.10.2006, pursuant to Annexure VII, more so; when there is a categoric admission of applicants on affidavit that S.A. is rendered infructuous before the High Court. The operative portion of order dated 29.09.2018 reads as follows:

“The Tribunal has considered the judgments relied upon by the Ld. Counsels and the rival submissions made by either side, it is an admitted status that the SA filed by the applicants stood concluded on the date of the scheduled auction sale held on 5.10.2006. further there was no challenge to sale at the first instant on the date of filing the SA and the only one ground raised at para 10 was with regard to the fixing the reserve price and the valuation fixed which the Tribunal had considered the said contentions elabo