The main legal point established in the judgment is that invoking Section 17(1) of SARFAESI Act before losing possession of the mortgaged property is premature and constitutes judicial impropriety. Failure to follow the binding judgments of superior Courts and address issues of forged documents and bias of the Presiding Officer also amounts to judicial impropriety.

1. While presiding over Debts Recovery Appellate Tribunal, Allahabad as its Chairperson I have been examining and scrutinising the orders passed by different Debt Recovery Tribunals (DRTs) functioning under the jurisdiction, superintendence and control of DRAT, Allahabad while hearing appeals coming up before this appellate Tribunal arising out of orders passed, interim as well as final, in petitions filed by borrowers and other aggrieved persons under Section 17(1) of the SARFAESI Act as well as under the earlier Recovery of Debts Due to Banks and Financial Institutions Act, 1993 which now stands amended in the year 2016 and comes to be called the Recovery of Debts and Bankruptcy Act, 1993. As far as the litigation arising from invocation of the provisions of the SARFAESI Act by Banks and other Financial Institutions for recovery of their money which they had lent to various borrowers and which was not repaid by the borrowers, guarantors/mortgagors by way of taking over the possession of mortgaged properties in order to sell them by way of public auctions, is concerned, the same mainly centres around the efforts of the defaulting borrowers to save their properties which they have mortgaged in favour of the Banks and Financial Institutions from being taken over and sold. The defaulting borrowers invoke Section 17(1) of SARFAESI Act and challenge the legality of the measures adopted by the Banks and other Financial Institutions and seek interim orders against dispossession from the mortgaged properties. DRTs not only entertain those Securitisation Applications (SAs) but also grant injunctions, ex-parte as well as after notice to the concerned Banks. Sometimes conditional stay orders are passed and sometimes unconditional also and Banks/Financial Institutions are restrained from taking over physical possession of their secured assets during the pendency of the SAs.

2. Hon'ble Supreme Court, however, recently gave one judgment in a case arising of the litigation under the SARFAESI Act and which is (2013) 9 SCC 620, Standard Chartered Bank vs. V. Noble Kumar and Others and it was held therein that the defaulting borrowers who were facing dispossession from the properties which they had mortgaged with the Banks at the instance of the Banks in exercise of its rights and powers conferred upon them by the Legislature under the SARFAESI Act could invoke the remedy under Section 17(1) of SARFAESI Act only after they have lost possession of the mortgaged properties in question.

3. In view of the said judgment of the Hon'ble Supreme Court two Division Benches of Hon'ble Allahabad High has also held that Section 17(1) of SARFAESI Act can be invoked by defaulting borrowers only after possession of mortgaged properties is lost. In one judgment rendered on 23rd April, 2014 in the case of Sushila Steels vs. Union Bank of India and Others, (2014) 4 BC 518 (DB), Special Appeal No. 415 of 2014 this aspect was dealt with as under:

"The real issue before us is as to whether the proceedings before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act, 2002 would be maintainable or not before the actual possession is taken. If the answer is negative then the interpretation of mere issuance of possession notice in any format becomes immaterial till the actual possession is taken. In some cases, there is resistance on the part of borrower to deliver possession and on that basis, proceedings under Section 14 are initiated by the Bank or the Securitisation Agency. Yet in such situation, the proceedings under Section 17 of SARFAESI Act, 2002 would not lie till the possession of mortgaged property is delivered to the Bank. In this connection we may refer to Para 36 of the Apex Court judgment rendered in the case of Standard Chartered Bank vs. V. Noble Kumar and Others, (2013) 9 SCC 620 which enumerates three situations in Paras 36.1, 36.2 and 36.3.

Learned Counsel for the appellant has argued that the later judgment rendered in the case of St