The Securitisation Act grants Debts Recovery Tribunals primacy in adjudicating matters related to secured interests, superseding civil court jurisdiction over such claims.

JUDGMENT

1. The reference here has been made by the Additional Judge of the Additional District Council Court, Khasi Hills, Shillong. Some basic facts need to be noticed before the questions raised by way of this reference are taken up for consideration.

2. According to the respondent bank, which claims to be a scheduled bank and to which the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 applies, it granted a loan to one Hamsarong Langwar in the year 2012. According to the respondent bank, the loan was covered by the mortgage of an immovable property in Mawlai Iewrynghep.

3. It appears that the mortgagor subsequently purported to sell the property to the appellant herein and, in or about 2018, the appellant filed a civil suit before the relevant District Council Court for eviction of the mortgagor and possession of the property. A decree followed and eviction proceedings were levied.

4. In the meantime, according to the respondent bank, upon the mortgagor failing to repay the loan, a notice under Section 13 (2) of the said Act was issued to which the debtor did not respond. The bank claims that a further notice under Section 13 (4) of the Act was issued and the bank took measures thereunder for realisation of its secured asset. Indeed, the bank also approached the appropriate authority under Section 14 of the Act and, pursuant to the administrative directions issued thereupon, claims to have taken possession of the property in question.

5. There is no dispute that the property which was sold by the mortgagor to the appellant is the same property that was mortgaged by the debtor to the bank herein.

6. In the appeal before the District Council Court, upon the issue arising as to the rights of the purchaser, namely the appellant in that court, vis-a-vis the bank, namely the respondent in that court, the District Council Court thought it expedient to frame the following legal questions for reference to this Court:

a. Whether the Execution Warrant/Order of the Court should bend down before the Notice pasted by the Respondent Bank?

b. Whether the Judgement and Decree passed by the lower Court or the Notice issued by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act has the supersession power over the other?

c. Whether it is the Appellant/Decree Holder or the Respondent Bank should approach the Court of competent jurisdiction to adjudicate the matter? If so, which Court has the jurisdiction to adjudicate the same?

d. In the event of no further adjudication is required any longer, in such a circumstance and in regard to the question of redemption/pre-emption, whether it is the Appellant/Decree Holder or the Respondent Bank has the right of redemption or pre-emption for recovery of the money to be realised from the properties of the Judgment Debtor?

7. Such questions were framed in an order for a reference to this Court passed on April 25, 2023. The order of reference reached this Court earlier this week and was assigned to the regular Division Bench by the Chief Justice's endorsement of May 16, 2023.

8. The said Act of 2002 is somewhat unusual and goes against the grain of the fundamental principles of law theretobefore established in this country. Under the jurisprudence that was in place, a claimant had to approach a court of law to establish the claim before the claimant could pursue any property over which the claimant asserted rights.

9. However, since claims by banks, both in respect of money due and properties mortgaged to banks, remained embroiled in courts for years and the money