IMPORTANT POINT
Recovery of debt – Petitioner cannot avail two parallel remedies simultaneously.

ORDER

This petition is filed seeking quashing of order dated 20.04.2023 passed by the Debts Recovery Tribunal (For short ‘the DRT’) rejecting the prayer for stay during pendency of the Securitization Application (for short ‘SA’). Further prayer is that the proceedings of taking over of the physical possession of the property mentioned in the petition having been mortgaged with the financial institution to secure the loan be quashed.

2. The facts are that the petitioner on 19.03.2022 purchased the property in question from his brother Huma Shameem (hereinafter referred to as ‘seller’). The seller had availed the loan facility from India Bull Ltd and had mortgaged the property to secure the loan. The petitioner for purchasing the property in question availed credit facility from Ambit Finvest Private Limited (for short ‘respondent No.3’). The proceedings were initiated by respondent No.1 under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Act’) for recovery of the due amount as the borrower failed to maintain financial discipline and the account was declared Non Performing Asset (for short ‘NPA’) on 06.06.2021. In continuation of the recovery proceedings, physical possession of the property in question was taken over. The petitioner aggrieved of the proceedings under Section 13 of the Act filed Securitization Application (for short ‘SA’) before the DRT, Jaipur accompanied by an application for stay. The application for stay was rejected on 20.04.2023. Hence, the present petition.

3. Learned counsel for the petitioner submits that action of the respondent No.1 is illegal as there was non compliance of Section 26(d) of the Act. During the due diligence done by the petitioner and the respondent No.3, no charge was found against the property. Further submission is that the petitioner is a bona-fide purchaser of the property and not being borrower and cannot avail remedy of appeal. It is contended that for filing appeal against the impugned order before the Debts Recovery Appellate Tribunal a pre-deposit of 50% of the amount due is to be made. Reliance is placed upon decision of the Supreme Court in the case of Commissioner of Income Tax & Ors. Vs. Chhabil Dass Agarwal reported in (2014) 1 SCC 603 to contend that the petitioner should not be relegated to the alternative remedy.

4. As per contra the petitioner has a remedy of appeal. Submission is that the seller had availed a loan facility from India Bulls Pvt Ltd., the loan was taken over by respondent No.1 by making payment to India Bulls Ltd. The seller and the petitioner are brothers and in order to hoodwink the financial institutions after the loan account having been declared NPA, the mortgaged property was transferred. It is submitted that Section 26(d) of the Act was duly complied with and the property mortgage was registered with Central Registry of Securitization Asset Reconstruction and Security Interest of India. The argument is that the seller after taking the documents of mortgaged property from the India Bulls Pvt. Ltd. instead of handing over it to respondent No.1 the petitioner borrowed loan from respondent No 3. The fraud was played with the financial institution for which FIR No.1003/2023 is lodged at Police Station Mansarovar against the seller and the petitioner.

5. It is an admitted fact that the petitioner aggrieved of the recovery proceedings initiated under Section 13 of the Act has availed statutory remedy before the DRT and the SA is pending.

Section 18 of the Act is reproduced:-

“18. Appeal to Appellate Tribunal.—(1) Any person aggrieved, by any order made by the Debts Recovery Tribunal1[under section 17, may prefer an appeal along with such fee, as may be prescribed] to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

Provided that different fees may be prescribed for filing an appeal by the borrower or by the person ot