The Asset Reconstruction Company is validly substituted as an applicant based on the Assignment Agreement under the SARFAESI Act, 2002, without requiring a Trust Deed.

JUDGMENT : 13^th March, 2026

THE APPELLATE TRIBUNAL:

1.Since both these appeals have arisen against a common order dated 10.3.2025 passed by Learned DRT-II, Hyderabad in I.A. 1900 of 2024 arising out of O.A. 3824 of 2017 (Punjab National Bank -vs- SEW LSY Highways Limited) hence both the appeals are being disposed of by a common judgment.

2. O.A. 3824 of 2017 was filed by Punjab National Bank and 11 others against SEW LSY Highways Limited. Pending O.A., I.A. 1900 of 2024 is filed for substitution by the National Asset Reconstruction Company Limited (NARCL) represented by its Power of Attorney Holder, India Debt Resolution Company Limited (IDRCL) through its Vice President, Mr. Pankaj Agnihotri.

3. It was contended by NARCL that it is a public limited company duly incorporated under the provisions of the Companies Act, 2013 and is registered under Section 3 of the SARFAESI Act, 2002 (hereinafter referred to as the ‘Act’) as Asset Reconstruction Company. It is further contended that by virtue of a Joint Assignment Agreement Document No. 9135 of 2024 dated 21.3.2024, the debt was assigned to the NARCL by Punjab National Bank and other Applicants in O.A. 3824 of 2017. It was for a valuable consideration. Subsequently, on 2.4.2024 NARCL appointed IDRCL as its power of attorney holder to exercise all rights, powers, privileges and other incidents of ownership or possession of financial assets pertaining to the Respondents, i.e., SEW LSY Highways Limited.

4. Notice of Assignment were also issued to the Respondents on 3.4.2024. No objections were received. Accordingly, the Appellant, viz., NARCL, applied for substitution in place of the original Applicants.

5. Objections were filed by the Respondents to the effect that the application is not filed with proper authorization as per the Assignment Agreement dated 21^st March, 2024. Debt was assigned to NARCL Trust-0008 and not to NARCL. Accordingly, in absence of the Trust Deed, there is no ground for moving an application for substitution. It was further contended that NARCL has no authority. Accordingly, it cannot re-delegate its powers to IDRCL. A delegated authority cannot re-delegate its powers. It was further contended that only Authorised Representatives of the Assignee can file the petition which was not done. The Power of Attorney in favour of IDRCL is irrevocable and it is an unregistered document. Accordingly, it cannot confer any right, title or interest over the immoveable property.

6. Learned DRT framed the following points for consideration:

i.Whether the assignment agreement is properly stamped?

ii Whether producing the Trust Deed of NARCL Trust is mandatory?

iii.Whether there is principal and agent relationship between the original applicants and the NARCL so that NARCL is prevented from further delegating the power to IDRCL as objected by the respondents-defendants 1 and 2?

iv. Whether registration of PoA is mandatory in the present case? v. Whether the authorization in respect of Pankaj Agnihotri is proper and valid?

vi.What relief?

7. Learned DRT held that there is no ground for holding the insufficiency of the stamps on the Assignment Agreement. Accordingly, recorded a finding in negative for Point No. 1.

8. Learned DRT further held that the assignment was made on the basis of the Assignment Agreement and not on the basis of the Trust Deed. Accordingly, there is no ground not to allow the substitution. It has further held that if the Trust Deed is not filed, it is a curable defect.

9. In Point No. 3 it is held that NARCL has ste