The Debt Recovery Tribunal must formally adjudicate on the status of parties involved rather than treating fee disputes as mere procedural defects.

J U D G M E N T

A.Muhamed Mustaque, Acg.C.J.

This appeal addresses an important issue regarding the procedure to be followed by the Debt Recovery Tribunal (DRT) while considering the challenge raised under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The Security Interest (Enforcement) Rules, 2002 (in short 'SIE Rules) prescribed different table of fees for challenge to be raised under of the SARFAESI Act. It is appropriate to refer Rule 13 of SIE Rules, which reads as follows;

“13. Fees for applications and appeals under Sections 17 and 18 of the Act (1) Every application under sub-section (1) of section 17 or an appeal to the Appellate Tribunal under sub-section (1) of section 18 shall be accompanied by a fee provided in the sub-rule (2) and such fee may be remitted through a crossed demand draft drawn on a bank or Indian Postal Order in favour of the Registrar of the Tribunal or the Court as the case may be, payable at the place where the Tribunal or the Court is situated. (2) The amount of fee payable shall be as follows:

2. The Registrar of the Tribunal noted that the appellant is guarantor and therefore, the appellant has to pay higher slab of the fees prescribed for entertaining such challenge under Section 17 of the SARFAESI Act. Aggrieved by that, the appellant herein invoked the remedy under Rule 5(5) of the Debt Recovery Tribunal Procedure Rules, 1993 before the Presiding Officer concerned. The Presiding Officer affirmed the order of the Registrar. The challenge has been made before the learned Single Judge. The learned Single Judge relegated the appellant to invoke appellate remedy under Section 18 of the SARFAESI Act before the Appellate Tribunal.

3. The Debt Recovery Tribunal Procedure Rules, 1993 , prescribes various procedures regarding filing scrutiny of application etc. In Rule 5, it is stipulated that if the Registrar raised an objection noting defects, an appeal would lie before the Presiding Officer and the Presiding Officer will take a decision in the chamber and that decision is final. It is appropriate to refer Rule 5 of the Debt Recovery Tribunal Procedure Rules, 1993 , which reads as follows;

“5. Presentation and scrutiny of applications (1) The Registrar, or, as the case may be, the officer authorised by him, shall endorse on every application the date on which it is presented or deemed to have been presented under Rule 4 and shall sign endorsement.

(2) If on scrutiny, the application is found to be in order, it shall be duly registered and given a serial number.

(2A) After registration of the application under sub-rule (2), the Tribunal shall issue summons to the defendants in Form IV.

(3) If the appl