CAV JUDGMENT

(Per: HONOURABLE THE CHIEF JUSTICE)

Date : 20-12-2024 The appellant was the 6th respondent in the writ petition. The writ petition was filed by a borrower who defaulted a loan availed from the respondent-bank and invited proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act’ for short).

2. The borrower-defaulter filed securitisation application numbered as S.A. No. 208 of 2018 before the Debt Recovery Tribunal, Patna, Bihar. The matter was heard and the application stood rejected on 20.03.2019. The borrower filed a review from the said application which stood allowed by judgment dated 01.09.2021. The bank filed an appeal before the Debt Recovery Appellate Tribunal (hereinafter referred to as the ‘DRAT’ for short), from the order in review, which stood allowed by order dated 11.11.2022; which was challenged by the borrower in the writ petition from which this appeal arises, producing the appellate order at Annexure-P/1. The learned Single Judge allowed the writ petition, which, the appellant-purchaser under the SARFAESI Act, has challenged in the above appeal.

3. We have heard Mr. P.K. Shahi, learned Senior Counsel appearing for the appellant, Mr. Gopal Kumar Singh appearing for the Canara Bank and learned Senior Counsel Mr. D.K. Sinha, for the borrower-writ petitioner who is impleaded as the 7th respondent in the appeal.

4. We refer to the parties as the defaulter, the purchaser and the Bank; in their status under the SARFAESI Act.

5. The learned Single Judge relied on a Division Bench judgment of this Court in LPA No. 1029 of 2018 (Dilip Kumar Vs. Union of India and Ors) dated 27.09.2018 and having extracted from the above decision, followed it and allowed the writ petition. The impugned order passed by the DRAT was set aside and the matter was remitted back to the DRT which was directed to consider the application made by the petitioner afresh, on its own merits, strictly in accordance with law; clearly opining that a review indeed is maintainable.

6. Mr. P.K. Shahi, argued on the basis of the facts and emphasized that the review as permissible under the SARFAESI Act read with the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the ‘RDB Act’ for short) is confined and restricted. The facts leading to the default, the proceedings under the SARFAESI Act, the application made by the defaulter and the subsequent proceedings were pointed out to stress upon the position that, in fact the defaulter ought to have filed an appeal, if aggrieved by the order of the DRT. While the review petition was pending, the bank continued proceedings under the SARFAESI Act and sold the property to the purchaser. The purchaser has made substantial investment in the property and cannot be ousted by reason of a review application which did not point out any error apparent from the face of the record or a mistake committed by the Tribunal; which also should be apparent from the face or record, as is provided under Rule 5- A of the Debts Recovery Tribunal (Procedure Rules), 1993 (hereinafter referred to as the ‘Procedure Rules’ for short).

7. Learned Counsel for the Bank read out the order of DRAT and asserted that it never found a review to be not maintainable. The DRAT specifically opined that the review as filed by the defaulter would not come within the ambit of Rule-5-A of the Procedure Rules.

8. The learned Senior Counsel appearing for the party respondent while seeking to sustain the order of the learned Single Judge specifically referred to Rule-22(2) of the SARFAESI Act which specifically confers the Tribunal with the powers as are vested in a Civil Court under the Civil Procedure Code, 1908 (‘CPC’ for brevity).

9. The learned Single Judge has relied entirely on the decision in LPA No. 1029 of 2018 which opined that the impugned judgment, in that appeal, was not erroneous in holding that the DRT would h