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2025 Supreme(Online)(Tel) 42070
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Moushumi Bhattacharya, Gadi Praveen Kumar, JJ
Mansarovar Pearls (India) Pvt. Ltd. – Appellant
Versus
Canara Bank – Respondent
WRIT PETITION Nos.15369 and 24372 of 2025
For the Appellants/Petitioners: Sri Avinash Desai, Sri P.V.Suryanarayana, Sri Sharad Sanghi
For the Respondents: Sri B.Shiva Ram Sharma
A Review Petition under the RDB Act and DRT Rules is limited to correcting errors apparent on the face of the record; it cannot be used as an 'appeal in disguise' to re-appreciate evidence or resolve complex legal issues that should be addressed in a statutory appeal.
Headnote:(A) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 13(2), 13(4) and Section 18 - Debts Recovery Tribunal (Procedure) Rules, 1993 - Rule 5-A - Security Interest (Enforcement) Rules, 2002 - Rule 8(5) and Rule 9(4) - Scope of review under DRT - Review cannot be used as an appeal in disguise to re-appreciate evidence or correct disputed errors - Alleged non-compliance with Rule 8(5) involving valuation is a matter for appeal, not review.
(B) Review Jurisdiction - An error apparent on the face of the record must be self-evident and not require extensive argumentative reasoning or re-appreciation of evidence.
Facts of the case:
The principal borrowers challenged the e-auction of their mortgaged properties conducted under SARFAESI Act, citing procedural violations in valuation report timing under Rule 8(5). The DRT initially upheld the Bank's measures but later, in a review petition, set aside the auction. The DRAT reversed the review order, holding that the DRT exceeded its jurisdiction.
Findings of Court:
The High Court upheld the DRAT’s order, confirming that the DRT’s review power is extremely limited and cannot be used to conduct a re-merits hearing or treat factual disputes as 'errors apparent on the face of the record'.
Issues: Whether the DRT acted within its review jurisdiction in setting aside an e-auction based on alleged valuation errors, and whether the auction purchaser is entitled to possession.
Ratio Decidendi: A review petition is limited to correcting errors that are self-evident; issues involving complex valuation discrepancies and Rule 8(5) compliance must be agitated through the statutory appellate route under Section 18 of the SARFAESI Act.
Result: Review by the tribunal is restricted; Writ Petition filed by borrowers dismissed, and Writ Petition by the auction-purchaser allowed.
| Table of Content |
|---|
| 1. respondent bank's stance on finality of orders and validity of valuation. (Para 14 , 13 , 14 , 15 , 16) |
| 2. summary of procedural history and factual disputes in sarfaesi proceedings. (Para 2 , 3 , 4 , 5 , 6) |
| 3. arguments concerning the scope of review jurisdiction and rule 8(5) compliance. (Para 7 , 8 , 9 , 10 , 11 , 12) |
| 4. auction purchaser rights and arguments against maintainability of review. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26) |
| 5. court holds review jurisdiction is narrow; disputes require statutory appeal under section 18. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37) |
14. (2015) 3 SCC 624 15. (2024) 2 SCC 362 THE HON’BLE JUSTICE MOUSHUMI BHATTACHARYA AND THE HON’BLE JUSTICE GADI PRAVEEN KUMAR WRIT PETITION Nos.15369 and 24372 of 2025 COMMON ORDER: (per Hon’ble Justice Gadi Praveen Kumar Since, the issues raised in both the Writ Petitions are one and the same, they are being disposed of by this common order.
W.P.No.15369 of 2025
2. This Writ Petition is filed by the petitioners/principal borrowers assailing the judgment dated 05.02.2025 passed in Appeal No.20 of 2024 by the Debts Recovery Appellate Tribunal at Kolkata (DRAT), which is preferred against the order dated 08-01-2024 in Review Petition No.3 of 2023 which was filed against the common order dated 22.05.2023 in Securitization Application (SA) No.87 of 2021 and Transfer Securitization Application (TSA) No.4 of 2021 (Old S.A.No.42/2021) passed by the Debts Recovery Tribunal-2, Hyderabad (DRT).
W.P.No.24372 of 2025
3. This Writ Petition is filed by the auction-purchaser of ‘A’ schedule property seeking declaration of the action of the respondent No.1 Bank in not delivering the physical possession of the property bearing Shop No.20 situated at ground floor of ‘Bhagyalaxmi Commercial Complex’ admeasuring 162.50 sq. ft. situated at Gulzar Houz, Hyderabad as per the registered Sale Certificate bearing Doc.No.1250 of 2023 dated 12.06.2023, as illegal, arbitrary, with a consequential direction to Respondent-
Bank to deliver physical possession of the said property to the petitioner.
4. The facts emanated from the record in W.P.No.15369 of 2025 are that the petitioner No.1 is a manufacturer of jewellery containing gold, silver, precious metals and semi-precious stones, and during the course of business, the 1st petitioner availed original and renewed credit facilities from the 1st respondent Bank from time to time. The cash credit limit allowed by the 1st respondent Bank was Rs.40 crores. Subsequently, it was reduced to Rs.35.35 crores vide Sanction Letter dated 06.12.2019 against the release of the mortgaged properties worth Rs.4.61 crores.
5. On default, the Respondent-Bank issued demand notice dated 11.02.2020 under Section 13(2) SARFAESI Act (the Act), followed by possession notice dated
24.09.2020 under Section 13(4) of the said Act. Eventually, an e-auction notice was issued dated 19.02.2021 and sale was conducted on 30.03.2021 in respect of Securitization Schedule (SA) properties. Aggrieved by same, the Principle Borrowers filed S.A.No.87/2021 & TSA No.4/2021 before DRT, Hyderabad, which were dismissed on 22.05.2023 holding Bank’s measures valid. Petitioners then filed Review Petition No.3/2023, which was partly allowed by DRT on 08.01.2024, setting aside the e-auction held on 30.03.2021 in respect of Schedule A & K properties, citing non-compliance with Rule 8(5) of the Security Interest (Enforcement) Rules, 2002 (The Rules).The Bank filed Appeal No.20/2024 before DRAT, Kolkata, who by order dated 05.02.2025, allowed the appeal and dismissed the Review Petition holding that DRT had exceeded its review jurisdiction.
6. Aggrieved thereby, borrowers filed W.P.No.15369/2025, while the auction purchaser filed W.P.No.24372/2025 seeking delivery of possession before this court.
7. Heard Sri Avinash Desai, learned Senior Counsel representing Sri P.V.Suryanarayana, learned counsel for the petitioners in W.P.No.15369 of 2025 and responden
