THE HON’BLE SRI JUSTICE ABHINAND KUMAR SHAVILI AN D THE HON’BLE SRI JUSTICE VAKITI RAMAKRISHNA REDDY WRIT PETITION No.25906 OF 2025

ORDER

(per the Hon’ble Sri Justice Abhinand Kumar Shavili)

This writ petition is filed aggrieved by the non-consideration of securitization application preferred by the petitioners before the Debts Recovery Tribunal on the ground that there is no Presiding Officer.

2. Heard Sri Krishna Grandhi learned Senior Counsel representing Ms. Tanya Kanwar & Ekta Bahl, learned counsel for the petitioners; learned Deputy Solicitor General of India, appearing for respondent Nos.1 and 2 and Sri Santhosh Reddy, learned counsel for respondent No.3.

3. Learned counsel for the petitioners had contended that the petitioners have availed loan facility from the then Andhra Bank, and owning to financial crisis, they could not clear the said loan and therefore, the petitioners accounts were declared as Non-Performing Assets. Subsequently, the Andhra Bank has been merged with the Union Bank of India and the Union Bank of India has initiated proceedings under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, ‘the Act, 2002’) by issuing notice under Section 13(2) of the Act on 21.02.2022 and the petitioners have submitted a proposal for One Time Settlement on 20.02.2025, wherein, the petitioners have offered Rs.65 crores to be paid within a reasonable period of time.

4. Learned counsel for the petitioners had further contended that the respondent-Bank was pleased to accept the proposal submitted by the petitioners and strangely granted only one day’s time to clear Rs.65 crores, vide their proceedings dated 27.03.2025. As reasonable time was not granted to the petitioners, they could not clear the loan amount under one time settlement. In those set of circumstances, the respondents have issued E-auction sale notice on 12.08.2025 fixing the auction on 29.08.2025 without following Rule 8(5) and 8(6) of the Security Interest (Enforcement) Rules, 2002. Aggrieved by the same, the petitioners have approached the Debts Recovery Tribunal by filing securitization application under Section 17 of the Act, 2002 and the securitization application preferred by the petitioners could not be taken up for hearing as the Presiding Officer is on leave. As the auction is scheduled to be held today, the petitioners are contending that let the auction be conducted subject to result of the securitization application preferred by the petitioners. Since the Presiding Officer is not there, the petitioners shall not be put to irreparable loss and therefore, appropriate orders be passed in the present writ petition by directing the respondents not to finalize the auction till the Debts Recovery Tribunal adjudicates the securitization application preferred by the petitioners.

5. Learned counsel for the petitioners had further contended that in view of acceptance of One Time Settlement by the respondent-Bank, if reasonable opportunity is given to the petitioners, they would pay Rs.65 crores to the respondents, within four (04) weeks in compliance with their acceptance of One Time Settlement.

6. Learned counsel for the respondent-Bank had contended that the acceptance of One Time Settlement given by the respondent-Bank on 27.03.2025 is already cancelled by the respondent-Bank on 27.05.2025 and if the petitioners are proposing another One Time Settlement, then the securitization application of the petitioners would be sent to Board of Directors and an appropriate decision would be taken thereon.

7. This Court, having considered the rival submissions made by both the parties, is of the view that the petitioners have already preferred securitization application under Section 17 of the Act, 2002 before the Debts Recovery Tribunal and their securitization application is not being considered because the Presiding Officer as on today is on leave. Therefore, ends of justice would be met if the present wri