Back
: Restores SARFAESI Appeal, Cites Article 300A
In a significant judgment that reinforces the , the has held that denying a borrower the opportunity to approach the to challenge possession measures under the would violate Article 300A of the Constitution.
Justice Anoop Kumar Dhand set aside the Debt Recovery Appellate Tribunal’s (DRAT) order that had rejected borrower Rishu Chaudhary’s appeal on grounds, and directed the DRAT to hear the matter on its merits. The court ruled that the for filing a under must be calculated from the date of the last action by the bank, not from the initial notice.
Behind the Dispute: A Loan Turned NPA
The case stems from a loan taken by Mrs. Rishu Chaudhary, sole proprietor of M/s Sagar Overseas, from the . Her account was declared a on . The bank issued a demand notice under on , and later took possession measures under Section 13(4) on .
The process culminated in an order under Section 14 of the Act passed by the District Collector & Magistrate, Alwar on , granting the bank assistance to take physical possession of the secured property. Chaudhary claimed she was unaware of this order until the bank communicated it via email on . She filed a before the DRT on . However, the DRT dismissed it as time-barred on . The , upheld this rejection on , leading to the present .
The Core Legal Question: When Does Start?
The critical issue before the High Court was whether the was filed within the prescribed period. While the bank argued that the arose from the Section 13(4) notice in April 2017, Chaudhary’s counsel contended that under the law, each subsequent action—including the Section 14 order—gives a fresh .
Court’s Reasoning: Precedents and Constitutional Protection
Justice Dhand relied on two key precedents: and .
In Ashok Saw Mill , the Apex Court held that the DRT has jurisdiction to scrutinise actions taken by a secured creditor after the Section 13(4) stage and can even restore possession. In Kanaiyalal Lalchand Sachdev , the clarified that an action under Section 14 is a continuation of proceedings under Section 13(4) and must be counted from the date of the last action.
Applying these principles, the High Court found that the last communication to Chaudhary was the email on . “Hence, there is no delay on the part of the petitioner in approaching the DRT,” the court observed, noting that the application was filed just 35 days later.
The court further emphasised the constitutional dimension of the case:
“To deny the borrower an opportunity to access or approach the DRT while questioning the steps taken by the secured creditor to get physical possession of the mortgaged assets, would tantamount to ignoring the Constitutional Right available to him/her under .”
A
The judgment explicitly held that provisions under Section 17 must be construed liberally. Justice Dhand made a pointed observation about the power imbalance in debt recovery:
“The law should not be harsh against the . In the case of default in repaying the borrowed amount to the bank, the Bank itself is the claimant, the judge and the executioner. The only remedy available to the is to approach the DRT by way of filing an application under .”
The court criticised the DRAT for deciding the appeal purely on technical grounds of delay:
“The DRAT instead of rejecting the appeal of the petitioner, on a technical count of delay … ought to have proceeded to decide the appeal on its merits.”
The Final Order: Appeal Restored
The High Court quashed the DRAT’s order dated , and restored the appeal to its original number. The parties have been directed to appear before the DRAT on . The tribunal has been instructed to decide the appeal expeditiously, preferably within four weeks thereafter, and without being influenced by any observations made by the High Court.
This decision serves as a strong reminder that , especially when the is at stake. It clarifies that borrowers facing are entitled to a , and that for challenging such measures runs from the last action, not the first.
