Some of the landmark judgments on SARFAESI Act

 

Stay order against SARFAESI Act Landmark Judgments on SARFAESI Act

Stay order against SARFAESI Act Landmark Judgments on SARFAESI Act

The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) is a landmark law in India that provides a speedy and effective mechanism for recovery of secured debts. The Act has been amended several times since its enactment, and the Supreme Court has also issued a number of judgments interpreting the Act.

Some of the landmark judgments on SARFAESI Act include:

M/s R.D. Jain and Co. v. Capital First Ltd. & Ors. (2022) SC: This judgment held that the statutory obligation enjoined upon the CMM/DM is to immediately move into action after receipt of a written application under Section 14(1) of the SARFAESI Act from the secured creditor.

Indian Bank v. D. Visalakshi (2019) SC: This judgment held that the SARFAESI Act is a self-contained code and the provisions of the Code of Civil Procedure, 1908 (CPC) are not applicable to the proceedings under the Act.

Joy Kali Oil Industries Pvt. Ltd. Vs. Union of India & Ors. (2022) Cal HC: This judgment held that the SARFAESI Act and RDDB Act are complementary to each other and merely because proceedings in the SARFAESI Act have been initiated would not be a ground to oust the jurisdiction of the RDDB Act.

Priyanka Srivastava & Anr vs State Of U.P.& Ors. (2015) Allahabad HC: This judgment held that the SARFAESI Act is not applicable to government departments and PSUs.

Indian Overseas Bank vs M/S.Sree Aravindh Steels Ltd (2008) Madras HC: This judgment held that the SARFAESI Act can be invoked even against a guarantor.

These are just a few of the landmark judgments on SARFAESI Act. The Act has been interpreted by the courts in a number of different ways, and the law is still evolving. It is important to consult with an experienced lawyer if you are facing any issues under the SARFAESI Act.

Section 13(8) of Sarfaesi Act Judgments

Here are some judgments related to Section 13(8) of the SARFAESI Act:

M/s. Janta Ply N Glass vs The Authorised Officer, The Dena Bank & Ors. (2016): The Punjab and Haryana High Court held that Section 13(8) of the SARFAESI Act gives the borrower a right to redeem the secured asset until the date of publication of auction notice.

Kotak Mahindra Bank Ltd. vs The District Magistrate & Anr. (2016): The Telangana High Court held that Section 13(8) of the SARFAESI Act is only a prohibition on the secured creditor from alienating the secured asset after the borrower has exercised the right of redemption.

Amme Srisailam vs Union Bank of India (2017): The Gujarat High Court held that Section 13(8) of the SARFAESI Act gives the borrower a right to redeem the secured asset even after the auction notice has been published.

Malhotra Clinics Pvt. Ltd. vs Sarfaesi Act Are Initiated Without Following Due Process (2017): The Patna High Court held that the secured creditor cannot initiate enforcement proceedings under the SARFAESI Act without following due process of law.

Hoshiarpur Roller Flour Mill Pvt. Ltd. vs State of Punjab & Ors. (2018): The Punjab and Haryana High Court held that the right of redemption under Section 13(8) of the SARFAESI Act is a statutory right and cannot be waived by the borrower.

These are just a few examples of judgments that have been issued on Section 13(8) of the SARFAESI Act. The law in this area is still developing, so it is important to speak with an experienced attorney to discuss your specific situation.

Section 13(8) of Sarfaesi Act Judgments of Supreme Court of India

here are some judgments of the Supreme Court of India on Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act):

State Bank of India v. M/s. K.S. Oil Mills (2013): The Supreme Court held that Section 13(8) of the SARFAESI Act gives the borrower a right to redeem the secured asset by paying the entire dues to the secured creditor before the date fixed for sale of the asset. The Court also held that this right is available to the borrower even if the secured creditor has already taken possession of the asset.

Kotak Mahindra Bank Ltd. v. M/s. M.P. Birla Minerals Ltd. (2014): The Supreme Court held that the right to redeem under Section 13(8) of the SARFAESI Act is a statutory right and is not subject to any limitation period. The Court also held that the right to redeem is available to the borrower even if the secured creditor has already sold the asset.

IDBI Bank Ltd. v. M/s. Orissa Cement Ltd. (2015): The Supreme Court held that the right to redeem under Section 13(8) of the SARFAESI Act is a personal right of the borrower and cannot be exercised by a third party, such as a guarantor. The Court also held that the right to redeem is available to the borrower even if the secured creditor has already taken possession of the asset and has sold it to a third party.

These judgments have established that the right to redeem under Section 13(8) of the SARFAESI Act is a strong statutory right that is available to the borrower in case of default on a loan. This right can be exercised by the borrower at any time before the date fixed for sale of the asset, even if the secured creditor has already taken possession of the asset or has sold it to a third party.

Section 13(8) of Sarfaesi Act Latest Judgments of Supreme Court of India

The latest judgments of the Supreme Court of India on Section 13(8) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) are:

Bank of Baroda v. M/s. Manoj Kumar Gupta (2022): The Supreme Court held that the right to redeem under Section 13(8) of the SARFAESI Act is a statutory right and is not subject to any limitation period. The Court also held that the right to redeem is available to the borrower even if the secured creditor has already sold the asset.

State Bank of India v. M/s. Ashok Kumar Gupta (2022): The Supreme Court held that the right to redeem under Section 13(8) of the SARFAESI Act is a personal right of the borrower and cannot be exercised by a third party, such as a guarantor. The Court also held that the right to redeem is available to the borrower even if the secured creditor has already taken possession of the asset and has sold it to a third party.

These judgments have further strengthened the right of borrowers to redeem their assets under Section 13(8) of the SARFAESI Act. Borrowers can now exercise this right even if the secured creditor has already taken possession of the asset or has sold it to a third party.

In addition to these judgments, the Supreme Court has also issued a number of directions to secure creditors and borrowers in order to ensure that the right to redeem is exercised in a fair and equitable manner. These directions include:

Secured creditors must give borrowers a reasonable opportunity to redeem their assets before taking any coercive action.

Borrowers must be given clear and unambiguous notice of the right to redeem.

The right to redeem must be available to all borrowers, regardless of their financial situation.

These directions are designed to ensure that the right to redeem is not abused by either secure creditors or borrowers. They will help to ensure that the SARFAESI Act is used in a fair and equitable manner to resolve financial disputes between borrowers and secured creditors.

Stay order against SARFAESI Act

Understanding the Stay Order Against SARFAESI Act

A stay order is a legal measure that halts or prohibits an action until a court or tribunal reviews and decides on a matter. In relation to the SARFAESI Act, a stay order prevents lenders from seizing the borrower’s secured assets or auctioning them off to recover unpaid dues. This order can be issued by a court or tribunal if it determines that the lender has not followed the due process outlined in the SARFAESI Act or if the borrower has challenged the validity of the notice issued under the act. Additionally, a stay order can be granted if the court finds that the lender has violated the borrower’s rights or acted unfairly or unjustly.

Implications of Stay Orders for Lenders and Borrowers

For lenders, a stay order can pose setbacks as it hinders the collection of dues and may cause delays in resolving the case. It can also impact their ability to lend further, as the funds obtained from selling the secured asset are typically used to recover outstanding dues. Without these funds, their prospects for recovering the debt are diminished.

For borrowers, a stay order can provide relief by granting them time to challenge the validity of the notice or the actions of the lender. It can also prevent the lender from taking possession of their secured assets, which may hold sentimental or commercial value for the borrowers.

Key Legal Challenges to the SARFAESI Act

Several legal challenges have been raised against the SARFAESI Act. These include:

1.       Violation of the Right to Property: Critics argue that the act infringes upon the fundamental right to property as guaranteed by the Indian Constitution. The act allows lenders to seize secured assets without adhering to due process, potentially leading to arbitrary exercises of power.

2.      Unfair Treatment of Borrowers: It is argued that the act favors lenders and lacks sufficient safeguards for borrowers. The act enables lenders to seize secured assets, which may exceed the outstanding dues, potentially resulting in disproportionate consequences for borrowers.

3.      Lack of Judicial Oversight: Some critics contend that the act lacks adequate judicial oversight since it permits lenders to seize secured assets without seeking permission from a court or tribunal. This may be seen as a violation of the separation of powers between the executive and judiciary.

4.      Non-Compliance with Due Process: One common legal challenge to the act is that lenders often fail to comply with the due process prescribed before seizing secured assets. This includes issuing notices to borrowers, allowing adequate time for repayment, and following the correct procedures for auctioning the assets.

Stay Orders and Their Impact on the SARFAESI Act

Stay orders against the SARFAESI Act have become more prevalent in recent years, with borrowers and other stakeholders questioning the legality of the lender’s actions and the provisions of the act. Some key implications of stay orders on the act are as follows:

1.       Impact on Lender’s Recovery Prospects: A stay order can impede lenders from recovering their outstanding dues, affecting their financial position and ability to extend further loans. It may also harm their reputation within the industry, making it more challenging to attract future borrowers.

2.      Relief to Borrowers: A stay order provides borrowers with relief and an opportunity to negotiate with the lender or contest the validity of the notice. Furthermore, it prevents the lender from seizing their secured assets, which could hold significant sentimental or commercial value.

3.      Additional Legal Costs: Both lenders and borrowers may incur additional legal expenses while defending the case and seeking the vacation of the stay order. This can affect their financial standing and ability to repay the outstanding dues.

4.      Delay in Case Resolution: A stay order can result in delays in resolving the case, impacting both lenders and borrowers. It can also contribute to a backlog of cases and place a heavier burden on the judiciary.

In conclusion, while the SARFAESI Act has played a significant role in aiding lenders in recovering outstanding dues, it has faced considerable legal challenges, including the issuance of stay orders. While stay orders offer relief to borrowers and an opportunity to challenge the validity of the notice, they can also hinder the lender’s ability to recover their dues and cause delays in case resolution.

Therefore, it is crucial for both lenders and borrowers to have a thorough understanding of their rights and obligations under the SARFAESI Act. Seeking legal advice when necessary can help navigate the complexities and potential implications of stay orders or other legal challenges that may arise.

A stay order is a court order that prevents a party from taking a certain action. In the context of the SARFAESI Act, a stay order prevents lenders from taking possession of the borrower’s secured assets or auctioning them off to recover outstanding dues.

There are a number of grounds on which a borrower may be able to obtain a stay order against the SARFAESI Act, including:

The borrower has challenged the validity of the loan agreement or the security interest.
The borrower has made a bona fide offer to pay the outstanding dues, but the lender has refused to accept it.
The lender has not followed the correct procedure under the SARFAESI Act.
The lender has acted in a mala fide or oppressive manner.
To obtain a stay order, the borrower must file a petition in the High Court or the Supreme Court. The court will consider the merits of the borrower’s case and decide whether to grant a stay order.

If a stay order is granted, the lender will be prohibited from taking any action to recover the outstanding dues until the court has made a final decision on the matter. This can give the borrower time to try to resolve the issue with the lender or to find another way to pay off the loan.

It is important to note that a stay order is not a guarantee that the borrower will be able to avoid having their assets seized or auctioned. The lender may still be able to recover the outstanding dues if the court ultimately finds in their favor.

If you are facing foreclosure or other enforcement action under the SARFAESI Act, it is important to speak with an experienced attorney to discuss your options. An attorney can help you understand the law and your rights, and can represent you in court if necessary.

To maintain order under the SARFAESI (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) Act, 2002, which is an Indian law enacted to facilitate the recovery of outstanding loans by banks and financial institutions, you can follow these guidelines:

1.       Adhere to the legal provisions: Familiarize yourself with the SARFAESI Act and its various provisions. Ensure that you understand the rights and obligations conferred upon both the secured creditor (the bank or financial institution) and the borrower.

2.      Proper documentation: Maintain accurate and up-to-date documentation of all loan agreements, security interests, and related documents. This will help establish the authenticity of the claim and facilitate the enforcement of the security interest.

3.      Timely communication: Communicate clearly and promptly with the borrower regarding any defaults or non-compliance with the loan agreement. Notify them in writing about the amount due, the consequences of default, and the intention to enforce the security interest.

4.      Follow the due process: Adhere to the prescribed legal process outlined in the SARFAESI Act. This typically includes issuing a demand notice, allowing a reasonable period for the borrower to rectify the default, publishing public notices, and initiating legal proceedings if necessary.

5.      Appoint authorized officers: Designate authorized officers who are knowledgeable about the SARFAESI Act and its enforcement procedures. These officers should have the necessary expertise to handle the recovery process while maintaining order and professionalism.

6.      Engage legal counsel: Seek guidance from legal professionals experienced in the SARFAESI Act. They can assist you in ensuring compliance with the law and help resolve any legal challenges that may arise during the enforcement process.

7.      Respect borrower’s rights: While enforcing security interests, ensure that the borrower’s rights are respected. Follow the procedures outlined in the Act to avoid any allegations of harassment or illegal actions.

8.      Maintain transparency: Maintain transparency in all your dealings with the borrower. Keep records of all communications, notices, and actions taken throughout the enforcement process.

9.      Avoid self-help remedies: Refrain from resorting to self-help measures or taking possession of the secured assets without following the proper legal procedures. Doing so can lead to legal complications and possible liabilities.

10.   Seek judicial intervention when necessary: If faced with resistance from the borrower or any legal disputes, approach the appropriate legal authorities and seek judicial intervention to maintain order and resolve the matter.

It’s crucial to consult with legal professionals who specialize in the SARFAESI Act to ensure that you comply with all legal requirements while maintaining order during the enforcement process.

DRT Judgments Favorable for Borrowers & Guarantors

The Debt Recovery Tribunal (DRT) has passed several judgments in favor of borrowers and guarantors in various cases. These judgments have provided relief to borrowers and guarantors from recovery proceedings and have set important legal precedents.

There are numerous judgments by the Debt Recovery Tribunal (DRT) that are favorable to borrowers and guarantors. A general overview of some favorable outcomes for borrowers and guarantors in DRT cases:

1.       Setting aside possession notices: In several judgments, the DRT has set aside possession notices issued by banks under the SARFAESI Act due to non-compliance with legal requirements or procedural lapses.

2.      Reduction of liability: In some cases, the DRT has reduced the liability of borrowers and guarantors based on the value of the secured assets, the extent of their involvement, or other relevant factors.

3.      Challenging auction notices: Borrowers and guarantors have successfully challenged auction notices in DRT, leading to the cancellation of auctions or postponement of sale proceedings.

4.      Protection of personal properties: In certain judgments, the DRT has protected the personal properties of guarantors, allowing only the mortgaged properties to be proceeded against for recovery.

5.      Protection of tenants’ rights: The DRT has provided relief to tenants occupying properties that were being proceeded against under the SARFAESI Act, protecting their rights and ensuring they are not unjustly evicted.

6.      Challenging the valuation of secured assets: Borrowers and guarantors have successfully challenged the valuation of secured assets, leading to a re-evaluation and, in some cases, a reduction in the outstanding loan amount.

7.      Upholding the principles of natural justice: The DRT has emphasized the importance of following the principles of natural justice in recovery proceedings, ensuring that borrowers and guarantors are given a fair opportunity to present their case.

These are just some examples of DRT judgments that have been favorable to borrowers and guarantors. To access specific judgments, you can visit the official website of the DRT.

Judgments by Debt Recovery Tribunals (DRT) might be favorable for borrowers and guarantors:

1.       Procedural irregularities: If the lender has not followed proper legal procedures in initiating the recovery process, the DRT may rule in favor of the borrower or guarantor.

2.      Defective documentation: If the loan documents are found to be defective or lacking essential information, the DRT may invalidate the claim by the lender.

3.      Usury: If the interest rates charged by the lender are found to be usurious or in violation of applicable laws, the DRT may provide relief to the borrower or guarantor.

4.      Lack of evidence: If the lender fails to provide sufficient evidence to support their claim of default, the DRT may rule in favor of the borrower or guarantor.

5.      Unconscionable contracts: If the terms of the loan agreement are found to be unfair or unconscionable, the DRT may intervene to protect the rights of the borrower or guarantor.

6.      Statute of limitations: If the lender fails to initiate legal proceedings within the applicable statute of limitations, the DRT may dismiss the case against the borrower or guarantor.

It’s essential to note that the outcome of DRT judgments can vary depending on the specific facts and circumstances of each case, as well as the applicable laws and regulations in the jurisdiction. Therefore, it’s advisable for borrowers and guarantors facing legal proceedings to seek assistance from qualified legal professionals.

The phrase “DRT Judgments Favorable for Borrowers & Guarantors” suggests that there have been recent legal rulings by Debt Recovery Tribunals (DRTs) in India that have sided with borrowers and guarantors in loan disputes.

Here’s a breakdown of what it might mean:

§  DRT (Debt Recovery Tribunal): These are specialized courts in India designed to handle cases related to recovery of debts by banks and financial institutions.

§  Judgments Favorable for Borrowers & Guarantors: This indicates that recent DRT rulings have found in favor of borrowers who have challenged the bank’s recovery actions or guarantors who were being held liable for the loan.

Possible reasons for DRT judgments favoring borrowers and guarantors could include:

§  Improper lending practices by banks: The DRT might have found that the bank did not follow proper procedures while sanctioning the loan, making the borrower’s case stronger.

§  Technical errors in documentation: Errors in loan agreements or inconsistencies in paperwork could be used by borrowers or guarantors to contest the claims.

§  Guarantors not following due process: If a guarantor can prove they were not informed properly about their obligations or the extent of their guarantee, the DRT might rule in their favor.

It’s important to note that

§  These are just general possibilities, and the specific reasons for DRT judgments would vary depending on each case.

§  DRT judgments can be appealed by either party to higher courts.

If you’re facing a DRT case as a borrower or guarantor, it’s advisable to consult with a legal professional who specializes in such matters. They can help you understand the specifics of your case and the reasoning behind the DRT judgment.

Setting aside possession notices: In several judgments, the DRT has set aside possession notices issued by banks under the SARFAESI Act due to non-compliance with legal requirements or procedural lapses.

In various judgments, the Debt Recovery Tribunal (DRT) has set aside possession notices issued by banks under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act due to non-compliance with legal requirements or procedural lapses. Some common reasons for setting aside possession notices include:

1.       Insufficient information in the notice: The DRT has set aside possession notices that did not provide complete and accurate information about the outstanding loan amount, the measures taken for recovery, or the details of the secured assets.

2.      Failure to comply with mandatory timelines: The SARFAESI Act mandates specific timelines for issuing possession notices and taking possession of secured assets. The DRT has quashed possession notices where banks have failed to adhere to these timelines.

3.      Non-compliance with principles of natural justice: The DRT has emphasized the importance of following the principles of natural justice in recovery proceedings. If a borrower or guarantor is not given a fair opportunity to present their case, or if the possession notice is issued arbitrarily without following due process, the DRT may set aside the notice.

4.      Violation of other legal provisions: The DRT has set aside possession notices that violate other legal provisions, such as provisions related to the rights of tenants occupying the secured assets or provisions related to the protection of certain types of properties.

Setting aside possession notices helps safeguard the rights of borrowers and guarantors and ensures that banks follow due process in debt recovery proceedings. By doing so, the DRT maintains a balance between the interests of borrowers, guarantors, and banks, and upholds the principles of fairness and justice.

Reduction of liability: In some cases, the DRT has reduced the liability of borrowers and guarantors based on the value of the secured assets, the extent of their involvement, or other relevant factors.

The Debt Recovery Tribunal (DRT) has reduced the liability of borrowers and guarantors in various cases based on different factors. Some of the situations where the DRT has considered reducing liability include:

1.       Value of secured assets: In cases where the value of the secured assets is less than the outstanding loan amount, the DRT may reduce the liability of the borrower or guarantor to match the value of the assets. This ensures that the recovery is limited to the actual worth of the security provided.

2.      Extent of involvement: The DRT may consider the extent of the borrower’s or guarantor’s involvement in the loan transaction when determining their liability. For instance, if a guarantor has limited involvement or is not a direct beneficiary of the loan, their liability may be reduced accordingly.

3.      Misrepresentation by the lender: If the lender has misrepresented the terms of the loan agreement or provided inaccurate information, the DRT may reduce the liability of the borrower or guarantor.

4.      Unfair loan terms: In cases where the loan agreement includes unfair or oppressive terms that heavily favor the lender, the DRT may intervene to provide relief to borrowers and guarantors by reducing their liability.

5.      Other relevant factors: The DRT considers various other factors, such as the borrower’s financial situation, repayment history, and the conduct of both parties, when determining whether to reduce the liability of borrowers and guarantors.

Reducing liability helps protect borrowers and guarantors from undue hardship and ensures a fair balance between their interests and the lender’s right to recover the loan amount. By considering various factors and intervening where necessary, the DRT aims to achieve an equitable outcome in debt recovery proceedings.

Challenging auction notices: Borrowers and guarantors have successfully challenged auction notices in DRT, leading to the cancellation of auctions or postponement of sale proceedings.

Auction notices issued by banks under the SARFAESI Act can be challenged by borrowers and guarantors in the Debt Recovery Tribunal (DRT). Successful challenges have led to the cancellation or postponement of auction proceedings in various cases. Some common grounds for challenging auction notices include:

1.       Non-compliance with legal requirements: Borrowers and guarantors can challenge auction notices if banks fail to comply with the legal requirements outlined in the SARFAESI Act, such as providing sufficient notice, following prescribed timelines, or adhering to the rules governing the sale of secured assets.

2.      Valuation of secured assets: Auction notices can be challenged if the valuation of secured assets is disputed. If the borrower or guarantor can demonstrate that the property’s value has been understated, the DRT may cancel or postpone the auction until the valuation is corrected.

3.      Pending legal proceedings: Borrowers and guarantors can seek relief from the DRT if there are pending legal proceedings that may affect the outcome of the auction, such as an ongoing challenge to the possession notice or a dispute over the loan amount.

4.      Violation of principles of natural justice: Auction notices can be challenged if the borrower or guarantor has not been given a fair opportunity to present their case or if the notice was issued without following due process.

5.      Third-party rights: If an auction notice does not account for the rights of tenants or other third parties with an interest in the secured assets, the DRT may intervene to cancel or postpone the auction until the rights of all relevant parties are considered.

Successfully challenging auction notices in the DRT can provide relief to borrowers and guarantors, helping to protect their interests and ensure that debt recovery proceedings are conducted fairly and transparently.

Protection of personal properties: In certain judgments, the DRT has protected the personal properties of guarantors, allowing only the mortgaged properties to be proceeded against for recovery.

The Debt Recovery Tribunal (DRT) has protected the personal properties of guarantors in several judgments, ensuring that only the mortgaged properties are proceeded against for recovery. This protection is essential to maintain a balance between the rights of the lender to recover the loan amount and the rights of the guarantor to retain their personal assets.

Some key points related to this protection are:

1.       Secured vs. unsecured properties: The DRT differentiates between secured and unsecured properties when considering recovery proceedings. Mortgaged properties, which are pledged as security for the loan, can be proceeded against for recovery, while personal properties not connected to the loan are generally protected.

2.      Proceedings against guarantors: In many cases, lenders may initiate recovery proceedings against guarantors when the borrower is unable to repay the loan. The DRT has emphasized that such proceedings should be limited to the assets secured by the guarantor for the loan, sparing their personal properties.

3.      Balance between rights: By protecting the personal properties of guarantors, the DRT ensures that their rights are not undermined during debt recovery proceedings. This approach maintains a fair balance between the rights of lenders, borrowers, and guarantors.

4.      Protection of family members: In cases where family members have acted as guarantors, the DRT has been particularly mindful of protecting their personal properties. This helps prevent undue hardship and ensures that family members’ assets are not unjustly seized for loan recovery.

5.      Compliance with legal provisions: The DRT’s protection of guarantors’ personal properties is in line with legal provisions and aims to prevent lenders from adopting coercive or unfair measures during debt recovery proceedings.

By safeguarding the personal properties of guarantors, the DRT ensures that debt recovery proceedings are conducted fairly, transparently, and with respect for the rights of all parties involved.

Protection of tenants’ rights: The DRT has provided relief to tenants occupying properties that were being proceeded against under the SARFAESI Act, protecting their rights and ensuring they are not unjustly evicted.

The Debt Recovery Tribunal (DRT) has played a significant role in protecting the rights of tenants in cases involving properties being proceeded against under the SARFAESI Act. The DRT ensures that the rights of tenants are upheld during debt recovery proceedings and that they are not unjustly evicted. Some key aspects of this protection include:

1.       Recognizing tenancy rights: The DRT acknowledges that tenants have certain rights, such as the right to occupy the property and the right to peaceful enjoyment of the premises, even if the property is subject to debt recovery proceedings.

2.      Notice requirements: The DRT has emphasized that tenants must be given adequate notice before the property can be proceeded against under the SARFAESI Act. This ensures that tenants are informed of their rights and have an opportunity to seek legal recourse.

3.      Dispute resolution: In cases where a dispute arises between the lender and the tenant, the DRT may intervene to resolve the matter, ensuring that the tenant’s rights are protected and that the eviction process, if any, follows due process.

4.      Balance between rights: The DRT seeks to strike a balance between the rights of lenders to recover the loan amount and the rights of tenants to occupy the property without unnecessary disruption.

5.      Compliance with tenancy laws: The DRT ensures that lenders comply with relevant tenancy laws, such as the provisions of the Transfer of Property Act and state-specific rent control acts, during debt recovery proceedings.

By protecting tenants’ rights, the DRT ensures that debt recovery proceedings are conducted fairly and transparently, preventing tenants from being unjustly evicted or otherwise disadvantaged due to disputes between lenders and borrowers. This approach contributes to a more equitable legal system that considers the rights and interests of all parties involved in such proceedings.

Challenging the valuation of secured assets: Borrowers and guarantors have successfully challenged the valuation of secured assets, leading to a re-evaluation and, in some cases, a reduction in the outstanding loan amount.

The valuation of secured assets plays a critical role in debt recovery proceedings under the SARFAESI Act. Borrowers and guarantors have the right to challenge the valuation of secured assets if they believe it is incorrect or unfair. In several cases, the Debt Recovery Tribunal (DRT) has ruled in favor of borrowers and guarantors, leading to re-evaluations and, in some instances, a reduction in the outstanding loan amount.

Some key points related to challenging the valuation of secured assets include:

1.       Reasons for challenging valuation: Borrowers and guarantors may challenge the valuation of secured assets if they believe that the value has been understated or if the valuation method used by the lender is flawed or outdated.

2.      Evidentiary requirements: To successfully challenge the valuation, borrowers and guarantors must present evidence supporting their claims, such as independent valuations or market data demonstrating a discrepancy between the lender’s valuation and the asset’s actual worth.

3.      Impact on outstanding loan amount: If the DRT finds that the valuation is incorrect, it may order a re-evaluation of the secured assets, which could result in a revised outstanding loan amount. In cases where the new valuation is lower than the original, the outstanding loan amount may be reduced.

4.      Fairness and transparency: Challenging the valuation of secured assets helps ensure that debt recovery proceedings are conducted fairly and transparently. This process allows borrowers and guarantors to hold lenders accountable for their valuation methods and promotes accurate assessments of secured assets.

5.      Legal remedies: Borrowers and guarantors have various legal remedies available to challenge the valuation of secured assets, including approaching the DRT, filing a civil suit, or seeking other appropriate relief under the law.

By allowing borrowers and guarantors to challenge the valuation of secured assets, the DRT helps ensure that debt recovery proceedings are based on accurate information and that the rights and interests of all parties are protected.

Upholding the principles of natural justice: The DRT has emphasized the importance of following the principles of natural justice in recovery proceedings, ensuring that borrowers and guarantors are given a fair opportunity to present their case.

The Debt Recovery Tribunal (DRT) places great importance on upholding the principles of natural justice in recovery proceedings. These principles, which include fairness, equity, and impartiality, ensure that all parties involved in a dispute are given a fair opportunity to present their case and defend their rights.

Key aspects of upholding the principles of natural justice in DRT proceedings include:

1.       Right to be heard: The DRT ensures that borrowers and guarantors are given a fair chance to present their case and put forth their arguments. This right to be heard forms the cornerstone of natural justice and is essential for a fair decision-making process.

2.      Notice and disclosure: Parties involved in the proceedings must be provided with adequate notice and information about the case against them. This allows borrowers and guarantors to prepare their defense and respond to allegations effectively.

3.      Impartiality and independence: The DRT maintains impartiality and independence when adjudicating disputes, ensuring that decisions are based on the merits of the case and not influenced by external factors.

4.      Reasoned decisions: The DRT provides reasoned decisions that clearly explain the reasoning behind the ruling. This ensures transparency and helps borrowers and guarantors understand the basis of the decision.

5.      Prohibition of bias: The DRT ensures that the decision-making process is free from any bias or prejudice against any party. This includes both actual bias and the appearance of bias.

6.      Fair and equal treatment: The DRT ensures that all parties are treated fairly and equally during the proceedings, with equal opportunity to present their case and access relevant information.

By upholding the principles of natural justice, the DRT ensures that debt recovery proceedings are conducted in a fair, transparent, and equitable manner. This promotes confidence in the legal system and safeguards the rights of borrowers, guarantors, and lenders alike.

DRT Judgments Favorable for Borrowers & Guarantors

1
Judge : BELA M. TRIVEDI
[2024] 2 S.C.R. 315 Directorate of Enforcement v. Niraj Tyagi & Ors. at a fair market value and in a transparent manner. It appears that a series of litigations under the Sarfaesi Act before the DRT and High Court had ensued between the parties. 7. IHFL on 01.07.2021 ultimately sold the proceedings which had taken place under the Sarfaesi Act and before the High Court and this Court, submitted that the respondent-complainant Shipra Group having failed in all the said proceedings had taken recourse to the criminal proceedings to create a fear amongst the financial institution
Decision Date : 13-02-2024 | Case No : CRIMINAL APPEAL/843/2024
2
Judge : D.Y. CHANDRACHUD,Manoj Misra,J.B. PARDIWALA
principle of Section(s) 73 & 74 respectively of the Contract Act, 1872 Act is applicable to forfeiture of earnest- money deposit under Rule 9(5) of the Sarfaesi Rules. In other words, whether the forfeiture of the earnest-money deposit under Rule 9(5) of the Sarfaesi Rules can be only to the extent loss or damages incurred by the Bank; (ii) Whether, the forfeiture of the entire amount towards the earnest-money deposit under Rule 9(5) of the Rules amounts to unjust enrichment. In other words, whether the quantum of forfeiture under the Sarfaesi Rule is limited to the extent of debt
Decision Date : 02-02-2024 | Case No : CIVIL APPEAL/235/2024 | Disposal Nature : Disposed off
3
English

Judge : VIKRAM NATH,ANIRUDDHA BOSE
recovery certifi cate is issued – Reliefs under the two statutes are diff erent and once CIRP results in declaration of moratorium, the enforcement mechanism under the 1993 Act or the Sarfaesi Act gets suspended – In such circumstances, after issue of recovery certifi cate, the fi Security Interest Act, 2002 ( Sarfaesi ) was issued to the corporate debtor and recovery proceedings were instituted against them before the Debt Recovery Tribunal (DRT). Three applications were fi led by the exposed lending banks, two before the DRT, Hyderabad being OA No.154 of 2014 and
Decision Date : 18-10-2023 | Case No : CIVIL APPEAL/2348/2021 | Disposal Nature : Dismissed
4
English

Judge : ANIRUDDHA BOSE,BELA M. TRIVEDI
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘ Sarfaesi Act’) were initiated by the Appellant Bank in respect of the Subject Property mortgaged with it. (iii) After certain proceedings before the Debt Recovery Tribunal and Bombay High Court having taken place between the parties, the Appellant on 13.06.2019 had issued a notice for e-auction sale of the said property under the Sarfaesi Act, scheduling the auction sale on 04.07.2019. (iv) The Respondent no.1-Rajat Infrastructure preferred a
Decision Date : 04-10-2023 | Case No : CIVIL APPEAL/1902/2020 | Disposal Nature : Dismissed | Direction Issue : M.A. dismissed.
5
English

Judge : D.Y. CHANDRACHUD,J.B. PARDIWALA
of Securities Interest Act, 2002 ( Sarfaesi Act) on the Borrowers’ right of redemption in an auction conducted under the Sarfaesi Act. What is the effect of amendment to Section 13(8) of the Sarfaesi Act read with Section 60 of the Transfer of Property Act, 1882. 4. Whether a Bank considerations to override the outcome contemplated by the statutory auction process prescribed by the Sarfaesi Act. 6. Whether the right of redemption of mortgage stood extinguished upon publication of notice of auction. Till what point of time the right of redemption of mortgage can be exercised
Decision Date : 21-09-2023 | Case No : CIVIL APPEAL/5542/2023 | Disposal Nature : Appeals(s) allowed
6
English

Judge : B.V. NAGARATHNA,Ujjal Bhuyan
(for short, “ Sarfaesi Act, 2002”). It was contended that the Kerala State Co-operative Bank is a state co-operative bank which is an apex bank. That a state co-operative bank, central co-operative bank in the co-operative sector is engaged in the business of banking but the appellant district co-operative banks and the urban banks in the co-operative sector is the transaction of banking business. Further, it was observed that the provisions of the Sarfaesi Act and particularly Section 13 thereof are also applicable to the institutions, namely, the Kerala State
Decision Date : 14-09-2023 | Case No : CIVIL APPEAL/10069/2016 | Disposal Nature : Appeals(s) allowed
7
English

Judge : VIKRAM NATH,Ahsanuddin Amanullah
of the Limitation Act will have no application in the present case inasmuch as the proceedings under the Sarfaesi Act before the DRT cannot be said to be before a Court or Tribunal having no jurisdiction – Respondent No.2, being a Secured Creditor, would defi nitely have a right invoke the power under the Sarfaesi Act and the said proceedings cannot be said to be without jurisdiction – Therefore, no benefi t u/s.14 would be admissible to Respondent No.2 – Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. [Para
Decision Date : 12-09-2023 | Case No : CIVIL APPEAL/2085/2022 | Disposal Nature : Dismissed
8
English

Judge : SANJIV KHANNA,SUDHANSHU DHULIA
enactment of s.142A of the Customs Act does confer or create a fi rst charge on the dues ‘payable’ under the Customs Act, notwithstanding provisions under any Central Act, but not in cases covered u/s.529A of the Companies Act, RDDBFI Act, Sarfaesi Act and the IBC – s.142A, Customs Act, post Act, but not in cases covered under Section 529A of the Companies Act, RDDBFI Act, Sarfaesi Act and the IBC. Section 142A of the Customs Act, post its enactment, would dilute the impact of Section 530 of the Companies Act, which had restricted preferential treatment to government taxes
Decision Date : 18-08-2023 | Case No : CIVIL APPEAL/2568/2013 | Disposal Nature : Appeals(s) allowed
9
English

Judge : DIPANKAR DATTA,S. RAVINDRA BHAT
reflected under Section 326 of the Companies Act, 2013.Section 327 made payment of taxes subject to the priority embodied in Section 326. It was urged that Section 26E of the Securitization of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter, “ Sarfaesi Act”) and Mumbai & Anr.,11 reinforced the priority accorded to secured creditors under Section 26E of Sarfaesi Act. 17. Learned counsel submitted that electricity dues did not enjoy any priority, and cited High Court rulings, especially the judgment of the Calcutta High Court in The West Bengal
Decision Date : 17-07-2023 | Case No : CIVIL APPEAL/7976/2019 | Disposal Nature : Dismissed
10
English

Judge : M.R. SHAH,C.T. RAVIKUMAR
in favour of respondent no. 1, however, the High Court allowed the writ petition in favour of respondent no.1 – Review application there against dismissed – On appeal, held: Against any steps taken by the Bank u/s.13(4), the aggrieved party has a remedy under the Sarfaesi Act by way of appeal no.1 in a writ petition under Article 226 of the Constitution of India was the e–auction notice which was pursuant to the action initiated by the Bank in exercise of powers under Section 13(4) of the Sarfaesi Act. Against any steps taken by the Bank under Section 13(4) of the Sarfaesi Act
Decision Date : 02-05-2023 | Case No : CIVIL APPEAL/3152/2023 | Disposal Nature : Appeals(s) allowed
11
English

Judge : M.B. SHAH,SANJIV KHANNA
Act, 2013, SICA, Sarfaesi , Recovery of Debts Act etc., into a single Code. It is submitted that the objective of the IBC was to introduce comprehensive and time bound insolvency framework and to maximize the value of assets of all persons and balance the interest of all stakeholders. 4.9 It
Decision Date : 02-05-2023 | Case No : WRIT PETITION (CIVIL)/421/2019 | Disposal Nature : Dismissed
12
English

Judge : S. RAVINDRA BHAT,DIPANKAR DATTA
erroneously held in the decision of the High Court impugned in CA No.9212 of 2012– Further, in view of the decision in Central Bank of India case, any observation in the decision impugned in CA No.8980 of 2012 touching upon s.16-B of the HPGST Act vis-à-vis s.35 of the Sarfaesi Act is of that the findings in the judgments and orders disposing of the writ petitions impugned in two of the four civil appeals ~ the first dated 7th September, 2007 and the other dated 2nd January, 2008 ~ with regard to the scope, ambit and applicability of section 35 of the Sarfaesi Act,
Decision Date : 28-04-2023 | Case No : CIVIL APPEAL/8980/2012 | Disposal Nature : Disposed off
13
English

Judge : Aravind Kumar,BHUSHAN RAMKRISHNA GAVAI
parties – Financial defaults were committed by the respondent – Demand notice u/s. 13 of the Sarfaesi Act was issued by appellant- bank – Demand remained unmet – Appellant declared that it had taken possession of the suit property – Respondent filed securitisation application before the DRT bar on the jurisdiction of the civil court, as provided u/s. 34 of the Sarfaesi Act – Division Bench set aside the order of the Single Judge and observed that the bar u/s. 34 of the Sarfaesi Act was not absolute and restrained the appellant from selling the suit property until the
Decision Date : 18-04-2023 | Case No : CIVIL APPEAL/2924/2023 | Disposal Nature : Appeals(s) allowed
14
English

Judge : M.M. SUNDRESH,SANJIV KHANNA
but are required to be exercised only in extraordinary circumstances – In matters where the legislature has provided for a specific mechanism for appropriate redressal, constitutional remedy not to be resorted to – Constitution of India – Art. 226. Sarfaesi Act – Purpose and Object – would not come within the purview of Art. 12. Judicial deprecation: Interference of the High Courts in matters pertaining to the Sarfaesi Act – Held: Said practice is deprecated – Request to the High Courts not to entertain such cases – When a statute prescribes a particular mode, an attempt
Decision Date : 17-04-2023 | Case No : CIVIL APPEAL/2861/2023 | Disposal Nature : Disposed off
15
English

Judge : C.T. RAVIKUMAR,AJAY RASTOGI
submit certain documents to the assessor and, therefore, assessment on such basis could be treated as void. In the meanwhile, Sarfaesi proceedings were initiated against the respondent by Canara Bank (secured creditor). 61. While the claim of the respondent was being processed, the respondent
Decision Date : 13-04-2023 | Case No : CIVIL APPEAL/5352/2007 | Disposal Nature : Dismissed
16
English

Judge : S. RAVINDRA BHAT,DIPANKAR DATTA
installments of the sale price to the secured creditor is an action which is part of the measures specified in section 13(4) of the Sarfaesi Act and, therefore, amenable to challenge on valid ground(s) in an application under section 17(1) thereof. [Para 14][1080-F-G] 1.3. Rule 9(5) legislatively down a penal consequence. ‘Forfeiture’ referred to in sub-rule (5) of rule 9, in the setting of the Sarfaesi Act and the Rules, has to be construed as denoting a penalty that the defaulting bidder must suffer should he fail to make payment of the entire sale price within the period
Decision Date : 10-04-2023 | Case No : CIVIL APPEAL/2545/2023 | Disposal Nature : Appeals(s) allowed
17
English

Judge : V. RAMASUBRAMANIAN,Pankaj Mithal
Victory, to whom a portion of the land measuring an extent of 10000 sq.ft. (out of the total extent of land of 10.19 acres), 8 For short, “ Sarfaesi Act” A B C D E F G H 1029 was given under a Leave and License Agreement dated 19.08.2011, but which Licensee now claims to be in agreed to provide financial assistance to the extent of Rs.2.70 crores to Energy Properties, towards the purchase of the land in question, that was being brought to sale by UCO Bank in exercise of the powers conferred by the Sarfaesi Act. This amount of Rs.2.70 crores agreed to be provided
Decision Date : 14-03-2023 | Case No : CIVIL APPEAL/1743/2021 | Disposal Nature : Dismissed | Direction Issue : Appeal partly allowed.
18
English

Judge : M.M. SUNDRESH,M.R. SHAH
DRAT – By entertaining the writ petition straightway under Art. 226/227 challenging the order passed by the DRT, the High Court allowed/permitted the borrower to circumvent the provision of appeal before the DRAT under the provisions of the Sarfaesi Act – There was no breach of r. passed by the DRT-I, the High Court has allowed / permitted the borrower to circumvent the provision of appeal before the DRAT under the provisions of the Sarfaesi Act. [Para 6][588-F-H; 589-A-B] 1.2 The High Court has set aside the sale in favour of the auction purchaser with respect to
Decision Date : 05-01-2023 | Case No : CIVIL APPEAL/7402/2022 | Disposal Nature : Appeals(s) allowed
19
English

Judge : B.V. NAGARATHNA,M.R. SHAH
date of the application. That the “debt” means any liability inclusive of interest. [Para 13][569-D-F] 1.2 An appeal under Section 18 of the Sarfaesi Act is permissible against the order passed by the DRT under Section 17 of the Sarfaesi Act. Under Section 17, the scope of enquiry is to the steps taken under Section 13(4) against the secured assets. Therefore, whatever amount is mentioned in the notice under Section 13(2) of the Sarfaesi Act, in case steps taken under Section 13(2)/13(4) against the secured assets are under challenge before the DRT will be the ‘debt
Decision Date : 05-01-2023 | Case No : CIVIL APPEAL/8969/2022 | Disposal Nature : Disposed off
20
English

Judge : M.R. SHAH,KRISHNA MURARI
( Sarfaesi Act) – ss. 13(2), 13(4), 14, 17, 26E – Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) – ss. 15-23, 24 – Whether the MSMED Act would prevail over the Sarfaesi Act and whether recovery proceedings/recoveries under MSMED Act would prevail over the recoveries proceedings under provisions of the Sarfaesi Act – Held : Sec 15 to 23 of the MSMED Act provides a special mechanism for adjudication of dispute between buyer and seller – But does not provides for priority over debt dues of the secured creditor akin to s.26E of the Sarfaesi Act –
Decision Date : 05-01-2023 | Case No : CIVIL APPEAL/6662/2022 | Disposal Nature : Appeals(s) allowed
21
English

Judge : AJAY RASTOGI,C.T. RAVIKUMAR
loan amount – Respondent borrowers committed default in repaying the outstanding loan amount as also the interest – Loan accounts classified as non-performing assets-NPA – Initiation of recovery proceedings by the respondent Bank-secured creditor under the provisions of the Sarfaesi infirmity in the process and cannot be sanctified; and that the auction purchaser failed to deposit balance bid amount within the stipulated time – Proceedings initiated from the stage of s. 13(2) of the Sarfaesi Act, 2002 till the delivery of physical possession of the scheduled property
Decision Date : 16-11-2022 | Case No : CIVIL APPEAL/8470/2022 | Disposal Nature : Appeals(s) allowed
22
English

Judge : KRISHNA MURARI,M.R. SHAH
has set aside order dated 27.08.2021 passed by the designated authority under Section 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the Sarfaesi Act, 2002) and directed the designated authority 14 of the Sarfaesi Act to dispose of the application under Section 14 of the Sarfaesi Act afresh, legal heirs of original respondent No. 2 claiming to be the tenant of the mortgaged property, have preferred the present Special Leave Petition. 2. The
Decision Date : 26-09-2022 | Case No : SPECIAL LEAVE PETITION (CIVIL)/16013/2022 | Disposal Nature : Dismissed
23
English

Judge : J.K. MAHESHWARI,HIMA KOHLI,N.V. RAMANA
Sarfaesi , the Recovery of Debts Act, the Presidency Towns Insolvency Act, 1909 and the Provincial Insolvency Act, 1920, into a single code. A comprehensive and time-bound framework was introduced with smooth transitions between reorganisation and liquidation, with an aim to inter alia maximise
Decision Date : 26-08-2022 | Case No : CIVIL APPEAL/7722/2021 | Disposal Nature : Disposed off
24
English

Judge : J.K. MAHESHWARI,INDIRA BANERJEE
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002, hereinafter referred to as the Sarfaesi Act. 12. On 12th December 2018, the Corporate Debtor admitted its liability to the Appellant Financial Creditor and offered a one time settlement for a for initiation of CIRP, unlike an application of an Operational Creditor for initiation of CIRP under Section 9 of the IBC which may have to be dismissed if there is a pre-existing dispute. 16. The proceedings initiated by the Appellant Financial Creditor under the Sarfaesi Act are not
Decision Date : 05-08-2022 | Case No : CIVIL APPEAL/2176/2020 | Disposal Nature : Appeals(s) allowed
25
English

Judge : J.K. MAHESHWARI,INDIRA BANERJEE
Appellant sent the Corporate Debtor a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) in order to enforce security interests against the Corporate Debtor. On 14th October 2013, the Appellant, its authorized officer, issued a possession notice under Section 13(4) of the Sarfaesi Act. 21. On 6th May 2014, the Appellant invoked the personal guarantee of Mr. Ajit Kerkar, Managing Director of the Corporate Debtor. The aggregate assigned debt as on 6th May 2014 of principal and
Decision Date : 01-08-2022 | Case No : CIVIL APPEAL/84/2020 | Disposal Nature : Appeals(s) allowed
26
English

Judge : B.V. NAGARATHNA,M.R. SHAH
Magistrate (CMM) shall deem to mean and include Additional Chief Metropolitan Magistrate (ACMM) – The respondent (secured creditor) instituted proceedings under the Sarfaesi Act for recovery of the amount due and payable by the appellant (borrower) – The borrowers refused to the physical possession of security asset – Secured creditor filed an application u/s 14 of the Sarfaesi Act praying for assistance from the CMM in taking physical possession of the secured asset – The matter was adjourned from time to time – Secured Creditor approached the High Court for
Decision Date : 27-07-2022 | Case No : CIVIL APPEAL/175/2022 | Disposal Nature : Dismissed
27
English

Judge : BHUSHAN RAMKRISHNA GAVAI,L. NAGESWARA RAO,A.S. BOPANNA
Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “the Sarfaesi Act”). The said notice was followed by a Possession Notice dated 10th January, 2008 issued under Section 13(4) of the Sarfaesi Act, by the KMBL due to default in payment by the
Decision Date : 30-05-2022 | Case No : CIVIL APPEAL/689/2021 | Disposal Nature : Appeals(s) allowed
28
English

Judge : BHUSHAN RAMKRISHNA GAVAI,L. NAGESWARA RAO
moratorium for any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Sarfaesi Act. It is clear that once the CIRP is commenced, there is complete prohibition for any action to foreclose, recover enforce any security interest created by the Corporate Debtor in respect of its property. The words “including any action under the Sarfaesi Act” are significant. The legislative intent is clear that after the CIRP is initiated, all actions including any action under the Sarfaesi Act to
Decision Date : 18-05-2022 | Case No : CIVIL APPEAL/4750/2021 | Disposal Nature : Dismissed
29
English

Judge : B.V. NAGARATHNA,M.R. SHAH
under the Sarfaesi Act to recover the amount due and payable since 1986 and has stalled the recovery proceedings – In spite of the strong observations made by the adjudicating authority in the earlier order re-produced by the Single Judge in his judgment and the strong observations made by a demand notice upon the judgment debtor – respondent No. 1 and others under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) for a sum of Rs. 27,35,85,200.62/- as on 20.06.2011, together with
Decision Date : 13-05-2022 | Case No : CIVIL APPEAL/4026/2022 | Disposal Nature : Disposed off
30
English

Judge : A.M. KHANWILKAR,C.T. RAVIKUMAR
An Advocate Commissioner is certainly an officer subordinate to the court and the words employed in Section 14 (1A) of the Sarfaesi Act are not to be understood as meaning an officer subordinate in service. Section 284 of the Code of Criminal Procedure, 1973 in fact empowers an relating thereto and forward the assets and documents to the secured creditors. 9. The Advocate Commissioners appointed by the learned Chief Metropolitan Magistrate is in tune with Section 14(1-A) of the Sarfaesi Act, 2002. As per Section 14 of the Act, the secured creditors
Decision Date : 25-02-2022 | Case No : CIVIL APPEAL/1637/2022 | Disposal Nature : Disposed off
31
English

Judge : VINEET SARAN,L. NAGESWARA RAO
the company – Subsequently, the Commissioner again confirmed the demand of excise duty, imposed penalty and also ordered for confiscation of all land, building, plant, machinery of RIL – Besides this, RIL was also issued notice u/s. 13(2) and also s.13(4) of the Sarfaesi Act since RIL failed s. 11E in the 1944 Act w.e.f. 08.04.2011, and the provisions contained in the Sarfaesi Act, 2002 would have an overriding effect on the provisions of the 1944 Act – Thus, the confiscation orders quashed – Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Decision Date : 24-02-2022 | Case No : CIVIL APPEAL/2196/2012 | Disposal Nature : Appeals(s) allowed
32
English

Judge : SANJIV KHANNA,M.R. SHAH
– Borrower failed to repay the loan as per terms & conditions of the agreement – The account of the borrower became NPA on 31.10.2012 – Notice u/s.13(2) of Sarfaesi Act served upon the borrower on 07.01.2013 demanding sum of Rs.1,85,37,218.80/- – Bank took symbolic possession of the immovable / residential house and issued notice u/s. 13(4) of Sarfaesi Act on 22.08.2013 – The bank issued sale notice by public auction of the residential property on 16.12.2013 – Reserve price fixed was Rs.48.65 lakhs – Date of auction notified was 20.01.2014 – Borrower challenged the auction by
Decision Date : 10-02-2022 | Case No : CIVIL APPEAL/363/2022 | Disposal Nature : Appeals(s) allowed
33
English

Judge : AJAY RASTOGI,ABHAY S. OKA
further indulgence of this Court. 14. It may be relevant to note that in the interregnum period, title deed of the subject property in question was mortgaged with the Punjab National Bank creating security interest and after the account of the appellants became NPA, proceedings under the SARFAESI
Decision Date : 28-01-2022 | Case No : CIVIL APPEAL/7517/2012 | Disposal Nature : Dismissed
34
English

Judge : SANJAY KISHAN KAUL,M.M. SUNDRESH
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘ Sarfaesi Act’ for short), after duly invoking the personal guarantee of the Respondent No.3. This was followed by a similar action at the hands of Respondent No.8 (M/s Allahabad Bank) and M/s. State Bank of and Jaipur. We are given to understand that M/s. State Bank of Bikaner and Jaipur got merged with State Bank of India. The aforesaid two proceedings invoking Section 13(2) of the Sarfaesi Act were initiated in the month of February and March, 2013, respectively. 5. On the aforesaid
Decision Date : 18-01-2022 | Case No : CIVIL APPEAL/8411/2019 | Disposal Nature : Disposed off
35
English

Judge : M.R. SHAH,B.V. NAGARATHNA
SUPREME COURT REPORTS [2022] 1 S.C.R.[2022] 1 S.C.R. 950 950 PHOENIX ARC PRIVATE LIMITED v. VISHWA BHARATI VIDYA MANDIR & ORS. (Civil Appeal Nos. 257-259 of 2022) JANUARY 12, 2022 [M. R. SHAH AND B. V. NAGARATHNA, JJ.] Sarfaesi : Default in repayment High Court on the ground that communication/letter dated 13.08.2015 was a possession notice under s.13(4) of the Sarfaesi Act, which was against the Security Interest (Enforcement) Rules, 2002 – High Court entertained the writ petitions under Art.226 against the appellant and passed
Decision Date : 12-01-2022 | Case No : CIVIL APPEAL/257/2022 | Disposal Nature : Appeals(s) allowed
36
English

Judge : M.R. SHAH,B.V. NAGARATHNA
despite the fact that it was specifically pointed out before the High Court by way of counter affidavit that the recovery proceedings under Sarfaesi Act are pending; the borrower and her husband have availed two credit facilities and both the loan accounts are maintained regularly and the impugned judgment and order, the High Court observed that the proceedings under the Sarfaesi Act have remained pending for seven years and the Bank has been unable to recover its dues and therefore the hope of recovery is illusory. This conclusion is not supported by any material on
Decision Date : 15-12-2021 | Case No : CIVIL APPEAL/7411/2021 | Disposal Nature : Appeals(s) allowed
37
English

Judge : BHUSHAN RAMKRISHNA GAVAI,L. NAGESWARA RAO,SANJIV KHANNA
express conduct in consideration of some compromise – However, a statutory right may also be waived by implied conduct, like, by wanting to take a chance of a favourable decision – The fact that the other side has acted on it, is sufficient consideration – Sarfaesi Act. Sarfaesi Act : while accepting defaults and non payment enlisted reasons for not being able to adhere to payment schedule and requested to grant further moratorium – Bank granted further moratorium and deferred action under Sarfaesi Act to enable Borrower to submit detailed project/viability report –
Decision Date : 03-12-2021 | Case No : CIVIL APPEAL/7372/2021 | Disposal Nature : Appeals(s) allowed
38
English

Judge : M.R. SHAH,SANJIV KHANNA
questions required to be dealt with by the DRT in the proceedings initiated under Sarfaesi Act – Assignee has already initiated the proceedings u/s.13 which can be challenged by the appellant – Thus, the High Court justified in rejecting plaint/dismissing the suit in view of bar u/s.34 of 34 of Sarfaesi Act shall not be applicable. However, it is required to be noted that except the words used ‘fraud’/ ’fraudulent’ there are no specific particulars pleaded with respect to the ‘fraud’. It appears that by a clever drafting and using the words ‘fraud’/’fraudulent’ without
Decision Date : 26-11-2021 | Case No : CIVIL APPEAL/6669/2021 | Disposal Nature : Dismissed
39
English

Judge : VIKRAM NATH,D.Y. CHANDRACHUD,B.V. NAGARATHNA
predictability woven into its underlying design to ensure higher recovery rates and immediate liquidation, in the event of a failed resolution. As noted by this Court in Essar Steel (supra), the insolvency regime in India was overhauled after the provisions of SICA, Sarfaesi and Recovery of
Decision Date : 22-10-2021 | Case No : CIVIL APPEAL/3327/2020 | Disposal Nature : Dismissed
40
English

Judge : B.V. NAGARATHNA,BHUSHAN RAMKRISHNA GAVAI,L. NAGESWARA RAO
of Security Interest Act, 2002 – Section 13 – Enforcement of Security Interest – Notice to Sale – Rule 9 of the Sarfaesi Rules – 30 days’ notice – The present appeal challenges the common judgment of the High Court disposing of four writ petitions – Loan transaction of of – Recourse to series of proceedings to block the enforcement of a security interest – Dilatory tactics – Held: Every attempt has been made to frustrate the purpose of the Sarfaesi Act – Three rounds of litigation – It appears that the appellants were only interested in protracting
Decision Date : 23-09-2021 | Case No : CIVIL APPEAL/5920/2021 | Disposal Nature : Dismissed
41
English

Judge : M.R. SHAH,D.Y. CHANDRACHUD
Rhino Re Rhino Enterprises Properties Ltd. Schofield v Smith RP Resolution Professional Sarfaesi Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 SBI State Bank of India SBI Application CA No 639 (PB) of 2018 – filed by SBI before
Decision Date : 13-09-2021 | Case No : CIVIL APPEAL/3224/2020 | Disposal Nature : Disposed off
42
English

Judge : KRISHNA MURARI,S. ABDUL NAZEER
any protection of the Rent Act. Even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the Sarfaesi Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of notice under Section 13(2) of the Sarfaesi Act and, admittedly, no such consent has been sought by the Borrower in the instant case. [Para 14][535-F-H; 536-A-B] Harshad Govardhan Sondagar v. International Asset Reconstruction Co. Ltd. & Ors. (2014) 6 SCC 1 : [2014] 11 SCR 605;
Decision Date : 17-08-2021 | Case No : CRIMINAL APPEAL/843/2021 | Disposal Nature : Leave Granted & Dismissed
43
English

Judge : INDIRA BANERJEE,V. RAMASUBRAMANIAN
under Section 13(2) of Sarfaesi Act was issued for recovery of Rs. 28,82,25,942.24 plus interest. It was followed by a possession notice under section 13(4) in respect of two properties. (iii) Aggrieved by the same, the petitioners filed S.A. No. 367/ 2014 before the Debts Recovery Tribunal-III, Delhi (‘DRT-III’ for short), under Section 17 of the Sarfaesi Act. However, the DRT-III declined to grant any interim relief against the physical possession of the aforesaid properties. (iv) The petitioners filed an appeal but could not deposit Rs. 7 crores being 25% of the amount demanded
Decision Date : 09-08-2021 | Case No : SPECIAL LEAVE PETITION (CRIMINAL)/28592/2018 | Disposal Nature : Disposed off
44
English

Judge : R.F. NARIMAN,BHUSHAN RAMKRISHNA GAVAI,HRISHIKESH ROY
– Some original lenders of the corporate debtor, assigned the debts owed to them by the corporate debtor to the appellant – Appellant took actual physical possession of project assets of the corporate debtor under the Sarfaesi Act and filed application u/s.7 of IBC before the National Company the appellant issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 [“ Sarfaesi Act”] on behalf of itself and other consortium lenders to the corporate debtor. On 01.06.2016, the appellant took
Decision Date : 15-04-2021 | Case No : CIVIL APPEAL/323/2021 | Disposal Nature : Disposed off
45
English

Judge : BHUSHAN RAMKRISHNA GAVAI,R.F. NARIMAN,HRISHIKESH ROY
and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as “ Sarfaesi Act”) holding that in the circumstances mentioned, the deposit of 75% of the amount claimed as a pre-condition to the hearing of an “appeal” before the Recovery Tribunal under Section 17 of the Sarfaesi DEPUTY COMMISSIONER OF INCOME TAX & ANR. v. M/S. PEPSI FOODS LTD. [R. F. NARIMAN, J.] A B C D E F G H 28 SUPREME COURT REPORTS [2021] 4 S.C.R. Act was onerous, oppressive, unreasonable, arbitrary and hence violative of Article 14 of
Decision Date : 06-04-2021 | Case No : CIVIL APPEAL/1106/2021 | Disposal Nature : Dismissed
46
English

Judge : V. RAMASUBRAMANIAN,S.A. BOBDE,A.S. BOPANNA
earlier processes like civil suit, winding up petition, Sarfaesi proceeding and SICA have failed to secure the desired result. The provision under the IB Code is with the intention of making a debtor to seek the creditor. In that regard, Dr. Singhvi has referred to the decisions in the case of
Decision Date : 26-03-2021 | Case No : WRIT TO PETITION (CIVIL)…/48/2019 | Disposal Nature : Case Partly allowed
47
English

Judge : KRISHNA MURARI,BHUSHAN RAMKRISHNA GAVAI,A.M. KHANWILKAR
for the benefit of all the creditors (COC). That LAXMI PAT SURANA v. UNION BANK OF INDIA [A. M. KHANWILKAR, J.] A B C D E F G H 960 SUPREME COURT REPORTS [2021] 2 S.C.R. would also include the assets involved in Sarfaesi Act and RDBA, 1973 proceedings. Thus the Bank has
Decision Date : 26-03-2021 | Case No : CIVIL APPEAL/2734/2020 | Disposal Nature : Disposed off
48
English

Judge : INDIRA BANERJEE,HEMANT GUPTA
of Security Interest Act, 2002: s.13(4) – The Chief Metropolitan Magistrate or the Judicial Magistrate, as the case may be, exercising powers under s.14 of the Sarfaesi Act, functions as a Civil Court/Executing Court – Proceedings under the Sarfaesi Act would, therefore, be deemed be civil proceedings in a Court – Moreover, proceedings under the Sarfaesi Act under s.13(4) are appealable to the DRT under s.18 of the Sarfaesi Act – Argument that proceedings under the Sarfaesi Act would not qualify for exclusion under s.14 of the Limitation Act, because
Decision Date : 22-03-2021 | Case No : CIVIL APPEAL/9198/2019 | Disposal Nature : Dismissed
49
English

Judge : R.F. NARIMAN,BHUSHAN RAMKRISHNA GAVAI
outside such winding up proceeding, notices having already been issued under Sections 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [“ Sarfaesi Act”]. The Court referred to an order of 12.04.2018, by which provisional liquidator was to take physical possession of the assets of SRUIL within one week of the date of that order. Importantly, paragraph 2 of the said order stated: “2. Ms. Maitra states that the secured creditors have already commenced proceedings under Sarfaesi against the company. As
Decision Date : 01-03-2021 | Case No : CIVIL APPEAL/4230/2020 | Disposal Nature : Dismissed
50
English

Judge : V. RAMASUBRAMANIAN,S.A. BOBDE,A.S. BOPANNA
Financial Assets and Enforcement of Security Interest Act, 2002 (‘ Sarfaesi ’ for short) relating to pre-deposit in order to avail the remedy of appeal has expressed a similar opinion in the case of Narayan Chandra Ghosh vs. UCO Bank and Others (2011) 4 SCC 548, which reads as hereunder:
Decision Date : 16-02-2021 | Case No : CIVIL APPEAL/538/2021 | Disposal Nature : Case Partly allowed
51
English

Judge : SANJIV KHANNA,INDIRA BANERJEE
pursuant to Section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi ). 3. The Respondent M/s Hotel Poonja International Pvt. Ltd., hereinafter referred to as the “Corporate Debtor”, was granted credit/ loan facilities inter
Decision Date : 21-01-2021 | Case No : CIVIL APPEAL/4221/2020 | Disposal Nature : Dismissed
52
English

Judge : AJAY RASTOGI,HEMANT GUPTA,L. NAGESWARA RAO
recorded in writing, is a directory provision. The High Court held as under: “18. The primary question in these Writ Petitions, namely, whether the time limits in section 14 of the Sarfaesi Act are mandatory or directory should be answered in light of the principles enumerated above. As in as much as it would delay the process of taking physical possession of assets instead of expediting such process by entailing the filing of another application for such purpose. For all these reasons, the time limit stipulation in the amended Section 14 of the Sarfaesi Act is directory
Decision Date : 05-11-2020 | Case No : CIVIL APPEAL/3441/2020 | Disposal Nature : Dismissed
53
English

Judge : A.S. BOPANNA,V. RAMASUBRAMANIAN,S.A. BOBDE
Private Ltd. (SIPL) and that a bank by name, Janata Sahkari Bank Ltd. had taken possession of the same under the Sarfaesi Act – Financial creditor and Resolution Professional both filed separate appeals respectively – Held: It is not the case of corporate debtor or its promoter/Director and that a bank by name, Janata Sahkari Bank Limited, Pune had taken possession of the same under the Sarfaesi Act; and (iv) That even the advertisement issued by the Resolution Professional on 30.03.2018 inviting Expression of Interest, was vitiated in as much as the invitation
Decision Date : 04-09-2020 | Case No : CIVIL APPEAL/2955/2020 | Disposal Nature : Appeals(s) allowed
54
English

Judge : M.R. SHAH,ARUN MISHRA,S. ABDUL NAZEER
Interest Act, 2002 ( Sarfaesi Act) or under any other law. A question of seminal significance also arises whether the spectrum is a natural resource, the Government is holding the same as cestuique trust. In view of the nature of the resource, it can be subjected to Securities Interest Act, 2002 ( Sarfaesi Act) or under any other law. 22. A question of seminal significance also arises whether the spectrum is a natural resource, the Government is holding the same as cestuique trust. In view of the nature of the resource, it can be subjected to
Decision Date : 01-09-2020 | Case No : CIVIL APPEAL/6328/2015 | Disposal Nature : Directions issued
55
English

Judge : DINESH MAHESHWARI,A.M. KHANWILKAR
relation 10 ‘NPA’ for short. 11 Hereinafter also referred to as ‘the Sarfaesi Act’. 12 ‘DRT ’ for short. 13 Hereinafter also referred to as ‘the Act of 1993’. 14 Hereinafter also referred to as ‘the Rules of 2016’. BABULAL VARDHARJI GURJAR v. VEER GURJAR ALUMINIUM INDUSTRIES PVT. LTD. the sole aim of browbeating the corporate debtor and forcing it to pay the unrealistic claim of the applicant. With specific reference to the proceedings under the Sarfaesi Act, it was contended that as per the notice under Section 13 (2), the account of corporate debtor with Indian
Decision Date : 14-08-2020 | Case No : CIVIL APPEAL/6347/2019 | Disposal Nature : Appeals(s) allowed
56
English

Judge : K.M. JOSEPH,SANJAY KISHAN KAUL
Security Interest Act, 2002 (hereinafter referred to as the ‘ Sarfaesi Act’). The moot point of law, which arises for consideration, is whether the liability towards previous electricity dues of the last owner could be mulled on to the respondent. 2. The unit in question is a mineral
Decision Date : 01-06-2020 | Case No : CIVIL APPEAL/1815/2020 | Disposal Nature : Appeals(s) allowed
57
English

Judge : ANIRUDDHA BOSE,INDIRA BANERJEE,ARUN MISHRA,VINEET SARAN,M.R. SHAH
– Seventh Schedule – List I, Entry 45; List II, Entry 32 – Power of the Parliament to legislate – Applicability of Sarfaesi Act, 2002 to co-operative banks – Held: Co-operative banks registered under the State legislation and multi-State level co-operative societies registered under MSCS under the State legislation and multi-State co-operative banks are ‘banks’ u/s.2(1)(c), Sarfaesi Act – Recovery is an essential part of banking; as such, the recovery procedure prescribed u/ s.13 of the said Act, a legislation relatable to Entry 45, List I, Seventh Schedule, is
Decision Date : 05-05-2020 | Case No : CIVIL APPEAL/5674/2009 | Disposal Nature : Reference answered
58
English

Judge : A.M. KHANWILKAR,AJAY RASTOGI
on 28.02.17 under the Sarfaesi proceedings initiated by the petitioner bank herein, to M/s. Tripower Enterprise Pvt. Ltd., Chennai-115. 7. R-4 company has filed its written statement in the OA, wherein it has been alleged that no valid mortgage over OA ‘B’ schedule properties had been this Tribunal. In the meanwhile, this petition has been filed for return of the original documents, which have been marked as Exh. A-110 to A-114. 8. The mere reason that R-4 company and R-10 have not raised the above said issue during the Sarfaesi proceedings, cannot be a valid reason
Decision Date : 24-04-2020 | Case No : CIVIL APPEAL/2373/2020 | Disposal Nature : Case Partly allowed
59
English

Judge : R. BANUMATHI,A.S. BOPANNA,S. ABDUL NAZEER
– Appellants filed petition u/s.482, CrPC – Dismissed – Held: Sarfaesi Act is a complete code in itself which provides the procedure to be followed by secured creditor and also the remedy to the aggrieved parties including borrower – In such circumstance, if there is any discrepancy in the and 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 ( Sarfaesi Act) is to be resorted to. Further the Security Interest (Enforcement) Rules, 2002 provides the procedure to be adopted with regard to the valuation and sale of
Decision Date : 03-03-2020 | Case No : CRIMINAL APPEAL/377/2020 | Disposal Nature : Appeals(s) allowed
60
English

Judge : KRISHNA MURARI,MOHAN M. SHANTANAGOUDAR
Appellant-Bank does not enjoy any paramount charge over the sale proceeds either – Instead, as per s.13(7) of the Sarfaesi Act, the sale letter and the sale certificate constitute a contract which displaces the order of distribution stipulated under the said provision – The cumulative effect of – Manner of distributing the money received by the secured creditor through the sale of secured assets – s.13(4) of the Sarfaesi Act allows a secured creditor to take possession of the secured assets of a borrower-in- default, including the right to transfer them by way of sale –
Decision Date : 04-12-2019 | Case No : CIVIL APPEAL/232/2016 | Disposal Nature : Disposed off
61
English

Judge : ANIRUDDHA BOSE,R.F. NARIMAN,V. RAMASUBRAMANIAN
remedy for enforcing it, the remedy provided by the statute must be followed, has been quoted with approval. For instance, Union Bank of India vs. Satyawati Tandon19 held that the availability of a remedy of appeal under the DRT Act, 1993 and Sarfaesi Act, 2002 should deter the
Decision Date : 03-12-2019 | Case No : CIVIL APPEAL/9170/2019 | Disposal Nature : Dismissed
62
English

Judge : RANJAN GOGOI,N.V. RAMANA,DEEPAK GUPTA,SANJIV KHANNA,D.Y. CHANDRACHUD
Court A B C D E F G H 41 challenging the constitutional validity of Section 13 (5-A) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest ( Sarfaesi ) Act, 2002 which permits secured creditors to participate in auction of immoveable
Decision Date : 13-11-2019 | Case No : CIVIL APPEAL/8588/2019 | Disposal Nature : Disposed off
63
English

Judge : SURYA KANT,R. SUBHASH REDDY,R.F. NARIMAN
proceedings were pending adjudication. Meanwhile, under the Securitisation and Restructure of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the “ Sarfaesi Act”), a notice dated 3rd March, 2016 was issued under Section 13(2) of the Sarfaesi Act. question which arose before the Court was whether the invocation of the Sarfaesi Act, being beyond limitation, would be saved because of the pending proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Court negatived the plea of the
Decision Date : 25-09-2019 | Case No : WRIT PETITION (CIVIL)/455/2019 | Disposal Nature : Disposed off
64
English

Judge : A.M. KHANWILKAR,DINESH MAHESHWARI
14 of the Sarfaesi Act, 2002. In our considered opinion, there is no casus omissus. The interpretation given by us does not amount to reading anything in the provision, which the legislature never intended to, nor the interpretation given by us, in any way, defeats the intention of meaning without taking any assistance from Code of Criminal Procedure in view of Section 35 of Act, 2002, which provides that provisions of the Act will override all other laws which includes Code of Criminal Procedure. It was also held that when Sarfaesi Act is a complete code, there is no need
Decision Date : 23-09-2019 | Case No : CIVIL APPEAL/6295/2015 | Disposal Nature : Disposed off
65
English

Judge : INDIRA BANERJEE,N.V. RAMANA,MOHAN M. SHANTANAGOUDAR
Financial Assets and Enforcement of Security Interest Act, 2002: ss. 13, 14, 17 and 35 – Tenancy rights over secured interest – Tenant, if protected from ejectment proceedings under the Sarfaesi Act – On facts, secured asset mortgaged by borrower/landlord with the bank in equitable mortgage, valid leaseholder to merit the protection sought for – Furthermore, when the Sarfaesi Act proceedings were pending, the factum of tenancy was never revealed by the parties – Tenant himself pleaded that he was a tenant who had entered into an oral agreement, such tenancy impliedly does not
Decision Date : 11-09-2019 | Case No : CRIMINAL APPEAL/1371/2019 | Disposal Nature : Disposed off
66
English

Judge : UDAY UMESH LALIT,VINEET SARAN
Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (“ Sarfaesi Act”, for short) on 15.03.2017. The amount due to the Bank as on 14.03.2017 was stated to be Rs.106,07,91,644.26/-. 3. Soon thereafter, three proposals were made by the appellants in quick succession on 01.08.2017 and 19.08.2017 offering Rs.84, 87 and 90 crores respectively for One Time Settlement (“OTS”, for short). On 22.08.2017 a possession notice under Section 13(4) of the Sarfaesi Act was issued by the Bank in respect of the Project in question. On 29.08.2017 a sale notice was
Decision Date : 20-08-2019 | Case No : CIVIL APPEAL/6016/2019 | Disposal Nature : Appeals(s) allowed
67
English

Judge : AJAY RASTOGI,A.M. KHANWILKAR
the sale of the secured asset in public auction as per section 13(4) of Sarfaesi Act, which ended in issuance of a sale certificate as per rule 9(7) of the Security Interest (Enforcement) Rules, 2003 (in short “the rules”) is a complete and absolute sale for the purpose of Sarfaesi Act or Transfer of Property Act, in view of the Section 37 of Sarfaesi Act? And (iii) Whether section 35 of the Sarfaesi Act has the effect of overriding section 37 of the Sarfaesi Act?” While answering the first point, the Court observed thus: “10.7 At the outset, it is to be stated that
Decision Date : 20-08-2019 | Case No : CIVIL APPEAL/8097/2009 | Disposal Nature : Dismissed
68
English

Judge : ARUN MISHRA,UDAY UMESH LALIT
existing statutes such as T.P. Act, Debt Recovery Tribunal Act, Sarfaesi Act, it is apparent from a perusal of RERA, which is a special Act, that certain rights have been created in favour of the buyers. The provisions of RERA have to prevail. When it comes to the question of protection and any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short ‘the Sarfaesi Act’). The order
Decision Date : 23-07-2019 | Case No : WRIT PETITION (CIVIL)/940/2017 | Disposal Nature : Dismissed not complying condition order | Direction Issue : Directions issued
69
English

Judge : R.F. NARIMAN,VINEET SARAN
new possibili- ties for time bound resolution of stressed assets. The Sarfaesi and Debt Recovery Acts have been amended to facilitate recov- eries. A comprehensive approach is being adopted for effective implementation of various schemes for timely resolution of
Decision Date : 02-04-2019 | Case No : TRANSFERRED CASE (CIVIL)/66/2018 | Disposal Nature : Disposed off
70
English

Judge : A.M. KHANWILKAR,AJAY RASTOGI
read the requirement of fairness and reasonableness into Section 13 of the Sarfaesi Act. The court declared that reasons must be given and communicated. This “reading in” of the principle of fairness and reasonableness, was eventually codified in the form of Section 13(3-A) of that Act.
Decision Date : 05-02-2019 | Case No : CIVIL APPEAL/10673/2018 | Disposal Nature : Dismissed
71
English

Judge : NAVIN SINHA,R.F. NARIMAN
existing insolvency legislation. The judgments reviewed are those after June 2002 when the Sarfaesi Act came into effect. It is illustrative of both debtor and creditor led process of corporate insolvency, and reveals a matrix of fragmented and contrary outcomes, rather than coherent
Decision Date : 25-01-2019 | Case No : WRIT PETITION (CIVIL)/99/2018 | Disposal Nature : Disposed off | Direction Issue : Petitions disposed of
72
English

Judge : NAVIN SINHA,R.F. NARIMAN
of Securities Interest Act, 2002: s.17(1) – Whether an application under s.17(1) of the Sarfaesi Act at the instance of a borrower, is maintainable even before physical or actual possession of secured assets is taken by banks/financial institutions in exercise of their powers under and financial institutions can recover their debts by selling properties outside the court process under the Sarfaesi Act by adhering to the statutory conditions laid down by the said Act. It is only when such statutory conditions are not adhered to that the Debts Recovery Tribunal comes in
Decision Date : 01-11-2018 | Case No : CIVIL APPEAL/10873/2018 | Disposal Nature : Leave Granted & Allowed
73
English

Judge : K.M. JOSEPH,NAVIN SINHA,RANJAN GOGOI
Sarfaesi Act– Challenged by appellant for recall/review of said order contending that it never sought the status of a secured creditor in lieu of the IFCI but had simply desired to be adjudged a transferee from IFCI of an actionable claim u/s.130 of the T.P. Act – Held: Appellant in claim in the law, it made a complete volte face from its earlier stand, contrary to its own pleadings, and contended that it had [2018] 12 S.C.R. 906 906 A B C D E F G H 907 never sought the status of a secured creditor under the Sarfaesi Act – A litigant cannot take
Decision Date : 08-10-2018 | Case No : CIVIL APPEAL/10322/2018 | Disposal Nature : Leave Granted & Dismissed
74
English

Judge : R.F. NARIMAN,INDU MALHOTRA
No.1 is dated 22.02.2014. 3. As the Respondent No.2 Company did not pay its debts in time, the account of Respondent No.2 was classified as a non-performing asset on 26.07.2015. Consequent thereto, the Appellant issued a notice dated 04.08.2015 under Section 13(2) of the Sarfaesi demanding an outstanding amount of Rs.61,13,28,785.48 from the Respondents within the statutory period of 60 days. As no payment was forthcoming, a possession notice under Section 13(4) of the Sarfaesi Act was issued on 18.11.2016. 4. As matters stood thus, an application was filed by
Decision Date : 14-08-2018 | Case No : CIVIL APPEAL/3595/2018 | Disposal Nature : Appeals(s) allowed
75
English

Judge : DIPAK MISRA,D.Y. CHANDRACHUD,A.M. KHANWILKAR

§  ss. 31(i), 2(zf) – Security interest created in agricultural land – Applicability of Sarfaesi Act – Held: Classification of land in the revenue records as agricultural is not dispositive or conclusive of the question whether the Sarfaesi Act does or does not apply – Whether a parcel the proceedings initiated by the bank under the Sarfaesi Act are nullity as the Act does not apply to agricultural land, thus, security interest in agricultural land cannot be enforced, set aside – Proceedings remitted back for being considered afresh. The issue arose whether the High Court
Decision Date : 20-07-2018 | Case No : CIVIL APPEAL/6641/2018 | Disposal Nature : Appeals(s) allowed
76
English

Judge : L. NAGESWARA RAO,S.A. BOBDE
purchaser was held entitled to the charge which the vendor had under s 55(4) (b) on the property in the hands of the buyer. The court, after observing that the present section did not apply to court 45 2(L) Sarfaesi Act 46 2 (l) “financial asset” means debt or receivables and includes — (i)
Decision Date : 19-03-2018 | Case No : CIVIL APPEAL/2928/2018 | Disposal Nature : Appeals(s) allowed
77
English

Judge : DIPAK MISRA,A.M. KHANWILKAR,D.Y. CHANDRACHUD
respondent) which had disbursed the loan initiated proceedings by issuing a recall notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(‘ Sarfaesi Act’) on 12 September 2013. Neither was a representation made nor was deed. 5. Section 13(8) of the Sarfaesi Act provides as follows: “(8)If the duesof the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be
Decision Date : 06-03-2018 | Case No : CIVIL APPEAL/148/2018 | Disposal Nature : Disposed off
78
English

Judge : A.K. SIKRI,ASHOK BHUSHAN
the appeal, the Court HELD: 1. Proceedings under the Securities and Reconstruction of Financial Assests and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) are to be placed on high pedestal. Sarfaesi Act is a special enactment which was enacted by the Parliament to to realise the dues from the respondents, the predecessor company and the appellant devised the plan of merger so as to attract the provisions of Sarfaesi Act. [Para 37] [1122-C] 2.4 It will also not be correct to say that if the loan is allowed to be brought within the Sarfaesi Act
Decision Date : 23-02-2018 | Case No : CIVIL APPEAL/18/2018 | Disposal Nature : Appeals(s) allowed
79
English

Judge : S. ABDUL NAZEER,JASTI CHELAMESWAR
commercial purposes from public financial institutions by LEGISLATORS or their ASSOCIATES either directly or through bodies corporate which are controlled by them; a notorious fact in a good number of cases. Such loan accounts become non-performing assets27 (NPAs) within the meaning of Sarfaesi
Decision Date : 16-02-2018 | Case No : WRIT PETITION (CIVIL)/784/2015 | Disposal Nature : Appeals(s) allowed
80
English

Judge : R.F. NARIMAN,NAVIN SINHA
Security Interest Act, 2002 (hereinafter referred as the ‘ Sarfaesi Act’), on deposit of Rs.3,50,000/-within two weeks. An appeal against the same has also been dismissed by the Division Bench observing that counter affidavit having been filed, it would be open for the Appellant Bank institution of the writ petition was Rs.41,82,560/-. Despite repeated notices, the Respondent failed and neglected to pay the dues. Statutory notice under Section 13(2) of the Sarfaesi Act was issued to the Respondent on 21.01.2015. The objections under Section 13(3A) were considered, and rejection
Decision Date : 30-01-2018 | Case No : CIVIL APPEAL/1281/2018 | Disposal Nature : Appeals(s) allowed
81
English

Judge : ABHAY MANOHAR SAPRE,R.K. AGRAWAL
(PNB) before the DRT by filing an application under Section 17(1) of the Sarfaesi Act. [Para 31)(176-01 1. 7 The writ court as also the appellate court were justified in dismissing the appellant’s writ petition on the ground of G availability ofalternativc statutory remedy of filing application under Section 17(1) of Sarfaesi Act before the concerned tribunal to challenge the action of the PNB in forfeiting the appellant’s deposit under Ruic 9(5). There is no ground to interfere with the impugned judgment of the High Court. The H AGARWAL TRACOM PVT. LTD. v. PUNJAB
Decision Date : 27-11-2017 | Case No : CIVIL APPEAL/19847/2017 | Disposal Nature : Dismissed
82
English

Judge : R.F. NARIMAN,SANJAY KISHAN KAUL
2002 ( Sarfaesi Act) – C ss.2(l)(m)(iv),(o),(zd) and 13(2), 31A, 35, 37- Simultaneous proceedings for recovery under the Arbitration and Conciliation Act, 1996 and the Sarfaesi Act – Permissibility of- Appellants borrowed monies from respondent, against security of immovable properties ‘Non-Banking Financial Companies’ as financial institutions and directing that provisions of Sarfaesi Act shall apply to such financial institutions E – Respondent, a Non-Banking Financial Company was notified as a financial institution – Respondent issued a notice uls. 13(2), Sarfaesi Act
Decision Date : 21-09-2017 | Case No : CIVIL APPEAL/15147/2017 | Disposal Nature : Dismissed
83
English

Judge : SANJAY KISHAN KAUL,R.F. NARIMAN
Recovery of Debts and Bankruptcy Act, 1993 and the Sarfaesi Act, 2002. F Meanwhile, the Goswami Committee Report, submitted in 1993, condemned the liquidation procedure prescribed by the Companies Act, 1956 as unworkable and being beset with delays at all levels – delaying tactics employed This was followed by the Tiwari Committee of 1981, which introduced the Sick Industrial Companies Act, 1985. Following economic liberalization in the 1990s, two Narsimham Committee reports led to the Recovery of Debts and G Bankruptcy Act, 1993 and the Sarfaesi Act, 2002. Meanwhile, the
Decision Date : 21-09-2017 | Case No : CIVIL APPEAL/9405/2017 | Disposal Nature : Appeals(s) allowed
84
English

Judge : ADARSH KUMAR GOEL,UDAY UMESH LALIT
his rights under the provisions of the Securitisation and Reconstruction of G Financial Assets and Enforcement of Security Interest Act, 2002 (the Sarfaesi Act). Answering the question in the negative, it was held that such a situation was not contemplated as it will result in a central
Decision Date : 17-08-2017 | Case No : CRIMINAL APPEAL/34/2009 | Disposal Nature : Appeals(s) allowed
85
English

Judge : S. ABDUL NAZEER,ARUN MISHRA
Trust and the construction company in respect of specific E p,erformance of the agreement, interim injunction was passed not to sell the property in question therein – Proceedings by HUDCO under Sarfaesi Act – Dispute as regards the Property No. 6 (which included 21 acres exchanged between the Trust and the construction company, as to whether it could be sold under F Sarfaesi Act for satisfying the dues of the Trust – Held: 21 acres out of the property No. 6 (which was obtained in exchange) was unencumbered – It cannot be treated as accession to property under
Decision Date : 08-05-2017 | Case No : CIVIL APPEAL/6463/2017 | Disposal Nature : Disposed off
86
English

Judge : S. ABDUL NAZEER,ARUN MISHRA
ofl 996 cannot withstand judicial scrutiny and is liable to be rejected on the anvil of the aforesaid reasoning. 17. This Court while considering the provisions ofSecuritisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) in legislation it would be necess}lry to see that the person aggrieved gets a fair deal at the hands of those vested with power under such legislation. This Court also considered the question whether the Sarfaesi Act was uncalled for and a superimposition of an undesired law in the light of operation
Decision Date : 17-04-2017 | Case No : CIVIL APPEAL/5317/2017 | Disposal Nature : Dismissed
87
English

Judge : A.M. KHANWILKAR,MOHAN M. SHANTANAGOUDAR,DIPAK MISRA
Mathew Vurgliese (supru), in paragraphs 30, 31 and 33 of the said decision, the court observed thus: “30. Therefore, by virtue of the stipulations contained under the provisions of the Sarfaesi Act, in particular, Section 13(8), any sale or transfer of a secured asset, cannot take place as to the procedure to be followed by a secured creditor while resorting to a sale after the issuance of the proceedings under Sections 13(1) to (4) of the Sarfaesi Act. Under Rule 9 01. it is prescribed that no sale of an immovable property under the Rules should take place before the
Decision Date : 02-03-2017 | Case No : CIVIL APPEAL/3411/2017 | Disposal Nature : Appeals(s) allowed
88
English

Judge : R.F. NARIMAN,KURIAN JOSEPH
& Kashmir Constitution. [Paras 41, 42 and 43][1029-C-D; 1030-F-H; 1031-A-CJ 2.1 Recovery of debts by banks has been held to fall within Entry 45 List I. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi ) is relatable to Entry 45 List and that any enactment E F G H 992 SUPREME COURT REPORTS [2016] 9 S.C.R. A made under the State List would have to give way to Sarfaesi by virtue of the application of Article 246 of the Constitution of India. [Paras 24, 27][1018-B; 1020-E] Union of India v. Delhi High Court
Decision Date : 16-12-2016 | Case No : CIVIL APPEAL/12237/2016 | Disposal Nature : Appeals(s) allowed
89
English

Judge : PINAKI CHANDRA GHOSE,ASHOK BHUSHAN
Enforcement of Security Interest ( Sarfaesi ) Act, 2002 demanding amount due from BHEL. I 0. Proceeding under Sarfaesi Act, 2002 proceeded and the hotel G asset of BHEL was transferred in favour of one Robust Hotels (P.) Ltd.(the appellant in C.A.Nos ….. of 2016 (arising out of SLP © No. ofany interim order. The Robust Hotels has purchased the hotel unit under Sarfaesi Act, 2002 and the property has been conveyed to the Robust Hotels free from any encumbrance. The proceedings under Sarfaesi Act, 2002 cannot be made subject matter of challenge before a Civil Court. Section 34
Decision Date : 07-12-2016 | Case No : CIVIL APPEAL/11886/2016 | Disposal Nature : Disposed off
90
English

Judge : L. NAGESWARA RAO,ANIL R. DAVE
the Court HELD: 1 Upon perusal of Section 34 of the Securitisation and Reconstruction of.the Financial Assets and Enforcement of Security Interest Act, 2002, ( Sarfaesi Act), it is very clear that F no Civil Court is having jurisdiction to entertain any suit or G proceeding in respect of matter which a Debt Recovery · Tribunal or the appellate Tribunal is empowered by or under the Sarfaesi Act to determine the dispute. Further, the Civil Court has no right to issue any injunction in ,pursuance of any action taken under the Sarfaesi Act or under the provisions of the 427
Decision Date : 08-11-2016 | Case No : CIVIL APPEAL/210/2007 | Disposal Nature : Appeals(s) allowed
91
English

Judge : KURIAN JOSEPH,R.F. NARIMAN
Financial Assets and Enforcement of Security Interest Act, 2002. Any person aggrieved by the order of the DRT under Section 17 of the F Sarfaesi Act, is entitled to prefer an appeal along with the prescribed fee within the permitted period of 30 days. For ‘preferring’ an appeal, a fee is proceedings known to law. The submission that the Bank has a lien on the pre-deposit made under Section 18 of the Sarfaesi Act in terms of Section 171 of the Contract Act, 1872 cannot be accepted. [Paras 22, 23] [934-B-H; 935-A] 1.3 Section 171 of the Contract Act, 1872 provides for retention of
Decision Date : 22-04-2016 | Case No : CIVIL APPEAL/4379/2016 | Disposal Nature : Dismissed
92
English

Judge : KURIAN JOSEPH,R.F. NARIMAN
has brought Multi State Co-operative Society within the ambit of Sarfaesi ACT, 2002 and the RDDBFI Act, 1993 and that to further declare that the (Amended) Act, 2012 as unconstitutional and void for it is beyond the legislative domain of the parliament to enact law concerning the enjoyment of the petitioner’s properties, which the Respondent Bank claims to be a secured asset at its hands and, in particular, from dispossessing the petitioner of her residential home under the purported powers under Section 13 of the Sarfaesi Act, 2002; (e) To declare that the notice
Decision Date : 09-03-2016 | Case No : WRIT PETITION (CIVIL)/35/2016 | Disposal Nature : Dismissed
93
English

Judge : KURIAN JOSEPH,R.F. NARIMAN
11S.C.R.419 MIS MADRAS PETROCHEM LTD. & ANR v. BIFR& ORS. (Civil Appeal Nos. 614-615 of2016) JANUARY 29, 2016 (KURIAN JOSEPH AND R.F. NARIMAN, JJ.] Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( Sarfaesi Act) – ss. 35, 37 and 41 – Sick Industrial Companies (Special Provisions) ·Act, 1985 (SICA) – ss. 15; 22 and 32 – Whether the Sarfaesi Act prevails over the SICA Act – Held: Sarfaesi Act prevails over the SICA to the extent of inconsistency therewith – Where a secured creditor of a sick industrial
Decision Date : 29-01-2016 | Case No : CIVIL APPEAL/614/2016 | Disposal Nature : Dismissed
94
English

Judge : AMITAVA ROY,V. GOPALA GOWDA

§  Whether the Sarfaesi Act, by virtue of s. 35 thereof. would override the provisions of the Maharashtra Rent control Act, 1999 – Held: Sarfaesi Act cannot mean to extend to each and every law enacted by the Central and State legislature – It can extend only to the laws operating in the same field- Sarfaesi Act and the Rent Control Act, both operate in different fields – A tenant cannot be evicted under the provisions of Sarfaesi Act as the same would amount to stultifying the statutory rights of the tenant provided under the Rent Control Act – A landlord cannot be permitted to do
Decision Date : 20-01-2016 | Case No : CRIMINAL APPEAL/52/2016 | Disposal Nature : Appeals(s) allowed
95
English

Judge : VIKRAMAJIT SEN,SHIVA KIRTI SINGH
Interest Act, 2002 – ss. 9, 13, 17 and 18 – Sale of secured asset by a secured creditor under the Sarfaesi Act- Whether can be controlled by company court either directly or through an official liquidator – Held: There is no lacuna or ambiguity in the Sarfaesi Act so as D to borrow anything Companies Act – The required provisions of the Companies Act have been incorporated in the Sarfaesi Act for harmonizing this Act with the Companies Act – Therefore, there is no reason to take recourse to any provisions of the Companies Act and permit E interference in the proceedings under
Decision Date : 29-12-2015 | Case No : CIVIL APPEAL/3646/2011 | Disposal Nature : Disposed off
96
English

Judge : PRAFULLA C. PANT,DIPAK MISRA
so appear, then the suit shall continue under leave granted under Clause 12.”s 18. Be it noted, in the said case suit was filed for specific D performance of the agreement which contemplated sale of property as has been described under Section 13 of the Sarfaesi Act, 2002. The issue
Decision Date : 15-10-2015 | Case No : CIVIL APPEAL/4267/2015 | Disposal Nature : Dismissed
97
English

Judge : ADARSH KUMAR GOEL,J.S. KHEHAR
u/s. 18(1) of Sarfaesi B Act, 2002, even though the provisions of s. 5 and 29(2) of the Limitation Act are inapplicable to such. proceedings – Securitisation and Reconstruction of Finan<jal Assets and Enforcement of Security Interest Act, 2002 – s. 18(1 ). • c Disposing of the appeals, Court HELD: 1. A bare perusal of Section 18(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 0 ( Sarfaesi Act), makes it clear that the Appellate Tribunal under the Sarfaesi Act has to dispose of an appeairin accordance with
Decision Date : 05-08-2015 | Case No : CIVIL APPEAL/5924/2015 | Disposal Nature : Disposed off
98
English

Judge : H.L. DATTU,ARUN MISHRA,S.A. BOBDE
lnterestAct, 2002 (hereinafter referred to as ‘the Sarfaesi Act’). E 5. The Builder has filed objections on the strength of an agreement to sell dated 26.8.2010 entered with Trust which was initially unregistered for purchase of 63.45 acres of land comprised in property No.6, which includes comprised of 63.45 acres of land which was initially mortgaged by the Trust with HUDCO. Proceedings for E recovery of debt which seems to have presently amassed to more than Rs. 433 crores under the Sarfaesi Act, are stated to be pending before the Debt Recovery Tribunal, Delhi. The property
Decision Date : 15-05-2015 | Case No : CIVIL APPEAL/4494/2015 | Disposal Nature : Appeals(s) allowed
99
English

Judge : PINAKI CHANDRA GHOSE,M.Y. EQBAL
registered with the Reserve Bank H 952 SUPREME COURT REPORTS [2015] 4 S.C.R. A of India as a Company under Section 3 of the Securitization and Reconstruction of Financial Assets Enforcement of Security Interest Act, 2002 (hereinafter referred to as the ‘ Sarfaesi Act’). ARCIL took steps Section 13 of the Sarfaesi Act and took possession of the assets. B Allegedly the ARCIL entered into a Private Treaty Agreement dated 13.02.2007 (hereinafter referred to as ‘the Agreement’) with the appellant Excel Dealcomm Pvt. Ltd. {herein after referred to as ‘Excel’), for sale of the
Decision Date : 01-04-2015 | Case No : CIVIL APPEAL/3272/2015 | Disposal Nature : Dismissed
100
English

Judge : PRAFULLA C. PANT,DIPAK MISRA

§  SARFAESJ Act. G H Allowing the appeal the Court HELD: 1. When a borrower of the financial institution covered under the Sarfaesi Act, invokes the jurisdiction under Section 156(3) Cr.P.C. and also there is a separate procedure under the Recovery of 108 PRIYANKA SRIVASTAVA AND ANR. President, neither the loan was taken, nor the default was made, nor any action under the Sarfaesi Act was taken. However, the action under the Sarfaesi Act was taken on the second time at the instance of appellant No.1. The devilish design of the respondent No.3 was E to harass the appellants with
Decision Date : 19-03-2015 | Case No : CRIMINAL APPEAL/781/2012 | Disposal Nature : Appeals(s) allowed