ADITYA BIRLA FINANCE LTD. Vs. MANGLESH CHAMPAKLAL GANDHI

JUDGEMENT

(1.) This Letters Patent Appeal is directed against the judgment and order dtd. 7/10/2019 passed by the learned Single Judge in allowing the writ petition remanding the matter to the Debts Recovery Appellate Tribunal (DRAT) to decide the Appeal No. 28 of 2019 on merits, which in turn was directed against the order dtd. 8/1/2019 passed by the Debts Recovery Tribunal (DRT) in Securitisation Application No. 27 of 2019, whereby the entire proceeding of recovery initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'SARFAESI Act, 2002') by the appellant herein has been quashed with the liberty to the appellant financial institution/ secured creditor to proceed afresh in accordance with law to recover its dues. The appellant financial institution/secured creditor has further been restrained from proceeding with the auction sale, which was subject matter of challenge before the DRT.

(2.) At the outset, it may be noted that the order passed by the DRT in quashing the entire proceeding of the recovery has been set aside by the DRAT only on one ground, i.e. the challenge to the proceedings under the SARFAESI Act, 2002 by way of the application under Sec. 17 was beyond the period of 45 days, as prescribed under Sec. 17(1) of the SARFAESI Act, 2002. It may further be noted that none of the grounds of challenge to the order passed by the DRT had been addressed by the Appellate Tribunal, viz. DRAT while allowing the appeal vide order dtd. 14/8/2019, which was subjected to challenge before the learned Single Judge.

(3.) The learned Single Judge, while allowing the writ petition, setting aside the order passed by the DRAT, has remanded the matter back with the observation that the cause of action to the borrower accrued from the time the notice under Rules 8(1) and 8(2) was issued and the borrower having right to approach the Tribunal (DRT) before the date of auction sale, could not be non-suited by the Appellate Tribunal. The arguments made by the learned advocate appearing for the financial institution/secured creditor that each measure under Sec. 13(4) gives rise to a separate cause of action and once the first measure was not challenged, the borrower could not subsequently challenge the same, was turned down. It was held that the borrower can challenge the action of the secured creditor within 45 days from the last step of the process, i.e. sale notice, which was issued before the date of auction sale.