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Judgment
Ranjit Singh, J
Whether the Debts Recovery Tribunal (DRT) can adjudicate the quantum of liability of any borrower while dealing with an S.A. filed by the borrower is the question which the appellant has raised in the present appeal. Considering the fact that this question may arise frequently and has indeed been so raised on earlier occasions also, the present appeal was kept for hearing giving notice to the counsel at the bar to assist this Tribunal in this regard so that considered view is taken on the issue for the Tribunal to follow. In response to the invitation to the counsel at the bar, a number of counsel have chosen to appear and have made submissions, the lead being taken by Mr. Rajeeve Mehra, Sr. Advocate.
Before making reference to the pleas that have been advanced in this case, reference to some facts may be essential.
The appellant had filed S.A. on 28.8.2012 for quashing and setting aside a demand notice dated 28.3.2011 issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, the SARFAESI Act). The prayer made by the appellant was to restrain the bank from taking possession of the secured assets pursuant to the order passed by the District Magistrate on 23.6.2011. On 20.1.2014, appellant filed I.A. No. 45/2014 pleading that without prejudice to his rights on merits the appellant was prepared and ready to settle the matter by repaying the outstanding amount along with interest @9% p.a. The appellant did his calculation and stated that the amount worked out to be Rs. 14,24,144/-, which was payable.
The respondent bank filed a response stating that it was entitled to contractual rate of interest and as such it was not ready to accept the amount with interest @9% p.a. simple. The bank, therefore, pleaded for dismissing the application. The Tribunal below has held that once a notice under Section 13(2) of the SARFAESI Act is issued by the respondent bank demanding payment of the outstanding amount, the liability of the appellant stood crystallized and the Tribunal cannot adjudicate on the quantum of the liability of the appellant under Section 17(1) of the SARFAESI Act The Tribunal has further observed that the appellant in an application filed under Section 17(1) of the SARFAESI Act can only challenge the measure taken by the appellant under Section 13(4) of the SARFAESI Act and accordingly dismissed the I.A. being devoid of any merit. It is that part of the finding recorded by the Tribunal where it has held that the Tribunal cannot adjudicate the quantum of liability that the appellant has felt aggrieved and would submit that this view of the Tribunal is not justified and would call for interference and correction by this Tribunal. This Tribunal thus has decided to invite a wider debate as this issue has often cropped up before this Tribunal from time to time.
Mr. Rajeeve Mehra has taken initiative to address the Tribunal on this neat legal issue, though he is not the counsel in the case. The counsel would submit that the view of the Tribunal below is not legally sustainable. As per the counsel, the Tribunal would have jurisdiction and power to determine the amount due and the view that the Tribunal has to confine itself to decide if the measures initiated under the SARFAESI Act are legally in order while considering and deciding the S.A. does not reflect the correct legal position. The counsel would contend that this aspect can even be made out from the case of Mardia Chemicals Ltd. etc. vs. Union of India (UOI) & Ors., AIR 2004 SC 2371, and thus there cannot be scope of any doubt in this regard, Counsel has made extensive reference to this judgment in this regard, the counsel would refer to the contention which were raised before the Court and are noticed in para 18 of the judgment, which are as under-
"18. It is submitted that the mechanism provided for recovery of the debt under Section 13 indicated above does not provide for any adjudicatory forum to resolve any dispute which may arise in relation to the liability of the borrower to be treated as a defaulter or to see as to whether there has been any violation or lapse on the part of the creditor or in this regard to the correctness of the amount sought to be recovered and the interest levied thereupon. On the other hand, Section 34 bars the jurisdiction of the civil court to entertain any suit in respect of any matter which a Debt Recovery Tribunal or the appellate Tribunal is empowered to determine. It also provides that no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under Act or under the Recovery of debts due to Banks and Financial Institutions Act, 1993. Section 35 gives an overriding effect to the provisions of the Act over the provisions contained under any other law. The submission, therefore, is that before any action is taken under Section 13, there is no forum or adjudicatory mechanism to resolve any dispute which may arise in respect of the alleged dues or the NPA"
One of the plea thus raised before the Hon'ble Supreme Court was that before any action is taken under Section 13 there is no forum or adjudicatory mechanism to resolve any dispute which may arise in respect of alleged dues or NPA The counsel would then refer to that part of the judgment where the Supreme Court, after having noticed the background. Went on to consider as to what forum and remedies are available to the borrower to ventilate his grievance. The Supreme Court has noticed that the purpose of serving notice on the borrower under Section 13(2) of the Act is that he may submit reply explaining the reasons as to why measures may or may not be taken under Section 13(4) of the SARFAESI Act. It is observed that it is must for a creditor to apply its mind to the objection raised in reply and an internal mechanism must be particularly evolved to consider such objections raised in the reply. The obligation to apprise the reasons for not accepting the objections to ensure principle of fairness and fulfill the requirement of reasonableness has been so emphasized by the Hon'ble Supreme Court. The Court has made it clear that communication with reasons for .not accepting the objection raised cannot be taken as occasion to resort to the proceeding under the SARFAESI Act. The Court has further observed that it is true that as per the provisions of the Act the borrower may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the DRT as provided under the Section 17 of the Act matures on an/measure having been taken under sub-section (4) of Section 13 of the Act. At the same time the Court has held that adjudication of the notice under Section 13(2) which would contain the amount sought to be recovered was likely to be done once the measure taken under Section 13(4) of the Act are followed and the borrower gets a right to challenge the entire action under Section 17 of the SARFAESI Act. The counsel has made reference to the relevant part of the judgment and has then referred to that part of the judgment where the Court has considered the plea of the borrower that by virtue of provisions under Section 13(4) of the SARFAESI Act the borrower may stand to lose his right of redemption of mortgage.
The submission by the counsel for the borrower was that it is the amount due according to the secured creditor which shall have to be deposited to redeem the property. In this regard, the Court has observed that it may be so that some difference regarding the amount due may be there but it cannot be said that the right of redemption of the property will be completely lost. The Court has observed that in cases where no such dispute is there the right can be exercised and in other cases the question of difference in the amount may be kept open and may get decided before the sale. It would be appropriate, here to note of the view expressed in this regard by the Court as recorded in para 54 of the judgment and it is as under:-
"54. In so far the argument advanced on behalf of the petitioners that by virtue of the provisions contained under sub-section (4) of Section 13 the borrowers lose their right of redemption of the mortgage. In reply it is submitted that rather such a right is preserved under sub-section (8) of Section 13 of the Act. Where a borrower tenders to the creditor the amount due with costs and expenses incurred, no further steps for sale for the property are to take place. In this connection, a reference has also been made by the learned Attorney General to a decision reported in [1977] 2 SCR 341, Naraindas Kavsondas Vs. S.A. Katam which provides that a mortgagor can exercise his right of redemption any time until the final sale of the property by execution of a conveyance. Sri Sibal, however, submits that it is the amount due according to the secured creditor which shall have to be deposited to redeem the property. Maybe so, some difference regarding the amount due may be there but it cannot be said that right of redemption of property is completely lost. In cases where no such dispute is there, the right can be exercised and in other cases the question of difference in amount may be kept open and got decided before sale of property."
(emphasis mine)
The learned senior counsel has laid emphasis on that part of the observations reproduced in italics above where the Court has held that the question of difference in amount may be kept open and got decided before the sale of the property. Obviously, when there is dispute or difference between the parties about the due amount or amount payable, the same may have to be decided before the sale of the property as the above noted finding by the Apex Court would convey. The counsel would thus urge that the Supreme Court has been rather clear in holding that the Tribunal would have jurisdiction to determine the amount due while dealing with the challenge raised by the borrower in his S.A.
The counsel has then referred to a Full Bench decision of the Madras High Court in the case of M/s. Lakshmi Shankar Mills (P) Ltd. vs. Authorised Officer, Indian Bank (FB), AIR 2008 Madras 181. The Full Bench in this case has considered and answered various questions, one of which was as under:-
"What is the scope of enquiry under Section 17 of the SARFAESI Act and whether the merits of the contentions raised by the borrower can be decided while dealing with the question relating to validity of the action taken by the Bank under Section 13 of the Act?"
Finding by the Full Bench in this regard is:-
"20. In Mison Leathers Ltd. vs. Canara Bank, Chennai, (2007) 3 LW 500 the constitution validity of the amended Section 17 was challenged on the ground that the remedy of filing application under Section 17 of the Act which is declared to be in the nature of the suit by the Supreme Court is totally taken away by the amendment and in any event, the remedy is only an empty formality and does not protect the rights of the borrowers, mortgagors and guarantors. Repelling this contention, the Division Bench Observed: - 10. We are afraid that the contention is totally mis-conceived. The provisions of Section 17(1) of the Act provides remedy for the borrower/guarantor/mortgagor to challenge the action of the Bank under Section 13(4) of the act before the Debt Recovery Tribunal. The Debt Recovery Tribunal is required to decide whether the action of the Bank/Financial Institutions, under Section 13(4) is in accordance with the provisions of the Act and the rules framed thereunder. It is open to the borrower/guarantor/mortgagor to demonstrate before the Debt Recovery Tribunal that resort to Section 13 of the Act is not permissible by law. In a given case, the claim of the Bank/Financial Institutions may be barred by limitation or there may be case, where the adjustment of the amount paid is not reflected in the notice or the calculation of interest may not be in accordance with the contract between the parties. Needless to say that all such grounds, which render the action of the Bank/Financial Institutions illegal can be raised in the proceedings under Section 17 of the Act before the Debt Recovery Tribunal.
Learned Additional Solicitor General and the learned Counsel appearing for banks and financial institutions fairly stated that all the objections which can be legally raised in the reply to the notice under Section 13(2) of the Act can also be raised in the proceedings under Section 17(1) of the Act. It would be for the Debt recovery Tribunal to decide in each case whether the action of the bank is in accordance with the provisions of the Act and is legally sustainable.
As can be seen from the Statement of Objects and Reasons of the Securitisation Act, the main purpose of the Securitisation Act, and in particular Section 13 thereof, is to enable and empower the secured creditors to take possession of their securities and to deal with them without the intervention of the Court. Therefore, in an application under Section 17, the Tribunal is concerned only with the validity of the acts of the secured creditor in taking possession of the securities and dealing, with the same under Section 13. In our opinion, the Division Bench has rightly held that all such grounds, which would render the action of the bank/financial institution illegal, can be raised before the Tribunal in the proceedings under Section 17. It is for the Tribunal to decide in each case whether the action of the bank was in accordance with the provisions of the Act and legally sustainable. However, we hasten to add that while considering the question of validity of the action of the bank, it is not necessary for the Tribunal to adjudicate the exact amount due to the secured creditors in other words, the purpose of an application under Section 17 is not the determination of the quantum of claim per se as the Tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under Section 13(4). In our opinion, the judgment of the Division Bench in Mison Leathers Ltd. lays down the law correctly and does not require any consideration."
Thus, the Full Bench has viewed that while considering the validity of the action it is not necessary for the Tribunal to adjudicate the exact amount due to the secured creditor. As held in this case, the purpose of an application under Section 17 of the Act is not to determine the quantum of the claim per se as the Tribunal is concerned with the issue of the validity of the measure taken by the bank/financial institution under section 13(4). Accordingly, the Full Bench has approved the observation of the Division Bench in Mison Leathers Ltd. vs. Canara Bank, Chennai, (2007) 3 LW 500, in this regard.
It is on the basis of law laid down by the Full Bench of the Madras High Court that the Tribunals below had been taking this view that they cannot adjudicate the quantum of liability and is strongly relied by the counsel for the respondent. Mr. Mehra, learned senior counsel, however, would contest the correctness of the view expressed by the Full bench as noted above - and would submit that while taking this view the Full Bench has ignored the law laid down by the Hon'ble Supreme Court in Mardia Chemical's case (supra). The counsel would accordingly contend that the view expressed by the Full Bench of the Madras High Court cannot act as guiding precedent in view of the ratio of law that would emerge from Mardia Chemical's case (supra).
Rather, Mr. Mehra would refer to a Division Bench judgment of Delhi High Court in M/s. Ram Murty Pyara Lal & Ors. Vs. Central Bank of India & Ors., W.P. (C) No. 13152/2009 decided on 1.11.2010, where it is observed that the Full Bench in the case of M/s. Lakshmi Shankar Mills (supra) has missed to take note of the view expressed in Mardia Chemical's case (supra). The Division Bench of the Delhi High Court in this case while considering the law laid down by Full Bench in the case of Lakshmi Shankar Mill (supra) though has agreed with the views expressed by the Full Bench on other points but has not agreed with that part of the observation where the Full Bench has held that while considering the question of validity of the action of the bank, it is not necessary for the Tribunal to adjudicate the exact amount due to the secured creditors. The Court has held that "In other words; the purpose of an application under Section 17 is not the determination of the quantum of claim per se as the Tribunal is concerned with the issue of the validity of the measures taken by the banks/financial institutions under Section 13(4)."
Thus, the Division Bench of the Delhi High Court has not agreed with the view expressed by the Full Bench of Madras High Court that it is not necessary for the DRT to adjudicate the exact amount due to the secured creditor. Delhi High Court has observed that this part of the judgment of the Full Bench in the case of Lakshmi Shakar Mill (supra) is in conflict with the paras 18 and 54 of the judgment of the Hon'ble Supreme Court in Mardia Chemical's case (supra). As per the Division Bench of the Delhi High Court the Supreme Court in the case of Mardia Chemical has clearly held that the proceedings under Section 17 is in the nature of original proceedings and even the amount which is claimed to be due to the bank/financial institution as stated in the notice under Section 13(2) of the SARFAESI Act can be challenged by the borrower. The Division Bench thereafter has reproduced the observation of the Hon'ble Supreme Court as recorded in para 18 and 54 of the judgment in the Mardia Chemical's which have already been taken note of by me and are reproduced above. The Division Bench ultimately has held as under:-
"We, therefore, feel that the Full Bench may not be right when it holds that it is necessary for the Tribunal to adjudicate the exact amount due to the secured creditor in the proceedings under Section 17 of the SARFAESI Act. All ground including the merits of the disputes, the amount due, the violation of the provision of the SARFAESI Act and all other applicable laws and rules have necessarily to be decided in a proceeding under Section 17 of the Act."
The Division Bench has then made reference to an earlier case titled Indira Devi vs. Union of India, W.P. (C) 8221/2009 decided on 9.8.2010, where the Court had referred to para 18 and 54 of the judgment in the case of Mardia Chemical and then had held:
"A reading of the aforesaid paragraphs clearly shows that the amount which is claimed by the financial institution on passing of an order under Section 13(3A) of the Securitization Act whereby the amount' is claimed against the borrower/mortgagor/guarantor etc, the said crystallisation is not final and it can always be challenged in an appeal under Section 17(1) of the Securitization Act which proceedings are in fact, though titled as appeal proceedings' original jurisdiction proceeding."
Mr. Mehra thus would seek support from these judgments and would submit that the finding returned by the Tribunal below that Tribunal cannot adjudicate the quantum of liability cannot be sustained.
Mr. Muneesh Malhtora has also come forward to make submissions and has generally supported the submissions made by Mr. Mehra. In addition the counsel would invite my attention to para 71 of the judgment in the case of Mardia Chemicals (supra) where the Hon'ble Supreme Court has emphasized that it would be incumbent upon financial institution to act fairly and in good faith while complying with their part of obligations under the contract. The Court has further observed that this is also basic principle of concept of lender's liability. As per Court, the borrowers cannot be left remediless in case they have been wronged against or subjected to unfair treatment violating the terms and conditions of the contract and that they can always plead in defence the deficiencies on the part of banks and financial institutions. As per the counsel, this would be sufficient to satisfy the submission made by counsel opposing the plea who have emphasised that the aim of the SARFAESI Act and RDDBFI Act is speedy recovery and if they are asked to adjudicate the amount claimed by the bank then it will negate the very purpose of these enactments which are aimed to facilitate speedy recovery.
There is a need to add here that it is not in every case that Tribunal may be called upon to adjudicate the quantum of the liability of the amount' due. The borrower may have to first satisfy the Tribunal that the case for such determination is prima facie made out. There may not be any need to determine the liability in a case where the same is not disputed. Such plea, of course, has to be considered and decided having regard to the facts of each case, but it is not apparently possible to hold that the Tribunal cannot adjudicate the quantum of the liability.
Mr. Pallav Saxena has also joined in to support the view canvassed by the counsel as noted above and would contend that the Tribunal can adjudicate the quantum of the liability. In this regard, he would refer to the observations made by the Hon'ble Supreme Court in the case of Authorized Officer, Indian Overseas Bank & Anr. Vs. Ashok Saw Mill, AIR 2009 SC 2420, where the Supreme Court has observed that safeguards have been provided to rectify the error or wrongful use of powers by vesting the DRT with authority after conducting an adjudication into the matter 10 declare any such action invalid. The counsel therefore has highlighted the following observations:-
"23. The intention of the legislature is, therefore, clear that; while the Banks and Financial Institutions have been vested with stringent powers for recovery of their dues; safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and a/so to restore possession even though possession may have been made over to the transferee. The consequences of the authority vested in DRT under Sub-section(3) of Section 17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The Legislature by including Sub-section (3) in Section 1st has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. Resultantly, the submissions advanced by Mr. Gopalan and Mr. Altaf Ahmed that the DRT has no jurisdiction to deal with a post 13(4) situation, cannot be accepted The dichotomy in the views expressed by the Bombay High Court and the Madras High Court has, in fact, been resolved to some extent in the Mardia Chemical Ltd.'s case (supra) itself and also by virtue of the amendments effected to Sections 13 and 17 of the principal Act. The liberty given by the learned single Judge to the appellants to resist S.A. No. 104 of 2007 preferred by the respondents before the DRT on all aspects was duly upheld by the Division Bench of the High Court and there is no reason for this Court to interfere with the same."
The counsel has also referred to the case of Khaja Industries vs. State of Maharashtra & Anr., 2008 (2) Bom. C.R. 860 : 2007 (6) Mh.L.J. 712. In this case, two contentions out of 6 raised before the Court, which are relevant here, were as under:-
The Securitisation Act, if applicable to co-operative banks, is arbitrary and violative of Article 14 of the Constitution of India as it deprives the borrowers such as the petitioners the right to challenge the action of the bank under Section 13.
By adopting proceedings under the Securitisation Act the borrower is deprived the right to have the claim adjudicated under the provisions of the MCS Act. While rejecting the first contention, the court has held that the jurisdiction of the Tribunal under Section 17 is not merely clerical. It is observed that all grievances can be raised in appeal under Section 17 and there is nothing in the section which even remotely suggests that the function of the Tribunal is reduced to merely a clerical one. The Court has then observed that in an application under Section 17, the Tribunal is concerned only with the validity of the acts of the secured creditor of taking possession of the-securities and dealing with the same under Section 13 of the SARFAESI Act and while considering this, it is not necessary for the Tribunal to finally adjudicate the exact amount due to the secured creditor. As is observed, the purpose of application under Section 17 is not determination of the quantum of claim per se, but where the value of the secured asset is equal to or granter that the dues of the borrower, then the DRT may well have to adjudicate the amount due to the secured creditor by the borrower even in proceedings under Section 17 of the SARFAESI Act. The relevant observations are as under:-
"27. Where the value of the secured assets is equal to or greater than the dues of the borrower, the Debt Recovery Tribunal may weft have to adjudicate the amount due to the secured creditor by the borrower even in proceedings under Section 17. But, such an adjudication is only for the purpose of ascertaining the validity of the action of the seemed creditor in enforcing its security under Section 13 and not for the purpose of a final adjudication regarding the indebtedness of the borrower."
The Court in the case of Khaja Industries (supra) has made reference to another case titled Trade Well & Anr. Vs. Indian Bank & Anr., 2007 (2) M.L.J. (Cri) 412, where the Division Bench while considering the provisions of Section 13 (4) has held as under:-
"Besides as per proviso to Section 13(3-A) and explanation to Section 17, non-communication of reasons to the borrower does not confer on the borrower or any person right to prefer an application under Section 17 at the stage of communication. This is the scheme of the NPA Act. It is so framed to achieve its object. At first blush this may appear harsh. But it is not so. The borrower and the third party is not remediless. Remedy is provided in Section 17 where appropriate relief can be given to them. It is after measures under Section 13(4) are taken that an application under Section 17 can be filed by a borrower or any person and in that application, all grievances including the grievance that reasons were not communicated can be voiced. Prior to that, at no point of time any grievances can be raised. Section 17 offers an adequate remedy. We shall advert to Section 17 a little later."
Even in the case of Misons Leather Ltd. (supra) where the Court was considering the constitutional validity of Section 17 of the SARFAESI Act as amended, the Court has observed that in a given case the claim of the bank/financial institution may be barred by limitation, where the adjustment of the amount paid is not reflected in the notice or the calculation of interest may not be in accordance with the contract between the parties which grounds would render the action of the bank illegal can be raised in the proceedings under Section 17 of the Act.
On the basis of law that will emerge from the judgments noticed above, the counsel would contend that the view that the DRT cannot adjudicate the quantum of the liability apparently would not be correct and the clear indication emerging from the judgments noticed above would show that the Tribunals can adjudicate the quantum of liability as well in a case where such an issue arises or is raised.
After considering the submission made before me, I am inclined to accept the view canvassed by the counsel pleading that the Tribunal can adjudicate the liability as well. Enough indications can be gathered from the case of Mardia Chemicals (supra) in this regard. The Division Bench of the Delhi High Court apparently is justified in relying on those observations recorded in the Mardia Chemicals' case (supra) while differing with the view expressed by the Full bench of the Madras High Court in the case of Lakshmi Shankar Mills. The Division Bench of the Delhi High Court while considering the Writ Petition (C) No. 6558 of 2012 titled as Smt. Satya Bhama Gupta vs. HDFC Bank & Ors. decided on 15.10.2012 in fact apparently took a serious note when it found that DRT at Delhi was seen to have ignored the views expressed in the case of M/s. Ram Murty Pyara Lal (supra) while referring to and relying upon the Full Bench in the case of Lakshmi Shankar Mills (supra). The relevant observation made by the Division Bench may be noticed as under:-
"10. .... The order of the DRT thereafter proceeds to deal with the issue of rate of interest and relied upon the Full Bench Judgment of the Madras High Court in Lakshmi Shankar Mills (P) Ltd. vs. Authorised Officer, Indian Bank; AIR 2008 Madras 181 for the proposition that it was not necessary for the Tribunal to adjudicate the exact amount due to the secured creditors as the purpose of an application under Section 17 of the SARFAESI Act is not the determination of the quantum of claim per se as the Tribunal is concerned with the issue of validity of the measures taken by the banks/financial institutions under Section 13(4) of the SARFAESI Act.
We would like to add here that the aforesaid judgment of the Full Bench of the Madras High Court was examined by the Division Bench of this court in M/s. Ram Murthy Pyara Lal & Ors. V. Central Bank of India & Ors., 174 (2010) DL T 310. The Division Bench while agreeing with the conclusion of the Full Bench in Lakshmi Shankar Mills case (supra) however did not agree with certain observations made therein. These observations in the Full Bench judgment were to the effect that it was not necessary for the DRT to adjudicate the exact amount due to the secured creditors. This ratio was held by the Division Bench to be in conflict with para 18 and 54 of the judgment in the case of Mardia Chemicals Ltd. & Ors. Vs. Union of India & Ors. 2004 (4) SCC 311. Since the Supreme Court judgment had held that the proceedings under Section 17 of the SARFAESI Act were in the nature of original proceedings and that even the amount which is claimed to be due to a bank/financial institution could be challenged by a borrower, it was held that all grounds including merits of the disputes, the amount due and the violation of the proceedings of SARFAESI Act and all other applicable laws and rules would necessarily have to be decided in the proceedings under Section 17 of the SARFAESI Act. Thus it was held that the amount which is claimed by financial institution on passing of an order under Section 13(3A) of the SARFAESI Act whereby the amount is claimed against the borrower/mortgagor/guarantor, the said crystallization is not final and it can always be challenged in an application under Section 17(1) of the SARFAESI Act through those proceedings may be titled as "appeal proceedings" as they are really in the nature of Original Side Jurisdiction Proceedings. We specifically posed a query to learned senior counsel for the petitioner whether this judgment which was sought to be referred before us had been brought to the notice of the DRT. Learned counsel conceded that it was not so, but surprisingly "sought to put burden on the Tribunal itself"! The DRT in its order dated 17.09.2012 held that the steps were properly taken under Section 13(4) of the SARFAESI Act. Simultaneously the application filed by the Bank for review of the order dated 06.07.2012 was dismissed but the same was allowed as regards Order dated 01.08.20.12, on the ground that the said order has been obtained by the petitioner upon suppression of material fact with regard to invocation of the bank guarantee by the beneficiary. Consequently, the I.A. of the petitioner alleging contempt of order dated 01.08.2012 came to be dismissed."
Even otherwise, the ratio of law laid down by the Hon'ble Delhi High Court may have to be followed by the Tribunal within the jurisdiction of the said High Court. Besides, the view expressed by the Hon'ble Delhi High Court is on the basis of law laid down by the Hon'ble Supreme Court. Therefore, I would respectfully follow the same view by holding that the DRT would be competent to adjudicate the quantum of liability as well though exercise of such power may depend upon the facts and circumstances in each case which cannot be exhaustively enumerated.
I have not been able to persuade myself to accept the view expressed by the Full Bench of the Madras High Court primarily because the ratio of law laid down by the Hon'ble Supreme Court in Mardia Chemicals' case (supra) has apparently expressed a view contrary to the one taken by the Full Bench of the Madras High Court.
In view of the above, present appeal is allowed. The impugned order passed by the Tribunal below is set aside. Case is remanded back to the Tribunal below to consider the plea of the appellant and to see if any adjudication of the liability is called for or not and then pass an appropriate order in accordance with law.