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Judgment
THE APPELLATE TRIBUNAL:
Instant appeal has been preferred against the order dated 23.12.2025 passed by the Learned DRT Cuttack, in S.A. 184 of 2025 (Ashok Kumar Panigrahi -vs- Authorised Officer, Canara Bank & Others)
As per pleadings of the parties the jural relationship of creditor and borrower is not in dispute, however, when the account was classified as NPA by the bank which was challenged by the respondents herein by preferring the Securitization Application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI ACT) (hereinafter referred as to as the 'Act'), seeking a relief of setting aside the order dated 25.10.2025 passed by the Chief Judicial Magistrate, Khurda, under Section 14 of the SARFAESI Act and the vacation notice were issued in compliance thereof dated 28.10.2025. Pending S.A., I.A. 1557 of 2025 is filed by the S.A. applicant wherein the impugned order is passed by the Learned DRT. S.A. Applicants was given an opportunity to make a deposit of the balance amount of Rs. 54,57,537.16/- in two installments and the bank was directed to proceed further till the next date. It also appears from the impugned order that certain amount was deposited by the borrower.
I have heard the Learned Counsel for the parties and perused the records.
Learned Counsel for the Appellant would submit that the impugned order is illegal, against law as the sale has already been confirmed and sale certificate has been issued. Even after service of the notices, no attempt was made by the borrower for redemption. Even the ground of concluded sale is not considered by the Learned DRT.
Per Contra Learned Counsel for the Respondents would submit that the borrower, respondents herein have made deposits and were also ready to make the remaining amount deposited within two months which liberty was granted by the Learned DRT. It is further submitted that an amendment application is moved for amendment in the S.A. which was allowed wherein sale certificate issued by the bank was also challenged. Learned Counsel also sought for setting aside sale certificate dated 03.11.2025 issued in the compliance of E-Auction sale dated 25.09.2025.
At the very outset, without entering into the merits of the matter, bare perusal of the impugned order would reflect that the Learned DRT has passed very cryptic, unreasoned order. Law is very well settled that reasons are the sole of an order as has been held by the Hon’ble Apex Court in Brijmani Devi -vs- Pappu Kumar and Another, reported in [(2022) 4 SCC 497] that:
“22.On the aspect of the duty to accord reasons for a decision arrived at by a court, or for that matter, even a quasi-judicial authority, it would be useful to refer to a judgment of this Court in Kranti Associates (P) Ltd., v. Masood Ahmed Khan, (2010) 9 SCC 496 wherein after referring to a number of judgments this Court summarised at para 47 the law on the point. The relevant principles for the purpose of this case are extracted as under:
(a)Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
(b)Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.
(c)Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.
(d)Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
(e)The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.
(f)Judicial or even quasi-judicial opinions these days can be as different as the Judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
(g)Insistence on reason is a requirement for both judicial accountability and transparency.
(h)If a Judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
(i)Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or "rubber-stamp reasons" is not to be equated with a valid decision-making process.
(j). It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the Judges and decision-makers less prone to errors but also makes them subject to broader scrutiny.
(k)In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "due process".
'24. The Latin maxim "cessante ratione legiscessat lex" meaning "reason is the soul of the law, and when the reason of any particular law ceases, so does the law itself, is also apposite."
It was incumbent upon the Learned DRT to consider the submissions of the Learned Counsel for the parties including the issue as to whether concluded sale can be set aside or right of redemption could be exercised by the borrower in the case of concluded sale, if so, under what circumstances Learned DRT should also have to consider the judgment of the Hon'ble Supreme Court in M. Rajendran and others - vs- KPK Oils and Protiens India Private Limited and Others (2026) 3 SCC 505.
Learned DRT has not recorded any reasons for passing the impugned order. Learned DRT was required to mention the reasons for arriving at a conclusion. Reasons are the soul of an order of a judicial authority, but Learned DRT lost sight of the basic cardinal principle of law. Accordingly, we do not find any ground upon which impugned order could be sustained, rather impugned order is liable to be set aside. Matter is remanded back to the Learned DRT to set aside the I.A. No. 1557 of 2025 along with the S.A and decide it afresh in accordance with law, after giving an opportunity of hearing to the parties. Accordingly, appeal is liable to be allowed.
ORDER
Appeal is allowed. Matter is remanded back to the Learned DRT to decide the I.A. 1557 of 2025 and S.A. on merits after giving opportunity of hearing to the parties. It is expected that the Learned DRT should pass reasoned order in accordance with law. Needless to observe that we have not entered into the merits of the case, Learned DRT would be at liberty to decide the matter on its own merits.
File be consigned to Record room.
Copy of the Judgment/Final Order be uploaded in the Tribunal's Website.
Order signed, dated and pronounced in open Court.