Vrinda Jadoun vs State Bank Of India & Others

Learned counsel for the petitioner submits that petitioner / guarantor is aggrieved by notice for e-auction of secured assets dated 09.11.2021 (Annexure-P/11). Earlier the borrower approached this Court in W.P. No.25263/2021 but this Court declined interference by order dated 23.11.2021 (Annexure-P3) by holding that borrower has no locus to challenge the auction. Liberty is reserved to present petitioner / guarantor to assail it.

The petitioner has assailed the auction on various grounds but bone of contention of Shri Bohra is that the Debt Recovery Tribunal is an appropriate forum where petitioner intends to assail the said notice. The petitioner will file appropriate application / proceeding before the Tribunal within ten working days from today along with prayer for interim relief. Till such time Tribunal decides the interim prayer, the petitioner may be protected. This Court has protected a similarly situated petitioner in W.P. No.24567/2021 [Kailash Chandra v/s Branch Manager] (Annexure-P/15).

Shri Bohra further submits that there are certain procedural improprieties in the action of secured creditor which will be pointed out and established before the Tribunal. The Tribunal being a Court of first instance may consider the said aspect.

Sounding a contra note, Shri R.C. Singhal placed reliance on Section 13(8) of the Secrutisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and urged that the petitioner has right of redemption only till the date of actual sale. Thereafter, even Tribunal has no right to grant redemption. Reliance is placed on two judgments of Supreme Court and High Court of Telangana in the cases of Shakeena & Others v/s Bank of India & Others reported in 2019 SCC OnLine SC 1059 and Maru Sreesaran v/s Magma Fincorp Limited & Others reported in 2020 SCC OnLine TS 2158 respectively.

No other point is pressed by learned counsel for the parties.

A careful reading of both the judgments of Supreme Court and High Court of Telangana makes it clear that matter travelled to the Higher Courts through the proceedings instituted before the Debt Recovery Tribunal. Indisputably, the said Tribunal is the Court of first instance in the matters of this nature.

A Constitution Bench of Supreme Court in L. Chandra Kumar v/s Union of India reported in (1997) 3 SCC 261 opined that High Court should not act as a Court of first instance when Tribunal is there to adjudicate upon the matter. There exists a Tribunal in the State of Madhya Pradesh although not functional at present. It was informed in various cases that Tribunal will become functional very soon. At this stage, when there exists a Court of first instance, we are not inclined to dwell upon the merits of the case because it may have an adverse impact on the stand of the parties. We deem it proper to relegate the petitioner to avail the said remedy.

Thus, in the interest of justice, we deem it proper to dispose of this petition with following directions:-

(i) Petitioner shall file appropriate proceeding before the Tribunal with prayer for stay within ten working days from today failing which, interim protection will come to end automatically;

(ii) the Tribunal soon it becomes functional shall take up the prayer for stay of petitioner and decide it in accordance with law expeditiously;

(iii) subject to aforesaid, till decision is taken on the stay application / prayer for stay, the respondents may proceed with the sale but no third party right shall be created.

With the aforesaid and without expressing any opinion on the merits of the case, this petition is disposed of.

Certified copy, as per rules.