The Tribunal dismissed appeals filed by third-party creditors challenging the sale of secured assets under the SARFAESI Act. It held that third parties without prior rights are not 'aggrieved persons' and that agricultural land embargo does not apply to sugar factories.
Appeals Nos. 160/2016 and 165/2016 were dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson
Appeal No. 160/2016
Between
Shri Siddhi Vinayak Traders
… Appellant/s
V/s.
The Maharashtra State Co-op. Bank Ltd. & Ors. …Respondent/s
And
Appeal No. 165/2016
Between
Shri Santosh M. Sharma … Appellant/s V/s.
Shri Santosh M. Sharma
The Maharashtra State Co-op. Bank Ltd. & Ors. …Respondent/s
Mr. Rajesh Nagori, i/b M/s. Sanjana Ghogare, Advocate for the Appellant.
-: Common Order dated: 01/11/2022:-
of Security Interest Act, 2002 (‘SARFAESI Act’ for short) is an “aggrieved person” coming within the purview of Section 17(1) of the said Act.
challenged the sale proceedings and contends that it is not in accordance with Rules 5, 6, 7, 8 and 9 of the Security Interest (Enforcement) Rules, 2002 (‘Rules’ for short). It is further contended that the land on which the sugar factory is situated, is agricultural land incapable of being proceeded against under section 31 (i) of the SARFAESI Act. Under the circumstances, the Appellant filed Securitisation Applications for setting aside the sale of the secured assets in violation of the SARFAESI Act and Rules.
remains as value of the property, it could be realised in the execution of a decree debt due from the borrower. The Appellant is raising a claim over the secured assets wherein he did not have any right prior to the attachment or the initiation of the Sarfaesi measures. Even in cases where there are more than one mortgage over the secured assets, the one earlier in point of time would take precedence over the later. The borrower in this case has not raised any objection regarding the impropriety in the Sarfaesi measures initiated by the secured creditor. The Appellant being a third party is not entitled to challenge the sale or the other Sarfaesi measures since he is not an ‘aggrieved person’. The Ld. Presiding Officer was, therefore, perfectly justified in dismissing the Securitisation Applications. I find no reason to interfere. The appeals are only to be dismissed and I do so.
Chairperson
mks-01 & 02
3 issues framed by the court
Whether a third party creditor who obtained a civil decree after the sale of secured assets under the SARFAESI Act qualifies as an 'aggrieved person' under Section 17(1) of the Act.
Whether the auction sale of agricultural land by a secured creditor under the SARFAESI Act is barred by the embargo in Section 31(i) of the Act.
Whether the appointed officer's dismissal of the securitisation applications against the sale of secured assets was sustainable.
2 provisions across 1 enactments
Shri Siddhi Vinayak Traders and Shri Santosh M. Sharma
The Maharashtra State Co-op. Bank Ltd.
Ramganesh Gadkari Sahakari Sakhar Kharkhana Ltd.
Ashok Menon
As recorded by the court registry
2 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
