Allowed

Sundaram Home Finance Limited v. saikat dalal

DRAT17 Apr 2026MISC APPEAL/80/2024

Case brief

AI extract

What is this about?

The Delhi High Court Appeals Tribunal allowed an appeal by the financial institution, holding that the DRT misinterpreted the CJM's order. The Tribunal found the CJM performed a ministerial role as per Supreme Court precedent and did not err, directing the DRT to decide the Further Stay Application on merits.

What did the court decide?

Impugned order dated 26.07.2024 set aside; Learned DRT directed to decide the pending S.A. in accordance with law.

Sundaram Home Finance Limited versus saikat dalal — Company and Corporate | DRAT (2026)

¶1

1 Reportable / Non-reportable

¶2

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶3

Misc. Appl. No. 80 of 2024

¶4

(Arising out of IA 2740 of 2024 in S.A. 582 of 2024 – DRT-III Kolkata)

¶5

THE HON’BLE JUSTICE SHRI ANIL KUMAR SRIVASTAVA, CHAIRPERSON

¶6

Order No.

¶7

17.04.2026

¶8

Sundaram Home Finance Limited having office at 1st Floor, Plot no. 3132, Rajdanga Main Road, Kasba, Kolkata -700107.

¶9

The Authorised Officer, Sundaram Home Finance Limited residing at 1st Floor, Plot No 3132, Rajdanga Main Road, Kasba, Kolkata – 700107.

¶10

... Appellant

¶11

--Vs--

¶12

Sri Saikat Dalal residing at Vivekananda Road, 10, Barasat, Landmark- Suryasen Nagar Kali Mandir, P.O- Udayrajpur, P.SMadhyamgram, Kolkata – 700118.

¶13

Smt Santa Dalal, residing at Vivekananda Road, 10, Barasat, Landmark - Suryasen Nagar Kali Mandir, P.O- Udayrajpur, P.SMadhyamgram, Kolkata – 700118.

¶14

... Respondents

¶15

For Appellant : Mr. Debasish Karmakar , ld. adv. Mr. Abhishek Bhatterjee, ld. Adv.

¶16

For Respondent : Mr. Ranjan Kali, ld. adv. Mr. M. Chakraborty, ld. Adv. Mr. P. Nath, ld. Adv. Ms. Ipshita Dam, ld. Adv.

¶17

THE APPELLATE TRIBUNAL : Instant appeal has arisen against the order dated

¶18

26.07.2024 passed by learned DRT-III Kolkata in I.A. 2740 of 2024 arising out of S.A. No. 582 of 2024 whereby learned DRT

¶19

directed the financial institution not to take any coercive measure

¶20

in respect of the secured asset pursuant to the order passed by

¶21

2 Reportable / Non-reportable

¶22

learned Chief Judicial Magistrate, North 24 Parganas, Barasat

¶23

dated 26.04.2024.

¶24

Feeling aggrieved by the impugned order financial institution preferred the appeal.

¶25

Heard learned counsel for the parties and perused the records.

¶26

As per pleadings of the parties, securitization application u/s

¶27

17 of the SARFAESI Act, (hereinafter referred to as Act) was filed

¶28

by the respondent herein challenging the order passed by the learned Chief Judicial Magistrate u/s 14 of the Act. Securitization applicant states that notice u/s 13(4) of the Act dated 07.11.2022 was published in the newspapers on 09.11.2022. On 03.07.2024 securitization applicant came to know about the order passed by

¶29

the learned CJM, North 24 Parganas, Barasat dated 26.04.2024.

¶30

Apart from challenging the steps taken by the secured creditor,

¶31

challenge to the order u/s 14 of the Act passed by the learned

¶32

CJM was made on the ground that no satisfaction was recorded

¶33

by the CJM as required u/s 14 of the Act. Further, the contents of

¶34

the affidavit are not considered by the CJM and a mechanical order was passed. Another ground is taken, although not argued,

¶35

3 Reportable / Non-reportable

¶36

that advocate on record of defendant no.1 has been appointed to

¶37

take over the possession. The description of the property is also

¶38

erroneous. It covers an area of 1118.24 Sft while the order u/s

¶39

14 of the Act directed to take over possession of 614.16 Sft.

¶40

Learned DRT held that satisfaction in so many terms about

¶41

nine points is not recorded by the learned CJM. All the nine points recorded in the affidavit also do not form part of the order as required u/s 14 of the Act. Learned CJM entrusted bank to

¶42

break open the padlock etc., although advocate commissioner was appointed for taking over physical possession. Accordingly, learned DRT held that the order passed by learned CJM suffers from irregularity. Subject to final decision of the S.A., financial

¶43

institution was directed not to take any coercive measures.

¶44

Learned counsel for appellant would submit that impugned

¶45

order suffers from material illegality and irregularity. There is no requirement for the CJM to record all the nine points verbatim stated in the affidavit rather in sum and substance it is to be

¶46

looked into whether overall satisfaction as regard nine points in

¶47

the affidavit is recorded by the learned CJM or not? It is further submitted that advocate commissioner is appointed to take over

¶48

4 Reportable / Non-reportable

¶49

the possession which was in accordance with law. It is further submitted that learned CJM could not act as an administrative authority rather he performed ministerial role to dispose of the application filed u/s 14 of the Act. He is not expected to go into the merits of the matter.

¶50

Learned counsel for respondent would submit that there are inconsistencies in the order passed by the CJM. At one place learned CJM permitted the financial institution to take over the possession and in another place advocate commissioner was appointed. Further, padlock was permitted to be broken open for taking over possession by the financial institution. It is further submitted that satisfaction regarding nine points in the affidavit is not recorded by the CJM in the impugned order.

¶51

Challenge to the order passed by the learned CJM, North 24

¶52

Parganas, Barasat dated 26.04.2024 is made by the appellant. As far as legal proposition is concerned, Hon’ble Apex Court in

¶53

Standard Chartered Bank Vs. V. Noble Kumar & Ors

¶54

[(2013)9 SCC 620] has held in para 24 and 25 which reads as under :

¶55

“24. An analysis of the nine sub-clauses of the proviso which deal with the information that is required to be furnished in the affidavit filed by the secured creditor indicates in substance that

¶56

5 Reportable / Non-reportable

¶57

(i) there was a loan transaction under which a borrower is liable to repay the loan amount with interest,

¶58

(ii) there is a security interest created in a secured asset belonging to the borrower,

¶59

(iii) that the borrower committed default in the repayment,

¶60

(iv) that a notice contemplated under section 13(2) was in fact issued, (v) in spite of such a notice, the borrower did not make the repayment, (vi) the objections of the borrower had in fact been considered and rejected, (vii) the reasons for such rejection had been communicated to the borrower etc.

¶61

The satisfaction of the Magistrate contemplated under the second proviso to section 14(1) necessarily requires the Magistrate to examine the factual correctness of the assertions made in such an affidavit but not the legal niceties of the transaction. It is only after recording of his satisfaction the Magistrate can pass appropriate orders regarding taking of possession of the secured asset.”

¶62

A bare reading of the judgment will show that the

¶63

satisfaction of the Magistrate on all the nine points envisaged in

¶64

Section 14 of the Act required to be examined the factual

¶65

correctness of the assertion made in the affidavit, but not legal

¶66

niceties of transaction. After recording satisfaction, the Magistrate can pass appropriate order.

¶67

Further, it is categorically held by the Hon’ble Apex Court in

¶68

R.D.Jain & Co. Vs. Capital First Ltd. & Ors. [(2023)1 SCC

¶69

675] that steps to be taken by the DM/CMM/CJM u/s 14 of the

¶70

Act, no element of quasi-judicial function or adjudication is

¶71

attracted, only his satisfaction on all the nine points is required.

¶72

DM/CMM/CJM has to adjudicate and decide the correctness of

¶73

information given in the application on affidavit and nothing more. Therefore, Sec. 14 of the Act does not involve an

¶74

adjudicatory process qua points raised by the borrower against

¶75

6 Reportable / Non-reportable

¶76

secured creditor taking possession of secured asset. The role of DM/CMM/CJM is not adjudicatory rather while disposing of

¶77

application u/s 14 of the Act, he should perform ministerial act.

¶78

Perusal of the order of the CJM would reflect that learned

¶79

CJM has considered all the nine points in the affidavit in detail and also recorded that nine points affidavit is filed and he has also recorded his satisfaction about nine points in the affidavit. Original document regarding taking over the possession of secured asset was submitted by the financial institution. Accordingly, learned CJM passed the order permitting the financial institution to take over possession, but learned CJM was conscious enough that financial institution cannot be directed to take possession rather he appointed advocate commissioner Smt.

¶80

Pragna Pratiti Sana as an officer for taking over the possession of

¶81

the secured asset. Learned CJM was also conscious of the fact that secured property may be under lock and key and it has to be broken open by the advocate commissioner appointed by him and consciously learned CJM directed that a person in the locality should remain present at the time of breaking open the padlock.

¶82

Whole order of the learned CJM is passed in consonance of the

¶83

7 Reportable / Non-reportable

¶84

provision of Section 14 of the Act and the law laid down by the Hon’ble Apex Court in R.D.Jain (supra). Learned DRT

¶85

misinterpreted the order passed by the learned CJM and passed

¶86

the impugned order which is not in accordance with law. Accordingly, appeal is liable to be allowed.

¶87

O R D E R