The Debts Recovery Tribunal held that an application under Section 17(1) of the SARFAESI Act filed to challenge a possession notice is not maintainable when the secured creditor has not yet taken possession of the mortgaged asset. Consequently, the cause of action has not arisen.
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.
Debts Recovery Tribunal-Il, Delhi
sAlL7l2023
DEEPENDER GOSWAMI VS. FULLERTON INDIA HOME FrN. CO.LTD. (GRTHASHAKTT)
09.01.2023
Item no.1(Supl)
Present: Shri Vijay Shankar Gandhi, counsel for applicant.
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filed on 06.01.2023, hence as on the date of filing of the SA no cause of action arise in favour of the applicant.
"Application aqainst measures to recover secu debt 17(1): Any person (including borower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorized officer under this Chapte, [maymake an applicationalong with such fee, as may be prescribedJ to the Debts Recovery Tribunal having jurisdiction in the matter within fofi-five days from the date on which such measures had been taken, "
In other words, the aggrieved person is not entitled to file SARFAESI application before the measures referred to in sub-section (4) of section 13 is taken by the secured creditor.
In a leading case law (Transcore Case), the Hon'ble Supreme Court have been pleased to clarify the reliefs which can begranted to aggrieved
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person/ who has filed the SARFAESI application in DRTs if the measures referred to in sub-section (4) of section 13 taken by the secured creditor is not found in accordance with SARFAESI Act by interpreting 17 (3) SARFAESI Act.
In Transcore case it has been observed that "the word" possessiorT' is a relative concept. It is not an absolute concept. The dichotomy between symbolic and physical possession does not find p/ace in the Act.The scheme of Section 13 (4) read with Section 17 (3) shows that / if the borrower is dispossessed, not in accordance with the provisions of the Actl then DRT is entitled to put the clock back by restoring the statusquo ante,"
In Transcore case, Hon'ble Supreme Court have been pleased to answer this issue after referring to Rule 8,
"The Supreme Court observes that Rule B provides that "till issuance of sale certificate under Rule 9, the authorized officer shall take such steps as the
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deems fit to preserue the secured assets, "
Honble Supreme Court further observed that "under Section 13 (8), if the dues of the secured creditor together with all costs, charges and expenses lncured by him are tendered to the creditor before the date fixed for sale or transfer, the asset sha/l not be sold or transfered, "
" Sedion 13(4) (a) declares that the secured creditor may take possession, of the secured assets, It does not specify, whether such a possession is to be obtained dlrectly by the secured creditor or by resorting to the
procedure under Section 14. We are of the
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opinion that by whatever manner the secured creditor obtains possession either through the process contemplated under Section 14 or without resorting to such a process obtaining of the possession of a secured asset is always a measure against which a remedy under Section 77 is available. "
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KUMAR JAUN AND OTHERS, the Hon'ble Supreme court has been pleased to hold that
"the power conferred on the court to terminate a civil action is a drastic one, and the conditions enumerated under Order VII Rule 11 of CPC are required to be strictly adhered to. Under Order VII Rule 11 of CPC, the duty is cast upon the court to determine whether the plaint discloses a cause of action, by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law. This Court has held that the underlying object of Order VII Rule 11 of CPC is that when a plaint does not disclose a cause of action, the court would not permit the plaintiff to unnecessarily protract the proceedings. It has been held that in such a case, it will be necessary to put an end to the sham litigation so that furtherjudicial time is not wasted".
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defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits.
File be consigned to records
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(Deepak Nath ^.oTiwari) Presiding Officer,DRT-II1, Delhi Additional Charge DRT-II, Delhi
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3 issues framed by the court
Whether an application under Section 17(1) of the SARFAESI Act filed before the secured creditor has taken possession of the mortgaged asset is maintainable.
Whether a cause of action arises for challenging the possession notice prior to the actual taking of possession.
Whether the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act allows for restoration of possession as a remedy before dispossession occurs.
Colour shows how this judgement treated each authority
Transcore CaseApplied¶21
Standard Chartered Bank Vs V. Noble Kumar & Ors.Relied on¶30
Standard Charted Bank Vs V. Noble Kumar &Ors., (2013) 9 SCC 620 · Who else cites this
RAIENDRA BAJORIA AND OTi, S v. HEMANT KUMAR JAUN AND OTHERS, CL 2021 (9) SC 35Referred¶38
Sopan Sukhdeo Sable and Others vs Assistant Charity Commissioner and OthersReferred¶41
Sopan Sukhdeo Sable and Others vs, Assistant Charity Commissioner and Others [ (2004) 3 SCC 137] · Who else cites this
4 provisions across 2 enactments
Deepender Goswami
Fullerton India Home Finance Co. Ltd.
Deepak Nath Tiwari
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
