Dismissed

Capri Global Capital Limited v. Idbi Bank Limited

DRT23 Sept 2025SA/290/2024

Case brief

AI extract

What is this about?

The DRT-Ill Delhi dismissed a Special Appeal filed by Capri Global Capital Limited against IDBI Bank Limited. The Court relied on a recent Supreme Court judgment holding that disputes between banks regarding secured creditor priority must be resolved via arbitration under Section 11 of the SARFAESI Act, negating DRT jurisdiction.

What did the court decide?

Special Appeal no.290/2024 is dismissed.

Capri Global Capital Limited versus Idbi Bank Limited — Arbitration | DRT (2025)

¶1

Debts Recovery Tribunal-Il, Delhi

¶2

s[l29Ol2024 CAPRI GLOBAL CAPITAL LIMITED Vs IDBI BANK LIMITED

¶3

23.09.2025

¶4

Item no.58

¶5

Present: Ms. Shweta Kapoor alongwith Ms. Najreena Sheikh, Counsels for applicant FI

¶6

Mr. RishiSingh, Counselfor respondent bank

¶7

Matter is taken through Video Conferencing/ Hybrid Mode.

¶8

The Ld. Counsel for the applicant FI submitted that the DRT Couft has no^juridiction to enteftain the^present matter because there is a decision from the Honble Supreme Court of India and the matter is^going to arbitration.

¶9

This SA has been filed by the applicant bank against the IDBI Bank Ltd. The Ld. Counsel of the respondent bank has submitted that the^present SA is not maintainable as^{per judgement passed} by the Honble Supreme Court in Appeal no.7tl0l2025 in matter of Bank of India Vs. M/s Sri Nangli Rice Mills Private Limited and Ors. It is submitted that where there is a dispute with regard to the recovery of the loans and where it is to be decided which secured creditor has priority of the charges, the SA shall not be maintainable under Section 17 of the SARFAESI Act and the secured creditor has to move under Section 11 of the SARFAESI Act. It is, therefore, submitted that the^present SA is liable to be dismissed in terms of the recent^{judgement passed} by the Hontle Supreme Court.

¶10

Heard the Ld. counsels of both the^parties and^perused the judgement passed by the Honble Supreme Coutt. From perusal of the^judgment in^para no.2 it is clear that the matter was^gone in appeal before the Hontle Supreme Court on a^question whether the dispute inter-alia is between two bankr the DRT has no g.."

¶11

jurisdiction to adjudicate the same and accordingly the parties may be directed to resolve the dispute through arbitration under Section 11 of the SARFAESI Act. The Hon'ble Supreme Court has considered this aspect in detail and has framed four issues for determination in para no. 42 of the^judgement which are as below:-^.

¶12

'42. Hauing heard the learned counsel appearing for the parties and having gone through the materials on recorQ the following questions fall for our consideration:

¶13

I. What is the scope of Section 11 of the SARFAESI Act? In other words, what is the meaning of the expression 'bny dispute relating to securitisation or reconstruction or nonpayment of any amount due including interest" occurring in Section 11 of the SARFAESI Act?

¶14

II. What is the significance of the expression "ariss amongst any of the parties, namely, the bank or financial institution or asset reconstruction company or qualified bttyer" used in Section 11 read with Section 2 of the SARFAESI Act? What is the underlying object behind prescribing arbitration for the adjudication of disputes between a banlC financial institution, asset reconstruction company or qualifid buyer, in Section 11 of the SARFAESI ACt?

¶15

[il. Whether the existenre of a written arbitration agreement between the^parties is required for the^purpose

¶16

of resolution of disputes under Section 11 of the SARFAESI Act, 2002? In other words, is there any conflict between the decisions of Oriental Bank of Commerce (supra) and Federal Bank (supra)?

¶17

IV. Whether Sectbn 11 of the SARFAESI Act, 2002 should be construed as mandatoty or diredory in its nature?"

¶18

The Honble Supreme Court has considered various judgements passed by the Honble Hiqh Court and also by the Y

¶19

Hontle Supreme Court and after making analysis of each and every Section used in this regard and also the intention of the enactment of the SARFAESI Act, has came to the following conclusion in para no.124, which is reproduced below:-

¶20

"124. We summarize our final conclusion as under: - (I) Section 11 of the SARFAESI Act deals with resolution of disputes relating to securitisatio4 rffonstruction or nonpayment of any amount due between the bank or financial institution or asset reconstruction company or qualified buyer.

¶21

(II) In order to attract the provision of Sution 11 of the SARFAESI Act, twin conditions have to be fulfilled being; first, the dispute must be between any bank or financial institution or aset reconstruction @mpany or qualified buyer and xcondly, the dispute must relate to s*uritisation or reconstruction or non-payment of any amount due including interest Where the aforesaid two conditions are found to be prima-facie satisfid, there the DRT will have no jurisdiction and the proper rffourse would only be through Section 11 of the SARFAESI Act read with the A4 1996.

¶22

(III) The expression "non-payment of any amount dug including interest" used in Section 11 of the SARFAESI Act is of wide import and would include a various range of scenarios of disputes' connected to unpaid amounts including those arising due to third-party defaul| such as indirect defaults of the borowers.

¶23

(IV) Any dispute between two bankq financial institutions, asset reconrtruction companies or qualified buyers etc., where the jural relation between the two is of a lender and borrower, then kction 11 of the SARFAESI Act will have no application whatsoever. The us of the phrase "any person" in the definition of 'borrower'in Section 2(f) of the SARFAESI Act, makes it abundantly clear that_even a bank, financt'al (I

¶24

ORDER

¶25

SA no.290/2024 is hereby dismissed.

¶26

File be consigned to records.

¶27

-CJ

¶28

¶29

(SUSHIL KUr,rAR RASTOGI) PRESIDING OFFICER DRT-II, Delhi

Capri Global Capital Limited v. Idbi Bank Limited

Case brief

What is this about?

What did the court decide?

Capri Global Capital Limited v. Idbi Bank Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases