Dismissed

Rakesh Yadav v. Fedbank Financial Services Limited

DRT27 May 2026SA/189/2026

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-II disposed of an application filed by a bidder who had deposited 25% of the auction amount. Relying on a Supreme Court precedent, the Tribunal held that since there was an inter-se mortgage dispute between two financial institutions, it lacked jurisdiction. Consequently, pending the arbitrator's decision, the Tribunal restrained all parties from further action and dism

What did the court decide?

The interim prayer was dismissed; the SA was held not maintainable and dismissed. Respondents were restrained from taking action until the arbitrator's order.

Rakesh Yadav versus Fedbank Financial Services Limited — Banking and Recovery | DRT (2026)

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Debts Recovety Tribuna!-Il, Delhi

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S.A.No. L8912O26 RAKESH YADAV VS. FEDBANK FINANCIAL SERVICES LIMITED

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27.0s.2026 Item no.3

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Present: Shri Chandrakant Tiwari, counsel for applicant. Shri Arun Pratap Singh, counsel for respondent no.1 FI. Shri Aruind Jadon, counsel for respondent no.2 EI.

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Matter is taken through VC/Hybrid mode.

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The Ld. Counsel for the S.applicant submitted that the applicant was declared as highest bidder^{in e-} auction dated 18.05.2026 conducted by the respondent no.2 and deposited Rs.20 Lakhs as^25o/o percent of the sale price and he will deposit the remaining amount Rs.60 Lakhs within 15 days. It^is submitted that the applicant was informed by^the respondent no. 2 that the propefi in^questionwas free from any encumbrance. It is submitted that respondent no.1 through Receiver is^going to take physical possession of the subject property on 28.05.2026. Therefore, it is^prayed that respondent no. UReceiver^{may be directedto maintain status quo with} respect to the property i.e. Entire upper Ground Floor and Second Floor with roof rights,^parts of^Freehold property bearing no. RZ 6A (Old Propefi No. 6) land area measuring 100 Sq. Yards i.e. 83.61 Sq. Meters, out of Khasra No. B3/3, Situated in the revenue estate of village Palam, Delhi State, Delhi and colony known as Mahavir Enclave, New Delhi 110045.

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The Ld. Counsel for respondent no.1^has submitted that the applicant_!.t deposited only^25o/o

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s4i

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of the bid amount and sale certificate has not been issued in his favour.

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The Ld. Counse! for respondent no.Z^has submitted that let the auction of the^{property be} completed and amount be deposited with the^DRT till final decision in the SA.

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Heard the Ld. Counsels of both the^{pafties and} perused the record.

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From^perusal of the record it is clear that^the applicant is claiming that he has^{participated in the} e.auction conducted by respondent^no.2 and^{has been} declared as highest bidder. It is submitted^{that the} applicant has also deposited 25o/o of the bid^amount and therefore, has^got interest in the subject^property. Therefore, it is submitted that respondent no.l^{may be} restrained from e.auction of the subject^property.On the other hand the Ld. counsel for respondent^{no.2 has} submitted that the respondent no.2 may be^permitted to go through the auction and the amount^received from the auction may be kept with the DRT and the same may be distributed among the^financial institution after conclusion of the Ld. Arbitrator^under Section 11 of the SARFAESI Act. I have considered^the riva! contention of all the^pafties. As^{per judgement} passed by the Hon'ble Supreme Couft in Appeal no.71t012025 in matter of Bank of India Vs. M/s Sri Nangli Rice Mills Private Limited and Ors. if there^is any dispute regarding the moftgage of the^property between two financial institutions, they should^{go to} the Arbitrator under Section 11 of the SARFAESI^Act and the DRT has no^{jurisdictio-l} to decide the^same.In

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the present matter, two financial institutions, the respondent no.1 & respondent no.2 are claiming mortgage over the same^property. Therefore, the inter-se dispute between the respondent no.l^and respondent no.2 shall be dealt by the Arbitrator under Section 11 of the SARFAESI Act. In^{such circumstances} no financial institution can be^permitted to^proceed under the^provisions of the SARFAESI Act as it^will fufther enlarge the litigation as the auction^purchaser wil! also become a^party and will have to suffer^the litigation. The applicant has already filed an^SA claiming that he is the highest bidder and^the respondent no.l may be restrained from taking^any action against the subject^property. The^{interim prayer} in that SA has already been declined by this^Tribunal as the applicant has no locus to file the^{SA- Despite} this, the applicant has deposited 25o/o of the^bid amount and he is claiming that now^{he has got an} interest in the subject^property and therefore,^{he is an} aggrieved^person as^{per provisions} contained^under Section L7 of the SARFAESI Act and the^respondent no.1 may be restrained from^proceeding against^the subject property. The applicant has taken such^an action having fult knowledge of the fact that^the respondent no.l is also claiming mortgage on^the same property. Therefore, this Tribunal is of^{the view} that the action of the applicant is not bonafide and^he himself is adamant to^purchase a^{propertyregarding} which a dispute between two financial institutions^is pending. As per directions issued by the Honble Supreme Court in the above mentioned^case,the dispute relating mortgage of the^propefty by^two financial institutions has to be adjudicated by the^Ld. Arbitrator, therefore, it will not be^proper to^permitany

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financial institution to go through the^SARFAESI proceedings and claim that the inter-se dispute will be decided later on by the Ld. Arbitrator. In^such circumstances this Tribunal is of the view that both^the respondent no.1 and respondent no.2 are^restrained from taking any action in respect of the subject property till the interim/ final order passed by the Ld. Arbitrator.

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In the light of the above, the interim^prayer of the applicant is liable to be dismissed.

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Order

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The interim prayer of the applicant is hereby dismissed. The respondent no.l and respondent no.2 are restrained from taking any action in respect of the subject propefty till the interim/ final order^passed by the Ld. Arbitrator. As the inter-se dispute regarding the validity of the mortgage is to be adjudicated by the Ld. Arbitrator and this Tribunal has no^jurisdiction to decide the same, therefore, the^present SA is not maintainable and is liable to be dismissed. SA no. L8912026 is hereby dismissed as not maintainable.

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File be consigned to records.

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<lt

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(susHIL Kl.JtvtAR RASToGI) PRESIDING OFFICER DRT-II, Delhi

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Rakesh Yadav v. Fedbank Financial Services Limited

Case brief

What is this about?

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Rakesh Yadav v. Fedbank Financial Services Limited

Case brief

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