2012 (8) TMI 1105 - HC - Indian Laws

Summary

Issues involved:
The issues involved in the judgment are the authority of the Debts Recovery Appellate Tribunal to remand a matter back to the Debts Recovery Tribunal, the right of a party to file an application under Section 17 of the SARFAESI Act, and the validity of declaring an agreement of sale as null and void under Section 13(13) of the Act.

Debts Recovery Appellate Tribunal's Authority to Remand:
The petitioner-Bank filed a writ petition seeking to quash the proceedings of RA(SA)No.62/2010 before the Debts Recovery Appellate Tribunal, Chennai, on the grounds of lack of maintainability and jurisdiction. The Acting Chief Justice and Justice Vilas V.Afzulpurkar considered Section 20(4) of the SARFAESI Act, 2002, which empowers the appellate Tribunal to pass orders as it deems fit, including remanding a matter. It was held that the remand order by the appellate Tribunal was not unlawful, as it falls within the scope of the Tribunal's authority under the Act. The submission challenging the remand order was deemed without merit, and the writ petition was disposed of accordingly.

Right to File Application under Section 17:
Another contention raised was regarding the right of the applicant to file an application under Section 17 of the Act before the Debts Recovery Tribunal, Hyderabad. The Court opined that any affected party, including one holding an agreement of sale from the borrower, has the liberty to apply under Section 17. It was clarified that the existence of an agreement of sale does not nullify the right to seek relief under the Act, and such applications are permissible for parties impacted by the Tribunal's orders.

Validity of Declaring Agreement of Sale Null and Void:
The validity of declaring an agreement of sale as null and void under Section 13(13) of the SARFAESI Act was also addressed. The Court emphasized that an agreement for sale does not contravene the Act and does not impede the rights of banks holding mortgages. Therefore, the argument to declare such agreements as null and void was deemed untenable. The appellate Tribunal's decision to remand the matter based on merits, particularly concerning Section 13(13) and Section 17 of the Act, was upheld as justified. The Court directed the Debts Recovery Tribunal, Hyderabad, to expedite the disposal of the case within two months from the date of the order.

This comprehensive summary highlights the key legal issues addressed in the judgment, including the authority of the appellate Tribunal, the right to file applications under specific sections of the SARFAESI Act, and the validity of agreements of sale under the Act.