The Madras High Court has dismissed a petition against the Central Bank of India, challenging the e-auction of a property in Tuticorin. The petitioner, Nathu K. Patel, had argued that the Recovery Officer did not have jurisdiction to conduct the auction as the property was situated outside of Chennai, where the Debt Recovery Tribunal (DRT) was located. However, the court held that the DRT was not bound by the Code of Civil Procedure (CPC) and had the power to regulate its own procedure under Section 22 of the Recovery of Debts and Bankruptcy Act, 1993.
The court observed that the DRT had already passed a decree that included the property in question and that the Recovery Officer had the authority to conduct the e-auction. The petitioner’s argument that the Recovery Officer lacked jurisdiction was rejected, as the court held that the property was part of the original application decided by the DRT in Chennai.
The court also relied on a previous Supreme Court judgment in Celir LLP Vs. Bafna Motors (Mumbai) Private Limited, which held that High Courts should not exercise writ jurisdiction under Article 226 of the Constitution of India when an efficacious alternative remedy was available under the SARFAESI Act. The court noted that the RDDB & FI Act was introduced to provide a speedy remedy for the recovery of debts and that the DRT had been established to provide expeditious adjudication of recovery of debts due to banks and financial institutions.
The petitioner had argued that the use of the word “may” in Section 39(1) of the CPC meant that the court which passed a decree could send it for execution to another court of competent jurisdiction, but the court rejected this argument, holding that the legislative intent was to provide a special remedy for the recovery of debts. The court concluded that the contentions raised by the petitioner had no force and that the findings of the DRAT Mumbai were just, proper, and sustainable in law. The petition was therefore dismissed.
The decision underscores the independence of the DRT and its ability to regulate its own procedure, free from the constraints of the CPC. It also highlights the importance of the RDDB & FI Act in providing a speedy and effective remedy for the recovery of debts due to banks and financial institutions. By upholding the authority of the DRT and the Recovery Officer, the court has reinforced the integrity of the debt recovery process and ensured that banks and financial institutions can recover their debts in a timely and efficient manner.
In conclusion, the Madras High Court’s decision is a significant one, as it clarifies the role and powers of the DRT and the Recovery Officer in the debt recovery process. It also reinforces the importance of the RDDB & FI Act in providing a speedy and effective remedy for the recovery of debts due to banks and financial institutions. The decision is expected to have a positive impact on the banking and financial sector, as it will facilitate the recovery of debts and reduce the burden of non-performing assets on banks and financial institutions.