Mr. Justice Alok Aradhe

Bar contained in Section 14(3) of SARFAESI Act, 2002 does not apply to a remedy provided before Debts Recovery Tribunal (DRT) under Section 17 | Against an order under Section 14, an aggrieved person has a remedy under Section 17 – Sai Hemaja Aerobricks Pvt. Ltd. and 2 others Vs. State Bank of India and another – Telangana High Court

Hon’ble Telangana High Court held that:

(i) The borrower has the remedy to approach the Debts Recovery Tribunal.
(ii) The contention that the decisions of Supreme Court in Kanaiyalal Lalchand Sachdev (supra), Kotak Mahindra Bank Limited (supra), Bajrang Shyamsunder Agarwal (supra), Satyawati Tondon (supra), Hindon Forge Private Limited (supra) and Hemraj Ratnakar Salian (supra) are per incurium cannot be accepted, as it is not open for this Court to hold that a decision of Supreme Court is per incurium as the same would be violative of Article 141 of the Constitution of India.
(iii) Section 14(3) of the SARFAESI Act provides that no act of Chief Metropolitan Magistrate or District Magistrate or any officer authorised by Chief Metropolitan Magistrate or District Magistrate done in pursuance of this section shall be called in question in any court or before any authority.
(iv) The Debts Recovery Tribunal under the SARFAESI Act is neither a Court nor an Authority. Therefore, the bar contained in Section 14(3) of the SARFAESI Act does not apply to a remedy provided before the Tribunal under Section 17 of the SARFAESI Act.
(v) In view of preceding analysis, it is held that against an order under Section 14 of the SARFAESI Act, an aggrieved person has a remedy under Section 17 of the SARFAESI Act.

Bar contained in Section 14(3) of SARFAESI Act, 2002 does not apply to a remedy provided before Debts Recovery Tribunal (DRT) under Section 17 | Against an order under Section 14, an aggrieved person has a remedy under Section 17 – Sai Hemaja Aerobricks Pvt. Ltd. and 2 others Vs. State Bank of India and another – Telangana High Court Read Post »

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court

The batch of 3 Writ Appeals were preferred by the suspended Board of Directors of M/s. Ind Bharath Power (Madras) Limited challenging the order passed by the Ld. Single Judge Bench upholding the decision/order of the First Level Committee of REC Limited in declaring the Appellants as wilful defaulters.

The Appellants alleged that the First Level Committee has acted in contrary to the procedure laid down in the RBI Master Circular dated 01.07.2015, as firstly the Appellants have not been informed about the constitution of First Level Committee and, secondly, there has been delegation of power as the decision of the First Level Committee was communicated to the Appellants by a member of the Committee.
Thereupon, the Sr. Advocate for Appellants relied upon the landmark judgment of ‘Jah Developers’ highlighting that declaration of Appellants as wilful defaulter is a direct violation of fundamental rights.

The Sr. Advocate representing the Respondent outrightly highlighted that the decision of the First Level Committee is well within the guidelines of the RBI Master Circular and that the order of the First Level Committee would attain finality only when it is confirmed by the review committee. Thus, the Appellants have preferred the Writ Appeal at a very premature stage and hence deserves no indulgence by the Hon’ble Division Bench of the Telangana High Court presided by the Chief Justice.

The Hon’ble Court after hearing the submissions of the parties and considering the guidelines of RBI Master Circular asserted that the Master Circular does not contain any requirement that the order passed by the First Level Committee should disclose the constitution of the First Level Committee and further held that till the time the provisional order of First Level Committee is not confirmed by the review committee, it is not possible to infer that any rights of the Appellants have been violated. Moreover, the Hon’ble Court also held that the case of Jah Developers is of no assistance in facts and circumstances of the case at hand. Thereby, the Division Bench upheld the order of the Ld. Single Bench and while disposing off the Appeals, granted liberty to the Appellants to approach the review committee within a period of 3 weeks from the date of receipt of the order.

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court Read Post »

Issue of Doctrine of Estoppel and application under Section 8 of Arbitration and Conciliation Act, 1996 filed subsequent to termination of arbitration proceedings – Dakshin Shelters Pvt. Ltd. Vs. Mr. Parikshit Shah and another – Telangana High Court

Hon’ble High Corut held that in the absence of essential factors giving rise to estoppel having been fulfilled, in our considered opinion, the doctrine of estoppel has no application to the facts of the case. It is also pertinent to note that the appellant was entitled to take a stand that the dispute is arbitrable by filing an application under Section 8 of the 1996 Act, as such a plea became available to him due to subsequent decision of the Hon’ble Supreme Court in Deccan Paper Mills Company Limited (supra).

Issue of Doctrine of Estoppel and application under Section 8 of Arbitration and Conciliation Act, 1996 filed subsequent to termination of arbitration proceedings – Dakshin Shelters Pvt. Ltd. Vs. Mr. Parikshit Shah and another – Telangana High Court Read Post »

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