Condition For Filing Securatisation Application: Delhi HC Stays DRAT Order

A Division Bench of the Delhi High Court headed by Justice Gita Mittal on Monday stayed the order of the Debts Recovery Appellate Tribunal in Vikram Bakshi v Housing Development Finance Corporation, wherein the DRAT had held that a Securitization Application under Section 17 of the SARFAESI Act, 2002 could not be filed in the DRT unless physical possession of the property was handed over to or taken over by the Mortgagee Bank.

The decision of the DRAT had caused extreme hardship to those persons against whose properties, Banks had taken symbolic possession and their Securitization Application would be summarily dismissed by the DRT by virtue of them still being in possession, due to the judgment of the DRAT.

The bench made a prima facie observation that such an onerous condition could not be read into the statute.

Mr Rajeev Mehra, learned Senior Counsel appeared on behalf of the Mortgagor challenging the order while Ms. Vibha Datta Makhija, learned Senior Counsel appeared for the Respondent-Bank defending the stance of the DRAT.