DRT Must Decide Securitisation Applications Within Statutorily Mandated Timeline : Supreme Court

The Supreme Court recently criticized the Debt Recovery Tribunal, Dehradun, for failing to decide a securitisation application preferred by a Bank within the statutory timeline mandated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act"). After noting that the DRT failed to abide by the strict timelines prescribed under the SARFAESI Act, a bench of Justices Sanjay Kumar and Alok Aradhe directed the DRT to dispose of the matter “without further delay” and strictly in line with Section 17(5) SARFAESI Act which requires a disposal of a securitization application within 60 days of filing the application, extendable up to four months.“Once the statute itself mandates that the DRT should dispose of the matter within the stipulated time, it is incumbent upon the DRT, Dehradun, to abide thereby. Further, in the event it fails to do so, the proviso to Section 17(5) ordains that reasons need to be recorded. We find from the orders passed by the DRT, Dehradun, that this statutory direction has also not been respected.”, the court said. The dispute arose after the Respondent (borrower) filed a Securitisation Application before the DRT, challenging recovery measures initiated by the Appellant-bank. The bank complained that the application was being kept pending indefinitely, frustrating recovery proceedings. The High Court declined to intervene, merely noting that the DRT was bound by the statutory provision leading to an appeal by the bank before the Supreme Court. Setting aside the High Court's order, the Court “dispose of the appeal directing the DRT, Dehradun, to take note of the statutory mandate under Section 17(5) of the SARFAESI Act and act accordingly without further delay.” Cause Title: INDIAN OVERSEAS BANK VERSUS M/S RADHEY INFRA SOLUTIONS (PVT.) LTD. & ORS.Citation : 2025 LiveLaw (SC) 997Click here to read/download the orderAppearance: For Petitioner(s) Mr. Rohit Kumar Singh, AOR Ms. Alka Marwala, Adv. Ms. Swati Sood, Adv. Ms. Payal Golimar, Adv. Mr. Shivam Sharma, Adv. Mr. Akash Kumar, Adv. Mr. Mahender Rathour, Adv. Mr. Anshuman Gupta, Adv. For Respondent(s) None

DRT Must Decide Securitisation Applications Within Statutorily Mandated Timeline : Supreme Court

Yash Mittal

Tags