Bihar DRT Not Functional : Supreme Court Stays E-Auction Of A Property

The Supreme Court on Friday stayed an e-Auction of a person's dwelling house in Bihar after taking into consideration that the Debt Recovery Tribunal was not functional in the State of Bihar.

The bench of Justices DY Chandrachud and Surya Kant granted the relief while considering a special leave petition assailing Patna High Court's order dated November 30, 2021 ("impugned order").

In the impugned order, the High Court while granting time to the petitioner to settle the account with State Bank of India had disposed of the petition by granting him the liberty to approach DRT, Bihar in case of failure for the settlement to fructify.

The Top Court while issuing notice directed the petitioner to deposit an amount of Rs 1 crore with the SBI Stressed Assets Management Branch on or before February 14, 2022 and a further amount of Rs 75 lakhs on or before March 14, 2022.

"Conditional on the petitioner complying with the above directions, there shall be a stay of the e-auction till the next date of listing," the bench further noted in its order while adjourning the matter to March 21, 2022.

Appearing on behalf of the petitioner Advocate Shivam Singh submitted that the High Court in the impugned judgment had granted time for settling the account with the respondent – Bank. He further contended that while granting time the High Court proceeded to dispose of the petition with the observation that if the settlement did not fructify, the petitioner would be at liberty to avail of the remedy before the Debt Recovery Tribunal.

It was also counsel's contention that the petitioner has been left without any remedy as Debt Recovery Tribunal is not functional in the State of Bihar. Advocate Shivam Singh further argued that the petitioner had offered an amount of Rs 1.41 crores initially towards the One Time Settlement ("OTS") which was enhanced to Rs 1.75 crores after the decision of the High Court.

The petitioner had argued in the petition that the High Court had failed to consider the petitioner's submission and had passed a non speaking order of remanding the matter back to the same authorities that had initiated the eviction process against him in the first place.

It may be noted that the Supreme Court has taken note of the alarming situation of many DRTs and DRATS remaining non-functional across the country due to unfilled vacancies. In view of this situation, the Supreme Court had passed an order in December 2021 urging High Courts to entertain debts recovery and SARFAESI matters under Article 226 if DRTs/DRATs are not functional in the jurisdiction.

Last week, the Bombay High Court had observed that it will summon the Finance Secretary if the DRAT Chairperson is not appointed by Febraury 21.

Case Title: Chandan Kumar v State of Bihar| Special Leave to Appeal (C) No.1730/2022

Coram: Justices DY Chandrachud and Surya Kant

Counsels for the Petitioner: Advocates Shivam Singh, Abhinav Singh and Gopal Singh

Click Here To Read/Download Order