Case Note & Summary
The dispute originated from recovery proceedings initiated by Corporation Bank (later merged with Union Bank of India) under Recovery Certificate No.6/2016 for Rs.85 lakhs. The auction purchaser (Respondent No.1) made the highest bid of Rs.85 lakhs against a reserved price of Rs.54 lakhs and deposited 25% earnest money. After seeking clarifications from the Recovery Officer, his application was dismissed on 28.11.2019 with forfeiture of 10% deposit. The auction purchaser appealed to DRT-II, Delhi, which dismissed the appeal on 18.03.2020. Subsequently, he filed Appeal No.91 of 2019 before DRAT challenging the DRT order. When DRAT did not grant interim relief against a proposed auction on 10.11.2021, the auction purchaser filed a writ petition before the High Court challenging the non-grant of interim relief. The High Court disposed of the writ petition by granting an opportunity to deposit the balance amount with Rs.5 lakhs damages, directing the Recovery Officer to release the 25% deposit with interest and confirm the sale. The original borrower (appellant) challenged this High Court order before the Supreme Court. The core legal issue was whether the High Court exceeded its jurisdiction by deciding the writ petition on merits when only interim relief denial was challenged, thereby making the pending DRAT appeal infructuous. The appellant contended that the High Court went beyond the scope of proceedings, while the respondent auction purchaser sought to uphold the High Court's order. The Supreme Court analyzed that the High Court had improperly appreciated that only interim relief denial was challenged, not the main appeal which was pending before DRAT. The Court reasoned that the High Court decided the matter as if considering the final DRAT decision, exceeding its jurisdiction and making DRAT proceedings infructuous. The Supreme Court quashed the High Court's judgment, set it aside, and directed DRAT to decide Appeal No.91 of 2019 on merits within four months, allowing the appeals accordingly.
Headnote
A) Banking Law - Recovery Proceedings - Auction Purchaser's Rights - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - The dispute arose from auction proceedings initiated by Corporation Bank (merged with Union Bank of India) under Recovery Certificate No.6/2016, where the auction purchaser made highest bid but faced forfeiture of deposit - The High Court granted opportunity to deposit balance amount with damages, which was challenged as exceeding jurisdiction - Held that High Court should not have disposed of writ petition on merits when only interim relief denial was challenged before it, as this made DRAT appeal infructuous (Paras 1-4). B) Civil Procedure - Writ Jurisdiction - Scope and Limitations - Constitution of India, Article 226 - The High Court entertained writ petition challenging DRAT's refusal to grant interim relief against proposed auction - The Supreme Court found High Court exceeded jurisdiction by deciding matter as if considering final DRAT decision, when main appeal was pending - Held that High Court went beyond scope of proceedings before it and should have limited itself to interim relief issue (Paras 3.2-3.3). C) Appellate Procedure - Tribunal Jurisdiction - DRAT Authority - Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - The DRAT was seized with Appeal No.91 of 2019 challenging DRT order which confirmed Recovery Officer's forfeiture of 10% deposit - The High Court's order effectively decided the matter, leaving nothing for DRAT to adjudicate - Held that High Court made DRAT proceedings infructuous by preempting its decision-making authority (Paras 3.2-4).
Issue of Consideration
Whether the High Court exceeded its jurisdiction by disposing of a writ petition challenging non-grant of interim relief by the DRAT, thereby making the pending appeal before DRAT infructuous
Final Decision
Appeals allowed; impugned judgment and order passed by High Court quashed and set aside; DRAT directed to finally decide and dispose of Appeal No.91 of 2019 in accordance with law and on its own merits within four months; no costs
Law Points
- Judicial review scope
- Writ jurisdiction limitations
- DRAT appellate authority
- Interim relief considerations
- Recovery proceedings finality
