M/S. RAL NUTRALIFE PVT. LTD. v. STATE BANK OF INDIA & ORS.

1. The petitioner has filed the present petition, inter alia, praying that Recovery Officer-I, Debts Recovery Tribunal-II, Delhi (hereafter ‘the Recovery Officer, DRT-II’) be directed to conclude the proceedings for confirmation of sale of immovable property described as property bearing no.223/2 (part), known as ‘Gurxetachi Buim’ situated near the Retreat by the Zuari Varca Village, Solcete, Goa, admeasuring 2732.50 sq. meters (hereafter referred to as ‘the said property’). The petitioner further prays for issuance of directions to release the documents relating to the said property. In the alternate, the RAWAL petitioner prays that the Recovery Officer, DRT-II be directed to refund the auction money deposited by the petitioner for purchase of the said property.

2. The petitioner had participated in an auction for the said property held on 12.10.2022. The said auction was initiated for recovery of the amount against Recovery Certificate issued in favour of respondent no.1 (State Bank of India) by the Recovery Officer in RC No. 393/2018 captioned State Bank of India v. M/s Avant Developments Pvt. Ltd. The petitioner was declared as the successful bidder and it deposited the entire consideration by way of demand drafts with the Recovery Officer of Debts Recovery Tribunal-I, Delhi (hereafter ‘the Recovery Officer, DRT-I’).

3. Thereafter, in terms of the Notification dated 04.10.2022 issued by the Ministry of Finance, Government of India, the recovery proceedings in question (RC No. 393/2018) were transferred from the Recovery Officer, DRT-I Delhi to the Recovery Officer, DRT-II Delhi. The recovery proceedings were renumbered as TRC NO. 121/2022.

4. The aforesaid matter (TRC No. 121/2022) was listed before the Recovery Officer, DRT-II, on 15.11.2022. However, the Recovery Officer, DRT-II did not confirm the sale of the said property in favour of the petitioner on the ground that he had not received the demand drafts furnished by the petitioner as consideration for the said property and therefore, was unable to verify the payments made by the petitioner. Apparently, the file pertaining to the recovery proceedings was RAWAL received by the Recovery Officer, DRT-II but the demand drafts continued to remain with the Recovery Officer, DRT-I.

5. It is stated that, thereafter, the proceedings before the Recovery Officer, DRT-II were repeatedly adjourned, inter alia, on the ground that this Court was seized with the question relating to the reallocation of jurisdiction of the Debts Recovery Tribunals in terms of the Notification dated 04.10.2022 (hereafter ‘the notification’)

6. The learned counsel for the parties have submitted that proceedings before the Debts Recovery Tribunals in Delhi have come to a standstill in view of the lack of clarity regarding their jurisdiction after the issuance of the notification. It is submitted that the Bombay High Court has stayed the notification and thereafter, there was a lack of clarity whether the Debts Recovery Tribunals could exercise the jurisdiction in terms of the notification.

7. The Hon’ble Bench of the Bombay High Court at Aurangabad had passed an order dated 17.11.2022 in Writ Petition No. 11164/2022 captioned Ishwarlal Shankarlal Lalwani (Jain) v. The Union of India, Through the Chief Secretary, whereby the notification was stayed. It is submitted by the counsel that in view of the said order, the functioning of the Debts Recovery Tribunals in Delhi have come to a standstill. The matters pending before Debts Recovery Tribunals were transferred in accordance with the allocation of jurisdiction in terms with the notification. And, the Debts Recovery Tribunals vested with the jurisdiction in terms of the notification are deferring the matter before them as the notification has been stayed by the Bombay High RAWAL Court. Thus, neither the Debts Recovery Tribunals possessed the jurisdiction they had prior to the notification nor had the Debts Recovery Tribunals seized with the jurisdiction in terms of the notification, and are not proceeding to decide the pending matters.

8. In view of the above, the principal question to be considered is whether the DRT-II is possessed with the jurisdiction to proceed with TRC- 121/2022.

9. It is relevant to refer to the decision of the Bombay High Court in Writ Petition No.11164/2022. Paragraph 1 of the order dated 17.11.2022 passed by the Bombay High Court in Writ Petition NO. 11164/2022 (supra) reads as under:

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10. It is apparent from the above that the petitioner in Writ Petition No.11164/2022 had assailed S.O. 4719(E) dated 04.10.2022 and not S.O. 4718(E), whereby the jurisdiction was reallocated, inter alia, amongst the Debts Recovery Tribunals at Delhi. In terms of the said order, the Bombay High Court has suspended “the Notification dated RAWAL 04.10.2022”. It is, thus, apparent that the reference to the notification in the order dated 17.11.2022 is to S.O. 4719(E) dated 04.10.2022, which was challenged by the petitioner in the said writ petition and not S.O.4718(E) dated 04.10.2022. Thus, we are of the view that the said order does not suspend S.O. 4718(E) dated 04.10.2022 and therefore, benches of Debts Recovery Tribunals in Delhi are required to exercise jurisdiction as allocated in terms of S.O. 4718(E) dated 04.10.2022.

11. In an order dated 18.04.2023 passed by a Co-ordinate Bench of this Court in International Asset Reconstruction Company Pvt. Ltd. v. Anoop Bishnoi & Ors.: W.P.(C) 3708/2021, the Court had made observations to the effect that the Notification in question had not been stayed for Delhi. Paragraph 5 of the said order is set out below: