Through its Authorized Officer v. Uma Shankar Gupta S/o

Ms. Sonal Singh For Respondent(s) : Ms. Rekha Jain JUSTICE ANOOP KUMAR DHAND Order 15/07/2025

1. By way of filing this writ petition, a challenge has been led to the impugned orders dated 22.10.2021 and 10.01.2022 passed by the Debts Recovery Tribunal, Jaipur (for short, ‘the DRT’) by which the SA No. 249/2020 submitted by the respondent has been disposed of and the entire matter has been settled by the DRT for the amount deposited by the respondent on the basis of the proposed settlement made on behalf of the petitioner-financial institution.

2. Counsel for the petitioner submits that the respondent borrowed certain amount from the petitioner-financial institution and when he failed to repay the said loan, the proceedings under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, [2025:RJ-JP:26414] (2 of 6) [CW-1074/2022] ‘the Act of 2002’) were initiated against him, and even thereafter, when the amount was not paid by the respondent, the proceedings under Section 14 of the Act of 2002 were initiated against him before the District Magistrate, who passed the order dated 28.01.2020, granting liberty to the petitioner-financial institution to get the possession of the mortgaged property from the respondent. Counsel submits that the order dated 28.01.2020 passed by the District Magistrate was assailed by the respondent before the DRT by submitting an application under Section 17 of the Act of 2002. Counsel submits that when the petitioner- financial institution initiated the auction proceedings regarding the mortgaged property, an interim order dated 25.08.2021 came to be passed by the DRT directing the respondent to pay a sum of Rs. 20 Lacs to the petitioner-financial corporation by way of demand draft on the same day i.e. 25.08.2021 and further directed to deposit a sum of Rs. 22,93,000/- within a period of twenty days thereafter against the total outstanding. Counsel submits that while imposing the two conditions upon the respondent, the DRT postponed the auction proceeding. Counsel submits that the aforesaid order dated 25.08.2021 passed by the DRT was not complied by the respondent and thereafter, when the matter again came up before the DRT on 22.10.20221 on the SA application, the same was allowed by the DRT vide impugned order dated 22.10.2021 on the premise that the petitioner- financial institution has proposed some settlement in the matter. Counsel submits that no such proposal or settlement was ever given by the petitioner-financial institution to the respondent but without any basis this fact was incorporated in the impugned order [2025:RJ-JP:26414] (3 of 6) [CW-1074/2022] and the application submitted by the respondent was disposed of to adjudicate the entire dispute for a sum of Rs. 42,33,548.87 against the total outstanding of Rs. 83,74097.51. Counsel submits that a further direction has been issued to the petitioner- financial institution to handover the subject property to the respondent. Counsel submits that on the contrary the respondent also never submitted any offer to the petitioner- financial institution for settlement of the dispute and the question of its acceptance also does not arise. Hence, the impugned order dated 22.10.2021 should not have been passed by the Tribunal. Counsel submits that immediately thereafter a review petition was submitted for recalling of the impugned order dated 22.10.2021 but the said review petition was rejected by the DRT vide order dated

10.01.2022. Counsel submits that as per the judgment passed by the Hon’ble Apex Court in the case of PHR Invent Educational Society Vs. UCO Bank (SLP (C) No. 8867/2022, decided on

10.04.2024), the instant writ petition is maintainable before this Court, in terms of the observations/directions issued by the Hon’ble Apex Court in para 29 thereof. Counsel submits that the DRT being a statutory authority has not acted in accordance with the provisions of the enactment/ Act of 2002, hence this Court is competent to entertain the instant writ petition against the order impugned.

3. Per contra, counsel for the respondents opposed the arguments raised by counsel for the petitioner and submitted that the instant writ petition is not maintainable, as the impugned orders passed by the DRT are appealable before the DRAT. Counsel submits that even otherwise, the offer was given by the [2025:RJ-JP:26414] (4 of 6) [CW-1074/2022] petitioner- financial institution to settle the dispute and the respondent has readily agreed to accept the same and on this basis, the impugned order dated 22.10.2021 has been passed, which requires no interference of this Court and the present writ petition is liable to be rejected.

4. Heard and considered the submissions made at Bar and perused the material available on record.

5. Perusal of the entire record indicates that when the outstanding amount was not repaid by the borrower- respondent, the proceedings under Section 14 of the Act of 2002 were initiated against him by way of filing an application before the District Magistrate and the said application was allowed vide order dated

28.01.2020 and the said order was assailed by the respondent before the DRT by way of filing an application under Section 17 of the Act of 2002. This fact is not in dispute that when the amount was not repaid by the respondent, the petitioner- financial institution initiated the auction proceedings against the respondent and at this stage the interim application was submitted seeking appropriate directions against the petitioner- financial institution, which was decided by the DRT vide order dated 25.08.2021 with the following observations and directions :- “Heard arguments and perused the record. I am of the considered view, that the amount as shown in the impugned Auction Notice for Rs. 79,50,373/- against the outstanding amount of Rs. 27,70,000/- as on 27.09.2017 is really very high and if the Applicant is ready and willing to settle the account in terms of contents made in para 4 of this S.A, an opportunity can be granted to him. Accordingly, following order is passed- [2025:RJ-JP:26414] (5 of 6) [CW-1074/2022] A Demand Draft of Rs. 20,00,000/- be 1. handed over to the Respondent F.I., today itself through their Ld. counsel or Authorized Officer.

2. Applicant will deposit an amount of Rs. 22,93,000/- (Rs. 1,43,000+Rs. 21,50,000/-) within 20 days from today against total outstanding amount.

3. Respondent F.I is directed to postpone the proposed auction and let the applicant to deposit amount as directed above, failing which, the Respondents will be at liberty to proceed ahead as per law.”

6. It appears that the respondent failed to comply with the directions issued by the DRT under the order dated 25.08.2021 within the time fixed therein and thereafter the matter was listed before the DRT on 22.10.2021. On which date the SA application submitted by the respondent was disposed of on technical count that a settlement has been proposed by the petitioner-financial institution in the matter. A bare perusal of the record indicates that no such settlement is available on record and the counsel for the respondent has also failed to produce the same before this Court, hence by no stretch of imagination, it can be believed and relied that any settlement has ever been arrived at between the parties and in absence of the said settlement between the parties, the matter ought not to have been decided on the facts by the DRT which were not available on record.

7. Hence this Court finds that instant case falls within the exception clause as carved out by the Hon’ble Apex Court in the case of PHR Invent Educational Society (Supra) wherein it has been held that in exceptional circumstances, a writ petition under Article 226 of the Constitution of India can be entertained in spite [2025:RJ-JP:26414] (6 of 6) [CW-1074/2022] of availability of alternative remedy where the statutory authority has not acted in accordance with the provisions of the enactment. Here in this case also the DRT has not acted in accordance with the provisions of SARFAESI Act, 2001 and has passed the impugned order contrary to the record.

8. In view of the above, the present writ petition stands disposed of and the impugned order dated 22.10.2021 so also the successive order dated 10.01.2022 stands quashed and set aside and the matter is remitted to the DRT, for disposal of the application submitted by the respondent, strictly in accordance with law.

9. Stay application and all pending application(s), if any, also stand disposed of. Ashu/72 (ANOOP KUMAR DHAND),J