High Court · 2025

Petitioner :- M/S Unchagaon Ice And Cold Storage And Another Respondent :- Canara Bank, Regional Officer And Another Counsel for Petitioner :- Rakesh Mishra Counsel for Respondent :- Krishna Mohan Asthana,Ashish Kumar Srivastava,Ramesh Kumar Shukla Hon'ble Rohit Ranjan Agarwal,J.

1. Heard Sri Naveen Sinha, learned Senior Counsel, assisted by Sri Rakesh Mishra, learned counsel for petitioners, Sri Anurag Khanna, learned Senior Counsel, assisted by Sri Ashish Kumar Srivastava, learned counsel for respondent no. 2 and Sri Krishna Mohan Asthana, learned counsel for respondent no. 1/bank.

2. This writ petition is directed against the order impugned dated 25.4.2025 passed by the Debts Recovery Appellate Tribunal, Allahabad in Application Diary No. 1958 of 2024 in Appeal Diary No. 1541 of 2024.

3. Case, in nutshell, is that petitioner was extended cash credit limit as well as term loan by the respondent no. 1/Canara Bank. As the borrower had defaulted in repayment of loan, proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated. Petitioners, before this Court, had filed S.A. No. 494 of 2021 before the Debts Recovery Tribunal (hereinafter referred as the 'Tribunal') challenging the proceedings under Section 13 (2) of SARFAESI Act as well as Section 14 (1) of the SARFAESI Act. On 22.2.2024, in the interim application moved in the said S.A. the Tribunal had granted time to borrower to deposit an amount of Rs. 15 Lakhs within 24 hours and thereafter Rs. 15 Lakhs within next ten days as the outstanding amount demand is Rs. 2.92 crores plus interest and other charges and borrower had only deposited Rs. 91 Lakhs.

4. According to learned Senior Counsel petitioners had complied the directions of the Tribunal and on 23.2.2024 deposited Rs. 15 Lakhs and thereafter on 1.3.2024 another amount of Rs. 15 Lakhs was deposited. Thereafter, the matter was again taken up by the Tribunal on 21.6.2024 and the Tribunal had required the borrower to deposit Rs. 30 Lakhs on 21.6.2024 itself and Rs. 20 Lakhs within a week. The auction proceedings were put to hold. The matter was again taken up by the Tribunal on 12.9.2024 wherein it was brought to notice of the Tribunal that auction had taken place and the auction purchaser had deposited 25% of the bid money and balance 75% yet to be deposited. The Tribunal in its order directed that the auction purchaser may deposit the remaining 75% of the bid amount but no sale certificate shall be issued till finalization of S.A.

5. Aggrieved by the said order, the auction purchaser had preferred Appeal No. 1541 of 2024 before the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred as the 'Appellate Tribunal') challenging the order dated 12.9.2024. The Appellate Tribunal by the order dated 7.11.2024 disposed of the said appeal with the observation that since the matter is pending before the Tribunal, the remedy open to the appellant/auction purchaser was to file an application before the Tribunal for redressal of his grievances and further directed the Tribunal to dispose of the matter within three weeks. The said appeal was disposed of on 7.11.2024. It appears that auction purchaser on 17.12.2024 filed another application before the Appellate Tribunal with a prayer that as 75% of the amount had already been deposited with the bank, sale certificate may be issued. The Appellate Tribunal on 27.11.2024 considering the application and submissions of the auction purchaser as well as the bank, proceeded to dispose of the application directing the Tribunal to consider and decide the S.A. No. 494 of 2021 expeditiously. No order was passed as to the consideration or issuance of the sale certificate. After the Application No. 1753 of 2024 filed in the earlier disposed of Appeal No. 1541 of 2024 was decided on 27.11.2024 the auction purchaser/respondent no. 2 filed another application before the Appellate Tribunal which was numbered as Application No. 1958 of 2024 and the Appellate Tribunal now taking u-turn had considered the said application on 25.4.2025 and held that since the entire sale amount has been deposited by the appellant/auction purchaser, directed the bank to issue sale certificate in favour of appellant/auction purchaser.

6. Sri Sinha, learned Senior Counsel, has submitted that twice the application filed by the auction purchaser was disposed of by the Appellate Tribunal with a direction to the Tribunal to dispose of the S.A. No. 494 of 2021 expeditiously. The prayer made by auction purchaser was turned down twice by the Appellate Tribunal and there stood no occasion for reconsidering the third application and passing the order dated 25.4.2025.

7. Sri Anurag Khanna, learned Senior Counsel, submitted that already sale certificate has been executed and the matter has become infructuous. He further submits that no purpose would be served in setting aside the order of Appellate Tribunal and remitting the matter to the Tribunal.

8. Sri K.M. Asthana, learned counsel appearing for Canara Bank, submits that the outstanding amount has been realized by the bank after auction sale has been conducted and sale certificate has already been issued in favour of the respondent no. 2.

9. After hearing learned counsel for the parties, I find that the Appellate Tribunal had committed gross illegality in reviewing its earlier orders refusing to grant any benefit to auction purchaser and had directed the Tribunal to decide the S.A. No. 494 of 2021. Once the Appellate Tribunal has recorded its finding that the appeal was not maintainable as the matter was still under the active consideration of the Tribunal, it should not have entertained the second application in already disposed of appeal and passing the order dated 25.4.2025 directing the bank to issue sale certificate. Once the matter was subjudiced before the Tribunal, the Appellate Tribunal should have only directed for expeditious disposal of the aforesaid S.A. The order dated 25.4.2025 is in teeth of the earlier two orders passed by the Appellate Tribunal.

10. In view of the said fact, the order impugned dated 25.4.2025 passed by the Debts Recovery Appellate Tribunal, Allahabad in Application Diary No. 1958 of 2024 in Appeal Diary No. 1541 of 2024 is hereby set aside.

11. Writ petition stands allowed. The Tribunal is directed to proceed with S.A. No. 494 of 2021 and decide the same, in accordance with law, within three months from the date of production of a certified copy of this order, keeping in mind that the order passed for issuing the sale certificate has already been set aside by this Court. Order Date :- 22.5.2025 Shekhar SHASHI SHEKHAR PANDEY High Court of Judicature at Allahabad

Petitioner :- M/S Unchagaon Ice And Cold Storage And Another Respondent :- Canara Bank, Regional Officer And Another Counsel for Petitioner :- Rakesh Mishra Counsel for Respondent :- Krishna Mohan Asthana,Ashish Kumar Srivastava,Ramesh Kumar Shukla Hon'ble Rohit Ranjan Agarwal,J.

1. Heard Sri Naveen Sinha, learned Senior Counsel, assisted by Sri Rakesh Mishra, learned counsel for petitioners, Sri Anurag Khanna, learned Senior Counsel, assisted by Sri Ashish Kumar Srivastava, learned counsel for respondent no. 2 and Sri Krishna Mohan Asthana, learned counsel for respondent no. 1/bank.

2. This writ petition is directed against the order impugned dated 25.4.2025 passed by the Debts Recovery Appellate Tribunal, Allahabad in Application Diary No. 1958 of 2024 in Appeal Diary No. 1541 of 2024.

3. Case, in nutshell, is that petitioner was extended cash credit limit as well as term loan by the respondent no. 1/Canara Bank. As the borrower had defaulted in repayment of loan, proceedings under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was initiated. Petitioners, before this Court, had filed S.A. No. 494 of 2021 before the Debts Recovery Tribunal (hereinafter referred as the 'Tribunal') challenging the proceedings under Section 13 (2) of SARFAESI Act as well as Section 14 (1) of the SARFAESI Act. On 22.2.2024, in the interim application moved in the said S.A. the Tribunal had granted time to borrower to deposit an amount of Rs. 15 Lakhs within 24 hours and thereafter Rs. 15 Lakhs within next ten days as the outstanding amount demand is Rs. 2.92 crores plus interest and other charges and borrower had only deposited Rs. 91 Lakhs.

4. According to learned Senior Counsel petitioners had complied the directions of the Tribunal and on 23.2.2024 deposited Rs. 15 Lakhs and thereafter on 1.3.2024 another amount of Rs. 15 Lakhs was deposited. Thereafter, the matter was again taken up by the Tribunal on 21.6.2024 and the Tribunal had required the borrower to deposit Rs. 30 Lakhs on 21.6.2024 itself and Rs. 20 Lakhs within a week. The auction proceedings were put to hold. The matter was again taken up by the Tribunal on 12.9.2024 wherein it was brought to notice of the Tribunal that auction had taken place and the auction purchaser had deposited 25% of the bid money and balance 75% yet to be deposited. The Tribunal in its order directed that the auction purchaser may deposit the remaining 75% of the bid amount but no sale certificate shall be issued till finalization of S.A.

5. Aggrieved by the said order, the auction purchaser had preferred Appeal No. 1541 of 2024 before the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred as the 'Appellate Tribunal') challenging the order dated 12.9.2024. The Appellate Tribunal by the order dated 7.11.2024 disposed of the said appeal with the observation that since the matter is pending before the Tribunal, the remedy open to the appellant/auction purchaser was to file an application before the Tribunal for redressal of his grievances and further directed the Tribunal to dispose of the matter within three weeks. The said appeal was disposed of on 7.11.2024. It appears that auction purchaser on 17.12.2024 filed another application before the Appellate Tribunal with a prayer that as 75% of the amount had already been deposited with the bank, sale certificate may be issued. The Appellate Tribunal on 27.11.2024 considering the application and submissions of the auction purchaser as well as the bank, proceeded to dispose of the application directing the Tribunal to consider and decide the S.A. No. 494 of 2021 expeditiously. No order was passed as to the consideration or issuance of the sale certificate. After the Application No. 1753 of 2024 filed in the earlier disposed of Appeal No. 1541 of 2024 was decided on 27.11.2024 the auction purchaser/respondent no. 2 filed another application before the Appellate Tribunal which was numbered as Application No. 1958 of 2024 and the Appellate Tribunal now taking u-turn had considered the said application on 25.4.2025 and held that since the entire sale amount has been deposited by the appellant/auction purchaser, directed the bank to issue sale certificate in favour of appellant/auction purchaser.

6. Sri Sinha, learned Senior Counsel, has submitted that twice the application filed by the auction purchaser was disposed of by the Appellate Tribunal with a direction to the Tribunal to dispose of the S.A. No. 494 of 2021 expeditiously. The prayer made by auction purchaser was turned down twice by the Appellate Tribunal and there stood no occasion for reconsidering the third application and passing the order dated 25.4.2025.

7. Sri Anurag Khanna, learned Senior Counsel, submitted that already sale certificate has been executed and the matter has become infructuous. He further submits that no purpose would be served in setting aside the order of Appellate Tribunal and remitting the matter to the Tribunal.

8. Sri K.M. Asthana, learned counsel appearing for Canara Bank, submits that the outstanding amount has been realized by the bank after auction sale has been conducted and sale certificate has already been issued in favour of the respondent no. 2.

9. After hearing learned counsel for the parties, I find that the Appellate Tribunal had committed gross illegality in reviewing its earlier orders refusing to grant any benefit to auction purchaser and had directed the Tribunal to decide the S.A. No. 494 of 2021. Once the Appellate Tribunal has recorded its finding that the appeal was not maintainable as the matter was still under the active consideration of the Tribunal, it should not have entertained the second application in already disposed of appeal and passing the order dated 25.4.2025 directing the bank to issue sale certificate. Once the matter was subjudiced before the Tribunal, the Appellate Tribunal should have only directed for expeditious disposal of the aforesaid S.A. The order dated 25.4.2025 is in teeth of the earlier two orders passed by the Appellate Tribunal.

10. In view of the said fact, the order impugned dated 25.4.2025 passed by the Debts Recovery Appellate Tribunal, Allahabad in Application Diary No. 1958 of 2024 in Appeal Diary No. 1541 of 2024 is hereby set aside.

11. Writ petition stands allowed. The Tribunal is directed to proceed with S.A. No. 494 of 2021 and decide the same, in accordance with law, within three months from the date of production of a certified copy of this order, keeping in mind that the order passed for issuing the sale certificate has already been set aside by this Court. Order Date :- 22.5.2025 Shekhar SHASHI SHEKHAR PANDEY High Court of Judicature at Allahabad