Case Note & Summary
The petitioner, Trishul Developers, a partnership firm, filed a writ petition under Article 227 of the Constitution of India challenging an order dated 16.04.2019 passed by the Debt Recovery Appellate Tribunal (DRAT), Chennai, in RA(SA) 108/2018. The petitioner had availed a loan from L & T Housing Finance Limited (respondent No.1) and defaulted in repayment. The respondent initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The petitioner filed a securitisation application under Section 17 of the SARFAESI Act before the Debts Recovery Tribunal (DRT), which passed an interim order directing the petitioner to deposit a certain amount. Aggrieved by this interim order, the respondent filed an appeal under Section 18 of the SARFAESI Act before the DRAT. The DRAT allowed the appeal and set aside the interim order. The petitioner then approached the High Court under Article 227. The main legal issue was whether an appeal under Section 18 of the SARFAESI Act is maintainable against an interim order passed by the DRT under Section 17. The petitioner argued that the word 'order' in Section 18 should be construed to mean only final orders, not interim orders. The respondent contended that the language of Section 18 is clear and includes all orders, including interim orders. The High Court, after hearing both sides, held that the expression 'order' in Section 18 is wide enough to include interim orders. The Court reasoned that the appellate remedy under Section 18 is a statutory right and cannot be restricted by reading down the word 'order' to mean only final orders. The Court further held that the DRAT had correctly entertained the appeal and that the impugned order did not suffer from any jurisdictional error or perversity warranting interference under Article 227. Consequently, the writ petition was dismissed.
Headnote
A) SARFAESI Act - Appeal against interim order - Section 18 of SARFAESI Act, 2002 - Maintainability - The issue was whether an appeal lies under Section 18 against an interim order passed by DRT under Section 17. The Court held that the expression 'order' in Section 18 includes interim orders, and therefore an appeal is maintainable against an interim order. The Court reasoned that the appellate remedy under Section 18 is a statutory right and cannot be curtailed by reading down the word 'order' to mean only final orders. (Paras 1-10) B) Constitutional Law - Writ jurisdiction under Article 227 - Scope - The Court held that the High Court, while exercising jurisdiction under Article 227, does not act as an appellate authority and cannot interfere with findings of fact unless they are perverse or without jurisdiction. The impugned order of the DRAT was found to be within jurisdiction and not suffering from any error of law. (Paras 11-15) C) SARFAESI Act - Interim order - Section 17 of SARFAESI Act, 2002 - The DRT passed an interim order directing the petitioner to deposit a certain amount. The Court held that such interim orders are appealable under Section 18, and the DRAT had correctly entertained the appeal. (Paras 5-8)
Issue of Consideration
Whether an appeal under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) is maintainable against an interim order passed by the Debts Recovery Tribunal (DRT) under Section 17 of the Act.
Final Decision
The High Court dismissed the writ petition, holding that the appeal under Section 18 of the SARFAESI Act is maintainable against interim orders passed by the DRT under Section 17. The impugned order of the DRAT was upheld.
Law Points
- Maintainability of appeal under Section 18 of SARFAESI Act against interim orders
- Scope of Article 227 of Constitution of India
- Distinction between interim and final orders under SARFAESI Act
