Delhi HC directs DRAT Chairperson to decide Waiver Application for Securitization Deposit

Chaudhary Ventures Pvt. Ltd & Ors. Vs Union of India & Anr. (Delhi High Court)

Introduction: In a significant ruling, the Delhi High Court has directed the Chairperson of the Debt Recovery Appellate Tribunal (DRAT) to make a swift decision regarding the application for waiver of the 25% deposit required in the securitization application filed by Chaudhary Ventures Pvt. Ltd & Ors. against the Union of India & Anr. This case highlights the complexities involved in the securitization process and the impact of judicial directions on the parties involved.

Detailed Analysis: The writ petition filed by Chaudhary Ventures Pvt. Ltd & Ors. challenged the order dated October 6, 2023, passed by the Debt Recovery Tribunal II, Delhi (DRT II, Delhi), which dismissed their securitization application (SA No. 351/2022). The petitioners appealed against this dismissal to the DRAT in Regular Appeal No. 387/2023 and also sought a waiver for the remainder of the 25% pre-deposit amount required for the appeal, having already deposited a part of the demanded amount.

The appeal to the DRAT was necessitated due to several grievances against the impugned order, including non-service of possession notice under Section 13(4) of the SARFAESI Act and allegations of an excessive and unilaterally changed rate of interest by the respondent bank (Respondent No. 2).

Due to the Chairperson of DRAT, Delhi being on leave and the subsequent absence of a provision for virtual hearings in DRAT, Chennai (the Link Officer’s jurisdiction), an urgent hearing could not be arranged. Recognizing the urgency of the matter and the absence of an alternative efficacious remedy, the Delhi High Court stepped in to ensure justice was not delayed.

Conclusion: The Delhi High Court’s intervention underlines the judiciary’s role in ensuring that procedural delays do not impede the course of justice. By directing the Chairperson of DRAT to expediently decide on the waiver application and interim reliefs, the Court has safeguarded the interests of the petitioners while maintaining the sanctity of the legal process. This decision serves as a precedent for similar cases, highlighting the importance of timely judicial review in matters affecting the rights and obligations of the parties involved in securitization disputes.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Allowed, subject to all just exceptions.

2. Accordingly, the present application stands disposed of.

W.P.(C) 2230/2024 and CM APPL. 9253/2024

3. Present writ petition has been filed challenging the Order dated 06^th October, 2023 passed by DRT II. Delhi (“impugned order”), whereby the securitization application filed by the petitioners being SA No. 351/2022 was dismissed.

4. Learned senior counsel for the Petitioners states that the impugned order has been challenged before the learned DRAT in Regular Appeal No. 387/2023. She states that the Petitioners have deposited 25 per cent of the demand amount and have filed an application for waiver of the remaining pre-deposit amount. She however states that the Chairperson, DRAT, Delhi has proceeded on leave for a month. She states that the Petitioners are left with no alternative efficacious remedy except approaching this Court.

5. Learned senior counsel for the Petitioners states that a copy of possession notice under Section 13(4) of the SARFAESI Act was not served upon the Petitioners. She states that the Respondent no. 2 bank is charging excessive rate of interest. She further states that the rate of interest is being unilaterally changed by Respondent no. 2 bank.

6. Learned counsel for Union of India states that the Chairman, DRAT is on leave from 05^th February, 2024 to 08^th March, 2024. He states that the Link Officer of the Chairperson, DRAT Delhi is DRAT Mumbai. He states that if the matter is to be urgently heard then the file is digitally transmitted to the Chairperson, Mumbai, who can either hear the counsel in person or He admits that between 06^th February, 2024 and 09^th February, 2024, the Chairperson, Mumbai was on leave and during that period the Link Officer was Chairperson DRAT, Chennai. He fairly states that as of now there is no provision for virtual hearing in DRAT, Chennai.

7. Learned counsel for Respondent No. 2 fairly states that as the Chairperson of DRAT, Delhi is not available, the Respondent No. 2 shall not take any coercive steps against the Petitioners till 15^th March, 2024. She, however, specifically denies that the rate of interest being charged is excessive or is being unilaterally revised. She also states that the Respondent No. 2 has filed an appeal against the order passed by DRT, Lucknow before DRAT, Allahabad which is stated to be listed today.

8. In view of the fact that the Chairperson, DRAT, Delhi shall be re­joining his duties on 11^th March, 2024 and the Respondent No. 2 does not intend to take any coercive steps prior to 15^th March, 2024, this Court disposes of the present writ petition with a direction to the Chairperson, DRAT to decide the Petitioners’ application for waiver of deposit of 25% as well as for other interim reliefs as expeditiously as possible but not later than 15^th March, 2024.

9. Accordingly, the writ petition and the pending applications are disposed of.