Canara Bank Vs Karishma Enterprises & Ors. (Delhi High Court)
Delhi High Court held that strict adherence to the procedural requirements under the SARFAESI Act and Rules 8 and 9 of the SARFAESI Rules cannot be insisted, as the sale of the secured asset was undertaken with the unequivocal consent of the borrowers. Accordingly, appeal is allowed.
Facts- The present Petition, filed by the Petitioner, assails the correctness of the order dated 02.03.2016 passed by Debts Recovery Appellate Tribunal. The issue that arises for consideration in the present petition is whether DRAT erred in failing to appreciate the prior conduct and explicit consent of Respondent Nos.1 and 2 to the sale of the mortgaged property as duly recorded in Debt Recovery Tribunal’s order dated 16.04.2014 and in disregarding the fact that despite having consented to such directions, the Respondents nevertheless challenged the order in Appeal No. 303/2014, which was ultimately disposed of as not pressed and infructuous by DRAT vide order dated 16.12.2014.
Conclusion- Held that strict adherence to the procedural requirements under the SARFAESI Act and Rules 8 and 9 of the SARFAESI Rules cannot be insisted upon, as the sale of the secured asset was undertaken with the unequivocal consent of the borrowers, as duly recorded in the order dated 16.04.2014. Once such consent was furnished before the learned DRT/DRAT, the borrowers effectively waived their right to later challenge minor procedural deviations, and no material prejudice has been demonstrated. The sale, therefore, stands fortified by the borrowers’ own voluntary submission, and no infirmity can be attributed to the secured creditor on the ground of technical non-compliance. Thus, the present Appeal is allowed. The Impugned Order is hereby set aside.
