Facts of the Case

The petitioners approached the High Court of Kerala by filing OP (DRT) No. 403 of 2022 in connection with proceedings before the Debts Recovery Tribunal-I, Ernakulam.

The case record shows that the petitioners had filed a Securitisation Application bearing I.D. No. 13597 of 2022 before the Debts Recovery Tribunal-I, Ernakulam. The appendix to the High Court order further records that a stay petition bearing I.A. (I.D. No. 13600 of 2022) had also been filed in the said Securitisation Application.

The documents produced by the petitioners included, among others:

  1. A deed of partnership dated 28 November 2018;
  2. GST registration certificate of the petitioners’ hypermarket dated 1 February 2019;
  3. Licence issued to Ganesh Hypermarket dated 9 April 2021;
  4. Lease Deed No. 5194/I/2021 executed between the petitioners and the second respondent dated 26 November 2021;
  5. Order passed by the Chief Judicial Magistrate, Palakkad in M.C. No. 12 of 2022 dated 30 July 2022;
  6. Notice of the Advocate Commissioner dated 20 August 2022;
  7. Securitisation Application (I.D. No. 13597 of 2022) filed before DRT-I dated 10 October 2022; and
  8. Stay Petition, I.A. (I.D. No. 13600 of 2022), filed in the said Securitisation Application.

When the Original Petition came up for consideration before the High Court on 19 October 2022, learned counsel appearing for the petitioners sought permission to withdraw the Original Petition.

Issues Involved

The principal procedural issues arising from the order were:

  1. Whether the petitioners should be permitted to withdraw OP (DRT) No. 403 of 2022;
  2. Whether the petitioners’ contentions should remain open despite withdrawal of the Original Petition; and
  3. Whether the pending Securitisation Application before DRT-I, Ernakulam should be listed for consideration without undue delay.

The underlying dispute related to securitisation and debt recovery proceedings, as reflected by the pending Securitisation Application before the DRT and the supporting documents forming part of the High Court record.

Petitioner’s Arguments

At the stage of final consideration recorded in the judgment, learned counsel for the petitioners sought permission to withdraw the Original Petition.

The High Court’s short judgment does not separately reproduce detailed submissions of the petitioners on the merits of the underlying securitisation dispute. Therefore, no additional substantive argument should be attributed to the petitioners beyond what is expressly recorded in the judicial order.

The record, however, establishes that the petitioners had already instituted Securitisation Application (I.D. No. 13597 of 2022) before DRT-I, Ernakulam and had also filed a stay petition in those proceedings.

Respondent’s Arguments

The judgment does not record any separate or detailed arguments advanced by South Indian Bank Limited or the second respondent on the merits of the dispute.

Accordingly, no specific respondent submission can properly be attributed from this order beyond noting that the respondents were represented in the proceedings.

Court Order / Findings

The High Court of Kerala passed the following order:

  1. The petitioners were permitted to withdraw the Original Petition.
  2. OP (DRT) No. 403 of 2022 was dismissed as withdrawn.
  3. All contentions of the petitioners were expressly left open.
  4. The Registrar, Debts Recovery Tribunal-I, Ernakulam was directed to ensure that the Securitisation Application filed by the petitioners was listed for consideration by the Tribunal without undue delay.

The operative direction is significant because, although the High Court did not adjudicate the underlying securitisation dispute on merits, it ensured that the petitioners’ pending Securitisation Application would be brought before the competent Tribunal for consideration without undue delay.

Important Clarification

This judgment is a short procedural disposal order and not a final adjudication on the merits of the underlying securitisation dispute.

The High Court did not:

  1. decide the legality or validity of the underlying recovery or securitisation measures;
  2. determine the merits of the petitioners’ Securitisation Application;
  3. record a final finding against South Indian Bank Limited on the substantive dispute;
  4. grant final substantive relief in favour of the petitioners; or
  5. expressly decide the legal effect of the Chief Judicial Magistrate’s order, Advocate Commissioner’s notice, lease deed, GST registration certificate, partnership deed, or other exhibits.

The Court specifically left all contentions of the petitioners open. Therefore, the substantive issues were preserved for consideration before the competent forum in accordance with law.

Further, the direction to list the Securitisation Application “without undue delay” should not be construed as a direction to allow the application or grant a stay. It is a direction for timely listing and consideration by the Debts Recovery Tribunal-I, Ernakulam.

Sections / Statutory Provisions Involved

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act)

The matter concerns a Securitisation Application before the Debts Recovery Tribunal and is situated within the statutory framework governing challenges to measures taken under the SARFAESI Act.

Section 17 of the SARFAESI Act, 2002 is the principal statutory provision governing an application to the Debts Recovery Tribunal by a person aggrieved by measures referred to in Section 13(4).

However, an important accuracy clarification is necessary: the short High Court judgment itself does not expressly quote or identify a particular section of the SARFAESI Act in its operative reasoning. Therefore, Section 17 should be understood as the relevant statutory framework ordinarily associated with the Securitisation Application, rather than as a section expressly adjudicated upon in the text of this judgment.

Related SARFAESI Framework

The case record refers to:

  • an order of the Chief Judicial Magistrate, Palakkad in M.C. No. 12 of 2022;
  • a notice issued by an Advocate Commissioner; and
  • a Securitisation Application before DRT-I, Ernakulam.

These documents indicate the broader securitisation enforcement context. Nevertheless, the High Court’s four-page order does not expressly specify the precise SARFAESI provision under which the Chief Judicial Magistrate’s order was passed. Accordingly, no such section should be stated as a concluded fact solely on the basis of this judgment.

Link to Download the Order-https://mytaxexpert.co.in/uploads/1783414860_1414compressed.pdf

 

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