Reasoned orders for receiver appointment and sale of secured property are mandatory; supervisory jurisdiction remains open for natural justice violations.

A Tribunal exercising power under section 19(18) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 may appoint a receiver and authorise seizure or sale of secured property only where it records reasons showing application of mind to the facts and circumstances; a non-speaking order taking such coercive interim action is unsustainable and liable to be set aside. The availability of an appellate remedy under section 20 does not ordinarily bar Article 227 where the impugned order is passed in violation of natural justice. The Tribunal's order was quashed and the matter remitted for fresh consideration after hearing both sides and recording reasons.

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Issues: (i) Whether the Tribunal could appoint a receiver and direct sale of secured property without recording reasons; (ii) whether the availability of an appeal under the Act barred recourse to Article 227.

Issue (i): Whether the Tribunal could appoint a receiver and direct sale of secured property without recording reasons.

Analysis: The Tribunal has power under section 19(18) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 to appoint a receiver or commissioner and to authorise seizure and sale of property when it is just and convenient to do so. That power is wide, but the appointment of a receiver and sale of property is an extreme step and must be supported by reasons showing application of mind to the facts and circumstances. Even where the debtor does not contest, the Tribunal must still pass a reasoned order, particularly when taking coercive interim action affecting property rights.

Conclusion: The impugned order, having been passed without reasons, was unsustainable and was set aside in favour of the petitioner.

Issue (ii): Whether the availability of an appeal under the Act barred recourse to Article 227.

Analysis: Although section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 provides an appellate remedy, that bar does not ordinarily apply where the impugned order is made in violation of natural justice. Since the Tribunal's order was a non-speaking order passed while taking an extreme step, the constitutional jurisdiction was held to be maintainable.

Conclusion: The revision under Article 227 was held maintainable notwithstanding the statutory appeal.

Final Conclusion: The Tribunal's order was quashed for want of reasons, and the matter was remitted for fresh consideration after hearing both sides and recording reasons.

Ratio Decidendi: A Tribunal exercising power to appoint a receiver and order sale of property must pass a reasoned order, and the existence of a statutory appeal does not bar supervisory jurisdiction where the impugned order violates natural justice.

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