SARFAESI enforcement and DRT procedure: constitutional challenge barred, fixed fee applied, and possession remains symbolic at notice stage.

The article explains that the Act's constitutional validity cannot be re-opened on a sub silentio argument where the Supreme Court has already considered it, and that the DRT may entertain section 17 applications even for debts below the RDB Act's monetary threshold because the reference is to the Tribunal with territorial jurisdiction. It also states that, after amendment, no ad valorem fee could be demanded under the 1993 Rules in the absence of a prescribed rule, so only the fixed fee applied until rules were framed. The text further notes that banks must elect between parallel recovery remedies and that section 13(4) permits only symbolic possession, not actual physical dispossession, unless the statutory procedure for physical possession is followed.

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Issues: (i) Whether the constitutional validity of the Act could be re-opened by invoking the doctrine of sub silentio; (ii) whether the DRT constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 had jurisdiction to entertain an application under section 17 of the Act even where the debt was below Rs. 10 lakhs; (iii) whether ad valorem court fee under rule 7 of the DRT (Procedure) Rules, 1993 was payable on an application under section 17(1) of the Act after the amendment of the Act; (iv) whether a bank or financial institution could simultaneously pursue remedies under the RDB Act or civil court and also proceed under the Act without withdrawing the earlier proceedings; (v) whether taking possession under section 13(4) of the Act authorised actual physical dispossession of the borrower.

Issue (i): Whether the constitutional validity of the Act could be re-opened by invoking the doctrine of sub silentio.

Analysis: The judgment held that the Supreme Court had already considered the constitutional validity of the Act as a whole, and the fact that a particular argument had not been specifically urged earlier did not permit the validity of the statute to be challenged again. The observations left open only such practical working problems as might arise in a particular factual setting, not the validity of the enactment itself.

Conclusion: The constitutional validity of the Act could not be re-opened and the challenge on the basis of sub silentio failed.

Issue (ii): Whether the DRT constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 had jurisdiction to entertain an application under section 17 of the Act even where the debt was below Rs. 10 lakhs.

Analysis: The judgment treated the reference to the DRT in the Act as incorporating the relevant provisions of the RDB Act by reference. It held that the DRT having jurisdiction under section 17 of the Act referred to the Tribunal with territorial jurisdiction, and the pecuniary limit in the RDB Act did not control the remedy created under the Act. The contrary view was rejected.

Conclusion: The DRT had jurisdiction to entertain an application under section 17 of the Act even in respect of debts below Rs. 10 lakhs.

Issue (iii): Whether ad valorem court fee under rule 7 of the DRT (Procedure) Rules, 1993 was payable on an application under section 17(1) of the Act after the amendment of the Act.

Analysis: The judgment held that after the amendment, section 17(1) itself required a fee to be prescribed by rules made under the Act, and section 38(2)(ba) specifically contemplated rules on fee for such applications. Since no such rule had yet been framed, rule 7 of the 1993 Rules could not be invoked to demand ad valorem fee. The earlier removal-of-difficulties order and the prior view supporting ad valorem fee were held inapplicable after the amendment.

Conclusion: Ad valorem court fee under rule 7 of the DRT (Procedure) Rules, 1993 was not payable, and the application under section 17(1) was maintainable on payment of a fixed fee of Rs. 250 until rules were framed.

Issue (iv): Whether a bank or financial institution could simultaneously pursue remedies under the RDB Act or civil court and also proceed under the Act without withdrawing the earlier proceedings.

Analysis: The judgment applied the doctrine of election and held that the two statutory remedies were parallel remedies toward the same recovery objective. Once the bank chose to proceed under the Act, it had to withdraw the pending proceedings under the RDB Act or in civil court, as the statutory scheme contemplated one remedy at a time for the same recovery action.

Conclusion: The bank or financial institution could not simultaneously pursue both remedies and had to elect its remedy.

Issue (v): Whether taking possession under section 13(4) of the Act authorised actual physical dispossession of the borrower.

Analysis: The judgment distinguished between symbolic possession under rule 8 and actual physical delivery of possession under the later stages of enforcement. It held that the notice and possession process under section 13(4) and rule 8 contemplated symbolic possession and could not be used to physically dispossess an occupant before adjudication by the DRT. Physical possession could be taken only in accordance with the statutory procedure, including section 14 or delivery after sale under rule 9.

Conclusion: Section 13(4) did not authorise actual physical dispossession at the stage of notice and symbolic possession.

Final Conclusion: The writ petition succeeded, the challenged demand of fee was quashed, the DRT was directed to entertain the application on payment of a fixed fee, and the core interpretations of the Act were settled in favour of the petitioners.

Ratio Decidendi: Where a special statute creates a remedy before the DRT without prescribing a fee, the tribunal cannot import an ad valorem fee from the procedure under the RDB Act; the enforcement mechanism under section 13(4) is confined to symbolic possession unless the statute's prescribed procedure for physical possession is followed.

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