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Issues: Whether the assignment of the debt by the bank to the asset reconstruction company violated the interim order passed in the securitisation proceedings, and whether the appellate tribunal's view that the assignment was governed by Section 5 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and not by Section 13(4), suffered from any perversity warranting interference under Article 226 of the Constitution of India.
Analysis: The interim order in the securitisation application was confined to the measures taken under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in the context of enforcement of security interest. Assignment of financial assets is a distinct transaction governed by Section 5 of the Act, which permits transfer of rights or interest in financial assets by agreement to a securitisation or reconstruction company. The borrower has no legal role in questioning such assignment, and the assignment does not become impermissible merely because the debt arose from default or because the assignee may acquire it at a discounted value. On the facts, the appellate tribunal correctly held that the interim order was not breached and that there was no jurisdictional or legal perversity in its conclusion. The writ court's interference under Article 226 was therefore unwarranted.
Conclusion: The challenge to the appellate tribunal's order failed; the assignment was held not to violate the interim order, and the writ petition was rejected.
Final Conclusion: The dispute was held to be an unmeritorious attempt to obstruct recovery proceedings, and the impugned order was sustained with costs against the petitioner.
Ratio Decidendi: An interim order passed in securitisation proceedings under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, when confined to measures under Section 13(4), does not restrain a bank's separate statutory power to assign financial assets under Section 5 of the same Act; such assignment cannot be treated as a breach of that interim order in the absence of perversity or legal infirmity.
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