SARFAESI enforcement and parallel insolvency proceedings: Delhi HC declined interference with prima facie tribunal directions.

A Delhi HC note on SARFAESI enforcement explains that a limitation challenge failed prima facie because the cause of action arose on recall of the loan facilities and recovery steps had already been initiated within time, with SARFAESI treated as an independent remedy. It further notes that pending rehabilitation proceedings under the Sick Industrial Companies Act did not, by themselves, bar secured creditors from proceeding under the 2002 Act. The Court also declined to disturb interim conditions imposed by the Tribunal on the issue of another secured creditor's consent, leaving the matter for final determination by the statutory forum.

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Issues: (i) whether the secured creditor's action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was prima facie barred by limitation; (ii) whether pendency of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 precluded action under the 2002 Act; and (iii) whether the absence of prima facie proof of consent of the other secured creditor invalidated the interim conditions imposed by the Tribunal.

Issue (i): whether the secured creditor's action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was prima facie barred by limitation.

Analysis: The relevant cause of action arose when the loan facilities were recalled, and recovery proceedings had already been instituted before the Debts Recovery Tribunal within the limitation period. The later resort to measures under the 2002 Act was viewed as an independent statutory remedy and not as a stale claim arising merely from the date of mortgage.

Conclusion: The plea of limitation was rejected prima facie and was held to be in favour of the secured creditor.

Issue (ii): whether pendency of proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985 precluded action under the 2002 Act.

Analysis: Pendency of rehabilitation proceedings under the 1985 Act did not, by itself, bar recourse by secured creditors under the 2002 Act where the secured debt and creditor entitlement justified enforcement action. The Court treated the statutory remedies as capable of operating notwithstanding the pending industrial sickness proceedings.

Conclusion: The objection based on the pending proceedings under the 1985 Act was rejected and was against the petitioner.

Issue (iii): whether the absence of prima facie proof of consent of the other secured creditor invalidated the interim conditions imposed by the Tribunal.

Analysis: The Tribunal had exercised interim jurisdiction under the statutory appeal provisions and had proceeded on prima facie materials. The Court noted the stand of the other secured creditor supporting consent and held that, in supervisory jurisdiction, it was not appropriate to interfere with the conditional interim order when the dispute remained to be decided by the Tribunal.

Conclusion: The challenge to the interim conditions failed and was against the petitioner.

Final Conclusion: The writ petition was not entertained on merits in supervisory jurisdiction, and the interim directions of the appellate tribunal were left undisturbed with time extended only for compliance.

Ratio Decidendi: In writ jurisdiction, the Court will not interfere with a reasoned interim order of the Debts Recovery Tribunal or Appellate Tribunal passed on a prima facie assessment under the 2002 Act, especially where limitation, consent, and parallel remedy objections remain for final determination by the statutory forum.

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