SARFAESI adjudication must be on merits; tribunals cannot indefinitely delay borrower challenges through repeated interim orders.

Under the SARFAESI framework, a tribunal seized of a borrower's challenge must decide the matter on merits expeditiously and cannot keep proceedings alive through successive interim orders. If an interim arrangement is not complied with, the proper course is to vacate it and proceed to adjudication, while the appellate forum may direct early disposal where delay occurs. An appellate order that permits auction and sale without deciding the pending challenge is mechanically made and defeats the statutory purpose of time-bound review. The article notes that such disposal was held unsustainable, with the writ petition succeeding, the order quashed, and the matter remitted for fresh decision within a fixed time.

---

---

Issues: (i) whether the Debts Recovery Tribunal and the Appellate Tribunal could keep the SARFAESI proceedings pending by successive interim orders instead of deciding the borrower's challenge on merits; (ii) whether the appellate order permitting auction and sale without adjudicating the appeal was sustainable.

Issue (i): whether the Debts Recovery Tribunal and the Appellate Tribunal could keep the SARFAESI proceedings pending by successive interim orders instead of deciding the borrower's challenge on merits.

Analysis: The statutory scheme under the SARFAESI Act requires the Tribunal seized of a borrower's challenge to examine the measures taken by the secured creditor and decide the matter expeditiously. The provision for disposal within a prescribed period reflects that the Tribunal is not meant to indefinitely preserve the dispute through repeated interim directions. If an interim arrangement is not complied with, the proper course is to vacate it and proceed to decide the matter on merits, while the Appellate Tribunal may direct early disposal where delay occurs.

Conclusion: The Tribunal and the Appellate Tribunal were not justified in keeping the matter pending through repeated interim orders; they were required to adjudicate the dispute on merits expeditiously.

Issue (ii): whether the appellate order permitting auction and sale without adjudicating the appeal was sustainable.

Analysis: The appellate order did not decide the controversy raised in the appeal and instead permitted recovery steps to continue, while leaving it open to the borrower to clear dues before auction. Such disposal defeated the statutory purpose of a time-bound adjudication under the SARFAESI framework and amounted to a mechanical disposal without deciding the pending challenge.

Conclusion: The appellate order was unsustainable and was set aside.

Final Conclusion: The writ petition succeeded, the impugned appellate order was quashed, the matter was remitted to the Debts Recovery Tribunal for fresh decision within a fixed time, and recovery steps were kept in abeyance for the limited period directed by the Court.

Ratio Decidendi: Under the SARFAESI Act, the Tribunals must decide borrowers' challenges on merits within the statutory framework and cannot indefinitely postpone adjudication by repeated interim orders or by disposing of the appeal mechanically while allowing recovery to proceed.

---