Writ petitions challenging SARFAESI proceedings dismissed, petitioners directed to approach DRT as appropriate forum

Delhi HC dismissed writ petitions challenging SARFAESI proceedings, ruling that petitioners must approach DRT as the appropriate forum. Despite petitioners' arguments regarding approved resolution plan under IBC, exemption of agricultural property from SARFAESI Act, and SC precedents on borrower redemption rights, the court held that DRT is competent to address these issues. The court directed DRT to consider petitioners' objections while deciding the securitisation application, emphasizing that relief sought cannot be entertained by HC when matter is pending before DRT.

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Issues:
1. Whether the writ petitions are maintainable or the appropriate remedy is to approach the Debt Recovery Tribunal (DRT).
2. Whether the Debt Recovery Tribunal (DRT) should address issues related to SARFAESI Act compliance, sale of mortgaged agricultural property, and discharge of guarantor obligations.
3. Whether the restructuring of debt under the Insolvency and Bankruptcy Code (IBC) affects proceedings under the SARFAESI Act.
4. Whether the High Court can entertain the petitions when the matter is pending before the DRT.

Detailed Analysis:

1. The High Court considered the maintainability of the writ petitions and whether the appropriate remedy for the petitioner was to approach the Debt Recovery Tribunal (DRT). The respondent argued that the writ petitions were not maintainable and that the petitioner should raise objections before the DRT. The Court noted that the petitioner had already raised objections before the DRT, which was yet to decide on the matter. Ultimately, the Court held that the petitions could not be entertained since the matter was pending before the DRT, emphasizing that the appropriate forum for the petitioner was the DRT.

2. The Court examined issues related to compliance with the SARFAESI Act, specifically whether the respondent bank had failed to comply with certain provisions of the Act during the proceedings. The petitioner alleged blemishes in the SARFAESI proceedings, including non-compliance with Section 13(8) of the SARFAESI Act and issuance of a sale proclamation for agricultural property, contrary to the Act. The Court highlighted the importance of addressing these issues before the DRT, which was the competent forum for such matters.

3. The judgment delved into the impact of debt restructuring under the Insolvency and Bankruptcy Code (IBC) on proceedings under the SARFAESI Act. The resolution plan approved by the National Company Law Tribunal (NCLT) under the IBC had restructured the debt of the corporate debtor. The Court considered whether the respondent bank could proceed under the SARFAESI Act in light of the debt restructuring and the conditions attached to the creditors under the resolution plan. It was emphasized that these issues should be addressed before the DRT, given the overriding effect of the IBC proceedings.

4. Lastly, the Court addressed the question of whether the High Court could entertain the petitions when the matter was already pending before the DRT. The petitioner sought relief from the High Court, citing relevant legal precedents. However, the Court reiterated that the issues raised should be considered by the DRT, as it was the appropriate forum to decide on matters related to the SARFAESI Act, debt restructuring under the IBC, and other legal contentions presented in the petitions. Consequently, the High Court disposed of the writ petitions with a direction for the DRT to consider the objections raised by the petitioners in accordance with the law.

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