High Court Rendered DRAT Proceedings Infructuous, Failed to Appreciate That Only Interim Relief Was Challenged - SC

In this case, Respondent No.1 was the auction purchaser, who purchased the properties which were auctioned in pursuance of the recovery certificate which was in favor of the Corporation Bank (now merged with the Union Bank of India) for a sum of Rs.85 lakhs. The reserved price of the properties was fixed at Rs.54 lakhs. Respondent No.1 made the highest bid of Rs.85 lakhs. After making the said bid and after making the earnest money deposit to the tune of Rs.21,25,000/­ (being 25% of the bid price), Respondent no.1 moved an application before the Recovery Officer seeking some clarity in the matter. The same was replied to by the Bank. However, thereafter the Recovery Officer dismissed the application of the petitioner and forfeited 10% of the amount deposited by him. Respondent No.1 preferred an appeal before DRT­ - II, Delhi which was also dismissed.

The DRAT, however, did not grant any interim relief to him and consequently, the Bank sought to put the property to auction. Though the appeal before the DRAT was pending and what was challenged before the High Court was with regard to not granting any interim relief against the auction, by the impugned judgment and order the Delhi High Court disposed of the writ petition by granting one further opportunity to the original writ petitioner to deposit the balance amount along with the damages quantified at Rs.5 lakhs. This impugned judgment of the Delhi High Court was challenged before the Apex Court.

Counsel, Ritesh Kumar appeared for the Petitioners in this case before the Supreme Court.

The primary issue in this case was –

• Whether the Delhi High Court had gone beyond the scope of the proceedings before it and had exceeded its jurisdiction.

The Supreme Court observed that the High Court had not properly appreciated the fact that what was challenged before it was regarding non-­grant of any interim relief, pending the appeal before the DRAT. The Delhi High Court had not considered that the main appeal was yet to be heard by the DRAT on merits. According to the Court, it appeared that the High Court had decided and disposed of the writ petition as if the High Court was considering the final decision of the DRAT.

The Apex Court opined that the order passed by the DRT confirming the order passed by the Recovery Officer forfeiting 10% amount deposited by the auction purchaser was yet to be decided by the DRAT and thus, the High Court had gone beyond the scope and ambit of the proceedings before it.

Moreover, the Court opined that the High Court had made the proceedings before the DRAT infructuous, as after the impugned judgment and order nothing further was required to be decided by the DRAT. Therefore, the High Court had exceeded its jurisdiction by passing the impugned judgment and order.

Thus, the Supreme Court quashed and set aside the impugned judgment and order passed by the Delhi High Court. Moreover, the DRAT was directed to finally decide and dispose of the appeal in accordance with law and on its own merits, at the earliest, preferably within a period of four months from the date of the receipt of the order.

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