High Court should not have disposed of petition regarding non-grant of interim relief by DRAT, if main appeal was yet to be considered by DRAT on merits: SC

Read Judgment: Srs Advertising & Marketing Pvt. Ltd. & Ors. V. Mr. Kamal Garg & Anr. 

Pankaj Bajpai

New Delhi, February 17, 2022: The Supreme Court has observed that when an 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 and was pending consideration before the DRAT, then the High Court could not finally dispose of the petition challenging DRAT’s decision.     

A Division Bench of Justice M.R Shah and Justice B.V Nagarathna said that such action of the High Court in considering the final decision of the DRAT was beyond the scope & ambit of the proceedings before the High Court. 

Going by the background of the case, Kamal Garg (First Respondent) who was the Auction purchaser, has purchased the properties, which were auctioned in pursuance of a Recovery Certificate which was in favour of the Corporation Bank for a sum of Rs.85 lakhs. After making the bid and after making the earnest money deposit to the tune of Rs.21,25,000/-, the First Respondent moved an application before the Recovery Officer seeking some clarity, which was dismissed and the Recovery Officer forfeited 10% of the amount deposited by him.

Since the DRT and DRAT did not grant any interim relief, the Corporation Bank (Second Respondent) sought to put the property to auction. Later, the High Court granted one opportunity to the First Respondent to deposit the balance amount along with the damages quantified at Rs.5 lakhs. Hence, the present appeal. 

After considering the submissions, the Top Court found 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. 

Main appeal was yet to be considered by the DRAT on merits, added the Court. 

Speaking for the Bench, Justice Shah therefore quashed the order passed by the High Court and directed the DRAT to finally decide and dispose of the appeal in accordance with law and on its own merits.

By passing the judgment and order, the High Court has as such made the proceedings before the DRAT infructuous, and has exceeded in its jurisdiction by passing the impugned judgment and order, added the Bench.