DRT Cannot Deny Joint Applications Under SARFAESI Act: High Court Affirms Tenants' Right to Collective Redressal
- REEDLAW
- 1 day ago
- 3 min read
The Kerala High Court held that the Debts Recovery Tribunal cannot deny joint applications filed under the SARFAESI Act, affirming that tenants have a right to collective redressal when challenging a common enforcement action by the secured creditor.
The Kerala High Court Single-Judge Bench of Justice Mohammed Nias C.P., while adjudicating a writ petition, recently held that a consolidated application filed by multiple tenants under Section 17 of the SARFAESI Act, challenging a common enforcement action, is maintainable. The Court observed that neither the Act nor the Rules prohibit joint filings, and procedural technicalities must not override the substantive right of aggrieved persons to be heard on the merits.
The petitioners had challenged the order passed by the Registrar of the Debts Recovery Tribunal-I, Ernakulam, which declined to register a consolidated Securitisation Application filed by four tenants against a dispossession notice issued by the Advocate Commissioner. The Tribunal’s Registry refused registration on the ground that a joint application by multiple tenants was impermissible and each tenant was required to file a separate application under Section 17 of the SARFAESI Act.
The High Court observed that all four applicants were tenants occupying the secured asset under the same borrower and were aggrieved by a common enforcement action taken by the secured creditor. It held that rejecting a consolidated application solely on the procedural ground that it was filed jointly, despite a common cause of action, was legally unsustainable. The Court analysed Section 17(1) of the SARFAESI Act and noted that it allows “any person” aggrieved by the measures under Section 13(4) to approach the Tribunal. The inclusive wording of the statute extends the remedy not just to borrowers but also to third parties like tenants.
The Court further pointed out that neither the SARFAESI Act nor the Security Interest (Enforcement) Rules, 2002, contains any express bar on filing joint applications. Relying on Rule 13A and Appendix X, the Court emphasised that procedural provisions are meant to facilitate access to justice, not to impede it. Citing the judgment of the Supreme Court in Mardia Chemicals Limited Etc. Etc. v. Union of India and Others Etc. Etc., REEDLAW 2004 SC 04201 : 2004(1) Bank CLR 641 (SC), the Court reiterated that proceedings under Section 17 are original in nature and akin to civil suits, meant to address grievances against enforcement actions. It emphasised that procedural hyper-technicalities should not obstruct substantive justice.
The High Court concluded that requiring each tenant to file separate applications would lead to avoidable duplication, delay, and inconsistency in adjudication, defeating the purpose of the SARFAESI framework. The order passed by the Registrar declining registration was therefore set aside, and the Registrar was directed to number the consolidated application. The Debts Recovery Tribunal was instructed to consider the case on merits and dispose of it in accordance with the law. The interim protection granted earlier was extended for six weeks to enable the petitioners to pursue relief before the Tribunal. Accordingly, the original petition was allowed.
Mr. O.D. Sivadas, Advocate, represented the Appellants.
Mr. Renjith. R, Advocate, appeared for the Respondents.
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