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Secured Creditor fails to produce evidence of compliance with Security Interest (E) Rules 8(6), 9(1)


Debts Recovery Appellate Tribunal (DRAT), Chennai Bench comprising Justice S. Ravi Kumar, Chairperson was hearing an appeal filed by the Secured Creditor against the borrower. The DRAT Bench dismissed the appeal and observed that the appellant failed to produce evidence of compliance, and the appeal is not meant to cure defects identified by the DRT.


This appeal was filed under Section 18 of the SARFAESI Act against the order of the DRT-I, Chennai. The first respondent sought to set aside a sale conducted on 23.12.2013, claiming non-compliance with the SARFAESI Act.


The Debts Recovery Tribunal (DRT) held that the appellant failed to substantiate compliance with Rule 8(6) and Rule 9(1) of the Security Interest (Enforcement) Rules, 2002, and set aside the sale.


The counsel for the appellant before the DRAT argued that the Debts Recovery Tribunal (DRT) erred in not considering the documents produced and that the sale should not be reversed as the total due was realized.


The counsel for the respondents supported the DRT’s findings. The second respondent, the auction purchaser, stated that she was ready to receive the refund as ordered by the DRT.


The DRAT found that the appellant failed to produce evidence of compliance, and the appeal is not meant to cure defects identified by the DRT.


The DRAT also dismissed the application to receive additional documents. The DRAT noted no grounds to interfere with the DRT’s order and dismissed the appeal, directing the appellant to implement the refund order.


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