Supreme Court Mandates Timely Disposal of Securitisation Applications by DRT Under SARFAESI Act
- REEDLAW
- 20 hours ago
- 3 min read
REEDLAW Legal News Network reports: In a significant ruling, the Supreme Court reaffirmed that the Debts Recovery Tribunal (DRT) is under a statutory duty, as per Section 17(5) of the SARFAESI Act, 2002, to dispose of securitisation applications within sixty days, which may only be extended up to four months with duly recorded reasons. The Court cautioned that non-compliance with this statutory mandate frustrates the legislative purpose of expeditious debt recovery and directed immediate adherence by all DRTs to the prescribed timeline.
The Supreme Court Bench comprising Justice Sanjay Kumar and Justice Alok Aradhe, while adjudicating a Civil Appeal along with an Interlocutory Application, held that Section 17(5) of the SARFAESI Act, 2002, imposes a statutory obligation upon the Debts Recovery Tribunal to dispose of securitisation applications within sixty days. This period may be extended up to a maximum of four months only upon recording valid reasons in writing. The Court observed that deviation from this statutory framework is impermissible, thereby directing Tribunals to strictly comply with the prescribed time limits to uphold the efficacy and expeditious nature of the SARFAESI mechanism.
The appeal was brought by the Appellant, a financial institution, seeking expeditious adjudication of its grievance regarding the delayed disposal of a securitisation application by the Debts Recovery Tribunal (DRT), Dehradun, under Section 17(1) of the SARFAESI Act. The Petitioner had previously approached the High Court, which declined to issue an express direction but granted liberty to rely on the relevant statutory provision before the DRT itself. Despite this, there was no advancement in the proceedings before the DRT.
Upon appeal, the Court observed that Section 17(5) of the SARFAESI Act imposes a statutory obligation on the DRT to dispose of securitisation applications as expeditiously as possible and within 60 days, extendable up to four months for recorded reasons. It was noted that the DRT had not adhered to this mandate, nor had it provided any written justification for the delay.
Accordingly, the Supreme Court disposed of the appeal with a direction to the DRT, Dehradun, to take due note of the statutory mandate under Section 17(5) of the SARFAESI Act and to act promptly and in accordance with law, ensuring no further delay in the adjudication of the securitisation application. All pending applications in connection with this matter were disposed of by the order.
Mr. Rohit Kumar Singh, AOR, Ms. Alka Marwala, Ms. Swati Sood, Ms. Payal Golimar, Mr. Shivam Sharma, Mr. Akash Kumar, Mr. Mahender Rathour and Mr. Anshuman Gupta, Advocates, represented the Appellant.
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