After Account Turns NPA and Recovery Suit Is Filed, Interest Is at Tribunal's Discretion: DRAT Allahabad

The Debts Recovery Appellate Tribunal (DRAT) at Allahabad has reiterated that once a loan account is classified as a non-performing asset (NPA) and a recovery suit is filed, contractual terms governing interest do not automatically apply. The tribunal said it is for the adjudicating forum to decide the rate of pendente lite and future interest. A coram of Chairperson Justice R.D. Khare dismissed an appeal filed by Housing and Urban Development Corporation Ltd. (HUDCO) against an order of the...

Mortgagor's Right Of Redemption Prevails Over Auction Purchaser's Claim Of Title: Calcutta High Court

The Calcutta High Court has reiterated that while an auction purchaser acquires certain rights upon being declared the successful bidder, such rights are not absolute and cannot override the statutory right of redemption available to the mortgagor under law.The court said once the borrower exercises the right of redemption by clearing the dues before the transfer of the secured asset, the auction purchaser cannot claim an indefeasible right over the property.A single bench of Justice Ajay Kumar...

Secured Creditors Must Act Speedily After SARFAESI Notice; Delay Defeats Law's Purpose: MP High Court

The Madhya Pradesh High Court has held that once a secured creditor initiates recovery proceedings under the SARFAESI Act, it must act without delay, failing which the very purpose of the law stands defeated. A division bench of Justice Vivek Rusia and Justice Pradeep Mittal, while dismissing a review petition filed by Cent Bank Home Finance Ltd, observed that lenders cannot remain inactive after issuing a demand notice under Section 13(2) of the SARFAESI Act. “After initiating the proceedings...

Pre-Deposit For Filing SARFAESI Appeal Must Be Paid To Tribunal, Not Lending Bank: Kerala High Court

The Kerala High Court has clarified that the mandatory pre-deposit required to file an appeal under the SARFAESI Act must be paid to the Debts Recovery Appellate Tribunal and not to the lending bank. A Division Bench of Justice Anil K. Narendran and Justice Muralee Krishna S delivered the ruling while allowing an appeal filed by Kerala Gramin Bank, setting aside a single judge's order that had directed the borrower to deposit money with the bank itself in order to pursue its appeal before the...

Statutory Appeal Cannot Be Rendered Illusory Due To DRAT Vacancies, Administrative Hurdles: Delhi High Court

The Delhi High Court on Tuesday observed that litigants cannot be denied an effective appellate remedy under debt recovery law when their statutory appeal remains unheard due to tribunal vacancies, recusals and administrative difficulties. On a plea by two auction purchasers, a division bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar held that while courts normally refrain from exercising writ jurisdiction when a statutory appeal is available, such restraint cannot...

Centre Notifies Reallocation Of Territorial Jurisdiction Of DRTs In West Bengal Under RDB Act

The Central Government has notified a reallocation of territorial jurisdiction among four Debt Recovery Tribunals (DRTs) in West Bengal through a notification dated December 16, 2025, issued by the Ministry of Finance under Section 3 of the Recovery of Debts and Bankruptcy Act, 1993. The notification amends the earlier jurisdictions notified on March 15, 2017, and reorganises how cases are distributed among the Kolkata and Siliguri DRTs. Under the earlier notification, Debts...

SARFAESI Sale Cannot Proceed If Sale Certificate Is Not Issued Before IBC Moratorium: Bombay High Court

The Bombay High Court on Wednesday held that a secured creditor cannot proceed with a SARFAESI sale once an interim moratorium under the Insolvency and Bankruptcy Code comes into force. It rulled that the Union Bank of India was not entitled to accept balance payments or issue a sale certificate after the personal insolvency process against the borrower had commenced. In an order passed on December 10, Justices R I Chagla and Farhan P Dubash held that “the secured creditor could not have...

SARFAESI Notice Counts As Valid Invocation Of Personal Guarantee: NCLT Mumbai

The National Company Law Tribunal at Mumbai has recently held that a notice issued under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), 2002, which empowers a secured creditor to demand repayment of dues within sixty days prior to enforcing its security, can operate as a valid invocation of a personal guarantee when it contains a direct repayment demand addressed to the guarantor.A coram of Judicial Member K R Saji...

Delhi High Court Slaps ₹1 Lakh Cost On Litigant For Misusing Writ Jurisdiction To Stall DRT, NCLT Proceedings

The Delhi High Court recently imposed costs of Rs 1 lakh on a litigant while dismissing his writ petition that sought to halt proceedings pending before two Debts Recovery Tribunals and the National Company Law Tribunal. The Court held that the petitioner, Sanjeev Krishan Sharma, had failed to show any violation of fundamental rights, statutory mandate or natural justice that could justify invoking the High Court's extraordinary writ jurisdiction. The Division Bench of Justices Anil...

DRAT Need Not Mandate 50% Of Debt Due As Pre-Deposit To Entertain Appeals, Must Consider Subject Matter: Kerala High Court

The Kerala High Court recently held that there is no mandate under law that the pre-deposit amount should always be 50% of the debt due, while entertaining appeals under Section 18 SARFAESI [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest] Act, challenging the order of the Debts Recovery Tribunal.It clarified that the Debt Recovery Appellate Tribunal (DRAT), while determining the amount to be deposited, shall take into consideration the subject matter...

Plea In Kerala High Court Challenges Tribunal Reforms Act, Appointments Of DRT Ernakulam Presiding Officer & DRAT Chennai Chairperson

A petition has been moved before the Kerala High Court challenging the appointments of Retired Justice G. Chandrasekharan as the chairperson of the Debts Recovery Appellate Tribunal, Chennai and Retired District Judge, Su Williahm, as presiding officer of the Debts Recovery Tribunal, Ernakulam.The plea states that the two appointments were not in accordance with the directions laid down by the Supreme Court in Rojer Mathew v South Indian Bank Ltd., mandating selection of tribunal members to...

Time Spent In DRT Recovery Proceedings Cannot Be Excluded U/S 14 Of Limitation Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT) held that the benefit of section 14 of the Limitation Act cannot be extended to the creditor who had initiated recovery proceedings before the Debt Recovery Tribunal (DRT) under the Recovery of Debt and Bankruptcy Act, 1993. The Tribunal held that the benefit under section 14 of the Act can be given only when the forum before which the proceedings were initiated lacked jurisdiction or suffered from a defect of similar nature. A bench...