HC Couldn’t Entertain Writ Contesting Auction Sale Cancellation as Petitioner Had Filed an Appeal u/s 30 of RDDB Act

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  • Last Updated on 11 September, 2023

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appeal u/s 30 of RDDB Act

Case Details: Raiskhan Firozkhan Pathan v. Recovery Officer, Debts Recovery Tribunal II - [2023] 153 taxmann.com 402 (HC-Gujarat)

Judiciary and Counsel Details

    • Ashutosh Shastri & J. C. Doshi, JJ.
    • Vinay D. Bairagar for the Petitioner.
    • Jal Unwala, Sr. Adv. Dhruvin N. Dossani, Masoom K. Shah, Vishwas K. Shah & V. N. Sevak for the Respondent.

Facts of the Case

In the instant case, upon the borrower’s failure to repay the secured loan, the bank initiated the process of recovering outstanding dues and in furtherance thereof, the bank issued an auction notice for the sale of the secured property.

In the auction sale, the petitioner emerged as a successful bidder and an amount of Rs. 6.82 crore was deposited in its entirety by the petitioner with the bank. Subsequently, in view of the specific objection raised by one of the contesting respondent in the present proceedings, the Recovery Officer (RO) by the impugned order cancelled the auction sale and directed the bank to refund the amount to the petitioner which had already been deposited by the petitioner pursuant to auction proceeding.

The petitioner filed the instant petition to set aside the order of RO on the ground that the said order was passed without issuing notice and granting any opportunity to him. Thus, the passing of the order by RO was nothing but an erroneous exercise of jurisdiction.

High Court Held

The High Court held that since the bank being aggrieved by the order of RO had also filed a substantive appeal under section 30 of the Recovery of Debts Due To Banks and Financial Institutions Act, 1993, the said appeal proceedings were very much pending.

To avoid conflicting decision on the very same order, the petitioner would also have to approach the appellate forum as they were not remediless and that every issue of law was to be examined and dealt with by the appellate forum. Thus, the instant petition was to be dismissed.

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