DRAT sets aside the DRT order for lacking legal basis and reasoning, emphasizing adherence to statutory mandates and judicial precedents.
Debts Recovery Appellate Tribunal (DRAT), Kolkata Bench of Justice Anil Kumar Srivastava (Chairperson) reviewed an appeal and observed that a tribunal must adhere to statutory mandates and judicial precedents, providing cogent reasons for its findings, and cannot grant benefits like One-Time Settlements without proper authorization or legal basis. Additionally, procedural non-compliance renders appeals or cross-objections non-maintainable under the Recovery of Debts and Bankruptcy Act, 1993.
The Debt Recovery Appellate Tribunal (DRAT) adjudicated an appeal filed by the State Bank of India challenging the order dated 2nd April 2018, passed by the Debt Recovery Tribunal-III (DRT), Kolkata. The DRT had partially allowed the Bank’s original application (O.A.) seeking recovery of ₹39.95 crore while also partly allowing the counterclaim of ₹29.28 crore raised by Emerald Mineral Exim Pvt. Ltd. and others. The DRT had directed the Respondents to repay a significantly reduced sum of ₹14.35 crore in instalments, alongside other reliefs, which the Bank contested on grounds of legal unsustainability.
The DRAT critically assessed the jurisdiction and reasoning of the DRT, noting its obligation to adhere strictly to legal principles under the Recovery of Debts and Bankruptcy Act, 1993. The Tribunal found the DRT’s reduction of the Bank’s claim and the grant of repayment facilities inconsistent with statutory mandates and judicial precedents. It highlighted deficiencies in the DRT's findings, including the absence of cogent reasoning and reliance on an unfinalized One-Time Settlement (OTS) offer. The DRAT held that such benefits could not be extended without proper authorization, as established in Bijnor Urban Cooperative Bank Limited Bijnor and Others v. Meenal Agarwal and Others, REEDLAW 2021 SC 12202 and related precedents.
The Respondents' cross objection, filed beyond the limitation period without requisite compliance under Section 21 of the Act and Order 41 Rule 22 of the CPC, was dismissed as non-maintainable. An application for its revival also failed on procedural grounds. Furthermore, the DRAT allowed an application under Order 41 Rule 27 CPC for additional evidence, while reserving its admissibility for determination by the DRT upon remand.
Emphasizing the necessity of reasoned judgments in judicial and quasi-judicial forums, the DRAT referenced Kranti Associates Pvt. Ltd. v. Masood Ahmed Khan (2010) and other authorities to underscore the inadequacy of the DRT’s findings. It set aside the DRT’s order and remanded the matter for fresh adjudication, directing the Tribunal to address all issues, including the counterclaims, with due adherence to the law and after providing both parties a fair hearing. No costs were awarded, and parties were instructed to appear before the DRT on 6th November 2024.
Mr. Joy Saha, Senior Advocate with Debasish Chakrabarty, Advocate represented the Appellant.
Mr. Md. Javed Sultan in person as Respondent.
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