Secured creditor must go to DRT
A secured creditor cannot approach the civil court but the Debt Recovery Tribunal if aggrieved by measures taken by the borrower under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, the Supreme Court held in the case Jagdish Singh vs Heeralal. It said that the “civil court jurisdiction is completely barred, so far as the ‘measure’ taken by a secured creditor under sub-section (4) of Section 13 of the Act, against which an aggrieved person has a right of appeal before the DRT or the Appellate Tribunal to determine as to whether there has been any illegality in the ‘measures’ taken.”
In this case, Singh was the auction purchaser of a land, which was sold for recovery of loan by the Bank of India. After confirmation of the sale, he came to know that the members of a joint Hindu family had questioned the title of the land before a civil court on the basis that the land was liable to be treated as joint Hindu family property and not the exclusive property of few members who had mortgaged it against a loan. The bank’s objections to the jurisdiction of the civil court were upheld. The civil court held that the aggrieved can file an appeal under Section 17 of the DRT Act and not a suit in view of the specific bar contained in Section 34 of the Securitisation Act. However, the Madhya Pradesh HC held the suit as maintainable. On appeal, the top court said set aside the HC decision on the ground that the bank being a secured creditor can always proceed against the secured assets of the borrowers.
BPCL’s stand for petrol pump
Upholding the Karnataka High Court’s judgment that quashed allotment of an urban site in a crowded residential area for a BPCL petrol pump, the Supreme Court said that the site earmarked for civic amenities like public park cannot be changed and given to run a outlet. “The public interest in the reservation and preservation of open spaces for parks and playgrounds cannot be sacrificed by leasing or selling such sites to private persons for conversion to some other user. Any such act would be contrary to the legislative intent and inconsistent with the statutory requirements,” it observed.
In this case, the Karnataka government had issued a notification in August 1990 under the Bangalore Development Authority Act