LegalAware
LegalAware.ai
EMPOWERING LEGAL AWARENESS

K. Sreedhar vs M/s Raus Constructions Pvt. Ltd. & Ors.

Civil Appeal · 2023 INSC 17Decided 5 Jan 2023
Civil Appeal No. 7402 of 2022
M.R. Shah · M.M. Sundresh

Background

Raus Constructions borrowed from Indian Bank in 2012 and defaulted. The bank took possession of the mortgaged properties under the SARFAESI Act and auctioned one of them (Item No. 8) in February 2017; K. Sreedhar was the highest bidder at about Rs. 2.76 crore, paid up, received a sale certificate, took possession, levelled the plot and applied for building permission. The borrower's challenge before the Debts Recovery Tribunal (DRT) failed in May 2019. Instead of appealing to the Debts Recovery Appellate Tribunal (DRAT), which would have required a pre-deposit of 25% of the debt, the borrower filed a writ petition in the Telangana High Court, which set aside the sale on the grounds that the 25% and 75% instalments were paid late and that several of the properties were agricultural land exempt from SARFAESI.

Decision Breakdown

The Supreme Court held that the High Court should not have entertained the writ petition at all, because an appeal to the DRAT was available and the writ route was used only to dodge the pre-deposit. On merits too the High Court was wrong: under Rule 9(3) of the Security Interest (Enforcement) Rules the 25% deposit may be paid on the day of auction or the next working day, and here Rs. 26 lakh was paid before the auction and Rs. 45 lakh the day after, so the full 25% was in time; the balance 75% was paid within the 15-day extended period the bank itself granted in writing, which Rule 9(4) permits. On the "agricultural land" point, the Court reiterated Blue Coast Hotels and K. Pappireddiyar: a revenue-record entry showing land as agricultural is not conclusive: what matters is whether the land was actually being used for agriculture when it was mortgaged, and the borrower who claims the exemption bears the burden of proving that use. The borrower had produced only revenue records, while the bank had produced photographs showing no farming activity. The High Court's judgment was set aside and the DRT's order confirming the auction sale was restored.

Lesson Learnt

A borrower cannot escape the SARFAESI appeal process (and its pre-deposit) by running straight to the High Court, and cannot shield mortgaged land from enforcement merely by pointing to an "agricultural" entry in the land records. It must show real agricultural use at the time of the mortgage. Auction purchasers who pay within the rules and any written extension from the bank get secure title.

Official source (sci.gov.in)View Judgment (PDF)

More rulings in Labour & Industrial Law

Labour & Industrial LawDelhi High Court

DTC vs. Shri Braham Prakash

The Court held that a writ court exercising supervisory jurisdiction cannot re-appreciate evidence like an appellate court, and can interfere only if the Tribunal's view was not a plausible one. It found the Tribunal's reasoning sound: the surrendered "unpunched tickets" bore signatures that didn't match the conductor's admitted signature, casting doubt on the management's case, and the sole checking-staff witness was uncorroborated. However, since more than three decades had passed, the workman had already reached superannuation, and he had been paid wages under Section 17-B of the Industrial Disputes Act throughout, the Court held reinstatement itself was no longer appropriate. It modified the award to a lumpsum compensation of Rs. 4,00,000 in lieu of reinstatement.

Decided 17 Sept 2026Read case
Labour & Industrial LawDelhi High Court

Indian Oil Corporation Ltd vs. Raj Kumar

The Court held that Section 11A of the Industrial Disputes Act expressly empowers a Labour Court to modify a disproportionate punishment even where the misconduct itself is proved. Since the Tribunal had not disturbed the finding of guilt and had only exercised its discretion on quantum, considering the workman's long service and disability, the Court found this to be a plausible and reasoned view. A writ court exercising supervisory jurisdiction does not substitute its own view merely because another view on punishment is also possible.

Decided 17 Sept 2026Read case
Labour & Industrial LawDelhi High Court

Varun Juneja vs. Soniya

The High Court revised the compensation upward, since the employer had itself admitted paying the deceased Rs. 18,000 per month (not the lower Rs. 15,000 minimum-wage figure the Commissioner had used), raising the total compensation to Rs. 15,57,680. On the separate question of penalty, the employer argued the maximum 50% penalty was too harsh, but the Court upheld it, noting the employer only deposited money after the family was forced to start recovery proceedings, more than three and a half years after the death, with no voluntary payment at any point.

Decided 17 Sept 2026Read case
Labour & Industrial LawDelhi High Court

Sri Bhagwan vs. Delhi Transport Corporation

The Court found the Tribunal had rightly relied on the workman's own clear admission in his enquiry reply, and that he never produced any medical evidence to back his claim of having been unwell. It rejected the argument that a small monetary amount automatically makes dismissal disproportionate, citing Supreme Court rulings that in cases of dishonesty or fraud (as opposed to mere carelessness), even a petty misappropriated sum can justify dismissal, because it is the breach of trust, not the rupee amount, that matters. Given the workman's admission and prior disciplinary history, the removal was upheld and the petition dismissed.

Decided 16 Sept 2026Read case
Labour & Industrial LawDelhi High Court

Delhi Transport Corporation vs. Balwan Singh

The Court held that non-examination of the ticketless passengers does not by itself invalidate the enquiry: credible hearsay evidence from checking staff, corroborated by signed passenger statements, was enough to prove the misconduct on a preponderance of probabilities. It agreed the Labour Court should not have shown leniency on punishment purely on sympathetic grounds once guilt was affirmed, citing Supreme Court rulings that even small-value ticket fraud can justify removal since it is a breach of trust, not merely a monetary loss. However, since the Labour Court's actual interference was limited to preserving pension/retiral benefits (not full reinstatement), the Court chose not to strip that narrow relief away after more than a decade, but capped the total payout at ₹5,00,000, to be released from the sum already deposited with the Court.

Decided 16 Sept 2026Read case
Labour & Industrial LawDelhi High Court

Sunil Kumar vs. M/S Delhi Metro Rail Corporation Ltd.

The High Court held that its power to review the tribunal's factual findings is very limited, and it would not re-weigh evidence just because another view was possible. It upheld the tribunal's findings that all three charges of misconduct were proved through credible witness testimony, rejecting the driver's technical objections (such as an attendance register not showing his name, which if anything supported the charge of unauthorized absence). However, the Court excluded from consideration one aspect of the evidence: testimony about a 2010 incident that occurred after his removal, which the tribunal itself had earlier ruled irrelevant but then still referenced. Despite upholding the misconduct findings, the Court found the punishment of outright removal "shockingly disproportionate" given the relatively minor nature of the proven acts and his 8-9 years of otherwise satisfactory service.

Decided 16 Sept 2026Read case