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M/s Tripower Enterprises (Private) Limited v. State Bank of India

Civil Appeal · 2020 INSC 360Decided 24 Apr 2020
Civil Appeal No. 2373 of 2020
Justice A.M. Khanwilkar · Justice Ajay Rastogi

Background

A guarantor had mortgaged property as security for a loan to the appellant company from the State Bank of India, and recovery proceedings (O.A. No. 11/2008) were pending before the Debts Recovery Tribunal (DRT), Madurai. The Bank applied to the DRT for return of the original title documents, which the DRT allowed, but the Debts Recovery Appellate Tribunal (DRAT) modified that order, and the guarantor then successfully challenged the matter before the Madras High Court in a writ petition, which set aside the order permitting return of the documents.

Decision Breakdown

The Supreme Court reversed the High Court, holding that the High Court ought not to have entertained a writ petition on this issue while the main recovery proceeding was still pending before the DRT, where both parties remained free to raise all their contentions. It modified the DRAT's order to partly allow return of the original documents to the Bank, except for the documents relating to a specific plot of land already the subject matter of a separate decree, which were to be retained. The Court clarified that the parties could still raise all other factual and legal contentions in the pending DRT proceeding (O.A. No. 11/2008), which the Tribunal would decide on its own merits. The appeal was partly allowed with no order as to costs.

Lesson Learnt

Where recovery proceedings before a specialised tribunal are still pending, courts are generally reluctant to let a writ petition short-circuit an interim/ancillary order (like return of mortgage documents): the proper course is for all substantive disputes to be argued and decided within the pending tribunal proceeding itself.

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

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