THE POWER OF DRT U/S 17 OF THE SARFAESI ACT, 2002

The DRT has vast power and it can even restore the possession back to the borrower in the event, it finds the action by the bank is illegal or incorrect.

The Supreme Court has clearly held in Mardia chemical ltd that the proceedings u/s 17, is in the nature of the original proceeding and that even the amount which is claimed to be due to bank as stated in notice u/s 13(2) can be challenged by the borrower. In an important decision on appellate power of DRT THE HIGH court of madras has held in the case of m/s Lakshmi Mills Private Ltd vs. Indian Bank ,AIR 2008 .181 (FB) as under:

The right of the bank is not automatically suspended upon filing an application u/s 17 of the act and secured creditor can proceed to auction secured assets, where no stay is granted by the tribunal. The tribunal has power to impose condition relating to deposit for grant of stay of auction. The tribunal has no power to pass any interim mandatory order relating to restoration of possession before finalization of the proceeding u/s 17 of the act. All the grounds, which rendered the action of the bank as illegal ,can be raised in the proceeding u/s 17 of the Act before DRT.It is forth DRT to decide in each case whether the action of the bank was in accordance with the provision of the said act and legally sustainable.

BORROWERS RIGHT OF APPEAL-

If the borrower or any other person who had any tangible grievance against the noticed issued u/s 13(4) or action taken u/s 14,then he could have availed remedy by filling an application u/s 17 (1) within 45 days from the date on which such measures were taken. The expression “any person” used in section 17(1) is of wide import .it takes within its fold, not only the borrower but also the guarantor or any other person who may be affected by the action taken u/s 13(4) or u/s 14.both the tribunal and the appellate tribunal are empowered to pass interim orders u/s 17 and 18 and are required to decide matters within fixed time schedule. It is thus evident that the remedies available to an aggrieved person under the SARFAESI Act are both expeditious and effective