# Ram Pal Soni & Anr v. State of U.P. & Ors

- **Citation:** (2024) 4 ILRA 1511
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-04-05
- **Case number:** Writ-C No. 13556 of 2021
- **Bench:** Jaspreet Singh, Manish Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/ram-pal-soni-anr-v-state-of-u-p-ors-51739
- **Pages:** 24

## Headnote

Civil Law - SARFAESI Act,2002 - Sections
13 & 17 -Reference by single Judge -specific
reference to Sections 13 and 17(as amended in
2016) of SARFAESI Act- to arrive at a
conclusion that since part cause of action in
the dispute arose within territorial jurisdiction
of Lucknow-the securitization application would
thus be maintainable at Lucknow - provisions
of Section 17(1-A) indicates three clauses
pertaining to local limits of the Debts Recovery
Tribunal-
within
whose
jurisdiction
an
application/appeal can be filed under Section
17(1) of the SARFAES Act- if we apply the
concept of ejusdem generis- it is evident that
none of the three clauses indicate any common
genus and operate in different and separate
fields and therefore are clearly disjunctive- non
obstante clause contained in Section 35 of the
SARFAESI Act would have overriding effect
over the Debt Recoveries Tribunals Act-since
notice for e-auction was issued by the
authorized officer at Lucknow- whereafter eauction was actually conducted in terms of
Section 13(4) of the Act by the very same
officer at Lucknow-definitely constitute a part
cause of action at Lucknow in terms of Section
17 (1-A) of the SARFAESI Act-Clause (a) of
Section 17(1-A) of the SARFAESI Act is
disjunctive from clauses (b) & (c) of Section 17
(1-A) of the SARFAESI Act and is to be read
separately- Section 17(1-A) of the SARFAESI
Act would have an overriding effect over
provisions of the Recovery of Debts Due to
Banks and Financial Institutions Act 1993-
since part cause of action in the dispute arose
within territorial jurisdiction of Lucknow-the
securitisation
application
would
thus
be
maintainable at Lucknow as well.

Held, that since notices under Section 13 were
issued by the authorized authority situate at
Lucknow from where the e-auction was also
conducted, part cause of action in terms of
Section 17(1-A)(a) was evidently at Lucknow
where the securitisation application was thus
maintainable. (para 54)

Held, that judgment rendered by the learned
Single Judge in the case of Saurabh Gupta
(supra) being per incuriam, does not lay down
good law and is hereby overruled. (para 65)

Reference answered. (E-9)

List of Cases cited:

## Text

_Characters 0–39,964 of 79,332. This is a partial read: ask again with offset=39964 for what follows._

4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1511
misconceived, is dismissed with no order as
to the costs.

14. Before parting the matter,
having considered a little delay in an
enquiry since the date of complaint moved
by
the
complainants,
namely,
Mr.
Khursheed and Rafeeq Ahmad, it would be
appropriate to issue a direction for
expeditious disposal of the enquiry and,
thereafter, to take final decision, if any. As
such, Inquiry Committee, as constituted in
pursuance of the order dated 29.02.2024, is
expected to complete inquiry and submit its
report in accordance with law preferably
within a period of two months from today
and District Magistrate shall take decision,
having considered the said report to be
submitted, preferably within a period of
one month, thereafter.
----------
(2024) 4 ILRA 1511
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.04.2024

BEFORE

THE HON'BLE JASPREET SINGH, J.
THE HON'BLE MANISH MATHUR, J.

Writ-C No. 13556 of 2021

Ram Pal Soni & Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Ambika Prasad Mishra

Counsel for the Respondents:
C.S.C., Anand Kumar Singh, Gyanendra Mishra

Civil Law - SARFAESI Act,2002 - Sections
13 & 17 -Reference by single Judge -specific
reference to Sections 13 and 17(as amended in
2016) of SARFAESI Act- to arrive at a
conclusion that since part cause of action in
the dispute arose within territorial jurisdiction
of Lucknow-the securitization application would
thus be maintainable at Lucknow - provisions
of Section 17(1-A) indicates three clauses
pertaining to local limits of the Debts Recovery
Tribunal-
within
whose
jurisdiction
an
application/appeal can be filed under Section
17(1) of the SARFAES Act- if we apply the
concept of ejusdem generis- it is evident that
none of the three clauses indicate any common
genus and operate in different and separate
fields and therefore are clearly disjunctive- non
obstante clause contained in Section 35 of the
SARFAESI Act would have overriding effect
over the Debt Recoveries Tribunals Act-since
notice for e-auction was issued by the
authorized officer at Lucknow- whereafter eauction was actually conducted in terms of
Section 13(4) of the Act by the very same
officer at Lucknow-definitely constitute a part
cause of action at Lucknow in terms of Section
17 (1-A) of the SARFAESI Act-Clause (a) of
Section 17(1-A) of the SARFAESI Act is
disjunctive from clauses (b) & (c) of Section 17
(1-A) of the SARFAESI Act and is to be read
separately- Section 17(1-A) of the SARFAESI
Act would have an overriding effect over
provisions of the Recovery of Debts Due to
Banks and Financial Institutions Act 1993-
since part cause of action in the dispute arose
within territorial jurisdiction of Lucknow-the
securitisation
application
would
thus
be
maintainable at Lucknow as well.

Held, that since notices under Section 13 were
issued by the authorized authority situate at
Lucknow from where the e-auction was also
conducted, part cause of action in terms of
Section 17(1-A)(a) was evidently at Lucknow
where the securitisation application was thus
maintainable. (para 54)

Held, that judgment rendered by the learned
Single Judge in the case of Saurabh Gupta
(supra) being per incuriam, does not lay down
good law and is hereby overruled. (para 65)

Reference answered. (E-9)

List of Cases cited:

1. Y. Y. Abraham Ajith and others Vs. Inspector
of Police, Chennai and another, (2004) 8 SCC
100
1512 INDIAN LAW REPORTS ALLAHABAD SERIES
2. Swamy Atmananda and others Vs. Sri
Ramakrishna Tapovanam and others, (2005) 10
SCC 51

3. Alchemist Ltd. and another Vs. State Bank of
Sikkim and others, (2007) 11 SCC 335

4. A.B.C. Laminart Pvt. Ltd. & Anr. versus A.P.
Agencies, (1989) 2 SCC 163

5. State of Rajasthan Vs. Swaika Properties,
(1985) 3 SCC 217

6. Saurabh Gupta versus Union of India and
another, 2018 (127) ALR 388 (overruled)

7. X versus Principal Secretary, Health and
Family Welfare Department, Government of NCT
of Delhi and another (2023) 9 SCC 433

8.
Vivek
Narain
Sharma
and
others
(Demonitasation case -5J versus Union of India
(2023) 3 SCC 1

9. Adani Gas Limited versus Union of India
(2022) 5 SCC 210

10. Siddeshwari Cotton Mills (P) Limited versus
Union of India and others (1989) 2 SCC 458

11. Amar Chandra Chakraborti versus The
Collector of Excise, Government of Tripura and
others (1972) 2 SCC 442

12. A.B.C. Laminart Pvt. Ltd. & Anr. versus A.P.
Agencies, (1989) 2 SCC 163

13. Ramsay Exim and Technology Private
Limited and others versus ICICI Bank Limited
and another, 2019 SCC Online Cal 2315

14. Amish Jain & others versus ICICI Bank
Limited, 2018 SCC Online Del 8947

15. State of Madhya Pradesh versus Narmada
Bachao Andolan (2011) 7 SCC 639

(Delivered by Hon'ble Manish Mathur, J.)

1. Heard Mr. Ambika Prasad Mishra
learned learned counsel for petitioners, Mr.
Dileep Kumar Tiwari learned State Counsel
for opposite party No.1, Mr. Anand Kumar
Singh learned counsel for opp. parties 3
and 4 and Mr. Gyanendra Mishra learned
counsel for opp. party No.5. Notice to opp.
party No.2 stands dispensed with.

2. This reference has been made by
Hon'ble the Chief Justice vide order dated
23rd April, 2022 and subsequently to this
Bench vide order dated 18th May, 2023 in
pursuance of questions referred by Hon'ble
Single Judge vide order dated 29th
September, 2021 passed in Writ C No.
13556 of 2021.

3. The questions framed and
referred by the Hon'ble Single Judge are as
follows:-

"(A) Whether in a case where part
of cause of action to maintain an
application under Section 17(1) of the
SARFAESI Act, arises within the limits of
territorial jurisdiction of Debts Recovery
Tribunal, Lucknow, the Debts Recovery
Tribunal,
Lucknow
will
have
the
jurisdiction,
power
and
authority
to
entertain and decide such application in
view of Sub section (1-A) of Section 17 of
the SARFAESI Act or not ?
(B) Whether Section 3 of the
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993, confers
exclusive jurisdiction on Debts Recovery
Tribunals
established
thereunder
vide
notifications of the Central Government?
(C) Whether Section 3 of the
Recoveries of Debts Due to Banks and
Financial Institutions Act, 1993, can be
read as conferring exclusive jurisdiction on
the
Tribunals
established
thereunder,
irrespetive of Section 19 of the Recoveries
of Debts Due to Banks and Financial
Institutions Act, 1993 and Section 17(1A) of
the SARFAESI Act, rendering Sections 19
4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1513
and 17(1A) of the respective Acts as
redundant or nugatory ?
(D) Whether the judgment in
Saurabh Gupta (supra), which lays down
that
the
Debts
Recovery
Tribunal,
Allahabad shall have exclusive jurisdiction
to entertain and decide the applications
arisen from 55 districts specified in the
notification dated 05.12.2017, without
noticing Section 19 of the Recoveries of
Debts Due to Banks and Financial
Institutions Act, 1993 and Section 17(1A) of
the SARFAESI Act, as also the judgment of
Hon'ble Supreme Court in case of Sri
Nasiruddin (supra) lays down the law
correctly ?
(E) Whether the judgment in
Saurabh Gupta (supra) is contrary to the
law laid down by the Hon'ble Supreme
Court in the case of Sri Nasiruddin (supra)
and is liable to be declared as not good law
? "

4. During course of hearing, this
Court vide order dated 25th January, 2024
framed two additional questions which are
as follows:-

"Question No.1:- Whether clause
(a) of Section 17(1A) of the SARFAESI
Act is to be read ejusdem generis with
Clauses (b) and (c) or is disjunctive?
Question No.2:- Whether insertion
of Section 17(1-A) in the SARFAESI Act
would have any overriding effect over
provisions of the Debts Recovery Tribunals
Act? "

5. The factual matrix of present
dispute is that the respondent bank being
UCO Bank granted loan facility to the
petitioner from its branch situate in district
Amethi, Uttar Pradesh. The loan was
secured by mortgage of property situate at
Amethi. Borrower who is the petitioner
No.1 and the guarantor, petitioner No.2
committed default in repayment of loan
whereafter a demand notice was issued by
the authorized officer from the zonal office
in Lucknow. Possession and sale notice
were also issued from the zonal office in
Lucknow whereafter the petitioners filed a
securitization application bearing No. 541
of 2019 before the Debts Recovery
Tribunal, Lucknow.

6. Upon service of notice upon the
respondent bank, a preliminary objection
was raised regarding jurisdiction of the
Tribunal at Lucknow with the submission
that territorial jurisdiction pertaining to
district Amethi lies with the Debts
Recovery
Tribunal
Allahabad.
The
aforesaid
preliminary
objection
was
rejected vide order dated 6th August, 2019
leading to filing of regular appeal No. 14 of
2020 by the respondent bank, which was
allowed vide order dated 25th March, 2021
upholding the preliminary objection and
transferring
the
proceedings
of
securitization application to the Tribunal at
Allahabad.

7. The said decision dated 25th
March, 2021 passed by the Debts Recovery
Appellate Tribunal, Allahabad has been
challenged in the writ petition in which an
Hon'ble Single Judge of this Court vide
order dated 29th September, 2021 has
referred the issue for consideration by
Larger Bench in view of his conflict of
decision
with
judgment
of
another
coordinate Bench in the case of Saurabh
Gupta versus Union of India and
another, 2018 (127) ALR 388.

8. The Hon'ble Single Judge has
made specific reference to Sections 13 and
17
(as
amended
in
2016)
of
the
Securitisation
and
Reconstruction
of
1514 INDIAN LAW REPORTS ALLAHABAD SERIES
Financial Assets and Enforcement of
Security Interest Act, 2002 (hereinafter
referred to as ' SARFAESI Act') to arrive at
a conclusion that since part cause of action
in the dispute arose within territorial
jurisdiction of Lucknow, the securitisation
application would thus be maintainable at
Lucknow as well. For this purpose, the
Hon'ble
Single
Judge
differed
from
judgment rendered in the case of Saurabh
Gupta (supra) which has been rendered
considering the notification dated 15th
February, 2017 passed under Section 3 of
the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993.

9. For proper appreciation of the
dispute, it would be apposite to refer to
Sections 13 and 17 of the SARFAESI Act,
which are as follows:-

Section 13 of the SARFAESI Act
"13.
Enforcement
of
security
interest.--(1)
Notwithstanding
anything
contained in section 69 or section 69A of
the Transfer of Property Act, 1882 (4 of
1882), any security interest created in
favour of any secured creditor may be
enforced, without the intervention of the
court or tribunal, by such creditor in
accordance with the provisions of this Act.
(2) Where any borrower, who is
under a liability to a secured creditor under
a security agreement, makes any default in
repayment
of
secured
debt
or
any
instalment thereof, and his account in
respect of such debt is classified by the
secured creditor as non-performing asset,
then, the secured creditor may require the
borrower by notice in writing to discharge
in full his liabilities to the secured creditor
within sixty days from the date of notice
failing which the secured creditor shall be
entitled to exercise all or any of the rights
under sub-section (4).
Provided that-
(i) the requirement of classification
of secured debt as non-performing asset
under this sub-section shall not apply to a
borrower who has raised funds through
issue of debt securities; and
(ii) in the event of default, the
debenture trustee shall be entitled to
enforce security interest in the same
manner as provided under this section with
such modiifications as may be necessary
and in accordance with the terms and
conditions of security documents executed
in favour of the debenture trustee.]
(3) The notice referred to in subsection (2) shall give details of the amount
payable by the borrower and the secured
assets intended to be enforced by the
secured creditor in the event of nonpayment of secured debts by the borrower.
(3A) If, on receipt of the notice
under sub-section (2), the borrower makes
any representation or raises any objection,
the secured creditor shall consider such
representation or objection and if the
secured creditor comes to the conclusion
that such representation or objection is
not acceptable or tenable, he shall
communicate within fifteen days of receipt
of such representation or objection the
reasons
for
nonacceptance
of
the
representation
or
objection
to
the
borrower.
Provided that the reasons so
communicated or the likely action of the
secured
creditor
at
the
stage
of
communication of reasons shall not confer
any right upon the borrower to prefer an
application
to
the
Debts
Recovery
Tribunal under section 17 or the Court of
District Judge under section 17A.
(4) In case the borrower fails to
discharge his liability in full within the
period specified in sub-section (2), the
secured creditor may take recourse to one
4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1515
or more of the following measures to
recover his secured debt, namely:--
(a) take possession of the secured
assets of the borrower including the right
to transfer by way of lease, assignment or
sale for realising the secured asset;
(b) take over the management of
the business of the borrower including the
right to transfer by way of lease,
assignment or sale for realising the secured
asset:
Provided that the right to transfer
by way of lease, assignment or sale shall be
exercised only where the substantial part of
the business of the borrower is held as
security for the debt:
Provided further that where the
management of whole of the business or
part of the business is severable, the
secured creditor shall take over the
management of such business of the
borrower which is relatable to the security
for the debt;
(c) appoint any person (hereafter
referred to as the manager), to manage the
secured assets the possession of which has
been taken over by the secured creditor;
(d) require at any time by notice in
writing, any person who has acquired any
of the secured assets from the borrower and
from whom any money is due or may
become due to the borrower, to pay the
secured creditor, so much of the money as
is sufficient to pay the secured debt.
(5) Any payment made by any
person referred to in clause (d) of subsection (4) to the secured creditor shall
give such person a valid discharge as if he
has made payment to the borrower.
(5A)
Where
the
sale
of
an
immovable property, for which a reserve
price has been specified, has been
postponed for want of a bid of an amount
not less than such reserve price, it shall be
lawful for any officer of the secured
creditor, if so authorised by the secured
creditor in this behaalf, to bid for the
immovable property on behalf of the
secured creditor at any subsequent sale.
(5B) Where the secured creditor,
referred to in sub-section (5A), is declared
to be the purchaser of the immovable
property at any subsequent sale, the
amount of the purchase price shall be
adjusted towards the amount of the claim of
the secured creditor for which the auction
of enforcement of security interest is taken
by the secured creditor, under sub-section
(4) of section 13.
(5C) The provisions of section 9 of
the Banking Regulation Act, 1949 (10 of
1949) shall, as far as may be, apply to the
immovable property acquired by secured
creditor under sub-section (5A).
(6) Any transfer of secured asset
after taking possession thereof or take over
of management under sub-section (4), by
the secured creditor or by the manager on
behalf of the secured creditor shall vest in
the transferee all rights in, or in relation to,
the secured asset transferred as if the
transfer had been made by the owner of
such secured asset.
(7) Where any action has been
taken against a borrower under the
provisions of sub-section (4), all costs,
charges and expenses which, in the opinion
of the secured creditor, have been properly
incurred by him or any expenses incidental
thereto, shall be recoverable from the
borrower and the money which is received
by the secured creditor shall, in the absence
of any contract to the contrary, be held by
him in trust, to be applied, firstly, in
payment of such costs, charges and
expenses and secondly, in discharge of the
dues of the secured creditor and the residue
of the money so received shall be paid to
the person entitled thereto in accordance
with his rights and interests.
1516 INDIAN LAW REPORTS ALLAHABAD SERIES
(8) Where the amount of dues of the
secured creditor together with all costs,
charges and expenses incurred by him is
tendered to the secured creditor at any time
before the date of publication of notice for
public auction or inviting quotations or
tender from public or private treaty for
transfer by way of lease, assignment or sale
of the secured assets,-
(i) the secured assets shall not be
transferred by way of lease assignment or
sale by the secured creditor; and
(ii) in case, any step has been taken
by the secured creditor for transfer by way
of lease or assignment or sale of the assets
before tendering of such amount under this
sub-section, no further step shall be taken
by such secured creditor for transfer by
way of lease or assignment or sale of such
secured assets.
(9) Subject to the provisions of the
Insolvency and Bankruptcy Code, 2016, in
the case of financing of a financial asset by
more than one secured creditors or joint
financing of a financial asset by secured
creditors, no secured creditor shall be
entitled to exercise any or all of the rights
conferred on him under or pursuant to subsection (4) unless exercise of such right is
agreed upon by the secured creditors
representing not less than sixty per cent in
value of the amount outstanding as on a
record date and such action shall be
binding on all the secured creditors:
Provided that in the case of a
company
in
liquidation,
the
amount
realised from the sale of secured assets
shall be distributed in accordance with the
provisions
of
section
529A
of
the
Companies Act, 1956 (1 of 1956):
Provided further that in the case of
a company being wound up on or after the
commencement of this Act, the secured
creditor of such company, who opts to
realise his security instead of relinquishing
his security and proving his debt under
proviso to sub-section (1) of section 529 of
the Companies Act, 1956 (1 of 1956), may
retain the sale proceeds of his secured
assets after depositing the workmen's dues
with the liquidator in accordance with the
provisions of section 529A of that Act:
Provided
also
that
liquidator
referred to in the second proviso shall
intimate the secured creditor the workmen's
dues in accordance with the provisions of
section 529A of the Companies Act, 1956 (1
of 1956) and in case such workmen's dues
cannot be ascertained, the liquidator shall
intimate
the
estimated
amount
of
workmen's dues under that section to the
secured creditor and in such case the
secured creditor may retain the sale
proceeds of the secured assets after
depositing the amount of such estimate
dues with the liquidator:
Provided also that in case the
secured creditor deposits the estimated
amount of workmen's dues, such creditor
shall be liable to pay the balance of the
workmen's dues or entitled to receive the
excess amount, if any, deposited by the
secured creditor with the liquidator:
Provided also that the secured creditor
shall furnish an undertaking to the
liquidator to pay the balance of the
workmen's dues, if any.
Explanation.--For the purposes of
this sub-section,-
(a) "record date" means the date
agreed upon by the secured creditors
representing not less than sixty per cent in
value of the amount outstanding on such
date;
(b) "amount outstanding" shall
include principal, interest and any other
dues payable by the borrower to the
secured creditor in respect of secured asset
as per the books of account of the secured
creditor.
4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1517
(10) Where dues of the secured
creditor are not fully satisfied with the sale
proceeds of the secured assets, the secured
creditor may file an application in the form
and manner as may be prescribed to the
Debts
Recovery
Tribunal
having
jurisdiction or a competent court, as the
case may be, for recovery of the balance
amount from the borrower.
(11) Without prejudice to the rights
conferred on the secured creditor under or
by this section, secured creditor shall be
entitled to proceed against the guarantors
or sell the pledged assets without first
taking any of the measured specifies in
clauses (a) to (d) of sub-section (4) in
relation to the secured assets under this
Act.
(12) The rights of a secured
creditor under this Act may be exercised by
one or more of his officers authorised in
this behalf in such manner as may be
prescribed.
(13) No borrower shall, after
receipt of notice referred to in sub-section
(2), transfer by way of sale, lease or
otherwise (other than in the ordinary
course of his business)any of his secured
assets referred to in the notice, without
prior written consent of the secured
creditor."
Section 17 of the SARFAESI Act
"17. Application against measures
to recover secured debts].--(1) Any person
(including borrower), aggrieved by any of
the measures referred to in sub-section (4)
of section 13 taken by the secured creditor
or his authorised officer under this
Chapter, may make an application along
with such fee, as may be prescribed, to the
Debts
Recovery
Tribunal
having
jurisdiction in the matter within forty five
days from the date on which such measure
had been taken:
Provided that different fees may be
prescribed for making the application by
the borrower and the person other than the
borrower.
Explanation.--For the removal of
doubts, it is hereby declared that the
communication of the reasons to the
borrower by the secured creditor for not
having accepted his representation or
objection or the likely action of the secured
creditor at the stage of communication of
reasons to the borrower shall not entitle the
person (including borrower) to make an
application to the Debts Recovery Tribunal
under this sub-section.
(1A) An application under subsection (1) shall be filed before the Debts
Recovery Tribunal within the local limits of
whose jurisdiction-
(a) the cause of action, wholly or in
part, arises;
(b) where the secured asset is
located; or
(c) the branch or any other office of
a
bank
or
financial
institution
is
maintaining an account in which debt
claimed is outstanding for the time being.
(2) The Debts Recovery Tribunal
shall consider whether any of the measures
referred to in sub-section (4) of section 13
taken
by
the
secured
creditor
for
enforcement of security are in accordance
with the provisions of this Act and the rules
made thereunder.
(3) If, the Debts Recovery Tribunal,
after examining the facts and circumstances
of the case and evidence produced by the
parties, comes to the conclusion that any of
the measures referred to in sub-section (4)
of section 13, taken by the secured creditor
are not in accordance with the provisions of
this Act and the rules made thereunder, and
require restoration of the management or
restoration of possession, of the secured
1518 INDIAN LAW REPORTS ALLAHABAD SERIES
assets to the borrower or other aggrieved
person, it may, by order,--
(a) declare the recourse to any one
or more measures referred to in sub-section
(4) of section 13 taken by the secured
creditor as invalid; and
(b)
restore
the
possession
of
secured assets or management of secured
assets to the borrower or such other
aggrieved person, who has made an
application under sub-section (1), as the
case may be; and
(c) pass such other direction as it
may consider appropriate and necessary in
relation to any of the recourse taken by the
secured creditor under sub-section (4) of
section 13.
(4) If, the Debts Recovery Tribunal
declares the recourse taken by a secured
creditor under sub-section (4) of section 13,
is in accordance with the provisions of this
Act and the rules made thereunder, then,
notwithstanding anything contained in any
other law for the time being in force, the
secured creditor shall be entitled to take
recourse to one or more of the measures
specified under sub-section (4) of section
13 to recover his secured debt.
(4A) Where--(i) any person, in an
application under sub-section (1), claims
any tenancy or leasehold rights upon the
secured asset, the Debt Recovery Tribunal,
after examining the facts of the case and
evidence produced by the parties in relation
to such claims shall, for the purposes of
enforcement of security interest, have the
jurisdiction to examine whether lease or
tenancy,--
(a)
has
expired
or
stood
determined; or
(b) is contrary to section 65A of the
Transfer of Property Act, 1882 (4 of 1882);
or
(c)
is
contrary
to
terms
of
mortgage; or
(d) is created after the issuance of
notice of default and demand by the Bank
under subsection (2) of section 13 of the
Act; and
(ii) the Debt Recovery Tribunal is
satisfied that tenancy right or leasehold
rights claimed in secured asset falls under
the sub-clause (a) or sub-clause (b) or subclause (c) or sub-clause (d) of clause (i),
then notwithstanding anything to the
contrary contained in any other law for the
time being in force, the Debt Recovery
Tribunal may pass such order as it deems
fit in accordance with the provisions of this
Act.
(5) Any application made under
sub-section (1) shall be dealt with by the
Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty
days from the date of such application:
Provided that the Debts Recovery
Tribunal may, from time to time, extend the
said period for reasons to be recorded in
writing, so, however, that the total period of
pendency of the application with the Debts
Recovery Tribunal, shall not exceed four
months from the date of making of such
application made under sub-section (1).
(6) If the application is not
disposed of by the Debts Recovery Tribunal
within the period of four months as
specified in sub-section (5), any part to the
application may make an application, in
such form as may be prescribed, to the
Appellate Tribunal for directing the Debts
Recovery Tribunal for expeditious disposal
of the application pending before the Debts
Recovery Tribunal and the Appellate
Tribunal may, on such application, make an
order for expeditious disposal of the
pending application by the Debts Recovery
Tribunal.
(7) Save as otherwise provided in
this Act, the Debts Recovery Tribunal shall,
as far as may be, dispose of the application
4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1519
in accordance with the provisions of the
Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of
1993) and the rules made thereunder.

10. It is relevant to indicate that
the present format of section 17 is in
pursuance of amendment incorporated in
the SARFAESI Act vide Act No. 44 of
2016 with effect from 1.9.2016 whereby
sub section (1-A) of Section 17 was
inserted. Prior to the aforesaid amendment,
Section 17 of the SARFAESI Act read as
follows:-

"17. Right to appeal.--(1) Any
person (including borrower), aggrieved by
any of the measures referred to in subsection (4) of section 13 taken by the
secured creditor or his authorised officer
under
this
Chapter,
may
make
an
application along with such fee, as may be
prescribed, to the Debts Recovery Tribunal
having jurisdiction in the matter within
forty five days from the date on which such
measures had been taken:
Provided that different fees may be
prescribed for making the applications by
the borrower and the person other than the
borrower.
Explanation. --For the removal of
doubts, it is hereby declared that the
communication of the reasons to the
borrower by the secured creditor for not
having accepted his representation or
objection or the likely action of the secured
creditor at the stage of communication of
reasons to the borrower shall not entitle the
person (including borrower) to make an
application to the Debts Recovery Tribunal
under sub-section (1) of section 17.
(2) The Debts Recovery Tribunal
shall consider whether any of the measures
referred to in sub-section (4) of section 13
taken
by
the
secured
creditor
for
enforcement of security are in accordance
with the provisions of this Act and the rules
made thereunder.
(3) If, the Debts Recovery Tribunal,
after examining the facts and circumstances
of the case and evidence produced by the
parties, comes to the conclusion that any of
the measures referred to in sub-section (4)
of section 13, taken by the secured creditor
are not in accordance with the provisions of
this Act and the rules made thereunder, and
require restoration of the management of
the secured assets to the borrower or
restoration of possession of the secured
assets to the borrower, it may, by order,
declare the recourse to any one or more
measures referred to in sub-section (4) of
section 13 taken by the secured assets as
invalid and restore the possession of
secured assets to the borrower or restore
the management of the secured assets to the
borrower, as the case may be, and pass
such order as it may consider appropriate
and necessary in relation to any of the of
the recourse taken by the secured creditor
under sub-section (4) of section 13.
(4) If, the Debts Recovery Tribunal
declares the recourse taken by a secured
creditor under sub-section (4) of section 13,
is in accordance with the provisions of this
Act and the rules made thereunder, then,
notwithstanding anything contained in any
other law for the time being in force, the
secured creditor shall be entitled to take
recourse to one or more of the measures
specified under sub-section (4) of section
13 to recover his secured debt.
(5) Any application made under
sub-section (1) shall be dealt with by the
Debts Recovery Tribunal as expeditiously
as possible and disposed of within sixty
days from the date of such application:
Provided that the Debts Recovery
Tribunal may, from time to time, extend the
said period for reasons to be recorded in
1520 INDIAN LAW REPORTS ALLAHABAD SERIES
writing, so, however, that the total period of
pendency of the application with the Debts
Recovery Tribunal, shall not exceed four
months from the date of making of such
application made under sub-section (1).
(6) If the application is not
disposed of by the Debts Recovery Tribunal
within the period of four months as
specified in sub-section (5), any party to
the application may make an application,
in such form as may be prescribed, to the
Appellate Tribunal for directing the Debts
Recovery Tribunal for expeditious disposal
of the application pending before the Debts
Recovery Tribunal and the Appellate
Tribunal may, on such application, make an
order for expeditious disposal of the
pending application by the Debts Recovery
Tribunal.
(7) Save as otherwise provided in
this Act, the Debts Recovery Tribunal shall,
as far as may be, dispose of application in
accordance with the provisions of the
Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of
1993) and the rules made thereunder."

11. For proper appreciation of
provisions of aforesaid sections of the
SARFAESI Act, it would be necessary to
appreciate the reasons for incorporation of
the amendment to Section 17 whereby
Clause 1-A was inserted in the year 2016.

12. As would be evident from the
provisions of Section 17 prior to its
amendment, right to appeal under Section
17 was available to any person, including a
borrower aggrieved by any of the measures
referred to in Sub Section (4) of Section 13
of the Act taken by a secured creditor or the
authorized officer. The appeal was to be
preferred to the Debts Recovery Tribunal
having jurisdiction in the matter. It is
relevant that the concept of jurisdiction of
the Debts Recovery Tribunal was not
clarified in Section 17 which led to various
litigations pertaining to jurisdiction.

13. The said anomaly was
thereafter sought to be remedied by
insertion of clause (1-A) to Section 17
whereby the concept of jurisdiction of the
Debts Recovery Tribunal before which an
appeal would lie, was explained.

14. The statement of objects and
reasons in the Act No. 44 of 2016 clearly
indicates that such amendment have been
proposed in order to facilitate expeditious
disposal of recovery applications. Evidently
the
amendment
to
Section
17
was
incorporated to remove any doubt with
regard to jurisdiction of a particular Debts
Recovery Tribunal and to stymie litigations
pertaining
to
same.
It
is
in
such
circumstances
that
the
amendment
incorporated in Section 17 is required to be
examined in a way to give effect to its
purpose.

15. The concept of purposive
interpretation of statutory provisions has
been enunciated by Hon'ble Supreme Court
in the case of X versus Principal Secretary,
Health and Family Welfare Department,
Government of NCT of Delhi and another
(2023) 9 SCC 433 in the following
manner:-

"34. In Principles of Statutory
Interpretation by Justice G.P. Singh, it is
stated that a statute must be read in its
context when attempting to interpret its
purpose. [ Justice G.P. Singh, Principles of
Statutory
Interpretation,
(Lexis
Nexis,
2016), at p. 35.] Context includes reading
the statute as a whole, referring to the
previous state of law, the general scope of
the statute, surrounding circumstances and
4 All. Ram Pal Soni & Anr. Vs. State of U.P. & Ors.
1521
the mischief that it was intended to remedy.
[Union of India v. Sankalchand Himatlal
Sheth, (1977) 4 SCC 193 : 1977 SCC
(L&S) 435; RBI v. Peerless General
Finance & Investment Co. Ltd., (1987) 1
SCC 424] The treatise explains that:
"For ascertaining the purpose of a
statute one is not restricted to the internal
aid furnished by the statute itself, although
the text of the statute taken as a whole is
the
most
important
material
for
ascertaining
both
the
aspects
of
"intention". Without intending to lay down
a precise and exhaustive list of external
aids, Lord Somervell has stated:"The
mischief against which the statute is
directed and, perhaps though to an
undefined
extent
the
surrounding
circumstances can be considered. Other
statutes in pari materia and the state of the
law at the time are admissible." These
external aids are also brought in by
widening the concept of "context" "as
including
not
only
other
enacting
provisions of the same statute, but its
Preamble, the existing state of the law,
other statutes in pari materia, and the
mischief which the statute was intended to
remedy". In the words of Chinnappa Reddy,
J.:"Interpretation must depend on the text
and the context. They are the bases of
interpretation. One may well say if the text
is the texture, context is what gives colour.
Neither can be ignored. Both are important.
That interpretation is best which makes the
textual interpretation match the contextual.
A statute is best interpreted when we know
why it was enacted."
xxx

xxxx

xxxx
36. In Bengal Immunity Co. Ltd. v.
State of Bihar [Bengal Immunity Co. Ltd. v.
State of Bihar, 1955 SCC OnLine SC 2 :
(1955) 2 SCR 603 : AIR 1955 SC 661] , the
Constitution Bench applied the mischief
rule in Heydon case [Heydon case, (1584)
3 Co Rep 7a : 76 ER 637] in the
construction
of
Article
286
of
the
Constitution. In Kehar Singh v. State (UT of
Delhi) [Kehar Singh v. State (UT of Delhi),
(1988) 3 SCC 609 : 1988 SCC (Cri) 711] ,
a three-Judge Bench of this Court held :
(Kehar Singh case [Kehar Singh v. State
(UT of Delhi), (1988) 3 SCC 609 : 1988
SCC (Cri) 711] , SCC pp. 717-18, paras
231 & 233)
"231. During the last several
years, the "golden rule" has been given a
go-by. We now look for the "intention" of
the legislature or the "purpose" of the
statute. First, we examine the words of the
statute. If the words are precise and cover
the situation in hand, we do not go further.
We expound those words in the natural and
ordinary sense of the words. But, if the
words are ambiguous, uncertain or any
doubt arises as to the terms employed, we
deem it as our paramount duty to put upon
the language of the legislature rational
meaning. We then examine every word,
every section and every provision. We
examine the Act as a whole. We examine
the necessity which gave rise to the Act. We
look at the mischiefs which the legislature
intended to redress. We look at the whole
situation and not just one-to-one relation.
We will not consider any provision out of
the framework of the statute. We will not
view the provisions as abstract principles
separated from the motive force behind. We
will
consider
the
provisions
in
the
circumstances to which they owe their
origin. We will consider the provisions to
ensure coherence and consistency within
the law as a whole and to avoid
undesirable consequences.
*

*

 *
233. For this purpose, we call in
external and internal aids:
External aids are : the Statement of
Objects and Reasons when the Bill was
1522 INDIAN LAW REPORTS ALLAHABAD SERIES
presented to Parliament, the reports of the
Committee, if any, preceding the Bill,
legislative history, other statutes in pari
materia and legislation in other States
which pertain to the same subject-matter,
persons, things or relations.
Internal aids are : Preamble,
scheme, enacting parts of the statutes, rules
of languages and other provisions in the
statutes."

16. In the case of Vivek Narain
Sharma and others (Demonitasation case
-5J versus Union of India (2023) 3 SCC 1
has also enunciated law pertaining to
purposive interpretation of statute in the
following manner:-

" 134. "Legislation has an aim, it
seeks to obviate some mischief, to supply
an inadequacy, to effect a change of policy,
to formulate a plan of government. That
aim, that policy is not drawn, like
nitrogen, out of the air; it is evidenced in
the language of the statute, as read in the
light of other external manifestations of
purpose
["Some
Reflections
on
the
Reading of Statutes" [(1947) 47 Columbia
LR 527] , Columbia LR at p. 538]." This
is how Justice Frankfurter succinctly
propounds the principle of purposive
interpretation.
Xxxxx
 xxxx
xxxx
138. Aharon Barak, the former
President of the Supreme Court of Israel,
whose
exposition
of
"doctrine
of
proportionality" has found approval by
the Constitution Bench of this Court in
Modern Dental College & Research
Centre
[Modern
Dental
College
&
Research Centre v. State of M.P., (2016) 7
SCC 353 : 7 SCEC 1] , to which we will
refer to in the forthcoming paragraphs, in
his
commentary
on
"Purposive
Interpretation in Law", has summarised
"the goal of interpretation in law" as
under:
"At some point, we need to find an
Archimedean foothold, external to the text,
from which to answer that question. My
answer is this : The goal of interpretation
in law is to achieve the objective-in other
words, the purpose-of law. [ D. Brink,
"Legal Theory, Legal Interpretation, and
Judicial Review", 17 Philosophy & Public
Affairs 105, 125 (1988).] The role of a
system of interpretation in law is to choose,
from among the semantic options for a
given text, the meaning that best achieves
the purpose of the text. Each legal textwill, contract, statute, and constitutionwas chosen to achieve a social objective.
Achieving this objective, achieving this
purpose, is the goal of interpretation. The
system of interpretation is the device and
the means. It is a tool through which law
achieves self-realisation.