Statutory Appeal Under RDB Act Cannot Be Rendered Illusory Due To Administrative Impediments: Delhi High Court
The High Court held that the appellate mechanism under the Recovery of Debts and Bankruptcy Act, 1993, forms an integral part of the statutory framework, and access to such a forum cannot be denied to an aggrieved party on account of procedural or administrative impediments beyond its control.
Justice Anil Kshetarpal, Justice Harish Vaidyanathan Shankar, Delhi High Court
The Delhi High Court has held that a litigant cannot be placed in a situation where a statutory right of appeal, under the Recovery of Debts and Bankruptcy Act, 1993, becomes illusory in practice, particularly where bona fide attempts to invoke the appellate remedy fail due to reasons not attributable to the litigant.
The Court was hearing a writ petition filed by auction purchasers challenging an order passed by the Debts Recovery Tribunal-II, Delhi, directing transfer of execution proceedings to other tribunals, against which a statutory appeal was available under the Recovery of Debts and Bankruptcy Act, 1993.
A Division Bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar, while examining whether writ jurisdiction could be exercised despite the availability of an appellate remedy, observed that “the appellate mechanism under the RDB Act forms an integral part of the statutory scheme, and access to such a forum cannot be denied for reasons beyond the control of the aggrieved party.”
Senior Advocate Rajeeve Mehra appeared for the petitioners, while the respondents were represented by Premtosh K. Mishra, CGSC.
Background
The dispute arose out of recovery proceedings initiated under the RDB Act pursuant to the issuance of a Recovery Certificate by the Debts Recovery Tribunal-II, Delhi. During execution proceedings, auction sales were conducted in respect of properties situated in Mumbai and Chennai, in which the petitioners emerged as successful auction purchasers.
Subsequently, objections were raised by the certificate debtors concerning territorial jurisdiction, leading to the filing of a miscellaneous application before the Presiding Officer, DRT-II, Delhi. By an order dated 08 April 2025, the Presiding Officer directed the transfer of execution proceedings to the Debts Recovery Tribunals having territorial jurisdiction over the subject properties.
Aggrieved by the said order, the petitioners sought to avail the statutory appellate remedy. However, due to recusals, vacancies, jurisdictional objections by registries, and changing administrative arrangements concerning the charge of various Debt Recovery Appellate Tribunals, the petitioners were unable to have their appeal entertained by any appellate forum despite repeated attempts over several months.
Court’s Observation
The Delhi High Court, at the outset, noted that ordinarily, where a statutory appellate remedy is available, exercise of writ jurisdiction would be circumscribed. However, the Court emphasised, “where a statutory remedy is rendered inefficacious in practice, or where a litigant is left remediless despite diligent pursuit of such remedy, this Court would be justified in exercising its jurisdiction to ensure that access to justice is not defeated”.
The Bench examined the factual chronology and recorded that the petitioners had made continuous and bona fide efforts to pursue their statutory appeal, first before DRAT Chennai, thereafter pursuant to clarification orders of the Court, and later before DRAT Delhi. The failure of the appeal to be entertained, the Court held, was not attributable to any lack of diligence on the part of the petitioners, but stemmed from administrative and procedural impediments beyond their control.
The Court observed that while the consequences of the impugned order had already begun to operate through the transfer of recovery proceedings, the statutory appeal against that order remained unheard. In such circumstances, the Court held “a litigant cannot be placed in a situation where a statutory right of appeal is rendered illusory on account of procedural or administrative impediments.”
Clarifying the scope of its earlier order permitting the petitioners to approach a particular appellate forum, the Court held that such permission was granted in the context of a transitory administrative arrangement and could not be construed as permanently foreclosing access to other competent appellate forums once the administrative situation changed.
The Court further emphasised that the merits of the impugned order, including questions relating to territorial jurisdiction and the stage at which such objections could be entertained, were matters falling squarely within the domain of the statutory appellate forum and ought not to be examined in writ proceedings.
Conclusion
Holding that the petitioners could not be rendered remediless merely due to procedural and administrative obstacles, the Delhi High Court permitted the petitioners to pursue their appeal before the Debts Recovery Appellate Tribunal having administrative charge and directed that the appeal be entertained and considered on merits within a stipulated time, without being influenced by any observations in the impugned order or the present judgment.
The petition, along with all pending applications, was accordingly disposed of.
Cause Title: Truevalue Marketing Services Private Limited & Anr. v. Union of India & Ors. (Neutral Citation: 2025:DHC:11766-DB)
Appearances
Petitioners: Senior Advocate Rajeeve Mehra, with Advocate Samyak Bilala
Respondents: Premtosh K. Mishra, CGSC, with Advocates Anurag Tiwari, Prarabhdh Tiwari, Shrey Sharma, Vipin Jai and Ujjwal Goel