Bombay HC stays Debt Recovery Tribunal order in favour of Nirvaan Birla – India Today

The Bombay High Court has stayed the effect and operation of an order passed by the Debt Recovery Tribunal (DRT), Mumbai, which had been in favour of Nirvaan Birla, the son of Yash Birla.

Kotak Mahindra bank challenged the DRT order which had ruled that symbolic possession of a property for which Yash Birla had defaulted, be handed over to Nirvaan Birla.

During the previous hearing, senior advocate Janak Dwarkadas appearing for Kotak argued that since the Debt Recovery Appellate Tribunal (DRAT) was vacant, Kotak was compelled to approach the high court directly.

The Bench led by Chief Justice Dipankar Datta asked Kotak Mahindra to “atleast file an appeal before the DRAT” before approaching the High Court. “The DRAT may be vacant, but an appeal can still be filed. We must be satisfied that the appellate remedy has been pursued,” Chief Justice Datta said.

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Accordingly, on Friday, Kotak Mahindra informed the High Court that the appeal had been filed in the DRAT and sought for hearing of the writ petition.

WHAT IS THE CASE?

Kotak Mahindra’s lawyers argued that Yash Birla had taken a home loan in the year 2012 from them when the bank was called ANG Vyasa. However, Birla defaulted in repayment of the loan and so the bank took measures under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and symbolic possession of the property.

However, Nirvaan Birla, Yash’s son approached the Tribunal in 2015 with an application challenging the measures taken by the bank. In the Tribunal, an interim order was obtained in Nirvaan’s favour where any further proceedings in Kotak Mahindra’s proceedings against Birla’s property were stayed.

On November 26, 2021, the DRT allowed Nirvaan’s application and declared him to be the owner of the property.

Aggrieved by the order, Kotak Mahindra approached the high court with a writ petition challenging the order. On Friday, Dwarkadas argued, “The DRT ventured into an unknown territory by dealing with the question of title of the property in question”. He even argued that the bank had a registered mortgage deed with Yash Birla which had been overlooked by the DRT.

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Dwarkadas further added that Nirvaan Birla had filed a civil suit which was still pending in the Mumbai City Civil Court since 2015, seeking that share certificates of the property be transferred in his name.

The bench after hearing the parties noted that an arguable issue is raised and that the petitioner is entitled to ad-interim relief.

However, they pointed out that in a different proceeding, a coordinate bench of the Bombay High Court had directed the Government of India to take appropriate steps for expeditious appointment of the chairperson of the DRAT(M). Such proceeding is returnable in the first week of February 2022.

In a three page order, the court clarified, “If the chairperson of the DRAT(M) is appointed in the near future, Kotak Mahindra would have to pursue its appeal before the chairperson, DRAT(M)”.

While listing Kotak’s petition for arguments on February 17, 2022, in the interest of justice, the bench stayed the effect and operation of DRT’s order of November till February 21 or until further orders, whichever was earlier.

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