DRAT Disposes of Appeal Against South Indian Bank, Directs DRT to Expedite Disposal of Securitisation Application [Read Order]

In a recent case, theDebt Recovery Appellate Tribunal (DRAT) Chennai disposed of the appeal filed against South Indian Bank, directing the Debt Recovery Tribunal (DRT) Coimbatore to expedite the disposal of the pending Securitisation Application (SA).

M/s Venus P P V Spinning Mills (P) Ltd., Mr. V Sekar (Managing Director) and Mr. Durairaj (director), the appellants challenged the DRT Coimbatore's interim order which had directed the appellants to deposit ₹7 Crores in two equal instalments as a precondition. The underlying SA 288/2022, challenging a sale notice published by the bank on 18.02.2022, remained pending before the DRT.

The SA 288/2022 was filed against the sale notice dated 11.02.2022 published in “The New Indian Express” and “Dinamani”, on 18.02.2022. The said SA is still pending.

Noting that the appeal was against an interim order while the main SA was still pending, the DRAT bench led by Justice G. Chandrasekharan, Chairperson, held that the most efficient course was to dispose of the appeal by directing the DRT to conclude the main SA 288/2022 expeditiously on its merits.

Consequently, the DRAT disposed of the appeal in M.A.(S.A):41/2024. The Tribunal granted an interim stay of the bank's recovery measures for one month, after which the DRT would decide on continuing the stay based on exigency. Both parties were directed to bear their own costs, and all pending interlocutory applications were closed.

The Tribunal held that when an appeal challenges an interim order in a pending main proceeding, the appellate forum can dispose of the appeal by directing the lower tribunal to expedite the main case, rather than adjudicating the interim issue itself.

V. Jayachandran appeared for the appellant and M.L. Ganesh appeared for the respondent bank.

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