Creative Home Fashion v. UOI and Ors

SANJIV KHANNA, J. kapil/dk

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment Reserved on: February 22, 2011 Judgment Delivered on: March 03, 2011 + WP (C) No. 1147of 2011 Creative Home Fashions Limited ..... Petitioner Through: Mr.Jayant Bhushan, Sr.Advocate with Mr.Aditya Tiwari, Adv. versus Union of India and others ..... Respondents Through: Mr.Sunil Kumar with Mr.Rajiv Ranjan Mishra, Advs. for Resp. 1 CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether reporters of the local papers be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes DIPAK MISRA, CJ By this writ petition preferred under Article 226 of the Constitution of India, though many a relief has been sought, yet in the course of hearing, we have made it clear that we would only address the first two prayers and it would be open to the petitioner to seek the other reliefs by way of an independent writ petition, if so advised. The first two prayers read as under:- "(i) Proviso III to Section 15 of the Sick Industries Companies (Special Provisions) Act, 1985 be declared, unconstitutional, ultra vires the Constitution of India and/or null and void; (ii) Proviso II & III to Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 be declared unconstitutional, ultra vires the Constitution of India and/or null and void." 2. First, we shall take up the second prayer. At the very outset, we may note with profit that in Mardia Chemicals Ltd. v. Union of India and others, AIR 2004 SC 2371 barring Section 17(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity "SARFAESI Act"), the entire Act was held to be constitutionally valid. After the said decision was rendered certain amendments were carried out in Sections 13, 17 and 18 of the Act. 3. The unamended Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read as follows: - "18. Appeal to Appellate Tribunal. – (1) Any person aggrieved by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal. (2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder." 4. Rule 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 deals with the procedure with regard to appeal to the Appellate Tribunal. The said Rule reads as follows: - "20. Appeal to the Appellate Tribunal. – (1) Save as provided in sub-section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. (2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties. (3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it with in that period. (4) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (5) The Appellate Tribunal shall send a copy of every ord