Authority: High Court of Jharkhand, Ranchi

Order Date: 25 June 2026 (reserved on 19 June 2026)

Case Overview

  • Petitioners: (i) Indian Bank (Allahabad) SAM Branch, represented by Authorized Officer Rahul Jaiswal; (ii) Yashoda Hospital & Research Centre Ltd., represented by Authorized Signatory Rajesh Kumar Pandey (the auction purchaser).
  • Respondents: (i) Maa Lalita Hospital and Research Centre Private Ltd. (the borrower); (ii) Shiv Dutt Sharma, Managing Director of the borrower; (iii) Sabina Kumari, wife of Shiv Dutt Sharma; (iv) the Debts Recovery Appellate Tribunal, Allahabad; (v) the Debts Recovery Tribunal, Ranchi; (vi) the Authorised Officer of Indian Bank.
  • Background: The borrower obtained an initial term loan of Rs 2 crore from Indian Bank for a 60‑bed multispecialty hospital. The loan was subsequently enhanced to Rs 9 crore, then to Rs 19.45 crore, and a fresh term loan of Rs 10 crore was sanctioned, bringing total exposure to roughly Rs 77 crore. The borrower defaulted; the loan was classified as NPA on 31‑12‑2009. SARFAESI proceedings were initiated on 20‑10‑2010, possession taken on 09‑12‑2013, and an Original Application under Section 19 of the Recovery of Debts and Bankruptcy Act was filed (O.A. No.125 of 2013) for recovery of Rs 27,96,56,510.14.
  • A compromise agreement dated 22‑01‑2015 required the borrower to pay Rs 19.37 crore plus delayed interest in 11 installments; only Rs 10 lakhs were paid and the borrower thereafter defaulted on the instalments.
  • A fresh SARFAESI notice was issued on 10‑07‑2025 for the remaining balance of Rs 70,92,12,296. The borrower challenged the notice on limitation grounds (W.P.(C) No. 6720 of 2025); the writ petition was dismissed on 05‑02‑2026, and an intra‑court appeal (L.P.A. No. 145 of 2026) upheld the dismissal.
  • The bank auctioned the secured assets on 07‑04‑2026, fetching Rs 44.22 crore. The auction purchaser (Yashoda Hospital) paid the full consideration.
  • The borrower approached the Debts Recovery Appellate Tribunal (DRAT) under Section 17A, seeking a stay on issuance of the sale certificate. DRAT issued an interim order on 10‑04‑2026 directing the Debts Recovery Tribunal, Ranchi to consider the interim application and allowing the bank to receive the sale proceeds but prohibiting issuance of the sale certificate. This order was extended on 21‑04‑2026.
  • Reliefs Sought: The bank (W.P.(C) No. 3469 of 2026) sought quashing of the DRAT orders and permission to issue the sale certificate. The auction purchaser (W.P.(C) No. 3548 of 2026) sought a writ of mandamus directing the bank to issue the sale certificate.
  • Arguments: The bank contended that Section 17A confers only administrative, not adjudicatory, powers and that the DRAT exceeded its jurisdiction. The auction purchaser argued that once full payment is made, the sale certificate must be issued and cannot be stayed. The borrower argued limitation and that Section 17A permits the Chairperson to stay issuance of the certificate.
  • Observations & Findings: The Court noted the outstanding debt of approximately Rs 77 crore, the failure of the borrower to honour the compromise, and the inadmissibility of the DRAT’s stay because it was a judicial order beyond the administrative scope of Section 17A. The Court emphasized that Section 17 confers adjudicatory powers, whereas Section 17A is limited to supervisory and administrative functions.

Final Outcome

  • The Court held that the DRAT, by invoking Section 17A, transgressed its jurisdiction in staying the issuance of the sale certificate. Both the interim order dated 10‑04‑2026 and the extended order dated 21‑04‑2026 were set aside.
  • Consequently, there is no impediment for Indian Bank to issue the sale certificate in favour of the auction purchaser, Yashoda Hospital & Research Centre Ltd.
  • Both writ petitions (W.P.(C) No. 3469 of 2026 and W.P.(C) No. 3548 of 2026) were allowed. Any pending interlocutory applications, if any, stand disposed of.

Topics: Court Order; Debt Recovery; Sale Certificate