Andhra Pradesh HC Halts Coercive Steps as Debt Recovery Tribunals Remain Non-Functional

The Andhra Pradesh High Court has intervened to protect a borrower from immediate e-auction after finding that the regional Debts Recovery Tribunals were rendered effectively non-functional due to the absence of Presiding Officers. The Court ruled that the unavailability of a statutory forum cannot be allowed to frustrate a litigant’s right to seek urgent interim relief against recovery proceedings.

A bench comprising Justice T.C.D. Sekhar and Justice Tuhin Kumar Gedela heard the petition. The Court was informed that the petitioner had already approached the Tribunal to challenge recovery notices, but the matter could not be heard as the designated Presiding Officers were on leave, leaving the borrower without an efficacious remedy against the scheduled sale of his property.

Key Takeaways

Right to Judicial Recourse

Ensures that the right to seek interim protection under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is not extinguished merely because of administrative vacancies or leaves within the Tribunal machinery.

High Court's Supervisory Intervention

Reaffirms the High Court's power to grant temporary protection when the specialized statutory forum (DRT) is temporarily incapacitated, preventing irreparable loss to borrowers.

Status of E-Auction During Vacancy

Establishes that coercive steps like e-auctions can be stayed by the High Court if the petitioner has already invoked the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 but finds the forum inaccessible.

Protection Against Coercive Measures

The petitioner had approached the High Court seeking a stay on an e-auction scheduled for October 23, 2026. Despite having filed an application under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 on October 21, the petitioner was unable to obtain any orders because the Presiding Officers of DRT-I Hyderabad, DRT-II Hyderabad, and DRT-Visakhapatnam were all on leave during the crucial period.

The Court noted that the very purpose of filing the statutory application would be frustrated if no interim orders were passed while the auction proceeded. Consequently, the High Court granted a two-week shield against coercive actions to allow the Tribunal time to resume operations and hear the stay application.

The Court has the following directions:

"...the respondents are directed not to take any coercive steps, more particularly in respect of the schedule property mentioned in the sale notice dated 17.09.2026, for a period of two weeks from the date of receipt of a copy of this order. Resultantly, this writ petition is disposed of directing the Debts Recovery Tribunal to adjudicate and pass orders in the stay application filed in S.A.No.725 of 2026, as expeditiously as possible preferably within a period of two (2) weeks."

Ratio

Where a statutory remedy under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 is rendered illusory or inaccessible due to the non-functioning of the Debts Recovery Tribunal or the absence of its Presiding Officer, the High Court may exercise its extraordinary jurisdiction to grant interim protection and ensure that the petitioner’s right to seek stay under Section 17 of the Act is not rendered redundant by the execution of coercive recovery measures.

Background

The petitioner had availed an Enterprise Finance Loan of Rs. 50,00,000 from Shriram City Union Finance Limited but defaulted on repayment. Following the default, the respondent financial institution initiated recovery proceedings by issuing notices under Section 13(2) and Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Subsequently, a sale notice was published on September 17, 2026, scheduling an e-auction for October 23, 2026.

The petitioner challenged these proceedings by filing S.A. No. 725 of 2026 before the Debts Recovery Tribunal. However, an office order from the DRAT Kolkata revealed that the Presiding Officers of the relevant DRTs were on leave from October 19 to October 23, 2026. Highlighting this procedural deadlock, the petitioner moved the High Court. The High Court disposed of the writ petition with a direction to the DRT to adjudicate the stay application within two weeks, while staying coercive steps in the interim.

Case Details:
Case No.: WRIT PETITION NO: 31004 of 2026
Neutral Citation: 2026:APHC:45290
Case Title: Tatavarthi Naga Venkata Ram Kumar Vs. The Union Of India and Others
Appearances:
For the Petitioner(s): Singamsetty V.M. Sankar, Advocate
For the Respondent(s): O.Uday Kumar, Advocate; C.V.S.S.Sarma, Advocate

Source: 2026 CaseBase(AP) 19554