In a setback for Nirvan Birla, son of businessman Yashovardhan (Yash) Birla, the Bombay High Court has stayed the operation of an order passed by the Debt Recovery Tribunal (DRT), which had directed the Kotak Mahindra Bank to restore possession of a property, a secured asset, to Nirvan.
A division bench of Chief Justice Dipankar Datta and Justice Anil S Kilor, on Friday, stayed DRT’s order for a month while hearing a plea by the Bank, the secured creditor, challenging the order of DRT-II of November 26, 2021.
The DRT had directed the Bank to restore possession to Nirvan while hearing his plea under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The disputed property, a row house at Kemps corner in the city, was to be restored to Nirvan to the extent of his shares in the same by January 22.
The Bank, aggrieved by the order, approached the Debts Recovery Appellate Tribunal (DRAT), Mumbai. However, the Bank also filed a petition in the HC against the DRT order.
According to the Bank. In 2012, Yash Birla had taken a home loan from the bank which was then ING Vysya Bank. Due to default in repayment of the loan, the bank had initiated steps under SARFAESI Act and took symbolic possession of the property.
In 2015, Nirvan Birla, who attained the majority, filed an application before the DRT challenging the bank’s action. He claimed that his father Yash Birla was the co-owner of the subject property and even if the father had mortgaged it, it would have been only pertaining to the father’s share in the property.
Bank opposed the contention saying that Yash Birla was the exclusive owner of the property.
DRT had then ruled in Nirvan’s favour.
The HC said it would hear the Bank’s plea as the office of the chairperson, DRAT, Mumbai was vacant. Posts in DRT had fallen vacant after its members retired, and no new appointment was made due to the Covid-19 pandemic.
Bank’s counsel argued before the HC that the DRT-II had decided the question of the title of the property by “transgressing its jurisdiction.”
Granting interim relief in favour of the Bank, HC has clarified that “if the chairperson of the DRAT, Mumbai is appointed in the near future, the petitioner would have to pursue its appeal before its Chairperson”.
The HC has kept Bank’s plea for hearing on February 17, when depending on circumstances, an appropriate order will be passed.
