Statutory Appeal Cannot Be Rendered Illusory Due To DRAT Vacancies, Administrative Hurdles: Delhi High Court

The Delhi High Court on Tuesday observed that litigants cannot be denied an effective appellate remedy under debt recovery law when their statutory appeal remains unheard due to tribunal vacancies, recusals and administrative difficulties.

On a plea by two auction purchasers, a division bench of Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar held that while courts normally refrain from exercising writ jurisdiction when a statutory appeal is available, such restraint cannot apply when the appellate remedy becomes meaningless in practice.

The court said the failure to hear the appeal was not due to any lapse by the petitioner-auction purchasers, but was caused entirely by systemic hurdles

"a litigant cannot be placed in a situation where a statutory right of appeal is rendered illusory on account of procedural or administrative impediments. It is well settled that while the existence of an alternate statutory remedy ordinarily disentitles a party from invoking writ jurisdiction, such a rule is not absolute. Where a statutory remedy is rendered inefficacious in practice, or where a litigant is left remediless despite diligent pursuit of such remedy, this Court would be justified in exercising its jurisdiction to ensure that access to justice is not defeated", it said.

The plea arises from recovery proceedings initiated by Bank of India against defaulting borrowers under the Recovery of Debts and Bankruptcy Act. A recovery certificate was issued in August 2017. During execution, two immovable properties belonging to the borrower entities were auctioned in February 2020, one located in Mumbai and the other in Chennai.

Truevalue Marketing Services Private Limited purchased the Mumbai property, while the second petitioner purchased the Chennai property. Both auction purchasers approached the High Court.

In April 2025, the Presiding Officer of Debts Recovery Tribunal-II, Delhi passed an order transferring execution proceedings to the DRTs in Mumbai and Chennai after entertaining objections raised by the borrowers on territorial jurisdiction.

The auction purchasers challenged this order. Although statute provides an appeal against such orders with the Debt Recovery Appellate Tribunal, their appeal was not heard for several months due to a series of obstacles.

This included the recusal of the DRAT Delhi Chairperson, vacancies at DRAT Mumbai, jurisdictional objections by tribunal registries and shifting administrative charge arrangements.

Before the High Court, the auction purchasers argued that objections to territorial jurisdiction were raised at a very late stage, long after the auctions had concluded, and were barred under the statute.

They contended that the transfer order was being used to delay recovery proceedings and had caused serious prejudice to bona fide auction purchasers. The Bank however argued that excution relating to immovable property should be handled by tribunals within whose territorial limits the properties are situated.

While it did not examine the merits of these rival claims, It noted that the auction purchasers had repeatedly attempted to file their appeal before different Debts Recovery Appellate Tribunals, but were turned away for reasons beyond their control.

“The failure of the appeal to be entertained thus far cannot be attributed to any inaction, negligence, or lack of diligence on the part of the Petitioners, but is a consequence of procedural and administrative impediments beyond their control.,” the court said.

The court directed that the petitioners' appeal against the April 2025 transfer order be entertained by the appropriate Debts Recovery Appellate Tribunal within seven days.

All questions of merit are left open for the consideration of appellate forum.

Case Title: True Value Marketing Services Pvt Ltd v Union Of India

Case Number: W.P.(C) 18257/2025

For Petitioner: Senior Advocate Rajeeve Mehra, along with Advocate Samyak Bilala

For Respondent: Advocate Premtosh K Mishra along with Advocate Anurag Tiwari, Prarabhdh Tiwari and Shrey Sharma for UOI; Advocates Vipin Jai and Ujjwal Goel, Advocates for Bank of India.

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