The Allahabad High Court has ordered a comprehensive inquiry by the Central Bureau of Investigation (CBI) into alleged procedural irregularities at the Debt Recovery Tribunal (DRT), Lucknow. The case, MATTERS UNDER ARTICLE 227 No. 5381 of 2024, was filed by Bank of Baroda, represented by Mr. Vinay Agrawal through its authorized officer, raising concerns over suspicious orders passed by the DRT Presiding Officer, A.H. Khan, prior to his superannuation.
Presiding over the matter, Justice Pankaj Bhatia flagged serious breaches of judicial conduct and procedural norms, emphasizing that the integrity of tribunals tasked with adjudicating critical financial disputes must remain unimpeachable. The High Court’s ruling comes as a significant step toward restoring faith in quasi-judicial institutions.
Background of the Case
The petitioner, Bank of Baroda, was represented by Advocate Prashant Kumar Srivastava, while the respondents, including the DRT and private parties, were represented by Advocate Apoorv Dev and others. The matter pertained to a securitization application under the SARFAESI Act, which facilitates recovery of financial dues by banks and financial institutions.
The controversy arose when the DRT passed an order on September 18, 2024, allegedly without conducting proper hearings or dictation. This order was later revised via a corrigendum dated September 27, 2024, just before the Presiding Officer retired. The corrigendum claimed that the original order should be read as dated September 24, 2024, adding to the confusion. These procedural discrepancies prompted allegations of malfeasance and mala fide intentions.
The petitioner highlighted additional irregularities:
- The case was not listed for hearing or pronouncement on September 18, 2024, raising doubts about how the order was issued.
- The corrigendum, which altered the order’s date, was reportedly introduced later and was absent from the tribunal’s official records obtained by the petitioner.
- The tribunal’s stenographer confirmed that no dictation was taken for the initial order.
These discrepancies cast doubt on the legitimacy of the orders passed by the Presiding Officer and led to allegations of manipulation aimed at favoring specific parties.
Key Legal Issues
The High Court’s judgment addressed the following critical legal questions:
- Validity of Procedural Irregularities in Judicial Orders:
- Could an order passed without adherence to procedural norms be considered valid?
- To what extent do such irregularities impact the rights of litigants?
- Accountability and Conduct of Tribunal Officials:
- Allegations of favoritism, nepotism, and corruption raised concerns about the personal and professional conduct of the Presiding Officer.
- The court also examined broader issues of judicial accountability within quasi-judicial bodies.
- Scope of Supervisory Jurisdiction under Article 227:
- The case highlighted the High Court’s supervisory role in ensuring that tribunals operate within the boundaries of law and procedure.
- Balancing Expeditious Recovery with Rights of Borrowers:
- The DRT Act, 1993, and SARFAESI Act confer wide powers to the tribunal. The court underscored the importance of fairness and transparency in safeguarding the rights of borrowers while enabling swift recovery of dues.
Observations by the Court
Justice Bhatia delivered a scathing critique of the Presiding Officer’s actions, observing:
“Tribunals are vested with substantial powers to ensure expeditious recovery of banking dues, but any shadow cast upon their functioning undermines the trust placed in such mechanisms. The integrity of quasi-judicial bodies cannot be compromised.”
The court noted that the DRT is entrusted with balancing the objectives of quick financial recovery with the constitutional rights of borrowers under Article 300-A, which protects the right to property. The alleged misconduct not only violated procedural norms but also risked eroding public confidence in the tribunal’s impartiality.
The High Court further emphasized that the powers conferred upon tribunal officials must be exercised fairly and transparently. Any deviation, the court added, subverts the legislative intent behind the establishment of such tribunals.
High Court’s Directive for a CBI Investigation
Based on the findings of a confidential report submitted by the Registrar, DRT Lucknow, the court found prima facie evidence of irregularities. The report revealed:
- The disputed order of September 18, 2024 was not dictated to the tribunal’s stenographer, contradicting standard practice.
- The corrigendum dated September 27, 2024, was created without proper procedural backing and was missing from the certified records provided to the petitioner.
- The Presiding Officer, A.H. Khan, superannuated on September 27, 2024, leaving a cloud of suspicion over his conduct during his final days in office.
The court directed the CBI Anti-Corruption Branch in Lucknow to verify the tribunal’s records and conduct a thorough investigation. Justice Bhatia specifically authorized the CBI to:
- Examine whether the orders were backdated or manipulated.
- Investigate allegations of nepotism and favoritism.
- Take appropriate legal action against individuals found culpable, including filing charge sheets.
The CBI was instructed to submit its report by December 10, 2024. In the interim, the High Court retained custody of the original records in a sealed cover.
Previous Complaints and Context
This case is not the first instance where the Presiding Officer faced allegations of misconduct. Earlier, the DRT Bar Association had filed complaints citing:
- Nepotism and favoritism in the allocation of cases.
- Intimidation and misbehavior toward advocates.
- Procedural irregularities in passing orders.
The High Court had previously directed the Chairman, DRAT, to conduct an inquiry under the Tribunal (Conditions of Service) Rules, 2021, but no decisive action was taken. The current case builds on these unresolved grievances.
The case has been listed for further hearing on December 10, 2024, when the CBI’s findings will be reviewed. Until then, the High Court has stayed the disputed orders issued by the DRT.
