Madras High Court Rejects SRM University’s plea Seeking Cancellation of Affiliation, Approvals, Counselling and Admissions of PERI Educational Institutions.* *Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan Accept the Submissions Advanced by Senior Counsel Hasan Mohammed Jinnah; Hold That All SARFAESI-Related Disputes Must Be Resolved Before the Debts Recovery Tribunal (DRT).*

*Madras High Court Rejects SRM University’s plea Seeking Cancellation of Affiliation, Approvals, Counselling and Admissions of PERI Educational Institutions.*

*Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan Accept the Submissions Advanced by Senior Counsel Hasan Mohammed Jinnah; Hold That All SARFAESI-Related Disputes Must Be Resolved Before the Debts Recovery Tribunal (DRT).*

SRM Institute of Science and Technology filed a writ petition before the Madras High Court seeking a direction to the State Government and the concerned regulatory authorities to initiate appropriate action by suspending the affiliation, approvals, counselling participation and admissions of the PERI Educational Institutions.

The writ petition came up for hearing before the Division Bench comprising Hon’ble Chief Justice Sushrut Arvind Dharmadhikari and Hon’ble Mr. Justice G. Arul Murugan.

On behalf of SRM University, the learned Senior Counsel submitted that SRM had been declared the successful auction purchaser under the SARFAESI Act, had paid the entire sale consideration and had obtained the sale certificate. It was contended that the continued functioning of the PERI Educational Institutions from the campus prejudiced the petitioner’s rights. Since the impleading application filed before the Debts Recovery Tribunal was still pending, it was prayed that the High Court direct suspension of the affiliation, approvals, counselling participation and admissions of the PERI Educational Institutions.

In response, Senior Counsel Hasan Mohammed Jinnah, along with Mr. Damodaran, appearing for the PERI Educational Institutions, submitted that the writ petition was not maintainable. He pointed out that both the proceedings challenging the order relating to taking physical possession of the property and the challenge to the auction sale were already pending before the Debts Recovery Tribunal, and that an interim stay had also been granted in respect of the physical possession proceedings. Therefore, all questions relating to the secured asset and the legal rights of the parties had to be adjudicated exclusively by the specialised forum, namely the DRT, and the High Court could not issue consequential directions on that basis.

Accepting the submissions advanced by Senior Counsel Hasan Mohammed Jinnah, the Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan observed that both the challenge to the auction sale and the proceedings initiated under Section 14 of the SARFAESI Act were already pending before the Debts Recovery Tribunal. The Court held that all disputes relating to the secured asset should be resolved before the DRT. It further observed that SRM University was at liberty to seek an early hearing of the pending proceedings as well as its impleading application before the Tribunal. Accordingly, the Madras High Court disposed of the writ petition without granting the relief sought by SRM University.