Debts Recovery Tribunals and Appellate Tribunals
BGM CONSORTIUM LTD and ors vs STATE BANK OF INDIA on 12 August 2026
IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA
CHAIRPERSON
Appeal No. 211 of 2018
Order No. 46
12.08.2026
BGM Consortium Limited & 3
Others … Appellants
-Vs-
State Bank of India & 4 Others
… Respondents
Mr. Nimish Mishra,
Mr. Debjit
Mukherjee with Mr. Abir Mondal,
Learned Counsel for Appellants
Mr. Mr. Debasish Chakrabarti,
Learned Counsel for Respondent
No.1/SBI
Mr.
A.K.
Dhandhania
with
Mr.
Soumo
Mukherjee
and
Ms.
Sweta
Mishra,
Learned
Counsel for Respondent No. 2
Mr. Pankaj Kumar Mukherjee,
Learned Counsel for Respondents
No. 4 and 5
THE APPELLATE TRIBUNAL:
I.A. 375 of 2018
Instant application is filed by the Applicant Alchemist Asset Reconstruction Co. Limited (hereinafter referred to as AARCL) for substituting the name in place of the Appellant State Bank of India.
Opposition is filed by the Respondent No. 2.
Heard the Learned Counsel for the parties and perused the record.
Instant appeal is preferred by the Appellant, against the Respondents feeling aggrieved by the order dated
09.02.2017 passed by Learned DRT-I, Kolkata in O.A. 215 of
2014.
It is submitted that pending appeal vide Registered Assignment Agreement dated 28.3.2018 loan was assigned to the Applicant, AARCL. Accordingly, prayer was made for striking down the name of State Bank of India and to incorporate the name of AARCL in place of State Bank of India.
Learned Counsel for Applicant would submit that the Registered Deed was executed on 18.3.2018. Learned Counsel has placed reliance upon Section 5 Sub-section (1A)
and Section 5 Sub-section (3) of the SARFAESI Act, 2002
(hereinafter referred to as the ‘Act’) and submits that the account is assigned to the Applicant under the provisions of the Act.
Per contra, Learned Counsel for Respondent No. 2
opposed the prayer and submits that the Applicant can be added along with State Bank of India in the cause title.
Learned Counsel would submit that there are allegations of siphoning of amount of approximately Rs.40.00 crore wherein even forensic audit was ordered to be conducted by the Hon’ble Delhi High Court. Learned Counsel has placed reliance upon Sections 130 and 132 of the Transfer of Property Act, 1882.
It is further submitted that the assignment is made to avoid the Forensic Audit of the accounts. The rights of Respondent No. 2 would be prejudiced by substitution of
State Bank of India with the Applicant. Although, Learned Counsel would further submit that right of Respondent No. 2
regarding counter-claim would be taken away by the substitution as he will be claiming the amount from the Bank.
Section 5 Sub-section (2) of the Act provides for acquisition of rights of the Bank or Financial Institution in the Asset Reconstruction Company. Section 5 Sub-section
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(1) empowers the Asset Reconstruction Company to acquire financial assets of any Bank or Financial Institution by entering into an agreement for transfer of such financial assets on such terms and conditions as may be agreed upon between them. Section 5 Sub-section (5) of the Act provides that on acquisition of financial assets under Sub-section (1), the Asset Reconstruction Company may file an application for substitution of its name and the Debts Recovery Tribunal or the Appellate Tribunal or Court or Authority can pass orders for the substitution of the Reconstruction Company in such pending suits, appeals or other proceedings. Learned Counsel for Respondent No. 2 would submit that the word ‘shall’ may not be used as mandatory. He has placed reliance upon Canara Bank -vs- V.K. Awasthy [(2005) 6 SCC 321] paragraphs 8 and 9 wherein the Hon’ble Supreme Court laid down the law about natural justice and legal justice.
As far as rights of Respondent No. 2 are concerned, counter-claim as argued has yet not been filed. A presumptive submission could not be made a ground for refusing the substitution. Reliance is also placed upon State of M.P. -vs- M/s Azad Bharat Finance Company (AIR 1967 SC 276) paragraph 5 wherein it was held that if a statute leads to absurdity, hardship or injustice presumably not intended a construction may be put on it which modifies the meaning of the words and given a structure of the sentence. However, the provisions of the SARFAESI Act, 2002 regarding acquisition are on the statute book which have not been declared ultra vires and could not be treated as causing hardship or injustice to the Respondents. Reliance is placed upon Sections 130 and 132 of the Transfer of Property Act, 1882. We could not be in agreement with the Learned Counsel for Respondents as the SARFAESI Act, 2002 itself is a self-contained Act. Provisions of Section 130 and 132 of the Transfer of Property Act would not be applicable in the present case in view of Section 5 of the SARFAESI Act, 2002. Chapter VIII which contains Section 130 and 132 of the Transfer of Property Act, 1882 and relates to the actionable claim. Actionable claim is defined under Section 3 of the Transfer of Property Act, 1882 which reads as under: "Actionable claim" means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent;”
Bare perusal of the definition would show that the provisions of Section 130 and 132 of the Transfer of Property Act, 1882 would not be applicable in the present case. Having considered the submission we are of the considered view that substitution of name of AARCL in place of State Bank of India is liable to be allowed. Accordingly, I.A. 375 of 2018 is allowed. However, all the legal pleas, if any, regarding any liability of the State Bank of India can be considered at the time of final disposal of the O.A. pending before the DRT. Let necessary amendment be carried out within a week. List on 12th October, 2026 for hearing of appeal.
(Anil Kumar Srivastava,J) Chairperson Dated 12th August, 2026 ac