In a significant ruling, the Delhi High Court has stated that the SC/ST Act’s provisions concerning wrongful occupation or dispossession of land cannot be used to prevent banks from enforcing their mortgage rights. Justice Sachin Datta, while issuing a stay on proceedings against Axis Bank, observed that the sections of the Act in question do not apply when a bank is exercising its mortgage rights.
The case involved a representation made to the National Commission for Scheduled Tribes, alleging violations of the Scheduled Castes and Scheduled Tribes Act against Axis Bank and its top executives. The Commission had summoned the bank’s Managing Director and CEO to appear in person.
The court noted that Section 3 of the Act penalizes wrongful occupation, and Section 3 addresses wrongful dispossession of land belonging to members of the SC/ST community. However, Justice Datta prima facie concluded that these sections are not applicable to preclude a bank’s mortgage rights.
The legal dispute arose after Axis Bank sanctioned a credit facility of ₹16.69 crore in 2013, secured by a mortgaged property. When the borrower defaulted, the account became a non-performing asset, leading to legal proceedings over the property’s ownership. Following this, a complaint was filed with the National Commission for Scheduled Tribes.
The High Court’s decision to stay the Commission’s proceedings was based on the assertion that the Commission lacked jurisdiction in this matter. The judge emphasized that no clear rationale had been provided for requiring the bank’s senior officials to appear personally. The court has scheduled further hearings for February 5 next year.
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