Jharkhand HC clears way for sale of Deoghar hospital over Rs 70-crore loan default
Ranchi, June 25: The Jharkhand High Court has cleared the way for Indian Bank to issue a sale certificate to the auction…
Ranchi, June 25: The Jharkhand High Court has cleared the way for Indian Bank to issue a sale certificate to the auction purchaser of Maa Lalita Hospital and Research Centre in Deoghar, setting aside interim orders of the Debts Recovery Appellate Tribunal (DRAT) that had stalled the process.
Justice Ananda Sen held that the DRAT Chairperson had exceeded his jurisdiction by staying the issuance of the sale certificate while exercising administrative powers under Section 17A of the Recovery of Debts and Bankruptcy Act.
Loan default led to auction
The case arose from a loan extended by Indian Bank to Maa Lalita Hospital and Research Centre Pvt Ltd for establishing a 60-bed multi-speciality hospital in Deoghar.
According to the court, the loan was initially sanctioned at Rs 2 crore, later enhanced to Rs 19.45 crore. After the borrower defaulted, the account was declared a non-performing asset (NPA) on December 31, 2009.
Although the bank and the borrower entered into a one-time settlement in 2015, the borrower failed to honour the terms despite regaining possession of the mortgaged assets. The outstanding dues later rose to over Rs 70 crore, prompting the bank to auction the secured assets on April 7, 2026, fetching Rs 44.22 crore.
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Court criticises borrower’s conduct
The High Court noted that the borrower had repeatedly attempted to delay the recovery process through litigation and had even failed to deposit Rs 2 crore when directed by a Division Bench while seeking interim relief.
The court observed that the borrower adopted a “clever tactic” by invoking Section 17A of the Recovery of Debts and Bankruptcy Act to obtain an order that could only have been passed by the Appellate Tribunal while exercising judicial powers under Section 17.
Justice Sen held that the Chairperson’s powers under Section 17A are administrative in nature and do not include granting judicial relief such as staying the issuance of a sale certificate.
Sale certificate to be issued
Setting aside the DRAT’s orders dated April 10 and April 21, 2026, the High Court ruled that there was no legal impediment to Indian Bank issuing the sale certificate in favour of the auction purchaser, Yashoda Hospital & Research Centre Ltd. Both writ petitions were accordingly allowed.
