Delhi High Court Rules SC/ST Act Cannot Override Bank's Legitimate Mortgage Rights

New Delhi:

The Delhi High Court has ruled that provisions of the SC/ST Act concerning wrongful occupation or dispossession of land belonging to Scheduled Castes and Scheduled Tribes members cannot be invoked to restrict a bank from exercising its legitimate mortgage rights.

Justice Sachin Datta delivered this prima facie observation while issuing a stay on proceedings initiated by the National Commission for Scheduled Tribes against Axis Bank and its top executives.

"Prima facie, in the context of the facts of the present case, Sections 3(1)(f) and (g) of the Atrocities Act are not attracted inasmuch the same cannot be invoked to preclude/prevent the exercise of mortgage right/security interest of the petitioner," stated the judge in his October 16 order.

The Commission had previously directed Axis Bank's Managing Director and Chief Executive Officer to appear personally following a representation alleging violations under Sections 3(1)(f) and (g) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act.

Section 3(1)(f) criminalizes wrongful occupation or cultivation of land belonging to SC/ST community members, while Section 3(1)(g) addresses wrongful dispossession of SC/ST members from their land or premises.

According to court documents, Axis Bank had sanctioned a credit facility of Rs 16.69 crore to Sundev Appliances Ltd in 2013, secured by a mortgaged property in Maharashtra's Vasai.

After the borrower defaulted, the account was classified as a non-performing asset in 2017, prompting the bank to invoke its legal rights. This was followed by a civil dispute regarding ownership of the mortgaged property.

Subsequently, one party in the dispute approached the National Commission for Scheduled Tribes.

The High Court stayed the Commission's order, declaring that its proceedings lacked jurisdiction.

"The proceedings pending before respondent no.1 (National Commission for Scheduled Tribes), particularly, the summons issued therein which requires the MD & CEO of the petitioner (bank) to appear before the respondent no.1, are without jurisdiction. No rationale has been recorded for requiring senior officials of the petitioner to appear personally before the respondent no.1," the judge concluded, scheduling further hearing for February 5 next year.