Shri Jasbir Singh Khangura & Ors. vs Uv Asset Reconstruction Company Limited & Anr.

$~33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 24.08.2026
# CNR No. DLHC010395722026
+ W.P.(C) 12291/2026, CM APPL. 56970/2026 & CM APPL.
56971/2026.
SHRI JASBIR SINGH KHANGURA & ORS. .....Petitioners
Through: Mr. Tarun Kashyap, Adv.
versus
UV ASSET RECONSTRUCTION COMPANY LIMITED & ANR.
.....Respondents
Through: None.
CORAM:
HON'BLE MR. JUSTICE VIVEK CHAUDHARY
HON'BLE MS. JUSTICE RENU BHATNAGAR
J U D G M E N T
1. The present writ petition is filed under Articles 226 and 227 of the
Constitution of India, 1950, challenging the multiple orders passed by the
Debt Recovery Tribunal, Delhi and Debt Recovery Appellate Tribunal, Delhi
which are detailed in the facts of the case.
2. The facts in brief are that the petitioners, (defendant nos. 2, 3, 4 and 7)
stood guarantors for credit facility taken by M/S Majestic Hotels Ltd., from
Tourism Finance Corporation of India Ltd. (“TFCI”). Along with them
defendant nos. 5, 6 and 8 also stood guarantors. The loan was defaulted, and
thus, TFCI instituted O.A No. 715 of 2017 before DRT-I, Delhi for recovery
of Rs. 242,17,25,050/-. Meanwhile TFCI assigned the debt to UV Asset
Reconstruction Company Limited (“UVARCL”)/respondent no. 1 which
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
16:41:09
W.P.(C) 12291/2026 Page 1 of 6

stood substituted in the proceedings.
3. A One Time Settlement (“OTS”) was agreed and sanctioned by letter
dated 27.12.2017, which was also signed by the petitioners as guarantors. The
terms of OTS were recorded in a Memorandum of Understanding dated
29.12.2017 whereby M/S Majestic Hotels Ltd. was to repay the dues in
installments, failing which the settlement would end and UVARCL could
recover the entire amount, as originally claimed. On this basis, UVARCL
together with the petitioners and the other consenting defendants filed I.A.
No. 1602/2018 on 24.10.2018 before DRT-I to record the OTS.
4. Acting on this application, DRT-I, by order dated 26.10.2018, recorded
the OTS and directed that a Recovery Certificate be issued as security and it
would stay inactive as long as the installments were paid on time, but would
become enforceable for the entire original amount the moment there was any
default. The Recovery Certificate was issued the same day against all the
eight defendants and kept in abeyance. The OTS was violated and thus,
demand notice was issued.
5. On 26.10.2021, nearly after a period of three years, the petitioners
sought for recall of the Order dated 26.10.2018 by filing an application under
Order IX Rule 13 of the CPC, 1908 before DRT-I, contending that they learnt
of the case only in February 2021, on receiving a demand notice and that the
order was obtained by fraud. Subsequently, on transfer to DRT-III, Delhi this
application was renumbered as TMA No. 1 of 2024 and was dismissed by
Order dated 27.08.2024.
6. An appeal was preferred by the petitioners against the said order which
came to be dismissed by the DRAT by Order dated 06.07.2026, affirming the
findings of DRT-III, Delhi.
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
16:41:09
W.P.(C) 12291/2026 Page 2 of 6

7. Aggrieved thereby, the petitioners have preferred the present writ
petition. The learned counsel for the petitioners submits that the Order dated
26.10.2018 is bad because no summons or notice was served on the
petitioners. He further submits that the settlement application was not duly
signed by an advocate or initialed on every page and that the Recovery
Certificate could not have been issued against defendant nos. 5, 6 and 8, who
did not sign the OTS. He submits that these infirmities are erroneously
overlooked by both DRT-III and DRAT.
8. On the basis of the aforesaid submissions, the question for
consideration is whether the concurrent orders of DRT-III and DRAT,
declining to recall the Order dated 26.10.2018, suffer from any jurisdictional
error, perversity so as to warrant interference by this Court in exercising of its
extraordinary and supervisory jurisdiction under Articles 226 and 227 of the
Constitution of India.
9. The scope of interference under Article 227 is well settled. In Estralla
Rubber v. Dass Estate (P) Ltd., (2001) 8 SCC 97, the Supreme Court held
that this power must be exercised sparingly, only to keep tribunals within the
bounds of their authority and not simply to correct an ordinary mistake of fact
or law. The relevant extract of the judgment reads
“6. The scope and ambit of exercise of power and jurisdiction by
a High Court under Article 227 of the Constitution of India is
examined and explained in a number of decisions of this Court.
The exercise of power under this article involves a duty on the
High Court to keep inferior courts and tribunals within the
bounds of their authority and to see that they do the duty expected
or required of them in a legal manner. The High Court is not
vested with any unlimited prerogative to correct all kinds of
hardship or wrong decisions made within the limits of the
jurisdiction of the subordinate courts or tribunals. Exercise of
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
16:41:09
W.P.(C) 12291/2026 Page 3 of 6

this power and interfering with the orders of the courts or
tribunals is restricted to cases of serious dereliction of duty and
flagrant violation of fundamental principles of law or justice,
where if the High Court does not interfere, a grave injustice
remains uncorrected. It is also well settled that the High Court
while acting under this article cannot exercise its power as an
appellate court or substitute its own judgment in place of that of
the subordinate court to correct an error, which is not apparent
on the face of the record. The High Court can set aside or ignore
the findings of facts of an inferior court or tribunal, if there is no
evidence at all to justify or the finding is so perverse, that no
reasonable person can possibly come to such a conclusion, which
the court or tribunal has come to.”
10. A similar view was taken in Shalini Shyam Shetty v. Rajendra
Shankar Patil , (2010) 8 SCC 329, where the Supreme Court held that this
power cannot be used only because another view of the evidence is possible,
and that the High Court cannot simply replace a tribunal’s findings of fact
with its own. It was further held that interference is warranted only where the
decision is clearly unreasonable, or there has been a serious abuse of process
causing real injustice. This Court is required to be guided by these settled
principles in examining the present challenge which is, in substance, a
challenge to findings of fact made by two tribunals after hearing at length.
11. On the facts, the position is clear that DRT-III has recorded and DRAT
has affirmed that I.A. No. 1602/2018 carries the signatures of the petitioners
themselves, along with the borrower and the other consenting defendants. The
petitioners and borrower negotiated the OTS with UVARCL and availed its
benefits in preference to a deferred decree for the entire claimed amount. It is
nowhere the petitioners’ case that the compromise is other than their own act
or that the same is not signed by them. Having appeared before DRT-I
through the compromise application and negotiating, signing and taking the
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
16:41:09
W.P.(C) 12291/2026 Page 4 of 6

benefit of a negotiated settlement, the petitioners were also present before the
DRT-I, when Order dated 26.10.2018 was passed, and never disputed the
same, but now.
12. This finding by the DRT-I is significant. Once the OTS is admitted and
the petitioners do not dispute its execution, they cannot years later, contend
that they were never served. Further, it is trite that Order IX Rule 13 of the
CPC is a remedy available only to a defendant against whom an ex-parte
decree was passed in their absence. Petitioners who had appeared,
participated in the proceedings, negotiated the compromise and duly signed it
and were present when the order was passed cannot voice such a plea.
13. It is also pertinent to mention that Order dated 26.10.2018 was never
challenged by the petitioners for more than two years and not until the OTS
failed and recovery proceedings were initiated against them. During this
period, the petitioners have not filed any appeal, review, or application, even
though, as per the findings of DRT-III and the DRAT, they were aware of all
developments. Therefore, an order acted upon and left unchallenged for so
long by the petitioners who participated in bringing it, cannot be now
reopened at their instance on a frivolous ground.
14. The objection of the petitioners that the OTS was not signed by an
advocate or initialed on every page is also without merit. The petitioners do
not dispute the terms of I.A. No. 1602/2018 or the genuineness of the
signature of the defendants. Once the document is duly signed and accepted
as genuine by the Tribunal, separate initials on every page are not required
and their absence does not affect the validity of the OTS, particularly when
the OTS was negotiated and partly performed.
15. Further, the objection that the Order dated 26.10.2018 was procured by
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
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W.P.(C) 12291/2026 Page 5 of 6

fraud is also without merit for a reason that claim of fraud, raised years after
an order has been acted upon, must include particular details including who
committed the fraud, how it was committed and what effect it had shall be
supported by cogent evidence. Accordingly, a vague claim that simply repeats
the plea of no service, which has been already rejected by the tribunal, does
not satisfy the requirement. Thus, DRT-III and DRAT were justified in not
treating fraud as an independent ground for interference.
16. The petitioners’ remaining objection regarding the issuance of
Recovery Certificate against defendant nos. 5, 6 and 8 is also without
substance as it can only be raised by defendants and not by petitioners who
participated throughout.
17. For the reasons stated above, this Court finds no jurisdictional error or
perversity in the Order dated 27.08.2024 passed by DRT-III and Order dated
06.07.2026 passed by DRAT and have concurrently and correctly declined to
recall the Order dated 26.10.2018. No case for interference is made out, and
the writ petition, being devoid of merit, is dismissed.
18. All pending applications, if any, stand disposed of.
VIVEK CHAUDHARY
(JUDGE)
RENU BHATNAGAR
(JUDGE)
AUGUST 24, 2026 / tr
Signature Not Verified
Signed By:PRATIBHA
KUMARI
Signing Date:08.09.2026
16:41:09
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