After Borrower Failed To Meet DRT’s Rs 6 Lakh Payment Terms, MP HC Says Its Status-Quo Order Won’t Bar Lender’s Auction Proceedings

In brief

The question

Whether the order dated 23 April 2026 should be reviewed because the Court had inadvertently overlooked the DRT’s existing interim order.

The court held

The High Court allowed the review to the limited extent of modifying its order dated 23 April 2026.

It also directed

It held that the observations in that order would not prevent the lender from conducting auction proceedings, having regard to the DRT’s order dated 18 March 2026; the review petition was disposed of.

The Court did not expressly issue a separate direction granting physical possession.

01Facts

The borrower had obtained an interim order from the DRT, Jabalpur on 11 March 2026 requiring payment of ₹3,00,000 by 13 March and a further ₹3,00,000 by 18 March, together with a suitable settlement proposal.

¶ 03–04

The lender asserted that the borrower had neither paid nor submitted the proposal. The borrower said it had attempted payment by demand draft, which the lender refused.

¶ 03–04

On 23 April 2026, in the borrower’s writ petition, the High Court directed the DRT to list the matter when a Presiding Officer became available and ordered the status quo to be maintained over the mortgaged property; any auction was not to be finalized until the DRT considered the stay application.

¶ 02

The lender sought review under Order XLVII Rule 1 CPC, contending that the High Court had overlooked the DRT’s existing interim order.

¶ 01 · ¶ 03

02Issues

i.Whether the order dated 23 April 2026 should be reviewed because the Court had inadvertently overlooked the DRT’s existing interim order.

¶ 05–06

ii.Whether the 23 April order’s restraint could continue to prevent the lender from conducting auction proceedings, given the borrower’s alleged non-compliance with the DRT’s interim directions.

¶ 03, 05–06

03Law Applied

The petition invoked Order XLVII Rule 1 of the Code of Civil Procedure, 1908, which provides for review on the grounds specified in that provision.

¶ 01

The Court applied the principle that an order may be reviewed or modified where a material matter already on record was missed through inadvertence; it identified no precedent or further statutory provision as the basis of its decision.

¶ 05

The DRT’s orders dated 11 March and 18 March 2026 were relevant existing orders whose effect had to be considered.

¶ 03, 06

04Reasoning

The Court found that the DRT’s interim order was already in operation when the writ order was made, but had been overlooked through inadvertence.

¶ 03–05

It also noted that the borrower had not complied with the DRT’s payment and settlement-proposal directions, notwithstanding the borrower’s assertion that a demand draft had been tendered.

¶ 03–05

In those circumstances, the Court concluded that the 23 April order should not operate as a bar to the lender’s auction proceedings in light of the DRT’s order dated 18 March 2026.

¶ 06