Dismissed

Mahesh Damu Khare v. Bank of Baroda and others

DRAT7 Dec 2022IA/187/2022

Case brief

AI extract

What is this about?

Appeal Tribunal rejected an application to condone a 1993-day delay in filing an appeal against a debt recovery order. The Court held the delay was unreasonable, unexplained, and the appellant failed to protect their rights despite supervening events like the pandemic.

What did the court decide?

Application for condonation of delay and the underlying appeal stand dismissed.

Mahesh Damu Khare versus Bank of Baroda and others — Banking and Recovery | DRAT (2022)

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BEFORE THE DEBTS RECOVERY APPELLATE TRIBUNAL, AT: MUMBAI Present: Mr Justice Ashok Menon, Chairperson

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I.A. No. 187/2022 (CoD)

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Appeal on Diary No. 236/2022

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Between

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Mahesh Damu Khare … Appellant/s V/s.

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Bank of Baroda & Ors.

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…Respondent/s

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Mr Pradyuman D. Sharma, Advocate for Appellant.

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Mr Anant B. Shinde, Advocate for Respondent.

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-: Order dated: 07/12/2022:-

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This is an application filed under section 20 (3) of the Recovery of Debts and Bankruptcy Act, 1993 (‘RDB Act’ for short) for condoning the delay of 1993 days in filing the appeal mentioned above challenging the judgment and order dated 04/10/2016 in Original Application (O.A.) No. 402/2011 on the files of Debts Recovery Tribunal-III, Mumbai (‘DRT’ for short).

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The Applicant is the 4^th defendant in the above-mentioned O.A. filed by the 1^st Respondent Bank of Baroda for the realisation of money due from defendants Nos. 1 to 3, the principal borrower and the guarantors. The 1^st defendant principal debtor had availed a housing loan of ₹ 7,50,000/-sanctioned on 23/08/2005 from the bank and had executed documents in favour of the bank. The 1^st defendant had also created an equitable mortgage on 19/09/2005, to secure the debt and had deposited his title deed for flat No. 101,

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admeasuring 840 ft² situate on the 1^st floor of the building named ‘Harbans Apartment’ constructed on plot No. 211 in Shiravane village, Nerul, Navi Mumbai (the subject flat). Defendants No. 2 and 3 had executed personal guarantees for repayment of the said loan availed by the 1^st defendant. The Applicant was raising a claim over the mortgage of the property; hence, he was also impleaded as a defendant in the Original Application.

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The Appellant’s case, in brief, is thus:

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M/s I. Kay Constructions (the 3^rd Respondent herein) is a partnership firm engaged in the building of flats. During the month of December 2002, the Appellant booked a flat being constructed by the 3^rd Respondent and paid earnest money of ₹ 4 lakhs. Thereafter the full sale consideration was paid to the 3^rd Respondent and the Appellant was handed over the possession of the subject flat on 20/02/2003 and thereafter, executed and registered a conveyance deed on 04/04/2007. The Appellant has been in peaceful possession of the said flat ever since he got possession. To the surprise of the Appellant, he received a communication from the Circle Officer, Belapur on 08/01/2008 informing him that the flat in his possession was to be attached for the realisation of a debt taken by the 2^nd Respondent herein. On enquiry made by the Appellant, he came to know that the subject property was allegedly mortgaged by the 2^nd Respondent for a housing loan of ₹ 7,50,000/-with the 1^st Respondent bank. It is assumed that the Appellant and the bank have been victims of fraud played by Respondents Nos. 2 and 3. The Appellant filed a police complaint on 30/01/2008 against

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Respondents Nos. 1 and 2 in Nerul Police Station. However, the police did not take cognizance of the complaint nor did they register any Crime. On the advice of his lawyer, the Appellant filed Writ Petition No. 500/2008 before the Hon’ble Bombay High Court. The Writ Petition was withdrawn after the Hon’ble High Court granted a status quo order for two weeks and directed the Appellant approached the appropriate forum. The Appellant's lawyer advised him to approach the Civil Court and accordingly, a Special Civil Suit No. 131/2008 was filed before the Civil Judge Senior Division, Thane against the 1^st Respondent bank and the District Magistrate. The 1^st Respondent appeared before the Civil Judge and filed a written statement stating that the Civil Court has no jurisdiction in view of the specific bar under section 34 of the SARFAESI Act. As a consequence of that, the interlocutory relief sought by the Appellant in that suit was rejected. The appellant requested the 1^st Respondent to supply a copy of the purported sale agreement dated 09/02/2005 allegedly executed in favour of the 2^nd Respondent by the 3^rd Respondent. There was no response from the 1^st Respondent. On 16/10/2010 the Appellant received a notice from the Revenue Circle Officer, Belapur once again. The Appellant approached the District Collector and applied for copies of the notices issued by the bank to the 2^nd Respondent. Thereafter, the Appellant filed a Securitisation Application (S.A.) at lodging No. 133/2010 before the Debts Recovery Tribunal-III, Mumbai (DRT) under section 17 of the SARFAESI Act. Since there was a delay in filing the S.A., the Appellant also filed an application for condonation of delay. The 1^st

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Respondent opposed the application to condone the delay and consequently, the DRT dismissed the application for condonation of delay, as also the S.A.

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The 1^st Respondent filed the above-mentioned OA for recovery of money from the 2^nd Respondent under section 19 of the RDB Act. The Appellant was also made the 4th defendant in the OA. He filed a written statement detailing the circumstances under which he was defrauded to purchase the flat which was again conveyed to the 2^nd Respondent without actually handing over possession to him. During the trial, the counsel appearing for the Appellant failed to file a claim Affidavit on time. The DRT permitted him to file an affidavit on payment of costs ₹ 2500/- vide order dated 12/04/2016. Despite having been given the opportunity to file an affidavit, the Appellant's counsel negligently failed to pay the cost as a result of which the affidavit was not accepted. The Appellant contends that he was not only a victim of fraud played by Respondent Nos. 2 and 3 but also to the professional misconduct office counsel for not having communicated the procedures to the Appellant. The DRT did not grant any relief to the Appellant and allowed the OA in favour of the 1^st Respondent, and the recovery certificate was issued on 04/10/2016.

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By filing this IA No. 187/2022, the Appellant seeks to condone the delay in filing this appeal. The Appellant reiterated his contentions in this application as well. The Appellant states that his counsel never intimated to him about his right to appeal under section 20 of the RDB Act. Only when the Appellant received a

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communication from the receiver appointed by the Recovery Officer did he know about the disposal of the OA against him. The 2^nd Respondent had never appeared in the OA to defend himself or his right over the subject property. The purported conveyance deed executed in favour of the 2^nd Respondent was never produced before the DRT while considering the OA. The Appellant contends that in view of the order of the Hon’ble Supreme Court in Suo moto Writ Petition No. 3/2020, the period between 15/03/2020 and 28/02/2022 is to be excluded while computing the period of limitation due to the pandemic. On the exclusion of the said period, the actual delay in filing the appeal would only be 1277 days. Hence it is prayed that the delay may be condoned.

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The 1^st Respondent has opposed the application for condonation of delay and has filed a reply affidavit denying the contentions raised therein. It is submitted that the 2^nd Respondent has purchased the property from the 3^rd Respondent by registered agreement for sale dated 09/02/2005 and the 2^nd Respondent created an equitable mortgage on 19/09/2005 in favour of the 1^st Respondent bank by deposit of title deeds to secure the housing loan of ₹ 7,50,000/-availed by the purchaser subject property. The Original Application was allowed and the 1^st Respondent filed Recovery Proceedings No. 468 of 2016 before the Recovery Officer. The civil suit filed by the Appellant was rejected so was the Securitisation Application filed by him. There was a delay of 767 days in filing the SA. The DRT refused to condone the delay. Aggrieved by that order, the Appellant had filed appeal No. 239/2010 before

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this Tribunal. The said appeal was dismissed for default on 09/03/2017. The Appellant has never been diligent in prosecuting the litigations he had indulged in. The huge delay in filing this appeal has not been explained. The appeal should have been filed long before the COVID -19 pandemic and the Appellant is, therefore, not entitled to the benefit of the Supreme Court order. It is prayed that the application for condonation of delay may be dismissed.

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Heard the Ld. counsel appearing for the Appellant in the Respondent. Records perused.

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The Ld. counsel appearing for the Appellant submits that the judgment of a decree obtained by playing fraud on the Court is a nullity and non-est in the eyes of law. It is stated that Respondents 2 and 3 had colluded to defraud the Appellant by concocting documents and obtaining a loan mortgaging the subject property. The Ld. counsel relies on the decision of the Hon’ble Supreme Court reported in S.P. Changalvaraya Naidu (dead) vs. Jaganath (dead) 1994 (1) SCC 1 in support of his submissions. In support of the argument that it was due to the inaction, deliberate omission, or misdemeanour of his lawyer that he could not file the appeal on time, the Ld. counsel relies on the decision of the Hon’ble Supreme Court reported in Rafiq and another vs. Munshilal and another (1981) 2 SCC 788 .

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Per contra the Ld. counsel appearing for the 1^st Respondent bank submits that there is an unreasonable delay in filing the appeal and that the Appellant cannot put the blame on his lawyer alone for the long delay in filing the appeal. The learned counsel relies on the

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decisions of the Hon’ble Supreme Court in support of his arguments such as Majji Sannemma alias Sanyasirao vs Reddy Sridevi & Ors 2021 SCC OnLine SC 1260, D. Gopinathan Pillai vs. State of Kerala & Anr (2007) 2 SCC 322 and P.K Ramachandran vs. State of Kerala & Anr (1997) & SCC 556 .

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In the instant case, there is a huge delay of 1993 days in filing this appeal. There is no doubt that Section 5 of the Limitation Act gives the court a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words ‘sufficient cause’ receiving a liberal construction so as to advance substantial justice when no negligence or inaction nor want of bona fides is imputable to the Appellant. (See Krishna vs. Chattappan, (1890) J.L.R. 13 Mad. 269 )

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In P.K. Ramachandran (supra), the Hon’ble attacks court refused to condone the delay of 565 days observing that in absence of a reasonable, satisfactory, or even appropriate explanation for seeking condonation of delay, the same is not to be condoned lightly. It was further observed that the law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds. It was also observed that while exercising discretion for condoning the delay, the court has to exercise discretion judiciously. In Majji Sannemma alias Sanyasirao (supra), the Hon’ble Apex Court refused to condone the delay of 1011 days in preferring the appeal holding that no

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explanation much less a sufficient or satisfactory explanation had been offered for getting the delay condoned. The Court/Tribunal is not expected to enquire into belated and stale claims on the ground of equity. Delay defeats equity and Courts would come to the help of only those who are vigilant and “do not slumber over the rights” as says in the Latin maxim: Vigilantibus Non-Dormientibus Jura Subveniunt . 12. In Sagufa Ahmed Vs. Upper Assam Plywood Products Ltd. MANU/SC/0697/2020 and in V. Nagarajan Vs. SKS Ispat & Power Ltd. & Ors. MANU/SC/0956/2021 , the Hon’ble Supreme Court had observed that the Appellants therein could not take refuge under the order of the Hon’ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 during the pandemic but it also observed that what the Hon’ble Supreme Court intended was to benefit vigilant litigants who were prevented due to the pandemic and lock-down from initiating proceedings. In that decision also, the proceedings were not filed at the statutory time prescribed under the NCLT and NCAL Rules. The Appellant herein cannot even take refuge under the Judgment of the Hon’ble Apex Court extending the period of limitation because this case does not fall within that category. In the instant case, the Appellant was a recalcitrant litigant and was far from being vigilant in prosecuting his case.

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It is true that a lawyer appearing for a party has a certain responsibility to conduct the case to the best of his ability and also to keep his client informed about the progress made in the litigation. However, the litigant also has an equal responsibility to enquire as to what is happening in the litigation. He cannot entrust the entire

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responsibility to his lawyer and slumber was over his rights. In the instant case, the Appellant has approached all the forums including the Civil Court and the Hon’ble High Court to get his grievance redressed and failed multiple times in getting any relief. He has not taken appropriate action at the appropriate time. The Securitisation Application filed before the DRT-III, Mumbai was dismissed for the delay in filing the same. The appeal preferred also failed. Taking into consideration the entire facts and circumstances of this case, it is noted that the Appellant has not approached the forums on time to get redressal of his grievance. Despite having knowledge about the mortgage created by the 2^nd Respondent in favour of the 1^st Respondent bank, the Appellant sat over his right to challenge the mortgage. The Civil Court failed to entertain his claim because it was a suit to thwart the Sarfaesi measures, and not for a declaration of his rights over the subject property.

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I am, therefore, of the opinion that the unreasonable and unexplaine delay caused in filing this appeal cannot be condoned. The application for condonation of delay is, therefore, dismissed. Resultantly, the appeal at lodging would also stand dismissed.

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Sd/Chairperson

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psa-01

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Mahesh Damu Khare v. Bank of Baroda and others

Case brief

What is this about?

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Mahesh Damu Khare v. Bank of Baroda and others

Case brief

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