The Debts Recovery Appellate Tribunal considered an application under Section 5 of the Limitation Act for condonation of a 280-day delay in filing an appeal under Section 18 of the SARFAESI Act.
Application for condonation of delay allowed subject to payment of costs; appeal registered regularly for hearing.
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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA
Dy. No. 635 of 2021
(Arising out of SA No. 98 of 2019 in DRT- 1 Hyderabad)
THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON
…Appellants
-Versus-
… Respondents
Counsel for the Appellants Mr. Debasish Chakrabarty with Ms. Sharmistha Pal, Advocate Counsel for the Respondent No. 3 Mr. Pankaj Kumar Mukherjee with Mr. Ambadipudi Satyanarayan, Advocate
JUDGMENT : On 16th October, 2023
THE APPELLATE TRIBUNAL
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I.A. No. 130 of 2022 application under Section 5 of the Limitation Act for condonation of delay in preferring the Appeal.
2. It is submitted that as per the Application, Appellant preferred an appeal under Section 18 of the SARFAESI Act to set aside an order passed by the Learned DRT-1 Hyderabad in S.A. No. 98 of 2019 dated 23.09.2019. Appellant is a third party who is not aware of the proceedings. Proceedings were initiated by the official liquidator, since Appellants were not a party to the proceedings, mortgage was not created by the Appellant. Appellant came to know about the proceedings on 14.11.2019. Respondent No. 3 i.e. N. Sitaram Raju tried to dispossess him. Then he filed a Civil Suit on 21.11.2009 against Respondent No. 3 before Civil Judge Sanga Reddy. Interim relief for injunction was refused vide order dated 05.02.2022. Appellant preferred the appeal before the Civil Judge which is pending and could not be taken due to the Covid 19 pandemic. Appellant preferred the writ petition No. W.P. 18227 of 2020 before the High Court of Telangana on 08.10.2020 challenging the impugned order dated 23.09.2019 which was disposed of on 31.03.2021 with the direction to avail the alternate remedies. Appellant challenged the order of the High Court by filing SLP (C) No. 14115 of 2021 on 20th July 2021 before the Hon’ble Apex Court. Hon’ble Apex court permitted the Appellant to
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withdraw SLP on 20th October, 2021 to adopt appropriate proceedings before the Debts Recovery Appellate Tribunal, Kolkata. Thereafter, Appellant preferred the Appeal on 6th December, 2021. Appellant is entitled for the benefit of order of the Hon’ble Apex Court in Suo Motu Writ Petition (Civil) No. 3 of 2020. There is a delay of 280 days in filing the Appeal which is to be condoned.
3. Respondent No. 2 filed objections on the ground that Appellant has not sought any leave to file the Appeal since he is a third party to the proceedings. Hence, the Appeal is not maintainable. Appellant has also availed the remedy of filing an application under Section 17 of the SARFAESI Act. Hence, both the proceedings cannot be prosecuted simultaneously. Partners of the petitioner and the Directors of the borrower Company i.e. M/s Sunrise Oleochemicals Pvt. Ltd. are closely related to each other which shows that the said Company has created the firm with an intention to defraud the Banks. Smt. Sarat Chandrika is wife of M. Uday Shankar Rao who is the Managing Director of M/s Sunrise Oleo Chemicals Pvt. Ltd. As such the petitioner and the borrower Company have colluded and mortgage was created in favour of the Central Bank of India on 13.11.1995. Exchange of the properties between them on 13.02.1997 creating a Sale Deed on 29.02.1997 and depositing the same with State Bank India in 1998 establishing that fraud was being played upon the Bank and secured creditor.
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4. Central Bank of India filed a Recovery Suit O.A. No. 252 of 2000 before DRT Hyderabad against M/s Sunrise Oleo Chemicals Pvt. Ltd. wherein decree was passed. Recovery Certificate was issued. SARFAESI Application No. 98 of 2019 filed by the Official Liquidator representing M/s Sunrise Oleo Chemicals Pvt. Ltd was dismissed by DRT-1 Hyderabad on merits. Appellant has no right, title and interest over the property.
5. Appellant has got knowledge of all the proceedings. No sufficient ground is made out for condonation of delay. Judgment of the Hon’ble Apex Court in Suo Motu Case No, 03 of 2020 is not applicable. In the facts and circumstances of the case, present application for condonation of delay is liable to be dismissed.
6. I have heard the Learned Counsel for the parties and perused the record.
7. Application for condonation of delay is filed for condonation of delay of 280 days in preferring the Appeal. Appeal is filed by challenging the order dated 23.09.2019 passed by Learned DRT. At the very outset it is an admitted fact that pending this appeal a SARFAESI application under Section 17 of the SARFAESI Act is also filed by the Appellant before the DRT. He is pursuing the Appeal as well as SARFAESI application simultaneously.
8. As far as filing of Appeal is concerned, admittedly Appellant was not a party before the Learned DRT. He has challenged the judgment passed by the DRT on different
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grounds along with the ground that he was not provided with an opportunity of hearing. As far as hearing is concerned, admittedly, Appellant filed a Civil Suit before the Civil Judge Sanga Reddy on 21.11.2019 wherein relief for injunction was sought against Respondent No. 3 which was refused vide order dated 05.02.2020. Said order was challenged in Appeal which is pending. Thereafter, a Writ Petion No. 18227 was filed before the Hon’ble Telangana High Court which was disposed of vide order dated 31.03.2021 by a Division Bench of the Hon’ble High Court. A perusal of the judgment will show that the Appellant had knowledge about the impugned judgment. Writ Petition was disposed of leaving it open to the petitioner to avail alternate remedies available under the law. Even after this order, appeal was not filed. Rather, this order was challenged before the Hon’ble Apex Court by filing SLP (C) No. 14115 of 2021 dated 20th October 2021 which was withdrawn by the Appellant as he was advised to adopt appropriate proceedings before the DRAT. Thereafter Appeal was preferred on 30th November, 2021. Learned Counsel for the Appellant made a submission for benefit of the orders passed by the Hon’ble Apex Court in Writ Petition No. 03 of 2020 wherein the benefit of the period of Covid 19 was allowed by the Hon’ble Apex Court in computing the limitation.
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In Sagufa Ahmed Vs. Upper Assam Plywood Products (P) Ltd. (2021) 2 SCC 317, it was held by the Hon’ble Apex Court that –
“The contentions raised by the learned Counsel for the Appellants are twofold, namely, (i) that the Appellate Tribunal erred in computing the period of limitation from the date of the order (Sagufa Ahmed v Upper Assam Plywood Products (P) Ltd., 2019 SCC OnLine NCLT 749) of NCLT, contrary to Section 421 (3) of the Companies Act, 2013, and (ii) that the Appellate Tribunal failed to take note of the lockdown as well as the order passed by this Court on 23.03.2020 in Cognizance for Extension of Limitation, In (2020) 19 SCC 10:2020 SCC OnLine SC 343, extending the period of limitation for filing any proceedings with effect form 15.03.2020 until further orders.”
Section 14 of Limitation Act provides for exclusion of time of proceeding bona fide in Court without jurisdiction. It has been held by the Hon’ble Apex Court in (2006) 6 SCC 239 State of Goa Versus Western Builders in Para No. 19 that-
“19. There is no provision in the whole of the Act which prohibits discretion of the court. Under Section 14 of the Limitation Act if the party has been bona fidely prosecuting his remedy before the court which has no jurisdiction whether the period spent in that proceedings shall be excluded or not.”
9. Appellant filed a Civil Suit for injunction before a competent Civil Court wherein injunction was refused. Order was challenged in Appeal but pending Appeal, Writ Petition was filed before the Hon’ble High Court which was disposed of by the Hon’ble High Court with an observation that the petitioner has alternate remedy of Appeal under Section 18
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of the Act. However, petitioner was given an opportunity to avail the alternate remedy in accordance with law. Even in the SLP before the Hon’ble Apex Court, SLP was withdrawn as the petitioner was advised to adopt appropriate proceedings before the DRAT. Hence, the Appellant would be entitled for claiming the benefit of Section 14 of the Limitation Act.
10. Now it is to be seen that the SLP was disposed of on 20.10.2021 and the Appeal was filed on 30.11.2021 with the delay of one month only. The delay in filing the Appeal by the Appellant would be counted from the date of decision of the Hon’ble Apex Court till the date of filing of the Appeal which is 40 days. Accordingly, I am of the opinion that the Appellant has been successfully able to show the cause for condonation of delay and to seek the benefit of Section 14 of the Limitation Act.
11. Accordingly, I.A. No. 130 of 2023 application for condonation of delay in preferring the Appeal is allowed subject to payment of cost of Rs. 10,000/- (Rupees ten thousand) to be deposited with State Legal Services Authorities within a period of one week, failing which Application under Section 5 of the Limitation Act shall stand dismissed.
On deposit of cost, Appeal be registered as regular appeal by providing a regular appeal number. Notices be issued to the Respondents who may file the opposition
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within four weeks with copy to the Appellant who may file the rejoinder two weeks thereafter.
List on 6th February, 2024 for hearing of Appeal.
(Anil Kumar Srivastava,J) Chairperson
Dated: 16th October, 2023 tp
2 issues framed by the court
Whether the delay in filing the appeal under Section 18 of the SARFAESI Act should be condoned under Section 5 of the Limitation Act.
Whether the appellant is entitled to the benefit of Section 14 of the Limitation Act by undergoing bona fide proceedings in other courts.
Colour shows how this judgement treated each authority
Sagufa Ahmed vs. Upper Assam Plywood Products (P) Ltd.Referred¶31
Sagufa Ahmed Vs. Upper Assam Plywood Products (P) Ltd. (2021) 2 SCC 317 · Who else cites this
State of Goa vs. Western BuildersExplained¶33
State of Goa Versus Western Builders (2006) 6 SCC 239 · Who else cites this
3 provisions across 2 enactments
Siddhi Vinayaka Industries
Central Bank of India
Reliance Asset Reconstruction Company Ltd.
N. Sitaram Raju
M/s Sunrise Oleo Chemicals Ltd.
Anil Kumar Srivastava
As recorded by the court registry
12 orders share this CNR
Judgements on the same questions, provisions and authorities, from every court
