Dismissed

P.Krishnan & Anr. v. State Bank of India & Anr.

DRAT6 Jul 2023REGULAR APPEAL/42/2019

Case brief

AI extract

What is this about?

This appeal challenged the rejection of a securitisation application under Section 17 of the SARFAESI Act due to a nine-day delay in filing. The tribunal held that the Limitation Act does not apply to such applications after the statutory amendment, ruling that the DRT lacks power to condone the delay, thereby dismissing the appeal.

What did the court decide?

The appeal RA (SA) 42/2019 is dismissed. All pending IAs stand closed.

P.Krishnan & Anr. versus State Bank of India & Anr. — Banking and Recovery | DRAT (2023)

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RA (SA) 42/2019

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI

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Dated the 6^th of July, 2023

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PRESENT: Hon’ble Mr. Justice S. Ravi Kumar CHAIRPERSON

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RA (SA) 42/2019

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[SA SR 9742/2017 on the file of DRT, Coimbatore]

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Between

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P. Krishnan,

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S/o N. Periyasamy,

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Site No. 110 and 112, Jai Sakthi Golden City, Elavanthi Road, Kehanur Village,

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Palladam Taluk, Tirupur District.

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K. Dhanalakshmi, Site No. 110 and 112, Jai Sakthi Golden City, Elavanthi Road, Kehanur Village, Palladam Taluk, Tirupur District. ……Appellants

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And

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The Authorised Officer, State Bank of India, Kethanur Branch, Kethanur, Udumelpet Main Road, Palladam Taluk, Tirupur District.

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K. Karthikeyan,

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S/o Kanga Sundaram, Old State Bank Road, Saavadipalayam, Kethanur – 641 671.

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….. Respondents Counsel for Appellant : M/s. S. Balaji Counsel for Respondent No.1 : Mr. S. R. Sumathy Counsel for Respondent No.2 : M/s. N. Elumalai

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RA (SA) 42/2019

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O R D E R

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1. This Appeal is against Order dated 29.12.2017 of

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DRT, Coimbatore, in SA SR 9742/2017.

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2. Brief facts leading to this Appeal are as follows:-

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Appellants herein filed SA SR 9742/2017 challenging E-auction Sale. As there was delay in filing said Securitisation Application, Registrar, DRT, Coimbatore, declined to take up the Application on file, as it is not filed within 45 days of measures taken. Appellants invoked Subrule 5 of Rule 5 of the Debts Recovery Tribunal (Procedure) Rules, 1993 ( Hereinafter referred to as Rules, 1993), and preferred a Chamber Appeal before Learned Presiding Officer and Learned Presiding Officer, DRT, Coimbatore, through impugned Order dated 29.12.2017 upheld rejection of Securitisation Application, and dismissed Chamber Appeal. Aggrieved by the same, present Appeal is preferred.

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RA (SA) 42/2019

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3. All parties filed Written Submissions and the same are

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reiterated at the time of oral arguments.

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4. Advocate for Appellants submitted, Appellants

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challenged E-auction Sale by filing SA SR 9742/2017, which is filed on 04.12.2017, with Delay Condonation Petition. He submitted, there is a delay of 9 days only, in filing Securitisation Application, but Securitisation Application was rejected on the ground that DRT has no power to condone delay in filing Application under Section 17 of SARFAESI Act, 2002. He submitted, Tribunal is not correct in holding that it has no power, and Hon’ble Supreme Court

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in A.R. Venugopal @ R. Venugopal Vs. Jotheeswaran , reported in 2015 (4 ) CTC 807 , held that, in view of Section 24 of RDB Act, 1993, specific power is given to DRT to condone delay. He submitted, in view of the same, impugned Order dated 29.12.2017, is liable to be set aside.

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RA (SA) 42/2019

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5. On the other hand, Advocate for first Respondent Bank

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submitted, two Division Benches of Hon’ble High Court of Madras, held that after amendment, Application filed under Section 17 of SARFAESI Act, 2002, is an Original Application, therefore, Section 5 of Limitation Act, has no application, and DRT has no power to condone delay. It is submitted, in Velar Engineering Works Private Limited Vs.

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The Authorized Officer, Indian Bank, Kanchipuram & Ors. and in Central Bank of India Vs. The Registrar, DRAT, Chennai & Ors., Division Benches of Hon’ble High Court of Madras, has held that Section 5 of Limitation Act, has no application to Application filed under Section 17 of SARFAESI Act, 2002, and in view of the same, Tribunal below is justified in rejecting Securitisation Application.

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6. Advocate for Auction Purchaser adopted the arguments

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of Bank, and submitted, there are no grounds to interfere with impugned Order dated 29.12.2017.

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RA (SA) 42/2019

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7. In reply, Advocate for Appellants submitted, the issue

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with regard to application of Section 5 of Limitation Act, to the Application filed under Section 17 of SARFAESI Act, 2002, is pending before Hon’ble Supreme Court of India in SLP No.4754/2021 in the case of K.J. George Vs. The Authorised Officer, Indian Bank and Ors. , and as the Appellants have shown sufficient cause for the delay of 9 days in filing Original Application, the same has to be accepted.

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8. I have perused material papers including the impugned Order dated 29.12.2017.

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9. Advocate for Appellants mainly contended that Hon’ble

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Supreme Court in the case of A.R. Venugopal @ R. Venugopal Vs. Jotheeswaran , held that RDB Act, 1993, is conferred with specific power to DRT to condone delay,

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RA (SA) 42/2019

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therefore, Tribunal below ought to have examined Section 5 Application, instead of rejecting the case on the ground that it has no power. According to Advocate for first Respondent Bank, Tribunal below justified in rejecting Securitisation Application, in view of Division Benches judgements of Hon’ble High Court of Madras. He further submitted, decision of Hon’ble Supreme Court is not in respect of Application filed under Section 17 of SARFAESI Act, 2002, but it is in respect of Appeal filed under Section 30 of RDB, Act, 1993, therefore, the same has no application. Hon’ble Supreme Court, in International Asset Reconstruction Company of India Ltd. Vs. The Official Liquidator of Aldrich Pharmaceuticals Limited & Ors., reported in AIR 2017 SC 5013, overruled the judgement of A.R. Venugopal @ R. Venugopal Vs. Jotheeswaran, and held that Section 5

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of Limitation Act, cannot be applied to Appeals filed under Section 30 of RDB Act, 1993. When Hon’ble High Court of Madras, while interpreting the nature of Application filed under Section 17 of SARFAESI Act, 2002, prior to amendment and after amendment, held that, Application

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RA (SA) 42/2019

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filed under Section 17 of SARFAESI Act, 2002, after amendment, is an Original Application, thereby Section 5 of Limitation Act, cannot be applied, contention of Advocate for Appellants that issue is pending before Hon’ble Supreme Court, cannot help Appellants until the decisions of Hon’ble High Court of Madras in Velar Engineering Works Private Limited Vs. The Authorized Officer, Indian Bank, Kanchipuram & Ors. and in Central Bank of India Vs. The Registrar, DRAT, Chennai & Ors. , are set aside. Those decisions are binding, in view of location of DRAT within the jurisdiction of Hon’ble High Court of Madras, and subject matter is also within the jurisdiction of Hon’ble High Court of Madras. In view of decision of Hon’ble Supreme Court in International Asset Reconstruction Company of India Ltd. Vs. The Official Liquidator of Aldrich

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Pharmaceuticals Limited & Ors., the decision relied on by Appellants, cannot be applied.

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RA (SA) 42/2019

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On a scrutiny of entire material, I am of the considered view that Tribunal below rightly rejected Securitisation Application, which is filed beyond the period of limitation, as it has no power to condone delay.

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