Dismissed

Hari Kishan Agarwal v. State Bank of India

DRAT11 Nov 2024MISC APPEAL/28/2024

Case brief

AI extract

What is this about?

This is an appeal against a DRAT order dismissing a utility application under Section 17 of the SARFAESI Act for being time-barred. The Tribunal rejected the claim that the limitation period began from the RTI response date, citing concealment of prior dismissal and lack of specific grounds for delay. The appeal was dismissed, affirming the lower court's order.

What did the court decide?

The appeal was dismissed and the impugned judgment and order of the DRT were affirmed.

Hari Kishan Agarwal versus State Bank of India — Banking and Recovery | DRAT (2024)

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Reportable/Non-Reportable

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Misc. Appeal No. 28 of 2024

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(Arising out of I.A. 524 of 2021 in S.A. 143 of 2021 in DRT, Cuttack)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA

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CHAIRPERSON

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Hari Kishan Agarwal, son of Late Nand Kishore Agarwal, carrying on business under the name and style of Krishna Enterprises having his office at Ward No. IV, Masjid Road, Rangangpur, District Sundargarh, Odisha;

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Kusumlata Agarwal, wife of Late Nand Kishore Agarwal residing at: Ward No IV, Masjid Lane, Main Road, Rajgangpur - 770 017, District: Sundargarh, Odisha;

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Lalita Agarwal, daughter of late Nand Kishore Agarwal, wife of Sri Ashok Kumar Agarwal, 2^nd Floor, 1B, Anookool Mukherjee Road, Kolkata - 700 007;

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Kavita Agarwal, daughter of late Nand Kishore Agarwal, wife of Sri Ajay Agarwal, BL-101, Sector II, Saltlake City, Kolkata - 700 091;

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Vinita Agarwal, daughter of late Nand Kishore Agarwal, wife of Sri Manish Agarwal, SAKHAMBARI, 154 RNT Marg Opp. Bank of India, Civil Lines, Nagpur – 440 001.

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… Appellants

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-Versus-

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State Bank of India, Corporate Office at State Bank Bhawan, Nariman Point, Madam Cama Road, Mumbai and Recovery Branch at Stressed Assets Management Branch (SAMB), Plot No. 778, 1^st Floor, Maharshi College Road, Sahid Nagar, Bhubaneshwar - 751 007;

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Authorised Officer, State Bank of India, Stressed Assets Recovery Branch (SARB), Plot No. 778, 1^st floor, Maharshi College Road, Sahid Nagar, Bhubaneshwar 751 007;

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District Magistrate, Office of District Magistrate, Sundargarh, Odisha;

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Sub Divisional Magistrate, Office of Sub Divisional Magistrate Sadr, Sundargarh, Odisha;

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Baidyanath Bharat LLP, a Limited liability partnership concern incorporated under the provisions of Limited Liability Partnership Act, 2008 having registered office at Plot No. BB 11,Civil Township, Rourkela, Sundargarh -769 004.

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… Respondents

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata

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Counsel for Appellants … Mr. Nemani Srinivas Mr. Sanwal Tibrewal Counsel for Respondents No. 1 and 2 … Mr. Debasish Chakrabarti Counsel for Respondent No. 5 … Mr. Saswat Kumar Acharya Ms. Ankita Upadhyay Mr. Abhijit Agarwal JUDGMENT : 11^th November, 2024 THE APPELLATE TRIBUNAL :

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Heard the Learned Cousel for the Appellant as well as Respondent Bank and the Auction Purchaser and perused the record.

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2. Instant appeal has arisen against judgment and order dated 15.11.2023, passed by Learned DRT, Cuttack in I.A. 524 of 2021 arising out of S.A. 143 of 2021 (Hari Kishan Agarwal & Others -vs- State Bank of India & Others), thereby dismissing I.A. 524 of 2021 and S.A. 143 of 2021. 3. As per the pleadings of the parties, the Appellant herein filed an application under Section 17 of the SARFAESI Act (hereinafter referred to as the ‘Act’) challenging the order passed by the Learned District Magistrate under Section 14 of the Act with an application, being I.A. 524 of 2021, to condone the delay, if any, in filing the application.

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4. In the SARFAESI Application filed by the Appellant, limitation was sought from the date of information disclosed on 26.11.2021 to the Appellant under the Right to Information Act whereby it was brought to the notice of the Appellant that an order was passed by the Learned District Magistrate on 20.12.2019. Taking cue from the information

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata received on 26.11.2021, an application under Section 17 of the Act was filed on 7.12.2021 whereby relief was sought challenging the action of the District Magistrate and the assistance sought by the Respondents No. 1 and 2, namely, Bank, and from taking assistance from Respondent No. 4, i.e. Sub Divisional Magistrate, Sadr, Sundergarh, Odisha, under Section 14 of the SARFAESI Act. Further relief was sought for injunction against the Bank from taking any action in furtherance of the information dated 26.11.2021 under the SARFAESI Act. 5. It also transpires from the pleadings that Appellant is a Borrower of the Respondent Bank who has availed financial facilities by creating equitable mortgage. After the accounts were classified as N.P.A., secured creditor proceeded under the SARFAESI Act. S.A. No. 92 of 2014 was filed by the Appellant before the Learned DRT, Cuttack which was dismissed on 8.6.2017. Thereafter, secured creditor obtained the order from District Magistrate under Section 14 of the Act on 20.12.2019 which could not be executed. Thereafter, Appellant herein moved an application under the Right to Information Act before the Collector seeking copy of the orders passed under Section 14 of the Act wherein the required information was provided on 26.11.2021 enclosing the order dated 9.11.2021 and other relevant documents. On the basis of the information received, Appellant filed an application under Section 17 of the Act along with an application for condonation of delay in filing the application under Section 17 of the Act.

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata 6. Opposition is filed by the Respondent before the Learned DRT stating that principle of equity could not be extended in favour of the Appellant as he has not filed the petition under Section 17 of the Act with clean hands. He has suppressed the fact of dismissal of S.A. 92 of 2014. Further it was stated that nowhere any pleading was made regarding date of knowledge of the orders passed by the Learned District Magistrate that prompted the Appellant to move application under the Right to Information Act before the District Magistrate to obtain copy of the order passed under Section 14 of the Act. It is further submitted that since the Appellant himself has sought for copy of the order passed under Section 14 of the Act that means he was having full knowledge of the order. Certain orders have been passed by the Learned District Magistrate. Since orders were passed by the Collector & District Magistrate on 20.12.2019 under Section 14 of the Act, SARFAESI Application was filed on 7.12 2021 which was beyond the period of 45 days which is required under the law. Accordingly, application for condonation of delay is liable to be dismissed. 7. Having considered the submission made by the Learned Counsel for the parties and perusing the record Learned DRT held that Applicants failed to prove their case for condonation of delay in filing the S.A. 143 of 2021. Although Learned DRT also recorded a finding on the merit of the order passed by Learned District Magistrate under Section 14 of the Act, which is unwarranted and Learned DRT has

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata exceeded its jurisdiction as the prayer before the Learned DRT simply, at this stage, was as to whether the application under Section 17 of the Act filed by the Applicant is legally maintainable or not or the Applicant is entitled to condonation of delay? Accordingly, SARFAESI Application as well as the I.A. were dismissed.

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8. Feeling aggrieved, the Appellant preferred the instant appeal.

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9. At the very outset, Learned Counsel for Appellant would submit that the Appellant has brought all the facts on record by filing the application under Section 17 of the Act. Police Officers visited the secured asset on 16^th or 17^th November, 2021. Thereafter, the Appellant was required to move the application under RTI Act asking for copy of the order passed by the Learned District Magistrate. It is further submitted that Learned DRT has exceeded its jurisdiction in recording the findings about merits of the order under Section 14 of the Act. It is further submitted that the Appellant was not required to move an application under Section 5 of the Limitation Act as the Appellant is seeking limitation from the date of supply of the information under the RTI Act. But on insistence of the office of the Registrar, DRT, application for condonation was moved with a prayer to condone the delay, if any. It is further submitted that the Respondents have nowhere challenged the date of knowledge of the order passed by the Learned District Magistrate; hence a new case could not be made out by the Learned DRT.

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata

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10. Per contra, Learned Counsel for the Bank and Auction Purchaser would submit that no pleading was made by the Appellant regarding the date of knowledge of the impugned order under Section 14 of the Act; no assertion is made as to when the police officers visited the secured assets; how the Appellant came to know when the impugned order was passed; what prompted him to move an application under the RTI Act on 24.11.2021. It is further submitted that copy of the order passed under Section 14 of the Act was filed by the Appellant under the RTI Act which shows that Appellant had full knowledge of the fact that some orders were passed by the Learned District Magistrate. Application under RTI Act was moved to simply take advantage of the Limitation Act.

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11. Learned Counsel further submits that Appellant has suppressed the fact of dismissal of S.A. 92 of 2014. Even in the application under Section 5 of the Limitation Act, no specific ground is taken for condonation of delay. No sufficient cause has been shown by the Appellant for condonation of delay. However, the Appellant failed to establish any ground before the Learned DRT. It is further argued that Appellant himself is not clear about the date of knowledge of the impugned order passed under Section 14 of the Act.

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12. As far as the question of limitation is concerned, it is settled legal proposition that application under Section 17 of the Act should be filed within 45 days from the date of cause of action. It is also settled legal proposition that the burden

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata

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lies upon the Applicant to prove that sufficient cause is made out for condonation of delay. The application for condonation of delay is moved with a prayer to condone the delay, if any. This itself shows that the Appellant was not sure about the date of knowledge of the order. It is also settled legal proposition that the Appellant cannot travel beyond the pleadings made by him. In the application for condonation of delay the limitation is claimed from the date of supply of the information to the RTI, i.e. 26.11.2021. Application for the same was made or given on 24.11.2021. Not a single word is stated as to how the Appellant came to know about the order under Section 14 of the Act on 24.11.2021. Learned Counsel for Appellant would argue that when the police officers visited the secured assets, i.e. on 16^th or 17^th November, 2021 then the Appellant came to know about the impugned order under Section 14 of the Act. Had it been so, this fact, in clear terms, should have been stated in the affidavit so as to afford an opportunity to the Respondents to controvert the same. But no such statement is made by the Appellants; hence there is no occasion for the Respondents to controvert that ground, as argued by the Learned Counsel for Appellant. Since there is no ground taken by the in the Appellant as to why the application under RTI Act is moved on 24.11.2021, Appellant could not take advantage of the same.

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13. It is argued by Learned Counsel for Appellant that application under Section 5 of the Limitation Act is moved on the insistence of the Registrar of the Learned DRT. But

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata perusal of I.A. shows that this fact is nowhere stated that this application is being filed by the Appellant under protest or under compulsion raised by the Registrar of the DRT. Hence such a plea cannot be accepted.

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14. Further in the application under Section 14 of the Act, in the Limitation Clause it is stated that :

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“The applicants further states that this application is filed within the period of limitation prescribed in sub section 1 of Section 17 of the Securitization & Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the said Act, of 2002"). From information disclosed on 26.11.2021 under an application by the applicant under the Right to Information Act 2005, it transpired that the Defendant nos. 1 and 2 have requested the Respondent no. 4 for police assistance to take physical possession of the land and building of the applicants and the instant application is being filed within the period of statutory period of limitation of 45 days therefrom and thus the same is within the prescribed period of limitation.”

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Even in this paragraph no statement is made as to how the Appellant was required to move application on 24.11.2021 for copy of the order passed under Section 14 of the Act. Simply it is stated that from information disclosed on 26.11.2021 limitation is claimed. This is against the law. No advantage could be extended in favour of the Appellant as per the Limitation clause narrated under the order under Section 17 of the Act.

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15. No doubt, as far as condonation of delay is concerned, in the case of Deecon India Private Limited & Others -

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vs- Canara Bank & Others ( 2022 SCC OnLine Cal 3737 , Hon’ble High Court has held that the time period mentioned under Section 17 (1) of the SARFAESI Act must be given a purposive construction. Although, the starting point is the date of the impugned measure taken by the

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata

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secured creditor, the provision would be rendered arbitrary and ineffective if the date of knowledge of the person is not taken into account. Date of knowledge is the relevant date which should have been stated and established by the Appellant to claim the limitation. In the present case, as far as the date of knowledge is concerned, there is nothing on record to show as to when the Appellant came to know about the District Magistrate order or what prompted the Appellant on 24.11.2024 when he moved the application under the RTI Act.

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16. Perusal of the application filed under Section 17 of the Act reveals that no assertion is made regarding dismissal of the earlier SARFAESI Application No. 92 of 2014. It means that a relevant fact was purposely concealed by the Appellant in the application under Section 17 of the Act. It is settled legal proposition that one who seeks equity must do equity. It means that Appellant should come with clean hands before the Tribunal. When a relevant fact is concealed, the only presumption can be drawn that concealment was made with an ulterior motive. In the present case, non-disclosure of dismissal of S.A. 92 of 2014 itself shows intention of the Appellant that he purposely concealed the fact and he is not entitled to any relief.

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17. As far as merit of the order under Section 14 of the Act is concerned, Learned DRT has recorded certain observations which are against law which should not have been recorded at this stage. Learned DRT was simply required to consider as to whether the application under

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Misc. Appeal No. 28 of 2024-DRAT-Kolkata Section 17 of the Act can be entertained or not? Accordingly, such observations are to be set aside and accordingly set aside.

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18. On the basis of the discussion made above, I am of the considered view that Learned DRT has rightly dismissed I.A. 524 of 2021 and S.A. 143 of 2021, having treated as time barred. Accordingly, appeal lacks merit and is liable to be dismissed.

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O R D E R E D

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Appeal is dismissed. The impugned judgment and order dated 15.11.2023, passed by Learned DRT, Cuttack in I.A. 524 of 2021 arising out of S.A. 143 of 2021 (Hari Kishan Agarwal & Others -vs- State Bank of India & Others), thereby dismissing I.A. 524 of 2021 and S.A. 143 of 2021, is affirmed.

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No order as to costs.

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Copy of the order be supplied to Appellants and the Respondents and a copy be also forwarded to the concerned DRT.

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File be consigned to Record room.

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Order dictated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 11^th November, 2024 11/ac

Hari Kishan Agarwal v. State Bank of India

Case brief

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Hari Kishan Agarwal v. State Bank of India

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