Dismissed

Vinod Nimnath Sonar v. the Authorized Officer Bank of Baroda and Ors.

DRAT18 Nov 2024REGULAR APPEAL/247/2016

Case brief

AI extract

What is this about?

The Appellate Tribunal dismissed the appeal, holding that the appellant failed to establish sufficient cause to condone a 459-day delay in filing an application under Section 17 of the SARFAESI Act, noting that ignorance of law was not a valid excuse.

What did the court decide?

The appeal was dismissed; the order dated 07.12.2012 declining to condone the delay of 459 days was upheld.

Vinod Nimnath Sonar versus the Authorized Officer… — Contract and Commercial Disputes | DRAT (2024)

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

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Appeal No. 247/2016

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Between

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Vinod Nimnath Sonar … Appellant/s V/s.

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The Authorised Officer, Bank of Baroda & Ors.

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Mr. Puneet Gogad, Advocate for Appellant. Mr. A.B. Shinde, Advocate for Respondents.

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The order dated 07.12.2012 in Misc. Application No. 15/2012 (M.A.) declining to condone the delay of 459 days in filing the Securitisation Application (S.A.) on the files of the Debts Recovery Tribunal, Aurangabad (D.R.T.) is impugned.

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The appellant had admittedly borrowed a sum of ₹ 6,00,000/from the respondent Bank of Baroda on mortgaging the property comprised in Survey No. 466/1, Plot No. 4 admeasuring 317.125 Sq. Mtrs. in Nageshwar Colony. The sanctioning of the loan was based on appropriate valuation.

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On the appellant's defaulting repayment, the account was classified as non-performing assets (NPA) and a demand notice was issued by the bank on 09.08.2008 u/s 13(2) of the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (“SARFAESI Act”, for short) calling upon the

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appellant to pay ₹7,33,739/- together with interest. A possession notice was issued on 23.02.2010 under Rule 8 (1) of the Rules. Thereafter, a possession cum sale notice was issued on 29.10.2010. The appellant approached the bank with a request for an extension of time for repayment of debt by equated monthly instalments (EMI). The bank refused the request and threatened to auction the secured asset unless the account was regularised.

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Believing the assurance given to the appellant that the secured asset would be sold in an auction based on the current market value, he consented to auction the property at the current market value, which was around ₹35 to ₹40 Lakhs.

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The appellant contends that the bank illegally sold the mortgaged property at ₹4,28,000/- to Respondent No.4 on 30.11.2010 without notice to the appellant. On coming to know about the sale, the appellant approached the bank for details of the sale. He was however not provided with any details. Hence, the appellant filed the S.A. on 14.06.2011 with M.A. No. 36 of 2011 for condonation of delay of 6 months and 2 days in filing the S.A. That application for condonation of delay was withdrawn with the liberty to file a fresh application due to non-disclosure of sufficient cause for the delay in that application. Thereafter, the appellant filed the present M.A. No. 15 of 2012 for condonation of delay of 459 days.

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In the impugned order, the Ld. Presiding Officer observed that the appellant did not approach the D.R.T. within 45 days and challenged the measures taken by the respondent bank and hence the

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S.A. is barred by limitation. It was observed that in the present MA also, no sufficient cause for the delay was shown, and that it was a copy of the earlier application. Hence the MA was dismissed. The appellant is aggrieved and hence in appeal.

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The respondent bank has vehemently opposed the appeal in defence of the impugned order stating that no sufficient reasons have been stated to condone the delay. Hence it is submitted that the appeal be dismissed.

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Heard the Ld. Counsel Mr Puneet Gogad for the appellant and Mr A.B. Shinde for the respondents. Records perused.

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Mr Puneet Gogad submits that there are sufficient grounds to condone the delay in filing the SA. Moreover, it is argued that the appellant has a very good case on merits no notice was served regarding the sale of the subject property on the appellant and it is pointed out that the sale notice and possession notice issued jointly on 29/10/2010 which is against the prescribed rules. It is also contended that there was no proper valuation report obtained before the sale in that the property was undervalued and sold for ₹ 5 lakhs only. The Ld. Counsel relied on the decision of the Hon’ble Supreme Court in Mool Chandra Vs. Union Bank of India and Ano. 2024 SCC Online SC 1878 to argue that the term ‘sufficient cause’ or to the liberal construction.

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The Ld. Counsel appearing for the bank relied on a decision of the Hon’ble Supreme Court in Maniben Devraj Shah Vs. Municipal Corporation of Brihan, Mumbai (2012) 5 SCC 157 to argue that the

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expression ‘sufficient cause’ would largely depend on the factual matrix of a given case and the bona fide nature of the explanation.

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It is seen from the records that the appellant had originally filed the S.A. with a delay of little more than 6 months. However, finding that the application for condonation of delay filed as M.A. No. 36/2011 was not properly worded, it was withdrawn on a Pursis filed by the Counsel appearing for the appellant. Thereafter, M.A. No. 15/2012 was filed for condoning a delay of 459 days.

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The pleadings in both the applications for condonation of delay are similar. It is stated that the applicant did not know the procedure of law. It is further contended that the bank had delayed giving the necessary documents about the auction of the secured asset and that the applicant was kept in the dark. The applicant had also issued a notice to the bank which caused a delay in applying. It is further stated that there was no intentional delay on the part of the applicant.

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The Hon’ble Supreme Court has in Maniben (supra) held thus:

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“23. What needs to be emphasised is that even though a liberal and justice-oriented approach is required to be adopted in the exercise of power under Section 5 of the Limitation Act and other similar statutes, the courts can neither become oblivious of the fact that the successful litigant has acquired certain rights on the basis of the judgment under challenge and a lot of time is consumed at various stages of litigation apart from the cost.”

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The Hon’ble Supreme Court had in an earlier decision P.K. Ramachandran vs. State of Kerala (1997) 7 SCC 556 held thus:

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“6. 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 proper to extend the period of limitation on equitable grounds.”

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In the decision upon by the Ld. Counsel for the appellant Mool Chandra (supra) the Hon'ble Supreme Court was considering the withdrawal of the application before the Central Administrative Tribunal by the counsel representing the applicant wherein it was contended that the party had not instructed the counsel to withdraw the application. In the instant case, the appellant has no such case. On the other hand, it is admitted that the application was withdrawn with his instructions. Hence, the ratio in the above-cited decision does not apply to the facts of this case.

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Mr Puneet Gogad vehemently argues that the appellant has a very good case on merits and therefore, an otherwise meritorious case should not be dismissed for reasons of delay alone. The Hon'ble Supreme Court has in the decision Commissioner, Nagar Parishad, Bhilwara vs. Labour Court, Bhilwara (2009) 3 SCC 525 taken a view that while deciding an application for condonation of delay, the High Court ought not to have gone into the merits of the case and should have only seen whether the sufficient cause has been shown by the appellant for condoning the delay in filing the appeal before it.

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The Hon’ble Supreme Court has in Bank of Baroda & Ano. vs. Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors. 2022 SCC OnLine SC 1006 held thus:

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“12. The reason for providing a time limit of 45 days for filing an application under Section 17 can easily be inferred from the purpose and object of the enactment. In Transcore v. Union of India, this court held that the SARFAESI Act is enacted for quick enforcement of security. It is unfortunate that proceedings where a property that has been brought to sale and third-party rights created under the provisions of the Act, have remained inconclusive even after a decade.”

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Given the decisions cited above, and on going through the facts and circumstances of this case, I find that the appellant has not succeeded in establishing that he has a good reason to get the delay condoned. The reason that he did not know the law is not good enough. It is also pertinent to note that the appellant had approached the bank before the sale and had given his consent to go ahead with the sale. He has an objection that the property was not sold at a fair value despite the bank's undertaking to sell the property at its current value. This would indicate that the appellant was aware of the proceedings, and also the intended sale of the property. He is therefore not entitled to get the delay of 459 days condoned. The very purpose of the statute would be defeated if the S.A. is taken on file after condoning a delay of 459 days when the statute provides for only 45 days to apply under Sec. 17 of the SARFAESI Act. The D.R.T. was justified in dismissing the application and I find no reason to interfere.

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As a result, the appeal is without merits and is, therefore, dismissed.

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psa-02

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Sd/Chairperson

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Vinod Nimnath Sonar v. the Authorized Officer Bank of Baroda and Ors.

Case brief

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Vinod Nimnath Sonar v. the Authorized Officer Bank of Baroda and Ors.

Case brief

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