Allowed

Icici Bank Limited v. Elora Mishra

DRAT17 Jan 2024REGULAR APPEAL/92/2019

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed the bank's appeal against a DRT order that had condensed a six-year delay in filing a SARFAESI application. The Tribunal held the warrant was time-barred as the applicant cannot claim lack of knowledge of proceedings she was fully aware of through her son, who litigated against the bank.

What did the court decide?

Impugned order setting aside the DRT judgment allowing condonation of delay was set aside; Section 17 of the SARFAESI Act was dismissed as time-barred.

Icici Bank Limited versus Elora Mishra — Banking and Recovery | DRAT (2024)

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Appeal No. 92 of 2019-DRAT-Kolkata

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IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

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Appeal No. 92 of 2019

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(Arising out of Diary No. 1675 of 2019 in M.A. 1677 of 2019 in DRT, Cuttack)

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THE HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

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ICICI Bank Limited through its Authorised Officer, at Kharavela Nagar, Bhanjaprava Building 2^nd Floor, Unit-3, Bhubaneswar – 751 001, District – Khurda.

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… Appellant

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-Versus-

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Elona Mishra, wife of Late Kishore Chandra Mishra, Plot No. 730/964, Plot No. 609, Elona Nivas, Near Utkal Hyundai, Rasulgarh, Bhubaneswar – 751 101.

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… Respondent Counsel for the Appellant … Mr. Avishek Guha Ms. Shreyasi Sen Counsel for Respondent … Mr. Nimish Mishra Mr. Abir Mondal

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JUDGMENT : 17^th January, 2024

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THE APPELLATE TRIBUNAL :

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Instant appeal has arisen against judgment and order dated 24^th August, 2019, passed by Learned DRT, Cuttack in M.A. 1677 of 2019 in Diary No. 1675 of 2019 (Elona Mishra -vs- ICICI Bank Limited); whereby M.A. 1677 of 2019, filed under Section 5 of the Limitation Act, was allowed and delay in filing the SARFAESI Application, under Section 17 of the SARFAESI Act, 2002 (hereinafter referred to as the Act), was condoned. 2. As per the pleadings of the parties, the SARFAESI Application under Section 17 of the Act was filed by the Respondent along with an application under Section 5 of the Limitation Act for condonation of delay stating that the Appellant Bank has taken over possession of the secured asset on January 12, 2012 but the possession notice was not published in the newspaper. SARFAESI Applicant came to know that the secured creditor, i.e. Appellant Bank, has taken physical

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Appeal No. 92 of 2019-DRAT-Kolkata possession of the property pursuant to an order under Section 14 of the Act passed by the District Magistrate. SARFAESI Applicant is a lady of 75 years hence there was a delay of six years four months in filing the SARFAESI Application. Accordingly, a prayer was made for condonation of delay of 2713 days in filling the SARFAESI Application. 3. Objections were filed by the Appellant Bank stating that the notices under Section 13 (2) and 13 (4) of the Act were duly served. After service of notice, Respondent’s son, Ashutosh Mishra, preferred a writ petition before the Hon’ble High Court of Orissa at Cuttack challenging the secured creditor’s action. As per the directions of the Hon’ble High Court, he deposited a sum of Rs.10.00 lac and submitted a letter of OTS which was rejected. No illegalities or irregularities were committed by the Bank.

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4. Learned DRT recorded a finding to the effect that power to condone the delay lies with the DRT. Further it was held that in order to do substantial justice to the parties and having considered the principles of natural justice, sufficient cause was shown by the Applicant. Accordingly, delay was condoned.

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Feeling aggrieved by the impugned order the Secured Creditor, preferred an appeal.

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I have heard the Learned Counsel for the parties and perused the record.

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5. Learned Counsel for Appellant Bank would submit that the Respondent/SARFAESI Applicant could not make out any ground to show that sufficient cause was there in her favour. No explanation is given in the application, under Section 5 of the Limitation Act, for condonation of delay. It is further submitted that the SARFAESI Applicant had full knowledge of the proceedings being undertaken by the secured creditor. Possession Notice was issued on 1^st December, 2012. It is further submitted that the writ petitions were filed by Ashutosh Mishra, son of the SARFAESI Applicant. She is living with him. No ground is taken that she is living separately; hence she had full knowledge of the actions taken by the secured creditor.

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Appeal No. 92 of 2019-DRAT-Kolkata

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6. Learned Counsel for Respondent would submit that the application, under Section 5 of the Limitation Act for condonation of delay in filing SARFAESI Application under Section 17 of the Act, is legally maintainable. It is further submitted that the SARFAESI Applicant was not having knowledge of any action being undertaken by the secured creditor. The Learned DRT has condoned the delay in order to do substantial justice between the parties.

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7. As far as the issue of maintainability of application under Section 5 of the Limitation Act before the Learned DRT, Cuttack, for filing the SARFAESI Application under Section 17 of the Act, is concerned, it was held by the Division Bench of the Hon’ble High Court of Orissa in Murarinath Sharma -vs- Allahabad Bank (2014 AIR CC 1797 and Sudeshna Dei -vs- Assistant General Manager, RASMEC CCC-SARC, SDBI & Others in W.P. (C) 7905 of 2018 decided on 25^th March 2021 that Limitation Act will apply to the proceedings under the SARFAESI Act. A different view was taken by the Hon’ble Division Bench from the law laid down by the Hon’ble Calcutta High Court in Akshat Commercial Private Limited & Another -vsKalpana Chakraborty & Others (AIR 2020 Cal 138). Same view was taken by the Hon’ble Allahabad High Court in the matter of State Bank of Patiala -vs- Chairperson DRAT & Others (AIR 2012 All 1).

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Accordingly, I am of the considered view that the Limitation Act would apply in an application under Section 17 of the Act filed before the DRT, Cuttack.

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8. Learned Counsel for Respondent has further placed reliance upon State (NCT of Delhi) -vs- Ahmed Jaan [(2008) 14 SCC 582], S. Ganesharaju (Dead) through LRs -vs- Narasamma (Dead) through LRs [(2013) 11 SCC 341], Raheem Shah & Another -vs- Govind Singh & Others (2023 SCC OnLine Hon’ble Supreme Court 910), Punjab Small Industries & Export Corporation Limited & Others -vs- Union of India & Others (1995 Supp (4) SCC 681 and Vedabai Alias Vaijayanatabai Baburao Patil -vs- ShantaramBaburao Patil & Others [(2001) 9 SCC 106].

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Appeal No. 92 of 2019-DRAT-Kolkata 9. Per contra, Learned Counsel for Appellant has placed reliance upon a judgment reported in (2010) 14 SCC 419 (Indian Oil Corporation Limited & Others -vs- Subrata Borah Chowlek & Others). 10. The Hon’ble Apex Court in a recent judgment in the matter of Sheo Raj Singh (Deceased) through Legal Representatives & Others -vs- Union of India & Another [(2023) 10 SCC 531] has held in paragraphs 30 and 32 as under:

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“30. X x x condonation of delay being a discretionary power available to courts, exercise of discretion must necessarily depend upon the sufficiency of the cause shown and the degree of acceptability of the explanation, the length of delay being immaterial.”

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“32. x x x At this stage, we cannot but lament that it is only excuses, and not explanations, that are more often accepted for condonation of long delays to safeguard public interest from those hidden forces whose sole agenda is to ensure that a meritorious claim does not reach the higher courts for adjudication.”

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Further it was held in paragraphs 35 and 36 as under:

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“ 35. We find that the High Court in the present case assigned the following reasons in support of its order:

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35.1. The law of limitation was founded on public policy, and that some lapse on the part of a litigant, by itself, would not be sufficient to deny condonation of delay as the same could cause miscarriage of justice.

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35.2. The expression "sufficient cause" is elastic enough for courts to do substantial justice. Further, when substantial justice and technical considerations are pitted against one another, the former would prevail.

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35.3. It is upon the courts to consider the sufficiency of cause shown for the delay, and the length of delay is not always decisive while exercising discretion in such matters if the delay is properly explained. Further, the merits of a claim were also to be considered when deciding such applications for condonation of delay.

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35.4. Further, a distinction should be drawn between inordinate unexplained delay and explained delay, where in the present case, the first respondent had sufficiently explained the delay on account of negligence on part of the government functionaries and the government counsel on record before the Reference Court.

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35.5. The officer responsible for the negligence would be liable to suffer and not public interest through the State. The High Court felt inclined to take a pragmatic view since the negligence therein did not border on callousness.

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36. Given these reasons, we do not consider discretion to have been exercised by the High Court in an arbitrary manner. The order under challenge had to be a clearly wrong order so as to be liable for interference, which it is not.”

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Appeal No. 92 of 2019-DRAT-Kolkata

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Now it is to be seen as to whether the Respondent had substantially shown any sufficient cause or whether she is a bona fide litigant or she had no knowledge of the proceedings being undertaken by the secured creditor?

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11. At the very outset, in the application under Section 5 of the Limitation Act, it is admitted that there is delay of six years four months. But the same is not intentional rather it is beyond the control of the Respondent. Further it is stated in paragraph 3 of the application that she was in total dark about the steps taken by the secured creditor and when it comes to her knowledge then suddenly she files the SARFAESI Application. However, source of knowledge is not mentioned in the affidavit. Even in the SARFAESI Application in the limitation clause it is mentioned that the application is filed within the period of limitation but source of knowledge is not mentioned as to how the SARFAESI Applicant came to know about the actions undertaken by the Bank.

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12. Notice under Section 13 (2) of the Act was sent by the Appellant Bank to Ashutosh Mishra, who is the son of SARFAESI Applicant, and the SARFAESI Applicant, Elona Mishra, apart from other persons. Writ Petition No. 19049 of 2011 was filed by Ashutosh Mishra, son of Kishore Chand Mishra, against the Appellant which was decided on 4^th August, 2011. Another W.P.(C) No. 33605 of 2011 was filed by Ashutosh Mishra against the Appellant Bank which was decided on 23^rd July, 2012. Another W.P. (C) No. 1060 of 2013 was filed by Ashutosh Mishra against the Bank which was decided 10^th February, 2014. Notice under Section 13 (2) of the Act was sent to the SARFAESI Applicant on 28^th September, 2010 and O.A. was filed by the Secured Creditor against Ashutosh Mishra, Essem Construction Private Limited, Bhabatosh Mishra, Mantosh Mishra and Enola Mishra, being O.A. 121 of 2015 which was decided ex parte on 6^th November, 2015. Thereafter, M.A. 27 of 2019 was filed by Bhabatosh Mishra, Enola Mishra (Respondent herein) and Mantosh

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Appeal No. 92 of 2019-DRAT-Kolkata Mishra for setting aside the ex parte order dated 6^th November, 2015 passed in O.A. 121 of 2015. This application was opposed by the secured creditor wherein it was stated that the ex parte decree was passed and Recovery Proceedings have been initiated. Misc. Application No. 27 of 2019 was recalled by the Learned DRT vide order dated 9^th January, 2019. It shows that the issuance of notice as well as passing of ex parte decree against the SARFAESI Applicant was well within the knowledge of the SARFAESI Applicant. But these facts are not mentioned in the SARFAESI Application under Section 17 of the Act. No plea is taken that notice under Section 13 (2) of the Act was not served upon the Appellant; rather it is admitted in para 5.3 of the application under Section 17 of the Act that a notice under Section 13 (2) of the Act was issued by the Bank to the Appellant demanding an amount of Rs.69,27,214.00 as on 28^th September, 2010. Another notice under Section 13 (2) of the Act was also issued on 3^rd November, 2010 demanding Rs.7,87,778.00. It is also admitted that being aggrieved by the notice, the Managing Director of the Company filed a W.P. (C) No. 33605 of 2012 before the Hon’ble High Court at Orissa which was disposed of. It is further admitted in para 5.4 that Bank has taken symbolic possession of the property on 12^th January, 2012. It is pertinent to mention here that in the Verification part of the SARFAESI Application all the contents of the application under Section 17 of the Act were verified to be true to the best of personal knowledge and belief of the SARFAESI Applicant. This paragraph specifically proves that the SARFAESI Applicant was having full knowledge of the notice under Section 13 (2) of the Act as well as the fact that the symbolic possession of the property was taken by the Bank on 12^th January, 2012. In such circumstances, it could not be accepted that the SARFAESI Applicant had no knowledge of the SARFAESI action undertaken by the Bank; rather she had full knowledge of the actions and despite that she filed an application under Section 5 of the Limitation Act for condonation of delay with wrong assertion. No

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Appeal No. 92 of 2019-DRAT-Kolkata doubt, as has been held by the Hon’ble Apex Court, an opportunity must be given to the litigant to decide the claim on merits but at the same time a litigant who has not come with clean hands and suppressed the facts cannot seek equity. The cause shown by the SARFAESI Applicant could not be accepted as sufficient cause rather it is designed to meet out the grounds for condonation of delay in filing the SARFAESI Application under Section 17 of the Act.

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13. In the case of State (NCT of Delhi) -vs- Ahmed Jaan (supra) the Hon’ble Apex Court held that proof of sufficient cause is a condition precedent. In para 10 it is held that

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“There is no general principle saving the party from all mistakes of its Counsel could be laid. The expression ‘sufficient cause’ must receive a liberal construction so as to advance substantial justice and generally delays in preferring the appeals are required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bona fides is imputable to the party seeking condonation of delay.”

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14. In S. Ganesharaju (supra) in para 12 it was held that

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“Unless the Respondents are able to show mala fides in not approaching the Court within the period of limitation, generally as a normal rule, delay should be condoned. The trend of the Courts while dealing with the matter with regard to condonation of delay has tilted more towards condoning delay and directing the parties to contest the matter on merits, meaning thereby that such technicalities have been given a go-by.”

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It was further held in para 14 that :

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“Since sufficient cause has not been defined, thus, thus, the Courts are left to exercise a discretion to come to the conclusion whether circumstances exist establishing sufficient cause. The only guiding principle to be seen is whet her a party has acted with reasonable diligence and had not been negligent and callous in prosecution of the matter.”

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15. In Raheem Shah (supra) it was held that the fact was mentioned in para 4 of the judgment that judgment challenged in appeal was not within the knowledge of the Appellant. Further there was a delay of only 52 days in filing the appeal.

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Appeal No. 92 of 2019-DRAT-Kolkata

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16. Facts of the Raheem Shah (supra) as well as Punjab Small Industries & Export Corporation Limited (supra) are entirely different and the Respondent cannot take any advantage of the same.

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17. As far as Ahmed Jaan (supra) and S. Ganesharaju (supra) are concerned it is to be looked into as to whether the action of the Respondent is bona fide or not. It has been held in the body of the judgment that the Respondent was having full knowledge of the actions taken by the secured creditor. Hence it could not be accepted that the action of the Respondents was bona fide.

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18. The judgment of the Hon’ble Apex Court in Shivraj Singh (supra) further fortifies the view that the Respondent was having full knowledge of the SARFAESI actions taken by the secured creditor. Her own son was litigating the matter. She is residing with him. It is admitted in the SARFAESI Application that she had full knowledge of the writ petition filed be her son. In such circumstances, it could not be accepted that the action of the Respondents was bona fide or she was acting with full bona fides.

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19. On the basis of the discussion made hereinabove, I am of the considered opinion that the Respondent/SARFAESI Applicant had full knowledge of the SARFAESI action undertaken by the Appellant Bank. Despite it, in order to avoid the SARFAESI actions taken by the Secured Creditor, an application, under Section 5 of the Limitation Act for condonation of delay in filing the application under Section 17 of the Act, was filed without showing any sufficient ground or cause. Respondent/SARFAESI Applicant is not a bona fide litigant who has full knowledge of the SARFAESI action being undertaken by the Bank. Accordingly, I am of the considered view that Learned DRT has erred in allowing the application under Section 5 of the Limitation Act. Accordingly, appeal deserves to be allowed and impugned order is liable to be set aside.

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O R D E R

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The appeal is allowed. Impugned order dated

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24^th August, 2019 is set aside. Consequently, Application under

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Appeal No. 92 of 2019-DRAT-Kolkata Section 5 of the Limitation Act, filed by the Respondent before the DRT, Cuttack, stands dismissed. Consequently, the SARFAESI Application, filed under Section 17 of the SARFAESI Act by the Respondent, is dismissed, being time barred.

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No order as to costs.

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File be consigned to Record room.

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

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Order dictated, signed, dated and pronounced in open Court.

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(Anil Kumar Srivastava,J) Chairperson

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Dated: 17^th January, 2024 ac

Icici Bank Limited v. Elora Mishra

Case brief

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Icici Bank Limited v. Elora Mishra

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