Allowed

Punjab National Bank and Ors. v. Ms Mennonite Brethren Property Association of India Pvt. Ltd. and Ors.

DRAT16 May 2025REGULAR APPEAL/2/2024

Case brief

AI extract

What is this about?

This judgment allows appeals filed by secured creditors (banks) and auction purchasers against a DRAT order that set aside a SADRT auction. The court held that the Securitization Application was barred by limitation and the doctrine of election/res judicata because the applicant failed to avail the DRT remedy while repeatedly seeking relief from the High Court.

What did the court decide?

Impugned order dated 6.12.2023 setting aside the auction was set aside; Securitization Application No. 166 of 2019 was dismissed with costs.

Punjab National Bank and Ors. versus Ms Mennonite Brethren… — Banking and Recovery | DRAT (2025)

¶1

REPORTABLE/NON-REPORTABLE

¶2

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶3

IN THE DEBTS RECOVERY APPELLATE TRIBUNAL AT KOLKATA

¶4

Appeal No. 02 of 2024

¶5

(Arising out of S.A. 166 of 2019 (I.A. 4227 of 2019) in DRT-II, Hyderabad) with

¶6

Appeal No. 03 of 2024

¶7

(Arising out of S.A. 166 of 2019 (I.A. 4227 of 2019) in DRT-II, Hyderabad)

¶8

HON’BLE MR. JUSTICE ANIL KUMAR SRIVASTAVA CHAIRPERSON

¶9

Appeal No. 02 of 2024

¶10

(Arising out of S.A. 166 of 2019 (I.A. 4227 of 2019) in DRT-II, Hyderabad)

¶11

Punjab National Bank, Rep. by its Authorised Officer ARMB, Circle Office, Sayeed Plaza, Lakdi-ka-Pool, Saifabad, Hyderabad, Present Address:Circle SASTRA, Regency Plaza, Ground floor, Plot No-3, H.No. 7-1-450/RP/3/1/A, Maithrivihar area, Ameerpet, Hyderabad – 500038;

¶12

Bank of Maharashtra, Rep. by its Authorised Officer, Asset Recovery Management Branch, Mozzam Jahi Road, Hyderabad-500001, Present address: 4-4-448 to 460 to 468, 1^st floor, Vinootha Pittie's, Majesty Gopalbagh, Near Bank Street, Koti, Hyderabad-500001;

¶13

Canara Bank, (erstwhile Syndicate Bank), Rep. by its Authorised Officer, ARM Branch, 6-2-953/A, 1^st Floor, Raj Bhawan Road, Khairatabad, Hyderabad – 500 004.

¶14

… Appellants

¶15

-Versus-

¶16

M/s. Mennonite Brethren Property Association of India Private Limited, Now at: Missionary Bungalow, MB Mission Compound, Samshabad, Ranga Reddy District - 501 218;

¶17

The Governing Counsel of the Conference of Mennonite Brethren Church of India, A society registered under the Hyderabad Societies Registration Act 1 of 1350 Fasali Having its regd. Office at 2-2-130 MB Mission Compound, Mehboobnagar - 509 001;

¶18

Mr. K. Sai Reddy, S/o Late Sri K Janga Reddy, R/o H. No.8-4-17/180, Sairam Nagar, Karmanghat Saroornagar Ranga Reddy District - 500 079;

¶19

Dr. K. Krishna Reddy, S/o Late Sri K Janga Reddy, R/o H. No.9-6-189 Durgabhavani Nagar, Champapet Saidabad, Hyderabad – 500 079;

¶20

Dr. K. Vijay Shekhar Reddy, S/o Late Sri K Rama Chanda Reddy, R/o H. No.17-1-389/23/A, Prasanth Nagar, Saidabad, Hyderabad – 500 059;

¶21

Dr. B. Sugunakar Reddy, So Sri B Narasimha Reddy, H. No. 17-1-383/M/30, Manohar Nagar, Sadabad, Hyderabad – 500 059;

¶22

¶23

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶24

Dr. K. Lalitha Reddy, W/o Dr. K. Vijayashanker Reddy, R/o H.No.17-1-383/M/30 Manohar Nagar, Saidabad, Hyderabad – 500 059;

¶25

Dr. A. Prasanth Reddy, S/o Sri A Sudhakar Reddy, R/o H.No.8-5-32/42, Karmanghat, Srinidhi Colony, Saroor Nagar, Ranga Reddy District - 500 079;

¶26

Smt. B. Shailaja, W/o Dr. B. Sugunakar Reddy, R/o H. No. 17-1-383/M/30 Manohar Nagar, Saidabad, Hyderabad – 500 059;

¶27

Mr. Challa Ram Reddy, S/o Sri Mohan Reddy, R/o H. No.7-1-212/A/36 Shivabag Colony, Ameerpet, Hyderabad – 500 016;

¶28

11. Mr. V. Amarender Reddy, S/o Late No.401, H.No.2-3-647/182/A3, Him Bagh, Amberpet, Hyderabad – 500 0	Sri V Sudharshan Reddy, R/o Flat ashiva Apartments, Shivam Road 13. ... Respondents
Counsel for the Appellants …	Mr. P.B.A. Srinivasan Mr. Pankaj Kumar Mukherjee Ms. Srishti Bansal
Counsel for Respondent No. 1 …	Mr. Nemani Srinivas Mr. Asad Hussain Mr. Mainak Biswas Mr. Tirthankar Das
Counsel for Respondent No. 2 …	Mr. Tirthajit Roy Chowdhury (Virtual)
Counsel for Respondents No. 3 to 11 …	Mr. K. Partha Sarathi Reddy

¶29

With

¶30

Appeal No. 03 of 2024

¶31

(Arising out of S.A. 166 of 2019 (I.A. 4227 of 2019) in DRT-II, Hyderabad)

¶32

Dr. K. Krishna Reddy, S/o Late Sri K Janga Reddy, R/o H. No.9-6-189 Durgabhavani Nagar, Champapet Saidabad, Hyderabad – 500 079;

¶33

Dr. K. Vijay Shekhar Reddy, S/o Late Sri K Rama Chanda Reddy, R/o H. No.17-1-389/23/A, Prasanth Nagar, Saidabad, Hyderabad – 500 059;

¶34

Dr. B. Sugunakar Reddy, S/o Sri B Narasimha Reddy, H. No. 17-1-383/M/30, Manohar Nagar, Sadabad, Hyderabad – 500 059;

¶35

Dr. K. Lalitha Reddy, W/o Dr. K. Vijayashanker Reddy, R/o H. No.17-1-383/M/30 Manohar Nagar, Saidabad, Hyderabad – 500 059;

¶36

¶37

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶38

1. Dr. A. Prasanth Reddy, S/o Sri A Sudhakar Reddy, R/o H. No.8-5-32/42, Karmanghat, Srinidhi Colony, Saroornagar, Ranga Reddy District;

¶39

1. Smt. B. Shailaja, W/o Dr. B. Sugunakar Reddy, R/o H. No. 17-1-383/M/30 Manohar Nagar, Saidabad, Hyderabad;

¶40

Mr. Challa Ram Reddy, S/o Sri Mohan Reddy, R/o H. No.7-1-212/A/36, Shivabag Colony, Ameerpet, Hyderabad – 500 016;

¶41

Mr. V. Amarender Reddy, S/o Late Sri V Sudharshan Reddy, R/o Flat No.401, H.No.2-3-647/182/A3, Himashiva Apartments, Shivam Road Bagh, Amberpet, Hyderabad – 500 013;

¶42

Mr. K. Sai Reddy, S/o Late Sri K Janga Reddy, R/o H. No.8-4-17/180, Sairam Nagar, Karmanghat Saroornagar Ranga Reddy District. … Appellants

¶43

-Versus-

¶44

M/s. Mennonite Brethren Property Association of India Private Limited, Rep by its General Director, P.A. John, Now at: Missionary Bungalow, MB Mission Compound, Samshabad, Ranga Reddy District - 501 218;

¶45

The Governing Counsel of the Conference of Mennonite Brethren Church of India, A society registered under the Hyderabad Societies Registration Act 1 of 1350 Fasali Having its regd. Office at 2-2-130 MB Mission Compound, Mehboobnagar - 509 001;

¶46

Punjab National Bank, ARMB, Circle Office, Sayeed Plaza, Lakdi-ka-Pool, Saifabad, Hyderabad, Present Address: Circle SASTRA, Regency Plaza,Ground floor, Plot No-3, H.No. 7-1-450/RP/3/1/A, Maithrivihar area, Ameerpet, Hyderabad – 500038, Rep. by its Authorised Officer;

¶47

Bank of Maharashtra, Rep. by its Authorised Officer, Asset Recovery Management Branch, Mozzam Jahi Road, Hyderabad-500001;

¶48

Syndicate Bank, (Now Canara Bank), Rep. by its Authorised Officer, ARM Branch, 6-2-953/A, 1^st Floor, Raj Bhawan Road, Khairatabad, Hyderabad – 500 004. ... Respondents

¶49

Counsel for the Appellants … Mr. K. Partha Sarathi Reddy Counsel for Respondent No. 1 … Mr. Nemani Srinivas Mr. Asad Hussain Mr. Mainak Biswas Mr. Tirthankar Das

¶50

Counsel for Respondent No. 2 … Mr. Tirthajit Roy Chowdhury (Virtual)

¶51

¶52

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶53

Counsel for Respondents No. 3 … Mr. P.B.A. Srinivasan Mr. Pankaj Kumar Mukherjee Ms. Srishti Bansal

¶54

JUDGMENT : 16^TH May, 2025

¶55

THE APPELLATE TRIBUNAL :

¶56

1. Since both the Appeals have arisen against a common judgment dated 6.12.2023, passed by Learned DRT-II, Hyderabad allowing S.A. 166 of 2019 along with I.A. 4227 of 2019 (M/s. Mennonite Brethren Property Association of India Private Limited -vs- Punjab National Bank & Others), both the appeals are being decided simultaneously by a common judgment.

¶57

2. Appeal No. 02 of 2024 is filed by the Secured Creditor, i.e. Punjab National Bank while Appeal No. 03 of 2024 is filed by the Auction Purchasers. 3. As per the pleadings of the parties, facts of the case are that Securitization Application, under Section 17 of the SARFAESI Act, 2002 (hereinafter referred to as the ‘Act’) was filed being, S.A. 166 of 2019 (M/s. Mennonite Brethren Property Association of India Private Limited -vs- Punjab National Bank & Others), by one M/s. Mennonite Brethren Property Association of India Private Limited represented by its General Director, Mr. P.A. John for a relief to declare as illegal the e-auction Sale Notice dated 12.12.2018 fixing the date of auction on 7.1.2019 against the schedule property. Further the auction, conducted on 7.1.2019, was sought to be quashed along with relief to set aside the Sale Certificate

¶58

¶59

Appeals No. 02 & 03 of 2024-DRAT-Kolkata issued and registered on 4.4.2019 in favour of Respondents No. 3 to 11, Auction Purchasers, for non compliance of Rule 9 (3) and 9 (4) of the Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as the ‘Rules’). Further declaration was sought to the effect that Bank has no right, title, security and mortgage over the schedule property for the loan facility availed by Respondent No. 4. Further relief was sought for re-delivery of possession.

¶60

4. It is stated that an organization in the name of American Mennonite Brethren Mission was created in the year 1888 which has acquired properties in different cities of the country. Initially the activities of American Mennonite Brethren Mission were conducted by the persons coming from abroad. Subsequently, American Mennonite Brethren Mission and Canadian Mennonite Brethren Mission were amalgamated and a new organization by name M/s. MB Property Association of India Private Limited with Registration No. 6775/74 was started which was also registered under the Societies Registration Act. 5. In the year 1976, by virtue of an order passed by the Principal District Judge, Madhurai, Tamil Nadu in O.P. No. 7 of 1976, under Section 7 of the Charitable Religious Trust Act, 1920, properties owned by American Mennonite Brethren Mission and Canadian Mennonite Brethren Mission were vested with the Applicant Company, namely, M/s. Mennonite Brethren Property Association India Private Limited. One Dr. P.B. Arnold was interested in church activities and was spotted to be a person who could carry

¶61

¶62

Appeals No. 02 & 03 of 2024-DRAT-Kolkata out the visions of both the Missions. Therefore, he was nurtured to become a Medical Doctor. Dr. P.B. Arnold started medical college in the name and style of M.B. Christian Medical College, at Kaverampet, Jedcherla Mandal, Mahaboobnagar District, with the securities of Church properties. Dr. P.B Arnold, GPA Holder and Treasurer of the Company, and Dr. N.I. Livingston, General Director, offered the Church property as security without proper authorization and power of attorney and obtained loan from Respondents No. 1 to 3, i.e. Punjab National Bank, Bank of Maharashtra and Syndicate Bank. Applicants are the owners of the land measuring Ac 57.24 guntas in Survey Nos. 36, 37, 58 and 59 situated at Kaverampet, Jedcherla Grampanchayat & Mandal, Mahaboobnagar District, Telangana State. Respondent No. 4, namely Governing Council of the Conference of Mennonite Brethren Church of India, approached the Respondents No. 1 to 3, Banks, for Term Loan and BG Facilities to an extent to Rs.38.00 crore which was sanctioned but only Rs.6.00 crore was disbursed. General power of attorney and Treasurer of the Applicant as well as President of the Respondent No. 4 Society is one and the same hence decisions were taken by him. Applicant Company executed a registered Lease Deed in favour of the Respondent No. 4 Society, for a period of 99 years which was registered as Document No. 6496 of 2005 dated 20^th December, 2005. It was for the development of the hospital.

¶63

¶64

Appeals No. 02 & 03 of 2024-DRAT-Kolkata 6. The project for opening the Medical College could not be fructified as the permission from the Medical Council of India could not be received. Accordingly, loan became due and the account was classified as N.P.A. by the Respondent Bank. Notices under Section 13 (2) and 13 (4) of the Act were issued by the Banks.

¶65

7. Respondent Bank issued e-auction Sale notice dated 4.8.2018 through paper publication fixing the date of auction as 10.9.2018 against the schedule properties. Writ Petition No. 31117 of 2018 was filed by one of the Members of the Applicant Society before the Hon’ble High Court which was dismissed as infructuous on 10.9.2018. Respondent No. 4 made efforts for one time settlement. Rs.1.00 crore was deposited; remaining Rs.7.00 crore was to be deposited. Cheques issued by Dr. P.B. Arnold got dishonoured. 8. E-Auction Sale Notice dated 12.12.2018 was published in two newspapers fixing the date of auction on 7.1.2019. Again Writ Petition No. 147 of 2019 was filed before the Hon’ble High Court wherein interim order was passed not to finalise the auction to be held on 7.1.2019. Dr. Margaret Anuradha Perumalla, Vice President-cumAuthorised Signatory along with Mr. S.S. Jaffania, Director, filed separate Writ Petition No. 1230 of 2019 and Writ Petition No. 1343 of 2019 before the Hon’ble High Court at Hyderabad which were dismissed on 28.2.2019. Aggrieved by the said order, SLP (C) 7305 of 2019 was filed before the Hon’ble Apex Court which was dismissed on 5.4.2019.

¶66

¶67

Appeals No. 02 & 03 of 2024-DRAT-Kolkata 9. Dues of Respondent No. 2, i.e. Bank of Maharashtra, to an extent of Rs.3,45,71,750.00 were cleared which were also communicated by them to the Respondent No. 1, i.e. Punjab National Bank. But the Bank proceeded with the e-auction on 7.1.2019 which was against law. E-auction Sale Notice was given on behalf of three Banks while Bank of Maharashtra had already received its due amount. Accordingly, auction notice for the whole amount is against law. Proposal for OTS was also made by the Applicants which was not accepted by the Respondent No. 1. Bank should have settled the amount as per the OTS proposal. In the e-Auction dated 7.1.2019, Respondents No. 5 to 13 were the successful bidders. Mortgage created through lease agreement is not valid. Dr. P.B. Arnold has no authority to offer Church property as security to the Bank for the benefit of Respondent No. 4, Society. An injunction order dated 4.8.2004 was also passed by the Second Additional District Judge, Mahboobnagar, in I.A. 84 of 2004 in O.P. No. 2 of 2004 which was in force wherein Dr. P.B. Arnold was restrained from alienating or transferring the Church properties. Accordingly, mortgage created by him against the injunction order is against law.

¶68

10. No notice under Rule 8 (6) of the Rules was served upon the Applicants. E-auction Sale Notice dated 12.12.2008 does not satisfy the provisions of Section 13 (8) of the Act. No copy of Panchnama and Inventory is served upon the Applicants. Equipments of Medical College are taken out by the Authorised Officer. It is further alleged that there is

¶69

¶70

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶71

violation of Rule 8 (5) of the Rules. In the year 2009 schedule property was valued at Rs.38.00 crore but after ten years Authorised Officer obtained assessed the Valuation Report at a lower price and fixed the Reserve Price at Rs.20.00 crore. It is further alleged that mortgage of the secured asset is barred by Section 31 (I) of the Act. It was an agricultural property. There was violation of Rules 8 (6), 8 (7) and 9 (1) of the Rules. It is further stated that there was an apprehension of the Applicants that the Auction Purchasers have not complied Rules 9 (3) and 9 (4) of the Rules. Accordingly, Securitization Application, under Section 17 of the Act, is filed by the Applicants.

¶72

11. Respondent No. 3, Bank, filed reply and additional reply denying assertions made in the Securitization Application. At the very outset, it is stated that the Applicant is a Company registered under the provisions of Companies Act and Mr. P.A. John has no proper authorization to represent the Company, hence the Applicant Company has no locus standi to file an application under Section 17 of the Act. Since 2015 Applicant Company filed various Writ Petitions before the Hon’ble High Court which were dismissed. In W.P. 147 of 2019, W.P. 1230 of 2019 and W.P. 1343 of 2019 by a common order dated 28^th February, 2019 Hon’ble High Court observed that the Bank has issued Demand Notice and Possession Notice on 15.4.2010 and 8.12.2010 but no steps were taken by the Company to approach the appropriate forum of the DRT. Securitization Application, under Section 17 of the Act, was filed on 10.4.2019 stating a delay of 74

¶73

¶74

Appeals No. 02 & 03 of 2024-DRAT-Kolkata days which was condoned. However, there was a delay of 3042 days in filing the application under Section 17 of the Act.

¶75

12. Governing Council of the Conference of Mennonite Brethren Church of India is a Society registered under the Hyderabad Societies Registration Act. Society approached the Bank for financial assistance for establishment of Medical College and Teaching Hospital at Kaverampet, Jedcherla Grampanchayat & Mandal, Mahaboobnagar District in the year 2007. Respondent Bank formed a consortium and sanctioned a total limit of Rs.38.00 crore. Necessary documents were executed. Security interest was created over the secured assets. Loan amount was not repaid then the Bank filed O.A. 382 of 2014 before the Learned DRT-II, Hyderabad wherein DRT-II, Hyderabad issued Recovery Certificate for Rs.32,72,08,520.74 in favour of the Bank. Recovery proceedings are pending.

¶76

13. Prior to filing of the O.A. measures under SARFAESI Act were initiated by the Bank. Notice under Section 13 (2) of the Act was issued on 15.4.2010 demanding an amount of Rs.8,49,01,166.00 as on 31^st March, 2010 which was duly served upon the Securitization Applicants and Respondents No. 4. No representation under Section 13 (3A) of the Act was filed. Possession Notice dated 8.12.2010 was issued and published. Thereafter Notice under Section 8 (6) of the Act was issued on 13.2.2015. Several Sale Notices were issued but auction could not be fructified as different Writ Petitions, being W.P. 23559 of 2015, W.P. 2376 of 2016, W.P. 7951

¶77

¶78

Appeals No. 02 & 03 of 2024-DRAT-Kolkata of 2016, W.P. 25171 of 2016, W.P. 31117 of 2018, W.P. 147 of 2019, W.P. 1230 of 2019 and W.P. 1343 of 2019 were filed before the Hon’ble High Court which were disposed of or dismissed on the ground of availability of alternative remedy. SLP(C) No. 7305 of 2019 and SLP(C) 8081 of 2019 were also filed before the Hon’ble Apex Court which were dismissed. However, no liberty was granted to the Applicants to approach the DRT. Hence, the limitation cannot be calculated from the date of dismissal of SLPs. The judgments of the Hon’ble High Court and the Hon’ble Supreme Court will also be res judicata.

¶79

14. E-auction was conducted on 7.1.2019 for an amount of Rs.28.75 crore. Sale Certificate was issued in favour of the Auction Purchasers, Respondents No. 5 to 13. It is further stated that all the due process, contemplated under the Securitization Act, have been followed by the Bank. Applicants are simply trying to drag the proceedings on flimsy grounds. Different Sale Notices were issued on different dates. Continuously Writ Petitions were filed challenging those notices which were dismissed. Hon’ble High Court, in the combined order of three writ petitions, have already decided all the issues which judgment was also challenged before the Hon’ble Apex Court in SLP which was dismissed by the Hon’ble Apex Court.

¶80

15. Separate opposition is filed by the Auction Purchasers wherein it is submitted that they are the successful bidders in the auction held on 7.1.2019. Applicants have filed Section 17 Application without proper authorization.

¶81

¶82

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Mr. P.A. John, who has filed the Application under Section 17 of the Act, declares himself to be the General Director whereas no such post finds place in the Article of Association of the Applicant Company. Authorization letter dated 2.4.2019 submitted by Mr. P.A. John was issued by Dr. Margaret Anuradha Perumalla, in the capacity of Vice President and GP Holder, without any support of the Resolution of Board of Directors of the Company. Such authorization is invalid. In W.P. 1230 of 2019 Hon’ble High Court observed that vakalatnama, signed by Dr. Margaret Anuradha Perumalla, did not contain rubber stamp or seal which can prove her position in the Company. Accordingly, the writ petition became merely a waste paper. On the date of filing of the Securitization Application, Dr. Margaret Anuradha Perumalla was neither President nor General Power of Attorney Holder nor even a Director of the Company.

¶83

16. In I.A. 2679 of 2019 an authorization letter, allegedly issued by one Dr. P.B. Arnold , was filed showing himself to be the President and General Power of Attorney Holder of the Company which I.A. was dismissed. W.P. 15036 of 2019 against the said order was dismissed at the ‘Admission’ stage. Securitization Application is barred by limitation. Further it is also not maintainable.

¶84

17. Separate reply was filed by Dr. P.B. Arnold, representing the Governing Council of the Conference of Mennonite Brethren Church of India, Respondent No.4, stating that he is the President of the Society. Loan was

¶85

¶86

Appeals No. 02 & 03 of 2024-DRAT-Kolkata taken for Teacher and Charitable activities. He had executed various loan documents. A lease in favour of Respondent No. 4 was executed by the Applicants vide Deed No. 6496 of 2005 dated 20.12.2005. Dr. P.B. Arnold has no property in his name. Whole amount of loan was not disbursed. Mortgage was not created in accordance with law.

¶87

18. Learned DRT framed the following issues:

¶88

i. Who is the competent person to represent the applicant company in this SA?

¶89

ii. Whether the SA is within limitation period? iii. Whether the issues are res judicata? iv. Whether the property is agricultural or non-agricultural? v. Whether the respondent banks followed the procedure as laid down in the Act and the Rules?

¶90

vi. Is there novation of contract on account of OTS and settlement of dues with 2nd respondent bank?

¶91

vii. Whether the mortgage was validly created in view of injunction order in OP 2 of 2004?

¶92

viii. To what relief?

¶93

19. Learned DRT recorded a finding on point No. (i) that Learned Counsel Sri B Sreenivasa Reddy, who initially instituted the Securitization Application, was heard by the Learned DRT. Further in compliance of the order of the Hon’ble Apex Court in SLP (C) 16177 of 2023 submission made by Mr. Asad Hussain, Advocate, on behalf of Dr. Margaret Anuradha Perumalla was also heard.

¶94

20. In point No. (ii) it was held that since the delay of 74 days has already been condoned vide order dated 30^th April, 2019, now it cannot be contended that the Securitization Application is filed after the period of limitation.

¶95

21. In point No. (iii) it is held that except the issue of time gap of Rule 8 (6) Notice and auction date, other issues framed in the writ petition have not been decided and hence

¶96

¶97

Appeals No. 02 & 03 of 2024-DRAT-Kolkata the principle of constructive res judicata will not be applicable. In point No. (iv) it is decided that the secured assets are not agricultural land.

¶98

22. In point No. (v) Learned DRT found violation of Rule 8 (5) of the Rules. Further in point No. (vi) Learned DRT found that there is violation of Rules 9 (3) and 9 (4) of the Rules. In point No. (vii) it was held that mortgage was not validly created.

¶99

23. Consequently, Learned DRT allowed the Securitization Application by setting aside the Possession Notice dated 8.12.2010, under Section 13 (4) of the Act, e-Auction Sale Notice dated 12.12.2018, e-Auction dated 7.1.2019 and the Sale Certificate dated 4.4.2019. Bank was directed to refund the bid amount to the Auction Purchasers with interest at the rate of 7% simple. Further, the Applicant Company was held to be entitled for re-possession of the schedule properties.

¶100

24. Feeling aggrieved by the judgment and order, Bank as well as Auction Purchasers preferred separate appeals.

¶101

25. I have heard the Learned Counsel for Secured Creditor as well as Mr. K. Partha Sarathi Reddy for the Auction Purchasers and Learned Counsel for Respondent No. 1, Mr. Nemani Srinivas. and Mr. Asad Hussain, who was permitted by the Hon’ble Supreme Court, was also heard. I also perused the record.

¶102

26. Learned Counsel for Appellant would submit that the impugned order suffers from material illegalities. Notice under Section 13 (2) of the Act was issued against

¶103

¶104

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Respondents No. 1 and 2 on 31.3.2010 while Sale Notice under Section 13 (4) of the Act was issued on 8.12.2020 which was duly served upon Respondents No. 1 and 2. Notice under Section 8 (6) was issued and served upon Respondents No. 1 and 2 on 13.2.2015. Thereafter, no challenge against the Securitization steps, undertaken by the Secured Creditor, was made by the Respondents rather Writ Petition No. 23559 of 2015 was filed before the Hon’ble High Court which was dismissed on 5.8.2016 wherein liberty was granted to avail appropriate legal remedies.

¶105

27. Thereafter, W.P. No. 25171 of 2016 was again filed before the Hon’ble High Court challenging the Sale Notice which was again dismissed on 28^th July, 2016.

¶106

28. Thereafter, W.P. 2376 of 2016 was filed which was again dismissed on 5.8.2016. On the basis of the statement of the Learned Standing Counsel that extent of the property occupied by the Church has been excluded from the Auction Notification.

¶107

29. It is submitted that the Securitization Application filed by the Applicants is not legally maintainable since not filed by the authorized person. It was filed by M/s. Mennonite Brethren Property Association of India Private Limited through its General Director, Mr. P.A. John, who was not authorized to file the same. Authorisation letter issued by Dr. Margaret Anuradha Perumalla has no legal value. She has no authority to issue the same, as has been held by the Hon’ble High Court in Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019, decided by a common judgment

¶108

¶109

Appeals No. 02 & 03 of 2024-DRAT-Kolkata dated 28.2.2019 which was affirmed by the Hon’ble Apex Court in SLP(C) 7305 of 2019.

¶110

30. Issue of maintainability of the Securitization Application was raised before the Learned DRT in I.A. 267 of 2019 in S.A. 166 of 2019 which was disposed of vide order dated 28.6.2019 wherein it was held that the petition for acceptance of receipt of authorization letter dated 2.4.2019 issued by Dr. P.B. Arnold, cannot be accepted. This order was challenged before the Hon’ble High Court in W.P. 15036 of 2019 which was decided by the Division Bench on 19^th July, 2019 wherein it was held that it was the Petitioner Company who has to take necessary steps before the Tribunal to establish its claim that the Securitization Application, as framed and presented, was maintainable.

¶111

31. IAIR No. 1282 of 2021 was filed by Dr. Margaret Anuradha Perumalla to allow vakalatnama of Mr. Asad Hussain, Advocate, in place of the Standing Counsel, to represent the Company. IAIR No. 1283 of 2021 was filed by Dr. Margaret Anuradha Perumalla to permit her to represent the petitioner Appellant Company in the S.A. proceedings. IAIR 1285 of 2021 was filed by Dr. Margaret Anuradha Perumalla to receive documents (i) copy of Board Resolution dated 6.8.2021 (ii) copy of Master Data of the Petitioner Company. These applications were dismissed by the Learned DRT holding that the since previous authorization letter dated 2.4.2019, issued by Dr. Margaret Anuradha Perumalla, is subject to enquiry in the S.A., the question of changing the authorized person or counsel to represent the

¶112

¶113

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Applicant Company by furnishing fresh authorization letter without proper authenticity does not arise.

¶114

32. Feeling aggrieved, the Securitization Applicant filed Appeal No. 121 of 2022 before DRAT, Kolkata which was dismissed on 20^th April, 2023. In Appeal 118 of 2023 for impleadment of Mr. P.A. John was filed which was also dismissed.

¶115

33. Feeling aggrieved by the judgment of the DRAT, Kolkata, W.P. 11746 of 2023 was filed before the Hon’ble High Court which was also dismissed by the Division Bench of the Hon’ble High Court holding that the petitioner in the writ petition, i.e. Dr. Margaret Anuradha Perumalla, showing her as authorized signatory of the Petitioner Company vide Resolution dated 6.8.2021, is not valid in law. Accordingly, the writ petition was dismissed.

¶116

34. Feeling aggrieved by the judgment of the Hon’ble High Court, SLP(C) No. 16177 of 2023 was filed by the Securitization Applicants which too was dismissed by the Hon’ble Apex Court. However, it was ordered that to cut short the controversy both the sides claiming that they have a right to appear for M/s. Mennonite Brethren Property Association of India Private Limited can be heard by the DRT.

¶117

35. Learned Counsel for Appellant further submits that only right of hearing of Mr. Asad Hussain was granted by the Hon’ble Apex Court but right to file the Securitization Application has to be decided by the Learned DRT, which has wrongly been decided. Learned DRT has not recorded in the

¶118

¶119

Appeals No. 02 & 03 of 2024-DRAT-Kolkata finding on the issues whether the Securitization Application, under Section 17 of the Act, was maintainable or not rather on the basis of the observation is made by the Hon’ble Apex Court held that the contentions of the various person on behalf of the Applicant Company does not require further discussion which finding is erroneous in law.

¶120

36. It is further submitted by the Learned Counsel for Appellants that Securitization Applicants have reckoned the limitation from the date of the order of the Hon’ble Apex Court dated 5.4.2019. Accordingly, an application for condonation of delay of 74 days was filed which was allowed by the Learned DRT. It is submitted that although this order was not challenged by the Appellants but it is a pure question of law which has to be decided and can be raised at any stage of the proceedings. It is submitted that admittedly notices under Section 13 (2) and 13 (4) of the Act were issued on 15.4.2010 and 8.12.2010, but despite filing of different writ petitions by the Securitization Applicants and dismissal of the writ petitions on the ground of availability of alternative remedy, no Securitization Application was filed. It is further submitted that Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 were also filed by the Applicants challenging the action taken by the Bank under the Securitization Act which were dismissed by the Hon’ble High Court Division Bench on 28.2.2019. Special Leave to Appeal No. 7305 of 2019 against the judgment of the Hon’ble High Court was also dismissed on 5.4.2019. No liberty was sought for filing the

¶121

¶122

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶123

Securitization Application and no liberty was granted by the Hon’ble Apex Court. Accordingly, even if delay of 74 days in filing the Securitization Application has been condoned but that was wrongly condoned as the delay was not for 74 days and the Securitization Application is firstly barred by time and secondly not maintainable in view of the judgment dated 28.2.2019 in Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019. It is further submitted that the delay in filing the Securitization Application although not condonable and could not be condoned as no sufficient cause is shown. Learned Counsel has placed reliance upon a judgment of the Hon’ble Apex Court in R. Nagraj -vsRajmani & Others (2025 SCC OnLine SC 762 paragraph 20) decided on 9.4.2025.

¶124

37. It is further submitted that all the issues have been raised by the Applicants in the Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 which were finally heard and decided by the Division Bench of the Hon’ble High Court which was in turn confirmed in the SLPs before the Hon’ble Apex Court. Hence, since the issues have already been raised and decided by the Hon’ble High Court, now Securitization Applicants are barred from challenging the same by preferring a Securitization Application. Learned Counsel in support of the submission has placed reliance upon paragraphs 126, 127 and 140 of the judgment of the Hon’ble Apex Court in CELIR LPP -vs- Sumati Prasad Bafna & Others (2024 SCC OnLine SC 3727).

¶125

¶126

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶127

38. It is further submitted by the Learned Counsel for Appellant that all the issues which are challenged by the Securitization Applicants have already been decided by the Hon’ble High Court in the Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019. Hence they will operate as res judicata. Further, it was submitted that it was a fifth sale wherein a notice was issued on 12.12.2018 and the auction date was 7.1.2019. There was a clear 15 days gap which has already been upheld by the Hon’ble High Court in the writ petition and was in accordance with law.

¶128

39. In SLP(C) No. 16177 of 2023, a Misc. Application No. 2162 of 2023 was filed which was also dismissed by the Hon’ble Apex Court on 16.10.2023. It is submitted that both the Resolutions, allegedly authorizing the persons for filing Securitization Application, are non est and are to be quashed.

¶129

40. It is further submitted that the issue of violation of Rules 9 (3) and 9 (4) of the Rules was not raised before the Hon’ble High Court in Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 hence could not be raised before the Learned DRT. It is barred by the principles of constructive res judicata. It is further submitted that no case of fraud or collusion has been pleaded and the auction sale could not be set aside in view of the judgment of the Hon’ble Apex Court in CELIR LPP (supra).

¶130

41. Learned Counsel further submits that the Bank was not a party before the original suit pending before the Second Additional District Judge wherein an injunction order was

¶131

¶132

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶133

allegedly passed restraining Mr. P.A. John from alienating or transferring the secured assets. Hence, the order is not binding upon the Secured Creditor. It is further submitted that the issue of legality and validity of the mortgage cannot be looked into by the DRT. Reliance is placed upon the judgment of the Hon’ble Apex Court in Central Bank of India & Another -vs- Smt. Prabha Jain & Others (2025 SCC OnLine SC 121 Paragraph 38).

¶134

42. It is further submitted that the loan was sanctioned by the Secured Creditor which was duly secured by deposit of title deeds wherein mortgage was created in favour of the Bank. Accordingly, Learned DRT has erred in allowing the Securitization Application which is liable to be dismissed.

¶135

43. Per contra, Learned Counsel Mr. Nemani Srinivas as well as Mr. Asad Hussain argued that the Securitization Application was filed by the competent person who was duly authorized by the Securitization Applicant. Initially there was a dispute about the authorised person but subsequently Hon’ble Apex Court allowed Mr. Asad Hussain to address and appear in the matter. Accordingly, now that issue becomes redundant.

¶136

44. It is further submitted that delay of 74 days in filing the Securitization Application has already been condoned by the Learned DRT which order is not challenged and attained finality. Now the issue cannot be re-agitated again. Liberty was granted by the Hon’ble High Court and the writ petitions were disposed of on account of availability of alternative remedy. Accordingly, after the judgment of the Hon’ble

¶137

¶138

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Apex Court Securitization Application was filed challenging the measures taken by the Secured Creditor. The Secured Creditor has not complied the mandatory provisions of 8 (6) and 9 (1) of the Rules. There is violation of 9 (3) and 9 (4) of the Rules. It is further stated that the judgment of the Hon’ble High Court cannot and shall not be treated as res judicata to the proceedings under Section 17 of the Act. Writ Petitions were not decided on merits.

¶139

45. It is further submitted that there was an injunction order of the competent Civil Court against Mr. P.A. John for not creating any interest in the secured assets but the same was violated by mortgaging the secured assets in favour of the Bank which itself is a nullity and non est in the eyes of law.

¶140

46. It is further submitted that the Debt Recovery Tribunal is well within its jurisdiction to decide the validity of mortgage of security interest wherein the Learned DRT held that the mortgage was not validly created in favour of the Bank.

¶141

47. Learned Counsel has not pressed the issue of valuation in the appeal.

¶142

48. It is further submitted that the issue of internal management of the Securitization Applicants cannot be raised by the Bank. It is further submitted that one plea that OTS proposal was submitted to the Bank by Dr. Margaret Anuradha Perumalla and Dr. P.B. Arnold who signed the proposal which was duly accepted by the Bank and an amount of Rs.1.00 crore was deposited at that time

¶143

¶144

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶145

no challenge was made about the authority to make an application for OTS. Now, Bank is raising objection which it is not entitled to raise. Accordingly, it is submitted that both the appeals are liable to be dismissed.

¶146

49. This case has a very chequered history wherein the Notice under Section 13 (2) of the Act was issued on 15.4.2010 which was duly served. Date of N.P.A. was 31.3.2010. Possession Notice was issued on 8.12.2010. Thereafter, Balance Confirmation Letters were executed by Respondents No. 1 and 2 on 19.3.2011 and 4.2.2014. Thereafter, Writ Petition No. 23559 of 2015 was filed by the Respondents No. 1 and 2, namely, M/s. Mennonite Brethren Property Association of India Private Limited and The Governing Counsel of the Conference of Mennonite Brethren Church of India which was dismissed on 5.8.2016 by the Division Bench of the Hon’ble High Court with liberty to avail appropriate legal remedy.

¶147

50. Another Possession Notice was issued by the Bank on 26.11.2015 and again a Writ Petition No. 2376 of 2016 was filed by Centenary Mennonite Brethren Church through its Pastor and Chairman Mr. Vijaya Bhusan and others which too was dismissed by the Division Bench of the Hon’ble High Court on 5.8.2016 on the basis of the statement of the Standing Counsel that the extent of the property occupied by the Church has been excluded from the Auction Notification.

¶148

51. Thereafter, Sale Notice dated 10.2.2016 was issued by the Bank which was again challenged by filing Writ Petition

¶149

¶150

Appeals No. 02 & 03 of 2024-DRAT-Kolkata No. 7951 of 2016 which too was dismissed vide order dated 5.8.2016 holding that the writ petition has become infructuous.

¶151

52. Again Sale Notice dated 27.6.2016 was issued by the Bank which was challenged by preferring a Writ Petition No. 25171 of 2016 by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its General Director, Mr. P.A. John. (Mr. P.A. John is the Securitization Applicant in the present appeal also). Writ Petition was dismissed by the Division Bench of the Hon’ble High Court on 28.7.2016 wherein the filing of earlier Writ Petitions No. 2376 of 2016 and Writ Petition No. 7951 of 2016 were also brought to the notice of the Hon’ble High Court wherein Learned Counsel for the Petitioner submitted that the Petitioner has nothing to do with the previous two writ petitions and making earnest endeavour to repay the loan. Hon’ble High Court held that the petitioners have a remedy, under Section 17 of the Act, if any illegality is committed by the Secured Creditor. Accordingly, Hon’ble High Court dismissed the writ petition. But the alternative remedy was never availed by the Securitisation Applicant.

¶152

53. Again Sale Notice dated 3.8.2018 was issued by the Bank which was again challenged by preferring a Writ Petition No. 31117 of 2018 which was also dismissed as infructuous on the ground that the petitioner paid a sum of Rs.1.00 crore and also agreed to pay Rs.7.00 crore. Accordingly, writ petition was dismissed on 10^th September, 2018.

¶153

¶154

Appeals No. 02 & 03 of 2024-DRAT-Kolkata 54. When the said amicable settlement failed, Auction Notice was again issued on 12.12.2018 fixing the e-Auction on 7.1.2019 which was subsequently conducted and the Auction Purchasers paid a sum of Rs.28.75 crore. Thereafter, Writ Petition No. 147 of 2019 was filed by one G. Jai Paul and two others. Writ Petition No. 1230 of 2019 was filed by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its Vice President-cumAuthorized Signatory, Dr. Margaret Anuradha Perumalla, and W.P. 1343 of 2019 was filed by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its Director Mr. S.S. Jaffania. All the three writ petitions were filed challenging the e-Auction Sale Notice dated 12.12.2018. Division Bench of the Hon’ble High Court, by a common judgment, dismissed all the three writ petitions on merit.

¶155

55. Feeling aggrieved by the judgment of the Hon’ble Division Bench, SLP(C) 7302 of 2019 and SLP(C) 8081 of 2019 were filed by M/s. Mennonite Brethren Property Association of India Private Limited which were dismissed by the Hon’ble Apex Court vide order dated 5.4.2019.

¶156

56. Thereafter, present S.A. 166 of 2019 was filed by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its General Director, Mr. P.A. John, challenging e-Auction Sale Notice dated 12.12.2018 and the auction conducted on 7.1.2019. Securitization Application was filed on 10^th April, 2019.

¶157

¶158

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶159

57. It further appears from the records that pending Securitization Application an issue was raised about the Authorisation Letter dated 2.4.2019 as to whether it was a proper authorization letter issued by the Company by a competent Director, entitled under Board Resolution to issue the Authoristion Letter dated 2.4.2019? I.A. 2679 of 2019 was filed wherein it was held by the Learned DRT that the subsequent Authorisation Letter of 2.4.2019 was nothing but an afterthought. In order dated 28.6.2019, Learned DRT held that the authorization letter issued by Dr. P.B. Arnold is not supported by any Board Resolution.

¶160

58. Mr. P.A. John filed S.A. 166 of 2019 basing on the authorization letter dated 2.4.2019. The said authorisation letter is signed by Dr. Margaret Anuradha Perumalla. Therefore, the S.A. either to fail or to succeed depends on the validity of the authorization letter issued by Dr. Margaret Anuradha Perumalla. If the S.A. is filed basing on the authorization letter issued by incompetent person, it is an inherent defect and is incurable. Therefore, the petition was dismissed for acceptance as to the receipt of the authorization letter dated 2.4.2019 issued by Dr. P.B. Arnold. This order was challenged before the Hon’ble High Court wherein the Division Bench in W.P. No. 15036 of 2019 dismissed the writ petition holding that the Tribunal has kept open the issue of maintainability of the Securitization Application on the strength of the existing authorization letter; that being so, it is for the petitioner Company to take necessary steps in this regard before the

¶161

¶162

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Tribunal so as to establish its claim that the Securitization Application, as framed and presented, was maintainable.

¶163

59. Pending S.A., Dr. Margaret Anuradha Perumalla introduced three new Board Resolutions by filing IAIR 1281 of 2021, IAIR 1283 of 2021 and IAIR 1284 of 2021 claiming to be the authorised Director to represent Respondents No. 1 and 2 and replace Mr. P.A. John to contest the S.A. All the IAIRs were dismissed by the Learned DRT vide order dated 31.10.2022. Appeal No. 121 of 2022 was filed before the DRAT, Kolkata against the order of the Learned DRT which too was dismissed on 20^th April, 2023.

¶164

60. Feeling aggrieved by the judgment of the DRAT, W.P. 11746 of 2023 was filed before the Hon’ble High Court which too was dismissed on 14.7.2023 holding that the Board Resolution dated 6.8.2021 is not valid in the eyes of law. Accordingly, the writ petition was dismissed. SLP(C) No. 16177 of 2023 was filed against the judgment of the Hon’ble High Court which too was dismissed by the Hon’ble Apex Court on 7.8.2023 wherein it was held that:

¶165

“We do not find any good ground and reason to interfere with the impugned judgment and hence the special writ petition is dismissed. However, to cut short the controversy we believe that both the sides claiming that they have a right to appear for M/s. Mennonite Brethren Property Association of India Private Limited can be heard by the Debts Recovery Tribunal.”

¶166

The Hon’ble Apex Court in S. Karthik -vs- N. Subhash Chand Jain [(2022) 10 SCC 641] in paragraph 1 has held that :

¶167

“Leave granted. This case is a classic example as to how an ingenious litigant, by taking recourse to a series of proceedings one after the other, has been successful in blocking the enforcement of a

¶168

¶169

Appeals No. 02 & 03 of 2024-DRAT-Kolkata security interest, created in favour of a secured creditor, thereby defeating the very purpose for which the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") was enacted.”

¶170

Observation of the Hon’ble Apex Court are squarely applicable to the facts of the present case where in the Securitisation Applicant adopted all the methods to defeat the purpose for which SARFAESI Act was enacted.

¶171

61. Now we have to see as to whether Securitization Application, which was filed through one Mr. P.A. John, is legally maintainable as filed through a proper person who is authorized to pursue the cause? At this stage, firstly we have to see that there is no challenge to the fact that Credit Facilities were sanctioned by the Secured Creditor wherein the security interest was duly secured through mortgage of the secured assets. It is not in dispute that in pursuance of the Auction Sale Notice dated 12.12.2018, auction sale was conducted on 7.1.2019. Successful Auction Purchasers deposited 28.75 crore and Sale Certificate was also issued. In this background we have to analyse the facts and its legal implications in the matter.

¶172

62. Securitization Application, as referred to above, was filed by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its General Director, Mr. P.A. John. At this stage, we may refer to another Writ Petition No. 2517 of 2016 which too was filed by Mr. P.A. John claiming himself to be the General Director wherein the Division Bench of the Hon’ble High Court held that if any

¶173

¶174

Appeals No. 02 & 03 of 2024-DRAT-Kolkata illegality was committed by the Secured Creditor, Borrowers or the Writ Petitioners can avail the remedy under Section 17 of the Act. However, the same was not availed. In the pending S.A., I.A. 2679 of 2019 was filed by the Securitization Applicant to receive the document (i) Authorisastion Letter dated 2.4.2019 and (ii) photographs wherein Mr. P.A. John claims himself to be Director and Authorised Signatory of the Applicants which was opposed by the Secured Creditor and the Auction Purchasers.

¶175

63. Learned DRT in its order recorded the context of the authorization letter dated 2.4.2019 which reads as under:

¶176

“As per Resolution dated 2.4.2019 I hereby authorize Rev. P.A. John who is the General Director of M/s. Mennonite Brethren Property Association of India Private Limited to file case in DRT related to MB Property Association of India Private Limited and also to deal with all the transactions, sign on documents to represent before the various judicial forums by filing cases on behalf of MB Property Association India Private Limited. This authorization will supersede all earlier authorizations given in favour of others.

¶177

The signatures of Rev. P.A. John, General Director, is attested below.”

¶178

64. By virtue of filing the I.A. earlier authorization letter was to be substituted with a different authorization which reads as under:

¶179

“This is to certify that Rev. P.A. John who is the General Director of MB Property Association of India Private Limited, is hereby authorized to file cases in DRT ……… MB Property Association India Private Limited.”

¶180

65. Learned DRT held that the authorization letter dated 2.4.2019, annexed to the I.A., is signed by one P.B. Arnold as President and GP of the petitioner Company. The authorization letter issued by Dr. P.B. Arnold is not supported by any Board Resolution. It was held by the DRT that the S.A. either to fail or to succeed depends on the

¶181

¶182

Appeals No. 02 & 03 of 2024-DRAT-Kolkata validity of the authorization letter issued by Dr. Margaret Anuradha Perumalla. Accordingly, Learned DRT refused to accept receipt of authorization letter dated 2.4.2019 issued by Dr. P.B. Arnold. This order was challenged by filing Writ Petition No. 15036 of 2019 which was dismissed by the Division Bench of the Hon’ble High Court on 19.7.2019. Accordingly, the order passed by Learned DRT attained finality.

¶183

66. Subsequently, IAIR No. 1282 of 2021 was filed by Dr. Margaret Anuradha Perumalla to allow vakalatnama of Mr. Asad Hussain, Advocate, in place of the existing counsel. IAIR No. 1283 of 2021 and IAIR 1284 of 2021 were filed by Dr. Margaret Anuradha Perumalla to permit her to represent the petitioner applicant Company in the S.A. proceedings. IAIR 1285 of 2021 was filed by Dr. Margaret Anuradha Perumalla to receive documents (i) copy of the Board Resolution dated 6.8.2021 (ii) copy of Master Data of petitioner/applicant Company. All the three I.A.s were dismissed by the Learned DRT.

¶184

67. Feeling aggrieved, Appeal No. 121 of 2022 was filed before the DRAT, Kolkata wherein it was held that private dispute between the parties, i.e. Mr P.A. John and Dr. Margaret Anuradha Perumalla, cannot be adjudicated by the DRT. Further, on the basis of the findings recorded by the Hon’ble High Court in Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 dated 28.2.2019 wherein it was held that individual members of the Society cannot question the action of the Bank in seeking recovery. Erstwhile

¶185

¶186

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶187

authorized signatory was authorized by Dr. Margaret Anuradha Perumalla to file the Securitization Application. It was further held that Mr. P.A. John is not a necessary party. Accordingly, appeal was dismissed.

¶188

68. Feeling aggrieved by the judgment of the Appellate Tribunal, Writ Petition No. 11746 of 2023 was filed before the Hon’ble High Court wherein Hon’ble High Court held that the petitioner showing her as authorised signatory of the petitioner Company by Resolution dated 6.8.2021 is not valid in the eyes of law. Accordingly, the writ petition was dismissed. The matter again travelled to the Hon’ble Apex Court by preferring SLP(C) No. 16177 of 2023 which was dismissed, as quoted in the earlier part of the judgment. However, Hon’ble Apex Court observed that to cut short the controversy we believe that both the sides claiming that they have a right to appear for M/s. Mennonite Brethren Property Association of India Private Limited can be heard by the DRT. On the basis of the judgment of the Hon’ble Apex Court Mr. Asad Hussain was also given a liberty of hearing before the Learned DRT as well as in the appeal. But as far as representation to represent the Securitization Applicant is concerned, it was not found in accordance with law as per DRT order dated 28.6.2019 which was duly affirmed by the Division Bench of the Hon’ble High Court and Dr. Margaret Anuradha Perumalla was also not held to be legally entitled in accordance with law to represent the Securitization Applicant by the DRT vide order dated 31.10.2022 which was affirmed in Appeal No. 121 of 2022 of DRAT, Kolkata

¶189

¶190

Appeals No. 02 & 03 of 2024-DRAT-Kolkata and W.P. No. 11746 of 2023 dated 14.7.2023 and affirmed by the Hon’ble Apex Court in SLP. Accordingly, although Mr. Asad Hussain was heard in compliance of the order of the Hon’ble Apex Court but Hon’ble Apex Court has not held that Dr. Margaret Anuradha Perumalla is legally entitled to represent the Securitization Applicant rather her contentions were repelled by the Hon’ble High Court in Division Bench in W.P. 11174 of 2023 and the same was approved by the Hon’ble Apex Court. Accordingly, I am of the considered opinion that Securitization Applicants are not properly represented through an authorised person. Accordingly Securitization Application, moved under Section 17 of the Act, is not legally maintainable.

¶191

69. Now arises the question of limitation.

¶192

70. Securitisation Application is filed on 10.4.2019 before the DRT. In the limitation clause it is stated that the writ petitions filed before the Hon’ble Andhra Pradesh High Court was dismissed on 28.2.2019. SLP against the same was dismissed by the Hon’ble Apex Court on 5.4.2019. Thereafter, Securitisation Application was filed claiming that although there is no delay in filing the application but as abundant caution delay of 74 days was sought to be condoned which was condoned by the Learned DRT by passing the following order:

¶193

“Counsel appearing for R1 to 3, R6 to 10 reported no counter. 11 to 13 counsel also reported no counter, Sri Abhay Singh, Advocate wakalat for R4 and reported no counter in IA No.1782 of 2019. Heard etitioner counsel perused and petition is allowed on costs of Rs. 1500/-paid by the petitioner forthwith, failing which the petition shall stand Essed. Costs paid. Petition is allowed. Delay of 74 days is filing of the

¶194

¶195

Appeals No. 02 & 03 of 2024-DRAT-Kolkata condoned. (Registry is directed to number the SA if otherwise in order. on 02.05.2019.)."

¶196

71. Accordingly, it is submitted by the Learned Counsel for Respondents that the Securitisation Application shall be treated to have been filed within time as provisions of Section 5 of the Limitation Act are applicable in The Securitisation & Assets & Enforcement of Security Interest Act, 2002.

¶197

72. Per contra, Learned Counsel for Appellants submits that the Securitisation Application was filed with a considerable delay. Although Learned Counsel did not dispute the legal proposition that Section 5 of the Limitation Act is applicable in the proceedings under the SARFAESI Act. Accordingly, delay in filing the Securitisation Application, under Section 17 of the Securitization Act can be condoned by the Learned DRT but the same has to be done in accordance with law.

¶198

73. Learned Counsel for Appellant would further submits that the Respondents have filed three writ petitions before the Hon’ble Andhra Pradesh High Court, being Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 wherein all the pleas which ought to have been taken were taken by the Respondents and the writ petitions were dismissed by the Hon’ble High Court vide judgment dated 28.2.2019. Special Leave to Appeal (C) No. 7305 of 2019 with SLP(C) 8081 of 2019 (M/s. Mennonite Brethren Property Association of India Private Limited -vs- Union of India) was filed by the Respondents against the judgment of the Hon’ble High Court. Both the Special Leave Petitions were dismissed by

¶199

¶200

Appeals No. 02 & 03 of 2024-DRAT-Kolkata the Hon’ble Supreme Court vide order dated 5.4.2019. Learned Counsel for Appellants firstly submits that no liberty was sought for by the Respondents to file application under Section 17 of the Act; secondly, writ petitions were dismissed on merit not on the ground of availability of alternative remedy; thirdly, no sufficient cause for the delay have been shown by the Respondents. It is further submitted that although delay of 74 days is condoned by the Learned DRT but there was a delay of considerable period what to say of 74 days but was not considered by the Learned DRT. It is a pure question of law regarding limitation which can be raised and agitated by the Appellants at any stage. Appeal is continuation of the original proceedings. Accordingly, the Securitization Application, filed by the Respondents, should be dismissed as time barred. 74. In a recent judgment of the Hon’ble Apex Court i n R. Nagraj -vs- Rajmani (supra) decided on 9.4.2025 Hon’ble Apex Court has laid down the law on the subject; wherein it was held that:

¶201

“Even in the absence of the specific pleadings regarding limitation in the plaint or a plea of defence there is a bounded duty of every Civil Courts to ascertain as to whether the lis has been initiated within the time prescribed under the law. Even if the parties to this lis had not raised any objections.”

¶202

It was further held in paragraph 20 of the judgment

¶203

that:

¶204

“In cases where the pleadings are silent then it becomes duty of the Court to ascertain from the evidence and the overall facts of the case as pleaded by other parties and to render a finding on limitation where the question of limitation is to be treated as question of law, since the Court cannot entertain frivolous or stale claims. It is

¶205

¶206

Appeals No. 02 & 03 of 2024-DRAT-Kolkata also apropos to reiterate the settled position of law that a question of law can be raised at any stage.”

¶207

75. It was further held by the Hon’ble Apex Court that the Courts are vested with powers to go into the question of law touching upon either the limitation or the jurisdiction even if no plea is raised and not in cases, where facts have been pleaded and evidence have to be let in. Even if no issue is framed it does not adversely affect the merits of the matter because procedural law is handmade of justice. What has to be seen is whether any irregularity is there to follow the procedure has caused serious prejudice to the parties? Hon’ble Apex Court has further held that:

¶208

“The trial Court ought to have framed a specific issue on limitation the same could very well fall under the broader issue”.

¶209

76. In the present case although an application, being I.A. 1782 of 2019 was filed by the Respondents for condonation of delay of 74 days in preferring the Securitisation Application on the ground that they were before the Constitutional Court on the advice of professionals hence could not approach the Tribunal within time challenging the e-Auction Sale Notice dated 12.12.2018 and auction dated 17.1.2019. Accordingly, 74 days delay was sought to be condoned. Although the Learned DRT allowed the application subject to payment of cost which order was not challenged by the Appellants herein but it is settled legal proposition that all the interim orders merge into the final order. If the Securitisation Application, at the very outset, was not filed within the stipulated period of limitation and Learned DRT

¶210

¶211

Appeals No. 02 & 03 of 2024-DRAT-Kolkata has wrongly entertained the same then all consequential proceedings would become illegal and void ab initio. It is a pure question of law which can be looked into any stage, as has been held by the Hon’ble Apex Court in the case of R. Nagraj -vs- Rajmani (supra). Hence now we have to see as to whether the Securitisation Application was filed within time or not?

¶212

77. In the limitation clause in the Securitisation Application it is stated that there is no delay from the date of disposal of the writ petition and SLP by the Hon’ble Supreme Court. However, application for condonation of delay of 74 days is filed to entertain the Securitisation Application. At this stage it would be relevant to look into the judgment of the Hon’ble High Court for the State of Telangana at Hyderabad dated 28.2.2019 in Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 wherein the Division Bench of the Hon’ble High Court dismissed the writ petitions as devoid of merits. The writ petitions were not dismissed on the ground of availability of alternative remedy or any liberty was sought for by the Respondents for preferring a Securitisation Application under Section 17 of the Act.

¶213

78. Thereafter, SLP(C) No. 7305 of 2019 and SLP(C) No. 8081 of 2019 were dismissed by the Hon’ble Supreme Court on 5.4.2019 by passing the following order:

¶214

“We see no reason to entertain these petitions. Accordingly, the Special Leave Petitions are dismissed. Pending applications stand disposed of.”

¶215

¶216

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Even in the order of the Hon’ble Supreme Court neither any liberty to approach the DRT was sought for nor granted. Accordingly, when the liberty was neither sought nor granted either by the Hon’ble High Court or the Hon’ble Supreme Court then how Respondents can claim the limitation from the date of dismissal of the SLP, i.e. 5.4.2019 which is not in accordance with law.

¶217

79. There is another aspect of the matter. Although neither any liberty was sought for nor granted to file the Securitisation Application under Section 17 of the Act but even the benefit of Section 14 of the Act was neither claimed in the application under Section 5 of the Limitation Act filed by the Respondents nor granted by the DRT. Although the application was moved under Section 5 read with Section 14 of the Limitation Act, but in the affidavit there is no assertion that due diligence was shown by the Respondents in pursuing the writ petitions. Section 14 of the Limitation Act reads as under:

¶218

Section 14 (1) of the Limitation Act 1963. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

¶219

80. Hon'ble Supreme Court in Purni Devi and another -vs- Babu Ram and Another 2024 SCC OnLine SC 482 has placed reliance upon Consolidated Engg. Enterprises -vs- Principal Secretary, Irrigation Department and

¶220

¶221

Appeals No. 02 & 03 of 2024-DRAT-Kolkata others (2008) 7 SCC 169 and M.P. Steel Corporation versus Commissioner of Central Excise (2015) 7 SCC 58 and held that the provisions of Section 14 of the Limitation Act are to advance the cause of justice must have interpreted to do so.

¶222

81. Principles pertaining to applicability of Section 14 of the Limitation Act were summarized by Hon'ble Apex Court in Consolidated Engg. (supra) wherein it was held that -

¶223

"21. Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in a court without jurisdiction. On analysis of the said section, it becomes evident that the following conditions must be satisfied before Section 14 can be pressed into service:

¶224

(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;

¶225

(2) The prior proceeding had been prosecuted with due diligence and in good faith;

¶226

(3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;

¶227

(4) The earlier proceeding and the latter proceeding must relate to the same matter in issue; and

¶228

(5) Both the proceedings are in a court."

¶229

It was further held in Para 31 that -

¶230

"This Court in Consolidated Engg. Enterprises (Supra) further expounded that the provisions of this Section, must be interpreted and applied in a manner that furthers the cause of justice, rather than aborts the proceedings at hand and the time taken diligently pursuing a remedy, in a wrong Court, should be excluded." It was further held that in Para 34 to 36 that -

¶231

"34. The judgment of this Court in M.P. Steel (Supra) discussed the phrases, "due diligence" and "in good faith for the purposes of invocation of Section 14 of the Limitation Act. While considering the application of Section 14 to the Customs Act, it was observed:

¶232

"10. We might also point out that Conditions 1 to 4 mentioned in the Consolidated Engg. case ((2008) 7 SCC 169] have, in fact, been met by the Plaintiff. It is clear that both the prior and subsequent proceedings are civil proceedings prosecuted by the same party. The prior proceeding had been prosecuted with due diligence and in good faith, as has been explained in Consolidated Engg. [(2008) 7 SCC 169] itself. These phrases only mean that the party who invokes Section 14 should not be guilty of negligence, lapse or inaction. Further, there should be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. xxx xxx xxx

¶233

¶234

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶235

49. ….. the expression "the time during which the plaintiff has been prosecuting with due diligence another civil proceeding" needs to be construed in a manner which advances the object sought to be achieved, thereby advancing the cause of justice." (emphasis supplied)

¶236

35. The judgments in Consolidated Engg. Enterprises (Supra) and M.P. Steel (Supra) have been followed consistently by this Court. For instance in Sesh Nath Singh v. Baidyabati Sheoraphuli Coop. Bank Ltd. (2-Judge Bench), while holding Section 14 to be applicable to applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 and the SARFAESI Act, it was observed:

¶237

" Section 14 of the Limitation Act is to be read as a whole. A conjoint and careful reading of sub-sections (1), (2) and (3) of Section 14 makes it clear that an applicant who has prosecuted another civil proceeding with due diligence, before a forum which is unable to entertain the same on account of defect of jurisdiction or any other cause of like nature, is entitled to exclusion of the time during which the applicant had been prosecuting such proceeding, in computing the period of limitation. The substantive provisions of sub-sections (1), (2) and (3) of Section 14 do not say that Section 14 can only be invoked on termination of the earlier proceedings, prosecuted in good faith."

¶238

36. More recently, in Laxmi Srinivasa R and P Boiled Rice Mill -vs- State of Andhra Pradesh (2-Judge Bench), this Court followed dictum in Consolidated Engg. Enterprises (Supra) and M.P. Steel (Supra) to exclude the time period undertaken by the Plaintiff therein in pursuing remedy under Writ Jurisdiction, in the absence of challenge to the bona fides of the Plaintiff, in view of Section 14."

¶239

82. Accordingly, the Appellants even cannot take any advantage of Section 14 of the Limitation Act. Accordingly, I am of the considered view that the Securitisation Application filed by the Respondents was not within time and was barred by law of limitation.

¶240

83. It is submitted by the Learned Counsel for Appellants that the Respondents preferred three writ petitions; Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019 before the Hon’ble High Court for the State of Telangana at Hyderabad wherein Writ Petition No. 147 of 2019 was filed by (i) G. Jai Paul, and (ii) A. Tytus Rajender, (iii) G. Machael Manohar. Writ Petition No. 1230 of 2019 was filed by M/s.

¶241

¶242

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Mennonite Brethren Property Association of India Private Limited, through its Vice President-cum-Authorised Signatory, Dr. Margaret Anuradha Perumalla, Writ Petition No. 1343 of 2019 was filed by M/s. Mennonite Brethren Property Association of India Private Limited, represented by its Director, Mr. S.S. Jaffania. Writ Petition No. 147 of 2019 was filed questioning the auction and also the question of right of management of the Society to create a mortgage. It is recorded by the Hon’ble High Court in its judgment that notices were issued subject to maintainability on 4.1.2019 and the Authorised Officer was allowed to proceed with the auction but not to confirm the sale. Accordingly, auction was conducted for an amount of Rs.28.75 crore against reserved price of Rs.20.00 crore. After more than two weeks of the auction, the Private Limited Company represented by a person claiming to be Vice President-cumAuthorised Signatory filed Writ Petition No. 1230 of 2019 challenging the auction notice. It was filed exactly after 16 days of the conduct of the auction.

¶243

84. On the very next date, i.e. 24.1.2019 another Writ Petition No. 1343 of 2019 was filed by the same Company, i.e. Mennonite Brethren Property Association of India Private Limited, represented by a person claiming to be Director of the Company, but with the same prayer, has sought for in the Writ Petition No. 1230 of 2019. Hon’ble High Court dismissed the Writ Petition No. 147 of 2019 on the ground of maintainability holding that the individual members of the Society who failed to question the action of the management

¶244

¶245

Appeals No. 02 & 03 of 2024-DRAT-Kolkata in availing the loan from the Banks cannot now question the Banks in seeking recovery. Thereafter, Hon’ble High Court considered the submission of the petitioner in the writ petition and observed that the contentions of the Learned Senior Counsel of for the petitioner are three fold:

¶246

“i) that the mandatory requirement of leaving a gap of thirty (30) days between the date of notice under Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002, and the date of auction under Rule 9 (1) was flouted;

¶247

(ii) that the amounts reflected in the sale notice, dated 12.12.2018 are completely incorrect, inasmuch as the payments made pursuant to the OTS were not taken into account; and

¶248

(iii) that as on date, the dues to the Bank of Maharashtra are completely discharged, despite which the auction has proceeded at the behest of the consortium of the banks.”

¶249

Hon’ble High Court held that time gap of 15 days was sufficient in issuing notice for the auction held on 7.1.2019. It was further held that :

¶250

“ 16. In a nutshell, the contentions of Dr. Kylasanatha Pillay, learned senior counsel for the petitioner company are three folds, viz., “i) that the mandatory requirement of leaving a gap of thirty (30) days between the date of notice under Rule 8 (6) of the Security Interest (Enforcement) Rules, 2002, and the date of auction under Rule 9 (1) was flouted; (ii) that the amounts reflected in the sale notice, dated 12.12.2018 are completely incorrect, inasmuch as the payments made pursuant to the OTS were not taken into account; and (iii) that as on date, the dues to the Bank of Maharashtra are completely discharged, despite which the auction has proceeded at the behest of the consortium of the banks.

¶251

17. We have carefully considered the above submissions. 18. At the outset, all the above three contentions were not raised by the petitioner company in the affidavit in support of the writ petition. They were raised only in the reply to the counter affidavit. Though the learned senior counsel for the petitioner company contended that these are only questions of law, which need not find part of the pleadings, we do not agree. The reason is that the allegation of non-compliance with the mandate of law should have its foundation on facts. But without putting these technicalities, we would consider the contentions.

¶252

19. In so far as the first contention is concerned, it is only for the first auction sale that the Rules stipulate a time gap of thirty (30) days. But, for subsequent sales, the time gap stipulated is only fifteen (15) days. According to the learned senior counsel for the banks, the auction held on 07.01.2019 was the fifth auction. Therefore, a time

¶253

¶254

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶255

gap of fifteen (15) days was sufficient. Hence, the first contention does not hold water.

¶256

20. The second and third contention of the petitioners cannot be countenanced. The law does not mandate that every time a rupee is paid, the next auction sale notice should indicate the amount remaining unpaid as on that date. The reason for mentioning the amount due in the auction notice, is to enable the borrower or the guarantor to make payment and redeem the property. If the petitioners were really interested in redeeming the property, they could have come up with an amount representing the balance. Even now they have not come up with money. The Bank will certainly adjust the payments already made before closing the account. Therefore, this cannot be a ground for setting aside the auction.

¶257

21. In any case, the second and third contentions of the learned senior counsel for the petitioner company revolve entirely around facts. Despite the fact that the bank issued a notice under Section 13 (2) of the Act,2002 way back on 15.04.2010 and a possession notice under Section 13 (4) of the Act, 2002 on 08.12.2010, neither the petitioner nor the Society has chosen to go so far to the DRT. The DRT is a Special Tribunal created for adjudication of all legal and factual aspects. In fact, it appears from the counter affidavit filed by the bank that the petitioner company or the Society or its members have been repeatedly knocking at the doors of this Court by way of writ petitions from the year 2015 without ever going to the Tribunal.

¶258

22. The Supreme Court has repeatedly held that bypassing of alternative remedies should not be permitted as a matter of routine. No special reasons are indicated in the writ petitions for bypassing the alternative remedy. In fact, from the year 2010 till date, the measures initiated by the bank under Section 13 (4) of the Act, 2002 have not been questioned before the DRT.

¶259

23. Therefore, the Writ Petitions are devoid of merits and hence, they are dismissed. However, in the circumstances, there shall be no order as to costs.”

¶260

85. SLP against the judgment of the Hon’ble Supreme Court was also dismissed.

¶261

86. Learned Counsel for Appellant vehemently argued that all the points which could have been raised or have been raised by the Respondents in the writ petition have been considered and decided by the Hon’ble High Court and now the same could not be re-agitated in the present petition under Section 17 of the Act. Learned Counsel has placed reliance upon a recent judgment of the Hon’ble Apex Court in CELIR LPP -vs- Sumati Prasad Bafna (supra). Learned

¶262

¶263

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Counsel for Appellant further argued that doctrine of election was also applicable in the present case as the Respondents have elected to prosecute the writ petitions challenging the auction notice and auction sale in place of filing a Securitisation Application under Section 17 of the Act.

¶264

87. Per contra Learned Counsel for Respondents submits that the principle of doctrine of election will not be applicable in the present case as the Respondents are well within their right under Section 17 of the Act. The Respondents have raised the issues before the Hon’ble High Court; thereafter, they filed the Securitisation Application on the ground of violation of mandatory provisions. Hence, the principle of Respondent judicata will also not be applicable.

¶265

88. At this stage, it would be pertinent to observe that notice under Section 13 (2) of the Act was issued by the secured creditor calling upon the Borrower and Respondent No.1 to repay the outstanding dues to the tune of Rs.8,49,01,166.00 as on 31.3.2010, the date of N.P.A. Thereafter, amount was not repaid and the Respondents herein were continuously filing writ petitions before the Hon’ble High Court. Writ Petition No. 23559 of 2015 was filed by the Respondents through its Chairman S. Vara Prasad which was for challenging the Demand Notice which was dismissed on 5^th August, 2016 with liberty to avail appropriate legal remedies by the petitioner therein.

¶266

89. Thereafter, Writ Petition 25171 of 2016 was filed by the Respondents through its General Director, P.A. John, which too was dismissed on 28^th July, 2016 by the Division Bench

¶267

¶268

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶269

of the Hon’ble High Court placing reliance upon a judgment of the Hon’ble Apex Court United Bank of India -vsSatyawati Tandon & Others (2010 8 SCC 110) on the ground of alternative remedy on 28.7.2016. Another W.P. No. 2376 of 2016 was filed which too was dismissed on 5^th August, 2016 by the Division Bench of the Hon’ble High Court. Again another Writ Petition No. 3117 of 2018 was filed by the Respondents which was dismissed on 10.9.2018 wherein there was challenge to the auction sale which could not be fructified and the writ petition was dismissed as infructuous. Again the e-Auction was fixed for 7.1.2019 wherein three writ petitions; Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019, were filed by the Respondents which were dismissed by a common judgment dated 28^th February, 2019 and the SLP against the same was also dismissed by the Hon’ble Supreme Court.

¶270

90. In this backdrop it is clear that the Respondents were given full opportunity to avail alternative remedy of filing Securitisation Application under Section 17 of the Act by the Hon’ble High Court at different stages and different time. But he did not chose to avail the same till the matter is finally decided by the Hon’ble High Court on 28.2.2019 and thereafter SLP was dismissed on 5.4.2019.

¶271

91. In the case of CELIR LPP -vs- Sumati Prasad Bafna (supra) in the facts of that case it was held by the Hon’ble Apex Court that:

¶272

“Section 17 of the SARFAESI Act is a complete Code that confers upon the DRT the jurisdiction to examine all the steps or measures taken by

¶273

¶274

Appeals No. 02 & 03 of 2024-DRAT-Kolkata the secured creditor under the Act and provide remedies to any person aggrieved by any of those measures.”

¶275

In the facts of the case of Bafna Hon’ble Apex Court held that remedy for seeking redemption of mortgage was not only available to the Borrower under Section 17 of the SARFAESI Act but was also availed by him by way of I.A. 2339 of 2023 in S.A. 46 of 2022. Orders were reserved by the DRT. However, Borrowers decided to move the Hon’ble High Court for seeking the same relief that it had sought in the Securitisation Application.

¶276

92. In the facts of the present case, situation is the same as continuously option was available to the Respondents to avail the remedy of Section 17 of the Act but was not availed. Every time when the Sale Notice was issued the same was challenged before the Hon’ble High Court by filing writ petitions and the Hon’ble High Court disposed of the same with liberty to challenge the same under Section 17 of the Act but the same liberty was not availed by the Respondents.

¶277

93. Hon’ble Apex Court in CELIR LPP -vs- Sumati Prasad Bafna (supra) in paragraph 128 held that :

¶278

“128. Once, the Borrower had elected to move the High Court for the very same cause of action and underlying prayers, the moment the same was entertained by the High Court, which it did, the Borrower was precluded from pursuing its remedies before the DRT by way of S.A. No. 46 of 2024, and was duty bound to now espouse it only in the writ proceedings, as otherwise it would tantamount to having a second bite at the cherry and relitigating what it has already litigated.”

¶279

In the case of Bafna it was also observed by the Hon’ble Apex Court that:

¶280

¶281

Appeals No. 02 & 03 of 2024-DRAT-Kolkata “The borrower, for reasons best known to him, never agitated the validity of the proceedings under the SARFAESI Act, including the legality of the 9^th auction notice”.

¶282

94. The Hon’ble Apex Court by placing reliance upon Joint Action Committee of Air Line Pilots’ Association of India (ALPAI) -vs- DGCA, (2011) 5 SCC 435 wherein it was further held that :

¶283

“12. The doctrine of election is based on the rule of estoppel-the principle that one cannot approbate and reprobate inheres in it. The doctrine of estoppel by election is one of the species of estoppels in pais (or equitable estoppel), which is a rule in equity. By that law, a person may be precluded by his actions or conduct or silence when it is his duty to speak, from asserting a right which he otherwise would have had. Taking inconsistent pleas by a party makes its conduct far from satisfactory. Further, the parties should not blow hot and cold by taking inconsistent stands and prolong proceedings unnecessarily."

¶284

Although in the present case there is a difference on the facts that in the case of Bafna matter was pending before the DRT and the borrower took up the matter to the Hon’ble High Court while in the present case although Securitisation Application under Section 17 of the Act was not filed before the DRT but the relief sought for in the Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019, was to the effect of quashing the sale to be conducted on 7.1.2019. The same prayer is made by the Respondents in the Securitisation Application before the Learned DRT wherein the prayer was to declare the Sale Notice dated 12.12.2018 and auction sale dated 7.1.2019 to be arbitrary and to quash the same. Consequential reliefs were also sought. Accordingly, it is abundantly clear that the reliefs which were sought before the Learned DRT were already sought by the Respondents before the Hon’ble High Court which were

¶285

¶286

Appeals No. 02 & 03 of 2024-DRAT-Kolkata declined by the Hon’ble High Court and was affirmed by the Hon’ble Apex Court by dismissing the SLP. Hence, the doctrine of election, as has been held by the Hon’ble Apex Court in the case of CELIR LPP -vs- Sumati Prasad Bafna (supra) is applicable in the present case also. Hon’ble Apex Court referred to the decision of Vodafone Idea Cellular -

¶287

vs- Ajay Kumar Agarwal [(2022) 6 SSC 496] wherein it was held that:

¶288

“As per the doctrine of election once a party has elected to choose remedy under one forum again the same cause of action cannot be challenged before another forum.”

¶289

Accordingly, Respondents have chosen the forum of Hon’ble High Court for espousing their cause instead of preferring an application under Section 17 of the Act, hence now they are estopped from challenging the same proceedings before the Learned DRT under Section 17 of the Act.

¶290

95. Now we have to look into the issue of res judicata or constructive res judicata in the matter.

¶291

96. As has been quoted above, Hon’ble High Court has dealt with all the issues raised by the Respondents in the three writ petitions; Writ Petitions No. 147 of 2019, 1230 of 2019 and 1343 of 2019; and categorical findings were recorded by the Hon’ble High Court that the Respondents, despite given liberty to avail remedy by filing application under Section 17 of the Act, did not avail the remedy rather they repeatedly approached the Hon’ble High Court. Accordingly, Hon’ble High Court did not accept the contention about the validity of notices under Section 13 (2)

¶292

¶293

Appeals No. 02 & 03 of 2024-DRAT-Kolkata or 13 (4) of the Act. Hon’ble High Court has categorically held that time gap of 15 days in fixing the date of auction sale after issuance of notice was sufficient. It was further held that the ground for not mentioning the amount paid could not be sufficient for redemption. Borrowers have not paid any amount till date.

¶294

97. Hon’ble Apex Court in the case of CELIR LPP -vsSumati Prasad Bafna (supra) held that there must be finality to litigation. In paragraph 144 of the judgment it was held that:

¶295

“144. From the above exposition of law, it is clear that the 'Henderson Principle' is a core component of the broader doctrine of abuse of process, aimed at enthusing in the parties a sense of sanctity towards judicial adjudications and determinations. It ensures that litigants are not subjected to repetitive and vexatious legal challenges. At its core, the principle stipulates that all claims and issues that could and should have been raised in an earlier proceeding are barred from exceptional being raised in subsequent litigation, except in circumstances. This rule not only supports the finality of judgments but also underscores the ideals of judicial propriety and fairness.”

¶296

Further Hon’ble Apex Court in paragraphs 149 to 153 held that:

¶297

149. Piecemeal litigation where issues are deliberately fragmented across separate proceedings to gain an unfair advantage is in itself a facet of abuse of process of law and would also fall foul of this principle. Merely because one proceeding initiated by a party differs in some aspects from another proceeding or happens to be before a different forum, will not make the subsequent proceeding distinct in nature from the former, if the underlying subject matter or the seminal issues involved remains substantially similar to each other or connected to the earlier subject matter by a certain degree, then such proceeding would tantamount to 'relitigating' and the Henderson Principle would be applicable.

¶298

150. Parties cannot be allowed to exploit procedural loopholes and different foras to revisit the same matters they had deliberately chosen not to pursue earlier. Thus, where a party deliberately withholds certain claims or issues in one proceeding with the intention to raise them in a subsequent litigation disguised as a distinct or separate remedy or proceeding from the initial one, such subsequent litigation will also fall foul of this principle.

¶299

¶300

Appeals No. 02 & 03 of 2024-DRAT-Kolkata

¶301

151. Similarly, where a plea or issue was proceedings but later abandoned it is deemed waived and cannot be relitigated in subsequent. Allowing such pleas to be resurrected in later cases would not only undermine the finality of judgments but also incentivize strategic behaviour, where parties could withdraw claims in one case with the intention of reintroducing them later. proceedings. Abandonment signifies acquiescence, barring its reconsideration in subsequent litigation. This ensures that judicial processes are not misused for tactical advantage and that litigants are held accountable for their procedural choices. Parties must litigate diligently and in good faith, presenting their entire case at the earliest opportunity.

¶302

152. The Henderson principle operates on the broader contours of judicial propriety and fairness, ensuring that the judicial system remains an instrument of justice rather than a platform for procedural manipulation. Judicial propriety demands that courts maintain the finality and integrity of their decisions, preventing repeated challenges to settled matters. Once a matter has been adjudicated, it should not such be revisited unless exceptional circumstances warrant reconsideration. Repeated litigation of the same issue not only wastes judicial resources but also subjects the opposing party to unnecessary expense and harassment. judicial processes are not merely technical mechanisms but are rooted in principles of equity and justice.

¶303

153. Both logic and principle support the approach that the judicial determination of an entire cause of action is in fact the determination of every issue which is fundamental to establishing the entire cause of action. Thus, the assertion that the determination is only on one of the issues is flawed as it is nothing but an indirect way of asserting that the whole judgment is flawed and thereby relitigating the entire cause of action once more. The effect of a judicial determination on an entire cause of action is as if the court had made declarations on each issue fundamental to the ultimate decision.

¶304

Hence, when the Respondents opted for filing the writ petitions without availing the remedy of filing Securitization Application under Section 17 of the Act and the Hon’ble High Court recorded a categorical finding about the validity of the auction Sale Notice and the auction sale which was confirmed by the Hon’ble Apex Court then now the Respondents cannot be permitted to re-agitate the issue. They are now estopped from raising the same in a Securitization Application under Section 17 of the Act. This is more so because, as has been held earlier that despite granting sufficient opportunities by the Hon’ble High Court in

¶305

¶306

Appeals No. 02 & 03 of 2024-DRAT-Kolkata different writ petitions, they did not avail the remedy of filing Securitization Application under Section 17 of the Act which was filed with a considerable delay of so many years which itself is a ground for dismissal of the Securitization Application.

¶307

98. Learned Counsel for Respondents although have taken a plea of under valuation but it is submitted that since they are challenging the auction sale itself, issue of under valuation was not pressed in the appeal.

¶308

99. Although the issue of valuation is not pressed by the Learned Counsel for Respondents but it is apparent from the record that valuation of the secured assets was fixed by the Authorised Officer on the basis of two valuation reports 21^st July, 2018 and 19^th June, 2018 filed by the Bank. In the valuation report of G.D. Rao & Associate Engineers dated 19.6.2018, market value was assessed at Rs.17,80,58,400.00 while the realizable value was Rs.14,66,88,880.00 while the distress sale value was Rs.12,21,00,000.00 while in the report of Sumeru Associates date3d 21^st July, 2018 assessed value was Rs.20,43,73,000.00 while the realizable value was Rs.16,34,98,000.00. While the Learned Counsel for Respondents have placed reliance upon the valuation report of 2009 wherein the assessed value was Rs.38.00 crore. In the report, it is nowhere mentioned as what was the prupose of obtaining the reports. Accordingly, valuation assessed by the valuer of the Bank was found in accordance with the rules and the valuation was fixed by the Authorised Officer

¶309

¶310

Appeals No. 02 & 03 of 2024-DRAT-Kolkata as per the valuation reports. I do not find any irregularity in fixing the valuation of the secured assets.

¶311

100. A plea is taken about the violation of Rule 9 (3) and 9 (4) of the Rules. I have gone through the pleadings as well as the judgment of the Learned DRT. It is stated in the Securitization Application that the Securitization Applicants are under an impression that there may be a violation of Rule 9 (3) and 9 (4) of the Rules. No specific plea of violation of Rule 9 (3) and 9 (4) of the Rules was taken by them. It is specifically stated by the Appellant Bank that amount was deposited in accordance with the Rules. There was due compliance of the Rule 9 (3) and 9 (4) of the Rules. Hence, I do not find any reason to accept the plea of the Respondents in this count.

¶312

101. It is submitted by the Learned Counsel for Respondents that an injunction order was passed by the Civil Court in O.P. No. 02 of 2004 to the effect that Respondent, i.e. Dr. P.B. Arnold, shall not alienate or transfer the properties of the Society in any manner prejudicial to the interest of the Society. Security interest was created by Dr. P.B. Arnold. P.B. Arnold offered the property of the Church as security and obtained loan from the Bank. It is submitted that the mortgage itself was illegal in view of the order of the Civil Court dated 4.8.2004. Bank was not a party in the O.P. No. 02 of 2004. I.A. 84 of 2004 pending before the Court of 2^nd Additional District Judge, Mehboobnagar wherein the injunction order was passed. There is nothing on record to show that this order was ever

¶313

¶314

Appeals No. 02 & 03 of 2024-DRAT-Kolkata served upon the Bank. Thereafter, there is nothing on record to show that any act prejudicial to the interest of the Society was committed by P.B. Arnold because in the order dated 4.8.2004 he was restrained from alienating or transferring the property in any manner prejudicial in the interest of the Society. Accordingly, injunction order cannot adversely affect the rights of the Secured Creditors, i.e., the Appellants. Accordingly, finding to this effect by the Learned DRT cannot sustain.

¶315

102. On the basis of the discussion made above, I am of the considered view that the Learned DRT has committed material irregularity and illegality in arriving at the finding in the impugned judgment. Findings recorded by the Learned DRT are erroneous. Accordingly both the appeals are liable to be allowed.

¶316

O R D E R

¶317

Both the appeals are allowed. The judgment and order dated 6.12.2023, passed by Learned DRT-II, Hyderabad allowing S.A. 166 of 2019 along with I.A. 4227 of 2019 (M/s. Mennonite Brethren Property Association of India Private Limited -vs- Punjab National Bank & Others) is set aside. Consequently, S.A. No. 116 of 2019 along with I.A. 4227 of 2019 is dismissed.

¶318

No order as to costs.

¶319

File be consigned to Record room.

¶320

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

¶321

¶322

Appeals No. 02 & 03 of 2024-DRAT-Kolkata Let a copy of this judgment be retained in the file of Appeal No. 03 of 2024.

¶323

Copy of the Judgment/Final Order be uploaded in the

¶324