Allowed

Sandeep Jaiswal v. Bank of Baroda

DRAT14 Feb 2025REGULAR APPEAL/76/2024

Case brief

AI extract

What is this about?

The Debt Recovery Appellate Tribunal allowed an appeal against the DRT's dismissal of an application for condonation of delay under Section 5 of the Limitation Act in relation to a Section 17 SARFAESI Act challenge. The Tribunal held the Section 17 application maintainable and directed the DRT to decide it on merits.

What did the court decide?

Appeal allowed; impugned order set aside; delay condoned; DRT directed to decide Section 17 application on merits.

Sandeep Jaiswal versus Bank of Baroda — Banking and Recovery | DRAT (2025)

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Reportable / Non-reportable

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IN THE DEBT RECOVERY APPELLATE TRIBUNAL - KOLKATA

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HON'BLE Justice Anil Kumar Srivastava, Chairperson

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APPEAL 76 OF 2024

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(Arising out of I.A. 492 of 2023 in S.A. Dy No. 2519 of 2019 – DRT- Cuttack) 14.02.2025

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Sandeep Jaiswal residing at Near Amareswar Temple Po Ps Buxi Bazar Town Dist Cuttack 753001.

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--Vs--

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Authorised Officer, BANK OF BARODA having office at Buxi Bazar Chalachitra Bhawan Town Dist Cuttack 753001

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2.REGIONAL MANAGER BANK OF BARODA residing at 1ST FLOOR, BIBHAB GULMOHAR, BEHARA SAHI, NAYAPALLI, BHUNANESWAR 751012

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3.ROHIT SANTUKA residing at CHOWDHURY BAZAR, P.S- SADAR, CUTTAK 753009

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4.MEETU DUA residing at Jaunlia Patti, CHOWDHURY BAZAR, P.S- SADAR, CUTTAK 753009

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... Respondents

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For Appellant : Mr. Nemani Srinivas, ld. Adv.

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For Respondent: Mr. Guru Dutt Kar, , ld. Adv. for bank

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Mr. Prasenjit Pal, ld. Adv. for resp. 3 & 4. Mr. Ajit Keshri, ld. Adv.

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The Appellate Tribunal

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Heard learned counsel for the parties and perused the records.

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Instant appeal has arisen against the order dated

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29.02.2024 passed by learned DRT Cuttack in I.A. No. 492 of

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2023 arising out of NDN No. 2519 of 2019 [Sandeep Jaiswal Vs.

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Authorised Officer, Bank of Baroda & Ors] whereby learned DRT has dismissed the I.A. for condonation of delay. Consequently,

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NDN No. 2519 of 2019 filed by the appellant herein u/s 17 of the

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SARFAESI Act (hereinafter referred to as Act) was also dismissed.

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Feeling aggrieved by the impugned order, appellant

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preferred the appeal.

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Brief fact of this case arethatappellant herein is borrower of

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the respondent bank who availed some credit facilities from the

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bank. Loan accounts became irregular and were classified as

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NPA. Bank initiated SARFAESI proceedings under the Act. Challenging the same securitization application u/s 17 of the SARFAESI Act. (hereinafter referred to as Act) being S.A. 70 of

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2018 was filed by the appellant. During pendency of the proceeding certain amount of Rs.73.50 lakhs was received by the

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bank, as such, S.A. was disposed of by the learned DRT vide

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judgement and order dated 21.07.2018 holding that account of

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the appellant stood closed and the proceedings become

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infructuous. It was also observed that if any amount is due to the

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bank they would be at liberty to take action as per law for recovery of their dues.

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Subsequent thereto vide letter dated 07.08.2018 demand of

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Rs.27,07,232.00 was made by the bank as per the direction of the learned DRT. Sale notice was issued. It was challenged before the Hon’ble High Court of Orissa by filing Writ Petition No. WP(C) 16570 of 2018 wherein certain interim order was granted

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in favour of the appellant. Ultimately, the writ petition was

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dismissed on 25.09.2019 with the observation that since the statement of account was obtained through RTI and admittedly

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the petitioners have not paid the dues for which the mortgage

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property was put to auction sale, Hon’ble Court was not inclined to go into the disputed questions of fact raised by the petitioner.

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The interim order passed by the Hon’ble Court on 07.09.2018

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was vacated. Subsequent thereto, M.A. 2240 of 2019 was filed along with an application for condonation of delay which was eventually dismissed by the learned DRT vide order dated 25.11.2019 with the observation that appellant is at liberty to

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take steps as per law challenging the fresh sale notice. Thereafter, S.A. Dy. No. 2519 of 2019 with an application being

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I.A. 827 of 2019 was filed which was subsequently withdrawn and

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I.A. 442 of 2023 was filed for condonation of delay in filing the

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S.A which was disposed of on 29.02.2024.

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Learned DRT by the impugned order dated 29.02.2024 held

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that no plausible reasons have been assigned by the applicant for the delay caused in filling the S.A. Accordingly, I.A. 492 of 2023 filed for condonation of delay was dismissed. Consequently, S.A. was also dismissed.

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At the very outset learned counsel for the respondent bank submits that application u/s 5 of the limitation Act for

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condonation of delay in filing the Section 17 application of the Act

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is not maintainable. Learned counsel for the appellant has placed

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reliance on the case laws cited hereunder :

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i) In Sudeshna Dei Vs. AGM, State Bank of India & Ors. [WP(C) No. 7950 of 2018 passed by the Hon’ble Orissa High Court;

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ii) In Smt. Kusum Jagdishchandra Singh Vs. LIC Housing Finance Ltd. & Ors. [WP No. 14010 of 2024] passed by the Hon’bld High Court of Madhya Pradesh;

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iii) In Aniruddh Singh Vs. AO, ICICI Bank Ltd. [M.P. No. 5324 of 2023] passed by the Hon’ble High Court of Madhya Pradesh.

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iv) In M/s. POROUS Laboratory Pvt. Ltd. Vs. Indian Bank & Anr. [Appeal No. 39 of 2017]passed by the DRAT Kolkata

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v) In M/s Baruah Vs. State Bank of India [WP(C) No. 7135 of 2023] passed by the Hon’ble High Court at Gauhati.

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vi) In Porus Laboratory Pvt. Ltd. Vs. Indian Bank [2019(1) DRTC 256 Hyd.] passed by the Hon’ble High Court at Hyderabad;

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However, Learned counsel for the appellant submits that Hon’ble Division Bench of Orissa High Court in Sudeshna Devi

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(supra) has held that application u/s 17 of the Act can be

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maintainable along with an application u/s 5 of the Limitation Act

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and learned DRT has jurisdiction to condone the delay sought in

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Section 5 Limitation Act in accordance with law.

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Learned counsel for the auction purchaser, respondent no.3

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and 4, submits that application u/s 5 of the limitation Act for

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condonation of delay in filing the Section 17 application of the Act

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is not maintainable as has been held by Hon’ble Court as under :

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i) Sandeep Jaiswal Vs. The AO, Bank of Baroda [Appeal no. 76 of 2024]

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ii) Manohar Lal (D) by Lrs. Vs. Ugrasen (D) by Lrs. & Ors. [Civil Appeal no. 973 of 2007]

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iii) Consolidated Engg. Enterprises & Ors. Vs. Principal Secy. Irrigation Deptt. & Ors. [Civil Appeal no. 2461 of 2008]

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iv) Radhey Shyam & Ors. Vs. Chhabi Nath & Ors. [Civil appeal no. 2548 of 2009]

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v) Jogendrasinhji Vijaysinghji Vs. State of Gujarat & Ors. [Civil appeal no. 2374 of 2015]

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In view of the law laid down by the Division Bench of Hon’ble

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Orissa High Court in Sudeshna Devi (supra), I am of the opinion

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that application u/s 5 Limitation Act is maintainable for

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considering the delay in filing application u/s 17 of the Act.

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Now it is to be seen whether there was sufficient ground

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made out by the appellant in the application u/s 5 Limitation Act

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for condonation of delay for maintaining the application u/s 17

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application?

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Learned counsel for the appellant would submit that appellant was pursuing his remedy diligently and bona fidely. He challenged the action of the bank before the Hon’ble High Court. After passing the judgement by the Hon’ble High Court, he preferred the S.A. which was dismissed being infructuous giving

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liberty to the bank to proceed further if any amount is found due. Subsequently, a demand notice dated 07.08.2018 was issued. Appellant preferred the M.A. for disposing of the S.A. which was dismissed wherein also learned DRT gave liberty to the appellant to move appropriate application in accordance with law. Hence,

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appellant preferred the S.A. u/s 17 of the Act with an application u/s 5 limitation Act for condonation of delay in filing the S.A. Learned counsel for the appellant further submits that appellant is entitled for the benefit of pursuing the proceeding diligently in

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good faith as provided u/s 14 of the Limitation Act.

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Per contra, learned counsel for the bank as well as auction purchaser has vehemently argued that remedy available u/s 14 of

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the Limitation Act has not been pleaded. Appellant has never

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taken the plea of getting the benefit of Section 14 Limitation Act. No relief is also sought for the benefit of Section 14 Limitation Act. It cannot be permitted to take advantage of the provision which is not pleaded by the appellant.

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Learned counsel for the auction purchaser also submits that right title interest has accrued in favour of the auction purchaser. Learned counsel further submits that appellant did not pursue the matter in good faith diligently rather he mala fidely dragged the proceeding without any sufficient reason. No sufficient reason could be shown by the appellant for condonation of delay.

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As far question of condonation of delay is concerned as would appear from the record, initially S.A. was dismissed by the learned DRT holding the same to be infructuous on the ground that appellant has deposited an amount of Rs.73.50 lakh. Further, it was recorded that bank refund an of Rs.8.50 lakhs to the auction purchaser. Accordingly, S.A. 70 of 2017 held to be infructuous, but it was observed that if any amount is due to the bank, they would be at liberty to recover the dues. After this order bank by its letter dated 07.08.2018 demanded Rs.27,07,232.00 from the appellant. This notice was issued to the

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borrower. Thereafter, it was challenged before the Hon’ble High Court at Orissa by preferring Writ Petition wherein an interim

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order was granted in favour of the appellant. Ultimately, Hon’ble High Court dismissed the writ petition on the ground that Hon’ble Court did not intend to go into the disputed question of fact raised by the petitioner. Accordingly, writ petition was dismissed

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on 25.09.2019. Thereafter, M.A. 2240 of 2019 was filed on 14.10.2019 before the learned DRT which was again dismissed by the learned DRT vide order 25.11.2019 giving liberty to the appellant to challenge the proceeding of fresh sale notice in accordance with law. In the meantime, a proposal of OTS was moved by the appellant. Subsequent thereto S.A. was filed on

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17.12.19 with an application u/s 5 of the Limitation Act wherein

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all the grounds of pendency of the litigation were taken by the appellant.

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As far as issue of benefit of Section 14 of the Limitation Act

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is concerned in a recent judgement Hon’ble Apex Court has held

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in Purni Devi & Anr. Vs. Babu Ram & Anr. [2024 SCC OnLine

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SC 482] in Para 27 and 30 to 35 as under :

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27.On a perusal of Section 14(2) of the Limitation Act, which is also applicable to the State of Jammu and Kashmir, it is evident that it carves out an exception excluding the period of limitation

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when the proceedings are being pursued with due diligence and good faith in a Court “which from defect of jurisdiction or other cause of a like nature, is unable to entertain it”.

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The principles pertaining to applicability of Section 14, were extensively discussed and summarised by this Court in Consolidated Engg. Enterprises (Supra), wherein while holding the exclusion of time period under Section 14 of the Limitation Act to a petition under Section 34 of the Arbitration Act it was observed:-

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“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: (1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party; (2) The prior proceeding had been prosecuted with due diligence and in good faith; (3) The failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature; (4) The earlier proceeding and the latter proceeding must relate to the same matter in issue; and

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

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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.

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In the present case, it is not in dispute that:- (i) Both the proceedings are civil in nature and have been prosecuted by the Plaintiff or the predecessor in interest. [2024] 4 S.C.R. 45 Purni Devi & Anr. v. Babu Ram & Anr. (ii) The failure of the execution proceedings was due to a defect of jurisdiction. (iii) Both the proceedings pertain to execution of the decree dated 10.12.1986, which attains finality on 09.11.2000. (iv) Both the proceedings are in a court.

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The only objection pointed out by the Respondent to the ingredients for invocation of Section 14, is that the Plaintiff have not approached this Court with clean hands and did not approach the Court of the Tehsildar diligently and in good faith.

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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:

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“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.

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xxx xxx xxx 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)

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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. 46 [2024] 4 S.C.R. Digital Supreme Court Reports Bank Ltd.5 (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:-

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“75. 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.”

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The plea that benefit of Section 14 of the Limitation Act is not claimed by the appellant in the appeal could not be accepted as details of time consumed in prosecuting different proceedings have been duly explained by the appellant as narrated above.

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Now it is to be looked into as to whether sufficient cause shown by the appellant for condonation of delay?Hon’ble Apex Court in a recent judgment in the matter of Sheo Raj Singh

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(Deceased) through Legal Representatives & Others -vsUnion of India & Another [(2023) 10 SCC 531] has held in paragraphs 30 and 32 as under:

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

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“32. x x x At this stage, we cannot but lament that it is only excuses, and not explanations, that are more often accepted for condonation of long delays to safeguard public interest from those

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hidden forces whose sole agenda is to ensure that a meritorious claim does not reach the higher courts for adjudication.”

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17.Hon’ble Apex Court in State (NCT of Delhi) -vs- Ahmed Jaan [(2008) 14 SCC 582], held that proof of sufficient cause

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is a condition precedent. In para 10 it is held that

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

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18. Hon’ble Apex Court in S. Ganesharaju (Dead) through LRs -vs- Narasamma (Dead) through LRs [(2013) 11 SCC

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341] in para 12 it was held that

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

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It was further held in para 14 that :

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

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Hon’ble Apex Court has laid down the law regarding the ground to be looked at the time of considering application u/s 5 of the Limitation Act. Sufficient cause has to be looked into while considering application u/s 5 of the Limitation Act. It is to be seen whether the appellant bona fidely prosecuting the

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proceeding to enable him to get the benefit of Section 5 Limitation Act coupled with the fact whether appellant prosecuting the proceeding bona fidely and diligently or not?

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In the present case appellant initially preferred the S.A. 70 of 2018 whereby a categorical finding is recorded by the learned DRT that S.A. has become infructuous giving liberty to the bank to proceed in case any amount found due. It means at that stage learned DRT was satisfied that no amount was due to the appellant. But subsequently bank found certain amount was due against the appellant and a demand notice was issued which was challenged on different forum, the fact of which is narrated above. Hence, it cannot be accepted that appellant was not diligently pursuing his proceedings rather he has pursuing the proceeding bona fidely and diligently. Hence, I am of the considered view that the appellant is entitled for the benefit of Section 5 of Limitation Act. Accordingly, appeal deserves to be allowed.

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O R D E R

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