Dismissed

Jeevan Prashram Birje v. Union Bank of India

DRT18 Jul 2022SA/173/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal II, Bengaluru addressed an interim application seeking condonation of delay for filing a securitization application challenging a sale certificate. The court held that DRTs lack the power to condone delay for Section 17 appeals under the SARFAESI Act and dismissed the petition, staying the main appeal's disposal.

What did the court decide?

Dismissed the interim application for condonation of delay and consequently dismissed the securitization application challenging the sale certificate. Directed the bank to register the sale certificat

Jeevan Prashram Birje versus Union Bank of India — Banking and Recovery | DRT (2022)

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IN THE DEBTS RECOVERY TRIBUNAL II, KARNATAKA AT BENGALURU

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Dated this the 18^th day of July, 2022

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Present: SMT. S. V. GOWRAMMA Hon`ble Presiding Officer

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I.A. No.1035/2022 in

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SA.No.173/2022

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BETWEEN:

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Jeevan Prashram Birje, S/o. Prashram Birje, Director,

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M/s. Vaijanath Industries Pvt. Ltd., R/at S.R.No.15 Malaprasha Nagar, TagginGalli, Belgavi – 590005

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Deepak Parashram Birje, S/o. Prashram Birje Director,

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M/s. Vaijanath Industries Private Limited S.R.No.15, Malaprabha Nagar, TagginGalli, Belgavi - 590005

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… APPLICANTS

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AND

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The Authorized Officer, Union Bank of India Registered Office, 1049/B-2, Tilakwadi, Khanpur Road, Blegaum – 590006

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M/s. Master Precision, Represented by its Partners a) Sanjeev V.Patil b) Baswanth P Parmoji Plot No.7/2, Gajanan Nagar, Behind K.E.B. Sub Station, Udyambag, Belgavi - 590008

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…. RESPONDENTS

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S.A. No. 173/2022

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Counsels on record/appeared for:

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Applicant : Mr. A. Mahammed Tahir with Mr. M. Mohammed Ibrahim Respondent 1 : Mr. M.V. Kini Respondent 2 : Mr. Anil Kumar

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ORDER on IA No.1035/2022

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The present Securitization Application is filed under sub section [1] of S.17 of the Securitization And Reconstruction of Financial Asset and Enforcement of Security Interest Act,2002 (for short the ‘Act’) challenging the action and the measure taken by the secured creditor under the Security Interest [Enforcement Rules, 2002 [for short the Rules]

¶22

The Sale Certificate dated 19.11.2021 is impugned in the present SA and the amount outstanding due in the loan account is Rs.3,49,73,916/- (Rupees three crore forty nine lakh seventy three thousand nine hundred and sixteen only) along with interest and other charges as Annexure, A-8 sale notice dated 08.07.2021.

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The first applicant and the second applicant are the Directors of M/s. Vaijanath Industries Pvt. Ltd. The first respondent is the bank/secured creditor, and the second

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respondent is the auction purchaser who has purchased the property in the auction held on 18.08.2021.

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Admittedly, the present SA is filed on 07.04.2022 with a delay of 107 days in challenging the certificate dated 19.11.2021. Hence, the applicant has filed an IA.No.1035/2022 a petition to condone the delay of 107 days in filing the present appeal.

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Along with the delay application, the affidavit of the 1^st applicant is filed submitting that the appeal be read as part and parcel of the affidavit and the SA is filed aggrieved by the sale certificate dated 19.04.2021. It is submitted that the bank has initiated proceedings under the Act by issuing the notice u/s.13(4) on 11.02.2021 which is challenged by the applicants in SA.No.91/2021 on 22.02.2021 and the present SA is filed challenging the sale certificate issued under Rule 9(6) of the SIE Rules for immovable property and contends that the same is a continuation of SA.No.91/2021.

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It is further submitted that the Hon’ble Supreme Court vide Order dated 10.01.2022 in Suo motu Writ Petition (C) No.3 of 2020 has excluded the limitation period from 15.03.2020 till 28.-02.2022. Hence, in view of the aforesaid order this Tribunal

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may please to condone the delay if any in filing the present application and hence prays for condonation of delay of 107 days.

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The respondent bank has filed their objections to the main SA and to delay application contending that the applicant has filed the IA on 07.04.2022 u/s.5 read with S.14 of the Limitations Act for condonation of delay in filing the appeal is not maintainable in facts and in law.

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The bank denies the contents of the affidavit submitting that the applicants are not competent to file the appeal as well as the IA’s as they are not having any authority to the file the appeal/IA’s on behalf of the Borrower Company M/s. Vaijanath Industries P Limited or in their individual capacity.

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It is further submitted that the present appeal is challenging the sale certificate dated 19.04.2021 said to have been issued by the bank (in fact the sale certificate has been issued by the bank on 19.11.2021 not on 19.04.2021 as stated in the appeal and the appeal has been filed on 07.04.2022. As per S.17(1) of the SARFAESI Act the appeal is required to be filed within 45 days from the date of measure taken by the bank and as the appeal is not within the stipulated time prescribed the

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appeal is barred by limitation, hence, prayed for dismissal of the IA with cost.

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The 2^nd respondent / Auction Purchaser has also filed his objections to the SA inter-alia contending that the 2^nd respondent is the Company who are running the business of manufacture of steel items with the name M/s. Master Precision represented by their partners (a) Sanjeev V. Patil and (b) Baswanth P Parmoji.

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The 2^nd respondent purchased the property as per the Auction held in the month of August 2021 after following all the procedures under the Act and the property sold to the successful bidder, i.e., Respondent no.2 Auction Purchaser for Rs.5,51,00,000/- (Rupees five crore fifty one lakhs only) under Rule 9(6) of the Act.

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The 2^nd respondent made the payment and the sale certificate has been issued in their favour on 19.11.2021 and the possession of the property has been handed over to them and they are in possession and the enjoyment of the properties. Further the 2^nd respondent cleared the remaining outstanding dues and other litigation on the property in question and after enquiring with the respondent bank them came to know that there are some

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disputes among the Directors to which the applicants has filed WP No. 100144/22022(GM-DRT) and Writ Appeal No.100155/2022 in the High Court of Karnataka Dharwad Bench which has been disposed of on 22.03.2022 and also filed SA No.173/2022 before the Debts Recovery Tribunal DRT-II at Bangalore.

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As per the Order in WA No.100155/2022 as per the order dated on 05.04.2022, the respondent bank is directed to maintain the status quo and not to register the property which in dispute before Hon’ble Court. On 11.04.2022 order of stay continued for further period of 1 week and an application to implead the auction purchaser came to be allowed. registration stamp duty paid at the stamp duty dated 20.01.2022

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The 2^nd Respondents submits that they have paid the stamp duty of 28,23,700 and penalty of Rs.1,13,000 to the SubRegistrar and from the date of 19.04.2022 the charges will be increased to 2.5% as per letter from the Kolhapur Head Office treasury Depart. The time duration for the registration is 8 months from the date of sale letter dated 19.11.2021 any delay for further will be 2.5% fine will be imposed along with the registration charges. Due to disputes amongst the Directors, applicant is paying penalty running to lakhs together.

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The Respondent bank no.1 has sold the property to respondent no.2 is not in the situation to obtain the government approvals for starting of their factor as the title deed in not transferred in their company name.

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The High Court disposed of the writ petition No.100144/2022 dated. 22.03.2022 with a direction to restore SA.No.91/2021 within 60 days from the date of the receipt of the Order and for payment of Rs.1,00,00,000/- to be deposited by petitioner shall be transferred to the DRT failing which the same will be refunded to the petitioners within 21 days. However, the applicants have filed Writ Appeal No.100155/2022 obtained the stay to register the property and extension of stay is continued till next date of hearing.

¶45

The applicants have not approached the Bangalore DRT for restored SA.No.91/2021 and SA.No.173/2022 which is filed challenging the sale certificate which was posted on 23.05.2022 and the applicants have taken time and without contesting the case continued the matter with the High Court by misleading the Court. The respondent, who is the Auction Purchaser has availed loan from Maharashtra Bank and purchased the property with investment of Rs.5.51 crores and is paying the EMI and other charges without starting the plant and operation of the business.

¶46

The respondent no.2 came to know about the dispute among the Directors and that the case in NCLT with C 61/MB/2022 at Mumbai Bench against the appellants and the NCLT has passed an Order dated 22.04.2022 against the applicants herein.

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It is further submitted that the applicants were given sufficient time to repay before the e-auction and now the applicants in order to mislead the court have filed cases which is multiplicity of proceedings and waste of the valuable time of the High Court with a delay with an intention only to harass the second respondent.

¶48

The second respondent has purchased the property as per the procedures but due to dispute among the Directors, the 2^nd respondent is facing problems after investing huge amount on the project, hence, pray for dismissal of the petition and direct the respondent no.1 bank to register the property favoring the 2^nd respondent herein.

¶49

Heard the arguments of the Ld. Counsels appearing for respective parties on the delay application and perused the records.

¶50

The preliminary issue for consideration in the present SA is whether the challenge to sale certificate dated 19.11.2021

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is within the period of 45 days ? and whether the Tribunal has the power to condone the delay to the application filed under S.17 of the Act ?

¶53

Before proceeding further, it is apt to cull out the background of the case leading to filing of the present SA.

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The applicants are the Directors of M/s. Vaijanth Industries Pvt Ltd., M/s. Vaijanth Industries Pvt Ltd., is the borrower and Directors of the Company, namely a) Girish T. Huddar b) Sneha Girish Huddar c) Dayanand M. Shastri d) Mallappa C. Shastri along with the applicants had filed SA.No.91/2021 challenging the S.13(4) possession notice dated 11.02.2021.

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The applicants being the additional Directors of the Company though had filed SA.No.91/2021 along with other Directors has filed the present SA without the authorization of the borrower company, hence the Tribunal had posed a question about the authority of the applicants to file the present SA.

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The Ld. Counsel for the applicant relied on the board resolution dated 18.02.2022 which was produced by the second respondent i.e., the auction purchaser and respondent bank has

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also produced the board resolution dated 18.02.2022 as Annexure-4 (Pg 13) of DC No.4427/2022 filed on 12.07.2022.

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It is an admitted fact that there are disputes amongst the Directors of the Company and the Director has approached the Hon’ble National Company Law Tribunal, Mumbai in CP.No.61/MB/2022. The respondent bank has also produced the Order dated 22.04.2022 passed by the Hon’ble NCLT, Mumbai. On perusal of the board resolution dated 18.02.2022 and the Order dated 22.04.2022 passed by the Hon’ble NCLT, Mumbai, it is manifest from the Order that the Hon’ble NCLT has restrained the Company M/s. Vaijanath Industries Private Limited, in implementing the operation of the resolution dated 18.02.2022.

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Additionally, the Board resolution dated 18.02.2022 is not passed by the Board of Directors or it does not carry the seal of the Company nor the signatures of the other Directors member present. The only signature seen on the board resolution is of the applicants herein. It is also pertinent to note that the said board resolution which is being relied upon by the applicant is after the disposal of SA. No.91/2021 on 16.12.2021 and after the Order dated 20.01.2022 passed by the Hon’ble High Court in W.P. No.100144/2022 remanding SA.No.91/2021 for reconsideration.

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Therefore, the applicants relying on the board resolution dated 18.02.2022 would not come to salvage the position of the applicants that they have authorization from the Company to file the present SA. Even otherwise, evidently the admitted fact in SA.No.91/2021 that there has been disputes among the Directors and criminal proceedings are initiated and proceedings before Hon’ble NCLT are pending against each other. Hence, the present SA filed by the applicants as Directors of the borrowing Company is not maintainable on this ground itself.

¶63

It is discernible from the records that the Tribunal vide order dated 02-02-2021 in IA.No.428/2021 [SA.No.91/2021] had granted an interim order of stay of possession notice dated 11-02-2021 on conditional payments of Rs.1.5 crore in three installments; the 1^st installment of Rs.50 lacs on or before 10.03.2021, 2^nd installment of Rs. 50 lacs on or before 30.03.2021 and the 3^rd installment of Rs.50 lac on or before 15.04.2021.

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The Tribunal had clarified that in case of default in conditional payment, the interim order would stand vacated. It is matter of record that the applicants could not comply with the payment of the interim order resulting in vacating of the stay order on 23-08-2021. Hence, the bank proceeded further and has put

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the property to auction, which has fructified into issuance of sale certificate favoring the successful bidder.

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The Ld. Counsel for the bank intimated the Tribunal vide proceeding dated 25-08-2021 that the property is sold on 1808-2021 and the Tribunal recording the same on 06-12-2021 which is also conceded by the applicant disposed the SA as settled between the parties.

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However, the Applicant No.1 Jeevan Parasharam filed an I.A.No. 1006/2022 in SA.No.91/2021 represented by Advocate A. Mohammed Tahir to restore ASA No.91/2021 (wrongly mentioned as ASA instead of SA) as per the Order dated 22-032022 of the Hon’ble High Court of Karnataka, Dharward Bench in W.P. No.100144/2022.

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It is seen from the Order that the W.P.No.100144/2022 came to be allowed setting aside the order of disposal of ASA No.91/2021 in part, restored the ASA on file of DRT for complete and final adjudication within 60 days from the date of receipt of the order. It further held that the court has not expressed any opinion on the auction being carried out.

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In the meanwhile, the Applicant No.1 & 2 has filed the present SA.No.173/2022 on 07-04-2022 challenging the sale certificate dated 19-11-2021 during the pendency of W.P. No.100144/2022 before the Hon’ble High Court of Karnataka, Dharwad Bench, which came to be allowed in part, remanding the matter SA.No.91/2021 for reconsideration. However, it is seen that the applicants herein preferred WA.No.100155/2022 wherein this Tribunal is directed to hear the remanded matter SA.No.91/2021 along with SA.No.173/2022 and further not to register the sale certificate and the same was subject to the outcome of SA. No.91/2021.

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It is discernible from the records that SA.No.173/2022

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is filed impugning the sale certificate date 19-11-2021 by the Applicants No.5 Deepak Prashram Birje and Applicant No.6-Jeevan Parashram Birje in SA. N0.91/2021, however, the other applicants in SA. No.91/2021 i.e., Applicants No.1,2,3,4 and 7 being the borrower Company and the Directors as well as the mortgagor are not aggrieved by the sale held by the bank as is evident from the affidavit filed by the Applicants No.1 to 4 & 7 in SA. No.91/2021.

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The Sale proceeds from the auction sale held is credited to the loan account by the Respondent bank, which is utilized by

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borrower Company for payment of statutory dues, sundry creditors, and other business purposes.

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Further the Appellants Nos. 1,2,3,4 and after service of notice for rehearing the matter were present personally. The Applicant No.4 is the son of the Applicant No.7 has filed Memo on 27-06-2022 submitting that his father Sri.Mallappa C Shastri is at USA due to ill health of his sister and unable to appear before this Tribunal.

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The Appellants Nos. 1,2,3,4 vide individual affidavits dated 27-06-2022 contended that the affidavit filed on 12-042022 be treated as part and parcel of this affidavit and the same is filed after the matter is reopened as per the direction of the Hon’ble High Court of Karnataka, Dharwad Bench in W.P.No.100144/2022 and in WA.No.100155/2022. Due to differences between the Directors the company stopped functioning and on personal grudges cases are filed against each other.

¶79

It is categorically admitted in the affidavit that the bank has followed the procedures under the Act and have sold the mortgaged property to M/s. Master Precision which is not a continuous cause of action and prays for disposal of the matter.

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It is a matter of record that the Applicants No. 1,2,3,4 & 7 [SA.No.91/2021] avowed that they do not intend to proceed in the matter and self-proclaimed and asserted that the bank has sold the property under public auction; the sale proceeds is appropriated towards the loan account and the balance amount is received by them which is used to pay other dues of the company and submits there is no requirement for re-opening the matter.

¶82

The present SA is filed on 07.04.2022 with a delay of 227 days in challenging the sale notice dated 08.07.2021; delay of 187 days in challenging the sale held on 18.08.2021; and with a delay of 94 days in challenging the sale certificate dated 19.11.2021. However, the applicant has filed an IA.No.1035/2022 a petition to condone only the delay of 107 days in filing the present appeal.

¶83

The affidavit of the 1^st applicant is filed contending to condone the delay on two grounds firstly to read the averments of the SA as part and parcel of the affidavit and secondly has relied upon the Hon’ble Supreme Court Order dated 10.01.2022 in Suo motu Writ Petition (C) No.3 of 2020 where it excluded the limitation period from 15.03.2020 till 28.02.2022 and hence prays for condonation of delay of 107 days.

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It is discernible from the averments made in the present SA from para 3 to part of para 16 pertains to the classification of account as NPA, issuance of S.13(2) notice and the issuance of S.13(4) notice are the same contentions as averred in SA.No.91/2021. The averment made in SA.No.91/2021 is already considered by this Tribunal and a detailed order has been passed in SA.No.91/2021.

¶86

The challenge to the sale certificate dated 19.11.2021 which is from para 17 onwards in the present SA, clearly reflects that there is no challenge to the sale notice dated 08.07.2021 and to auction sale held on 18.08.2021. Even otherwise, the applicant without challenging the sale notice and the sale held cannot challenge the sale certificate in isolation as the sale certificate is issued pursuant to the issuance of sale notice and to the proceedings of auction held. In fact the averments in respect sale certificate there is no case made out or the applicant has pointed any illegality in the issuance of sale notice or in the auction held.

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Per contra, it is an admitted fact that there are disputes among the Directors of the Company and the Director had approached the Hon’ble NCLT, Mumbai in CP.No.61/MB/2022. The Hon’ble NCLT vide Order dated 22.04.2022 has restrained the

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Company M/s. Vaijanath Industries Private Limited, in implementing the operation of the resolution dated 18.02.2022

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Even otherwise, it is matter of records that there are disputes among the Directors of the Company which are pending before appropriate courts. It is also admitted fact that the applicant has invoked the writ jurisdiction of the Hon’ble High Court of Dharwad wherein the High Court has directed this Tribunal to hear SA No.91/2021 wherein the present applicants along with the other Directors of the company had challenged the S.13(4) notice.

¶91

The Tribunal heard the arguments on the main SA.No.91/2021 and an Order is also being passed along with this SA.No.173/2022, as per the direction of Hon’ble High Court.

¶92

In the instant matter, the Tribunal without going into the disputes between the Directors of the Company is proceeding further in the matter in ascertaining whether the present application challenging the sale certificate dated 19.11.2021 is within the period of 45 days as mandated under the Act.

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For better appreciation, S.17(1) is extracted.

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Application against measures to recover secured debts (1) Any person (including borrower), aggrieved

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by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, [may make an application alongwith such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:

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[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.]

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[Explanation.- For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section(1) of section.17.]

¶99

A reading of the above provision is clear that any person aggrieved by any measures under S.13[4] is required to approach the Tribunal under S.17 within 45 days from the date of the measure.

¶100

In the instant matter challenge to sale certificate dated 19.11.2022 under S.17 of the Act is filed only on 07.04.2022 with an application to condone the delay of 107 days without any justification, but placing reliance on Order of the Supreme Court in Suo motto case for condoning the delay in preferring the appeal under S.17 of the Act.

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The Tribunal is mindful of the Suo Motu Cognizance for extension of Limitation in Re (2020) 9SCC Pg.468 had extended the limitation period for filing in all Courts and Tribunals effective from 15^th March 2020 till further order vide order dated 08^th March 2021, the suo motto proceedings were disposed of directing that in computing the period of limitation, the period from 15^th March 2020 till 14^th March,2021 shall stand excluded

¶103

The reliance of the Order of the Supreme Court would not come to the rescue of the applicants as there is no averment or submission that the applicant could not challenge the measures within 45 days due to pandemic or any justifiable reason made out in not filing the SA belatedly to avail the benefit of the Order. Further, the applicants were not prevented by the pandemic from taking steps to approach this Tribunal within 45 days whereas the applicant had invoked the writ jurisdiction challenging the sale certificate dated 19.11.2021 inspite of being aware of the statutory remedy available to them and had also challenged the possession notice dated 11.02.2021 in SA.No.91/2021.

¶104

Furthermore the challenge to the sale certificate is dated 19.11.2021 where the limitation period extended by the Hon’ble Supreme Court ended on 31.03.2021. In the instant

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matter the respondent bank had issued the possession notice dated 11.02. which is challenged by the applicants in SA.No.91/2021, but they have not chosen to challenge the sale notice dated 08.07.2021, auction sale held on 18.08.2021 and the issuance of sale certificated 19.11.2021 within 45 days and the said sale notice and action of the respondent bank is evidently after the extended period of limitation dated 31.03.2021. Hence, the Order of the Supreme Court in Cognizance for extension of limitation would not be applicable to the facts of the present case. In the delay application there is only a mention of the Order of Supreme Court without there being any pleading or averment to that effect.

¶107

The statement that the delay to be condoned placing reliance of the Hon’ble Supreme Court order for extension of limitation appears to be one of convenience in an effort to take the benefit of the extension of limitation period on account of Covid-19. The Tribunal would place reliance on the judgment of The Hon’ble Supreme Court in Sagufa Ahmed v. Upper Assam Plywood Products (P) Ltd., (2021) 2 SCC 317 was dealing with a case in which the National Company Law Appellate Tribunal (NCLAT) had dismissed the application for condonation of delay vide order dated 18^th September, 2020, the Supreme Court while

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referring to its orders dated 23^rd March, 2020 in the sou motu petition, held as follows:-

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“17 . But we do not think that the appellants can take refuge under the above order in Cognizance for Extension of Limitation, In re[Cognizance for Extension of Limitaton, In re, (2020) 19 SCC 10: 2020 SCC OnLine SC 343]. What was extended by the above order [Cognizance for Extension of Limitation In re, (2020) 19 SCC 10: 2020 SCC OnLine SC 343] of this Court was only “the period of limitation” and not the period up to which delay can be condoned in exercise of discretion conferred

¶111

by the statute . The above order [Cognizance for Extension of Limitation, In re, (2020) 19 SCC 10: 2020 SCC OnLine SC 343] passed by this Court was intended to benefit vigilant litigants who were prevented due to the pandemic and the lockdown, from initiating proceedings within the period of limitation prescribed by general or special law. It is needless to point out that the law of limitation finds its root in tow Latin maxims, one of which is vigilantibus et non dormientibus jura subeniunt which meas that the law will assist only those who are vigilant about their rights and not those who sleep over them.” (Emphasis added)

¶112

The benefit of the Order dated 23.02.2020 would be

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available to the vigilant litigant of their right and not to lethargic. There is also nothing in the orders of the Supreme Court that suggests that when an action has not been taken within the prescribed period of limitation, the merits of the

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application for condonation of delay need not be looked into and the same is to be allowed automatically. Only where the limitation has expired during the lockdown and even the extended period, which can be allowed in discretion of the court, also expired in the lockdown period, a party can claim that no delay has occurred as the Supreme Court had enlarged limitation periods prescribed.

¶116

In the instant matter the applicant has invoked the Writ jurisdiction in challenging the sale certificate dated 19.11.2021 by which time the lock down was lifted and the Tribunal was functioning normally. Further it is not the case of the applicants that the Hon’ble High Court had granted liberty for condonation of delay. Hence, the present application for condonation of delay does not merit any consideration and the same deserves to be dismissed.

¶117

Though the Hon’ble High Court had directed this Tribunal for consideration and adjudication of SA.No.91/2021 along with SA.No.173/2021 had not granted any liberty to applicants or any direction to the Tribunal to condone the delay in preferring the SA.

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Though the applicants who are Directors of the Company had challenged the possession notice dated 11.02.2021 before this Tribunal in SA.No.91/2021 on 22.02.2021 have not challenged the sale notice dated 08.07.2021 wherein the auction sale is held on 18.08.2021 resulting in issuance of sale certificate on 19.11.2021 which incidentally are within the knowledge of the applicants and other Directors in SA.No.91/2021 had also filed an affidavit submitting that they do not intend to proceed with the measures as the property is sold and the sale proceeds are also appropriated towards the loan account.

¶120

When such being the situation, the present SA is filed in view of the differences of opinion between the Directors challenging the sale certificate issued on 19.11.2021 when the borrower and mortgagors do not have grievance with the auction sale held.

¶121

It is a settled legal proposition that law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes. The Tribunal has no power to extend the period of limitation on equitable grounds and has no power to ignore that provision to relieve what it considers a distress resulting from its operation as per the Judgement of

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Hon’ble Supreme Court in the matter of P.K. Ramachandran vs. State of Kerala , reported in (1997) 7 SCC 556, the Hon’ble Supreme Court has held thus:-

¶124

"Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds".

¶125

Hence, the legal maxim “dura lex sed lex” which means “the law is hard but it is the law”, stands attracted in such a situation.

¶126

The Tribunal relies on the Hon’ble Supreme Court observation in Maniben Devraj Shah v. Municipal Corporation of Brihan Mumbai, (2012) 5 SCC 157, while dismissing the SLP:

¶127

"The law of limitation is founded on public policy. The limitation Act, 1963 has not been enacted with the object of destroying the rights of the parties but to ensure that they approach the court for vindication of their rights without unreasonable delay. The idea underlying the concept of limitation is that every remedy should remain alive only till the expiry of the period fixed by the legislature. At the same time, the courts are empowered to condone the delay provided that sufficient cause is shown by the applicant for

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not availing the remedy within the prescribed period of limitation." It is thus clear that in a special law, when the statute does not prescribe for condonation of delay, the application of Section 5 of the Limitation Act does not arise.

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The Hon’ble Supreme Court in Bahiru Goverdhane v. Land Acquisition Officer, reported in (2013) 10 SCC 765 has held that the law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes.

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The question whether the Debt Recovery Tribunal can entertain an application under S.17 of the Act after 45 days of measure referred to in sub section [4] of S.13 is no more res integra. The Hon'ble Division Bench of Hon’ble High Court of Kerala in Writ Appeal No.1797 of 2009 in W.P.(C) No.22192 of 2007 in the case titled K.P Jayan vs. Hong Kong & Shanghai Banking Corporation Ltd and others decided on 31.08.2015 had categorically held that the power to condone delay in entertaining an application under Section 17 of the SARFAESI Act is not conferred on the Debts Recovery Tribunal. It further held that the Debts Recovery Tribunal cannot consider an application for condonation of delay under Section 5 of the Limitation Act in an

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application under Section 17 of the SARFAESI Act. The relevant paras are extracted as under:

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“7. Referring to these provisions the contention urged before us is that since section 24 of the RDB Act makes Limitation Act applicable and as the DRT constituted under the RDB Act is conferred with jurisdiction under section 17, Limitation Act governs applications made in a proceedings under section 17 also. We are unable to accept this contention. Both the RDB Act and the SARFAESI Act are independent enactments, although certain provisions of the RDB Act are made applicable in respect of the proceedings under the SARFAESI Act also. However, that does not mean that every provision of the RDB Act would apply to every proceedings initiated under the SARFAESI Act. In so far as this case is concerned, proceedings were initiated under SARFAESI Act and in view of the provisions contained in section 17 conferring jurisdiction on the DRT constituted under RDB Act application is made by the appellant before the DRT. That does not mean that provisions of section 24 of the RDB Act governing the proceedings taken thereunder would get automatically attracted to such proceedings before the DRT. Therefore, the contention raised relying on section 24 in so far as this case is concerned is only to be rejected and we do so. This is further clear from section 36 of the SARFAESI Act, which confines the applicability of the Limitation Act to measures under section 13(4) of the said Act.

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Further, the Hon’ble High Court of Kerala has also considered the issue in case titled The Authorised Officer, Indian Bank Vs. K.J. George, order dated 02.11.2020 has placed reliance on K.P. Jayan V. Hong Kong & Shanghai Banking Corporation and has held the same, that DRT has no power to condone the delay u/s.17 of the Act.

¶137

Further the Hon’ble High Court of Kerala has also relied upon the case titled Baleshwar Dayal Jaiswal V. Bank of India and Others, reported in (2016) 1 SCC 444 where the Supreme Court was considering whether the DRAT has the power to condone the delay in filing the application u/s.18(1) of the SARFAESI Act, has held that S.5 of the Limitation Act are excluded from S.17 by not making any provision enabling the Tribunal to condone the delay. The relevant para of the judgment is as under :-

¶138

“4.3 Provisions of the Limitation Act can stand excluded not only by an express provision of a local or special law but also by necessary implication from the scheme of such local or special law. The scheme of the SARFAESI Act by making the Limitation Act expressly applicable to measures under Section 13(4) of the Act impliedly excludes the said Act from the appeals or other proceedings”.

¶139

The Tribunal place reliance on the case titled International Asset Reconstruction Company of India

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28 I.A.No.1035/2022 IN S.A. No. 173/2022

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Limited v. Official Liquidator of Aldrich Pharmaceuticals

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Limited and Others, reported in (2017) 16 SCC 137 where it has considered whether S.5 of the Limitation Act can be invoked to condone the delay u/s.30(1). The relevant para of the judgment is as under:-

¶143

In the matter of International Asset Reconstruction Company of India Limited (supra) relied by the learned counsel for the petitioner, the question was whether Section 5 of the Limitation Act can be invoked to condone the delay occurring beyond the prescribed period of 30 days, under Section 30(1) of the RDB Act. Paragraph 13 of the said judgment reads thus:

¶144

“13. The RDB Act is a special law. The proceedings are before a statutory Tribunal. The scheme of the Act manifestly provides that the Legislature has provided for application of O.P (DRT) No.73 of 2018 26 the Limitation Act to original proceedings before the Tribunal under Section 19 only. The appellate tribunal has been conferred the power to condone delay beyond 45 days under Section 20(3) of the Act. The proceedings before the Recovery officer are not before a Tribunal. Section 24 is limited in its application to proceedings before the Tribunal originating under Section 19 only. The exclusion of any provision for extension of time by the Tribunal in preferring an appeal under Section 30 of the Act makes it manifest that the legislative intent for exclusion was express. The application of Section 5 of the Limitation Act by resort to Section 29(2) of the Limitation Act, 1963 therefore does not arise. The prescribed period of 30 days under Section 30(1) of the RDB Act for preferring an appeal against the

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order of the Recovery officer therefore cannot be condoned by application of Section 5 of the Limitation Act”.

¶147

It is thus clear that the Hon'ble Supreme Court has held that in a special law when the statute does not prescribe for condonation of delay, the application of Section 5 of the Limitation Act does not arise.

¶148

The Tribunal would also rely on the Hon’ble High Court of Orissa Order dated 12.05.2021 in the case titled BM

¶149

The Urban Co-operative Bank Ltd., V. Registrar, Debts Recovery Tribunal and another’s held the Limitation not applicable to DRT.

¶150

The Tribunal relying on the above judgments concludes that this Tribunal cannot condone the delay in filing the application u/s.17 of the SARFAESI Act.

¶151

For the foregoing reasons, the present IA. No. 1035/2022 a petition to condone the delay fails. Accordingly, IA.No.1035/2022 stands dismissed. Consequently, SA.No.173/2022 is also dismissed. The respondent bank is directed to register the Sale Certificate dated 19.11.2021 in accordance with law. Pending IA’s

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if any does not survive and the same is disposed of. No order as to cost.

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30 I.A.No.1035/2022 IN S.A. No. 173/2022

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(Dictated to the Stenographer (LR), after its transcription and necessary corrections, signed and Order is passed on this day 18^th July 2022)

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Sd/-

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PRESIDING OFFICER DRT-2, BENGALURU

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APPENDIX

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LIST OF DOCUMENTS PRODUCED BY THE APPELLANT

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Sl No.	Particulars	Annexure
1	A copy of the demand notice dated 19.09.2020	A
2	A copy of the Possession notice dated 11.02.2021	A-1
3	A copy of the interim order dated 25.02.2201 passed in W.P.No.100144/2022	A-2
4	A copy of the order dated 06.12.2021 passed in SA No.91/2021	A-3
5	A copy of the order dated 20.01.2022 passed in W.P. No.10044/2022	A-4
6	A copy of the order dated 28.01.2022 passed in W.P.No.10044/2022	A-5
7	A copy of the order dated 07.03.2022 passed in W.P.No.10044/2022	A-6
8	A copy of the Final Order dated 22.03.2022 passed in W.P.No.10044/2022	A-7
9	A copy of the E-Auction sale notice dated 08.07.2021	A-8
10	A copy of the sale confirmation letter dated 19.08.2021	A-9
11	A copy of the sale certificate dated 19.04.2021	A-10
12	A copy of the order dated 05.04.2022	A-11
13	A copy of the statement accounts of the Appellants	A-12

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENT

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Sl	Particulars	Annexure
No.
1	Sale Notice dated 08.07.2021	A1
2	Affidavit filed by Appellant 01,02,03,04 & 07, in	A1(a)

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31 I.A.No.1035/2022 IN S.A. No. 173/2022

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	SA.No.91/2021, admitting the fact of Sale and procedures followed by the Respondent Bank, etc. on 12.04.2022
3	Postal Acknowledgement Card for having served the Sale Notice to Appellant No.1	A2
4	Postal Acknowledgement Card for having served the Sale Notice to Appellant No.3	A3
5	Valuation Report in respect of property No.120/1/2, 120/2/3, 120/3/2 dt. 12.06.2021, 18.06.2021 & 20.06.2021	A4 (a) (b) (c)
6	Valuation Report in respect of property No.107/1 & 107/2 + 3 + 4 dated 23.02.2021, 25.02.2021 & 20.06.2021	A5 (a) (b) (c)
7	Sale Certificate dated 19.11.2021	A6
	Memorandum of Association dt. 24.02.2008 of M/s. Shri Vaijanath Industries Pvt Ltd. (Borrower Company)
	Articles of Association of M/s. Shri Vaijanath Industries Pvt. Ltd. (Borrower Company)
	Certificate of Resolution M/s. Shri Vaijanath Industries Pvt. Ltd. (Borrower Company)
	Demand Notice dated 01.09.2020 issued under S/13(2) of SARFAESI Act, 2002	A1
	Postal acknowledgement for having sent the Demand Notice to Appellant No.1	A2
	Postal acknowledgement for having sent the Demand Notice to Appellant No.2	A3
	Demand Notice dt. 20.11.2020 issued u/s.13(2) of SARFAESI Act published in English Newspaper	A4
	Demand Notice dt. 20.11.2020 issued u/s.13(2) of SARFAESI Act published in Kannada Vijayavani Newspaper	A5
	Possession Notice dated 11.02.201 issued under section 13(4) of SARFAESI Act, 2002	A6
	Postal acknowledgement in respect of possession notice to Appellant No.1	A7
	Postal acknowledgement in respect of possession notice to Appellant No.2	A8
	Possession Notice dated 13.02.2021 published in	A9

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32 I.A.No.1035/2022 IN S.A. No. 173/2022

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Kannada Prajawani daily newspaper Possession Notice dated 13.02.2021 published in English Hindu newspaper	A10
Sale Notice dated 08.07.2021
Sale Notice published in Hindu English newspaper dated 08.07.2021
Sale Notice published in Tarun Bharat Marathi Newspaper dated 08.07.2021
Copy of Board Resolution of Appellants dated 18.02.2022 (which has been stayed by NCLT, Mumbai dated 22.04.2022)
Copy of NCLT Order Court 1 Mumbai, in CP 61/MB/2022 dated 22.04.2022 (stayed in implementing and operating the above Resolution dated 18.02.2022)
Affidavit filed on 12.04.2022 by Appellant 01,02,03,04 & 07, in SA 91/2021, admitting the fact of Sale and procedures followed by the Respondent Bank, and handing over the possession of the Properties to the purchaser (Respondent No.2 in SA No.173/2022) etc.	A1
Affidavit filed on 27.06.2022 by Appellant 01 (M/s. Vaijanath Industries Private Limited) in SA No.91/2021, admitting the fact of Sale and procedures followed by the Respondent Bank, and handing over the possession of the Properties to the purchaser (Respondent No.2 of SA No.173/2022) etc.	A2
Affidavit filed on 27.06.2022 by Appellant 02 (Mr. Girish T Huddar) in SA.No.91/2021, admitting the fact of sale and procedures followed by the Respondent Bank, and handing over the possession of the Properties to the purchaser (Respondent No.2 of SA.No.173/2022), etc.	A3
Affidavit filed on 27.06.2022 by Appellant 03 (Sneha Girish Huddar) in SA.No.91/2021, admitting the fact of Sale and procedures followed by the Respondent Bank, and handing over the possession of the Properties to the	A4

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S.A. No. 173/2022

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purchaser (Respondent No.2 of SA No.173/2022), etc. Affidavit filed by Appellant 04 (Dayanand M. A5 Shastri) & 07 (Mr. Mallappa C Shastri) in SA No.91/2021, admitting the fact of Sale and procedures followed by the Respondent Bank, and handing over the possession of the Properties to the purchaser (Respondent No.2 of SA No.173/2022), etc.

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Sd/PRESIDING OFFICER DRT-2, BENGALURU

Jeevan Prashram Birje v. Union Bank of India

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Jeevan Prashram Birje v. Union Bank of India

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