The Tribunal dismissed the application for condonation of delay in filing an appeal under Section 17 of the SARFAESI Act, holding the Tribunal lacks power to condone delays as the Act does not provide for it.
Condonation of delay dismissed; Main Section 17 appeal also dismissed with liberty to apply for another.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE DEBTS RECOVERY TRIBUNAL-I, KARNATAKA AT BENGALURU
Dated this the 17th day of August 2022
PTesent: Sri IMTIAZ ALI Presiding Officer
I.A.No,1319/2022 in
s.A. No.3lal2022
BETWEEN:
Both are residing at No.101, 1't Floor, BSR Koorla Residency, Property No.56/2, Kogilu Village, Yelahanka Hobli, Bangalore North Taluk, Bangalore-560 063
.. APPELLANTS
AND:
\ t, f \
r.a.No,1319/2022 in s.a.No.318/2022
2
Authorized Signatory
" RESPONDENTS
Counselson record/aDoearedfor: Appellants : SriV RaviPrakash Re;pondent No 1 : Flr Francisxavier of Fx & Co' RespondentsNo.2 to 5: Absent
FINAL ORDER
I
I.A.No.1319/2022 in s.A.No.318/2022
\
I.A.No.1319/2022 in S.A.No.3r8/2022
\
Apartment Ownerschallengedthe impugnedorder dated 16.03.2021passed inCrl.Misc.No.5821/2020,by filing Wrlt Petition No.641Ol2021before the Hon'ble High Court of Karnataka whichcame to be dismissed by the Hon'bleHigh Court vide its orderdated 23.04'2021 reserving liberty to the Petitioners to seekappropriate relief under Section 17 of the Act before theDebts Recovery Tribunal. The Appellantsalong with otherApartmentOwnerswho were aggrieved by the impugned orderfiled CriminalRevisionPetitionNo 22412021 on the file of theCity Civil And SessionsJudge, Bangalore which ispendingconsiderationThegrounds, inter alia,urged by the Appellantsin the appealmemorandumare, the Appellantsprior topurchaseof the Schedule-Bproperty had verified the encumbrancecertificate,but no entries of deposit of title deedsor titledeedsor mortgage deed were reflected and as such,the Appellants werenot aware and do not admit the transactionbetweenthe 1't Respondentand the2nd Respondent;no notice under Sections13(2)and 13(4) of the Act and rulesmade thereunderis issued, pasted on the scheduleproperty as per Rule 3 of the SecurityEnforcement Rules norpublished as required under Act and the rules made thereunder; 1'tRespondent has not compliedwith the requirement ofSection20 of the Act and the Schedule'A' Property has notbeen registeredunder the CERSAIas required underthe provisions of the AcU 1"t Respondentis
I.A.No.1319/2022 in s.A.No.318/2022
5
trying to dispossess the Appellants in a clandestinemethod without having any authority over the same; 1't Respondent ought to have verified the encumbrance certificateprior to initiating action under the Act since the registered sale deed executed by 2nd Respondent in favour of the Appellants would have been reflected in the encumbrance certificate; lst Respondent erred in registering the Memorandum ofDeposit of Title Deeds with incomplete detailsviz. the floor in which the apartment is situated at, undividedsharein the Schedule 'A' Property in respect ofeach apartment, car parking slots etc., and in respect of entire Schedule 'A'Property, the1't Respondent hand in glove with other Respondentshas intentionally not mentioned the conversionorder detailsand BBMP Khata number with a soteintention tobeneflt the Respondent No.2 and if the same had beenmentioned in the schedule of the alleged mortgage deed, theinnocent purchasers like the Appellants herein would not havegot cheated from the RespondentsNo.2 to 4;becauseof the fault committed by the RespondentNo.1, tilldate the entries of the indenture of mortgage deeddated 03.02.2077are not being reflected in the encumbrancecertificate andfurtherthe Respondent No.1 alsoerred infollowingdue procedureas contemplated in theprovisions of the Act With the foregoing
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I.A.No.1319/2022 ln S.A.No,318/2022
6
contentions andgrounds, the Appellants have flled the present appeal memorandumseekingfor settlngaside the impugned orderpassed by the LearnedMagistrate'
Along with the mainapplication,Appellants have filed the above I.A.with affldavit seeking to condone the delay of 380 days infiling the appeal memorandum.In the affidavit, inter alia, it is contendedthat the Appellantsalong with other Apartment Ownerson the advice preferred the present application beforethis Tribunal Appellantsfurthercontended that in view ofSection 14 of the LimitationAct, the present appealpreferredby the Appellants is within the period of the limitation. It is furthercontended that upon advice, the Appellants werepursuing the matter before other courtsand subsequently uponcoming to know about the provisionsof the Act, the Appellantshave preferredthe present application before this Tribunal;hencetheyhave sought for condoning the delay in approachingthis Tribunal as it was for the bona fide reasonsand not intentional.
I
LA.No.1319/2022 in s.A.No.318/2022
7
a matter of right and theparty who approaches the court should explain convincing reasons to condone day-to-day delay. The 1st Respondent denies the contention of the Appellants that they were not aware of the impugned order passed by the Learned Magistrate. Section 14 of the Limitation Actprovides that the ingredients required to be satisfied before invoking Section 14 of the Limitation Act are due diligence andgood faith. In the facts of the case, the Appellants have not established due diligence andgoodfaith. Instead of filing an appeal before thisTribunal asper the libertygiven by the Hon'ble High Courtin WPNo.6410/2021 dated 23.04.2021 within aperiod oflimitation,the Appellants rather opted to avail remedy ofrevision in Crl.Revision Petition No.224l2021 on the file of theLearned CityCivil Judge, at Bangalore, The 1stRespondent further contended that the Appellants have not exerciseddue diligencein the matter, they were totallycallousabout pursuing their appeal and they have not been able togive any plausibleor justifiable reason for condonation of delay ln view of the foregoing objections, the1st Respondenthas prayed for the dismissal of the applicationwith cost.
T
1.4.No.1319/2022 an S.A.No 318/2022
8
by the Counsels ofboth sides and the followingpoints arise
for my consideration:
b) To what relief, theparties are entitled?
REASONS
\
I.A.No.1319/2022 in S.A. No.318/2022
9
Admittedly the Appellants have filed thepresent appeal memorandum on t2.05.2022 challenging the Learned Magistrate's order dated 16.03.2021passed under Section14 of the Act to takephysicalpossession of thesecuredasset and to hand over the same to the secured creditor.Along with the application filed by them under Section17(1) of the Act, the Appellants have also filed the above LA.under Section 22(2)(H) of Recovery ofDebts Due toBanksand Financial Institutions Act, 1993, seekingto condone the delay of 380 days inpreferring the main application. The Appellants have notpreferred thesecuritizationapplication within 45 days from the date of theimpugnedorderpassedby the Learned Magistrate on16.03.2021. The Appellant havefiled the securitization application onL2.O5'2022and they themselves state that thereis a delay of 380 days in filingthe main application.
It is apt to call out Section17(t) of SARFAESI Act which states, "Right to appeal:(1) Any person(includingborrower), aggrieved by anyof the measuresreferredto in sub-section (4) of section 13 taken by thesecuredcreditor or his authorized officer underthis chapter, Imaymakean application alongwith such fee, as may be prescribedl to the Debts RecoveryTribunal having jurisdictionin the matter
I.A.No.1319/2022 in s.A.No.318/2022
10
within forty five daysfrom the dateon which such measures had been taken.
Further, the Tribunal has nopower to extend the period of limitation on equitablegrounds and hasno power to ignore thatprovision to relievewhat itconsiders a distressresulting from its operation asper theJudgment of Hon'ble Supreme Court in the matter ofP.K.Ramachandran vs. State of Kerala, reported in(1997) 7SCC 556, whereintheHon'ble Supreme Court has heldthus;-
"Law of limitationmay harshlyaffecta pafticular party but it has to be applied with all its rigourwhen the statute soprescribes and thecourts haveno power to extend the period of limitation on equitable grounds",
Hence, the legal maxim "duralex sed/ex" which means "the la!, is hard but itis the law", stands attracted.
\
Furthermore, in a speciallaw when the statutedoes not prescribe for condonation of delay, the applicationof Section 5 of the Limitation Act alsodoes not arise'Section14(3) of the SARFEASI Act excludes theapplicationof the Limitation Act 1963 and that the statutedoes not giveexpress power to the DRTS to condone delay.
1.A.No.1319/2022 in s.A.No.318/2022
11
\
The Tribunal relies on thejudgment of the Hon'ble High Court of Kerala in the case lilled K.P )ayan vs. Hong Kong & Shanghai Banking Corporation Ltd and ofhers decided on 31.08.2015, wherein the Hon'ble Division Bench has categorically held thatpower to condone delay in entertaining an application under Section 17 of the SARFAESI Act is not conferred on the Debts Recovery Tribunal. It has further held that the Debts Recovery Tribunal cannot consider an application for condonation of delay in an application under Section 17 of the SARFAESI Act. In the condonation of delay application, the Appellants have contended that they were bonafidelypursuing their remedy before other courts and in view of Section 14 of the Limitation Act, thepresent appeal preferred by the Appellants are within the period of the limitation. Rebutting the contentions of the Appellants, the1st Respondent in its statement of objections to the condonation of delay application has stated that Section 14 ofthe Limitation Actprovides that the ingredients required to be satisfied before invoking Section 14 of the LimitationAct are due diligence andgood faith. Inthe facts of thecase, the Appellants have not established due diligenceand goodfaith. Instead of filing an appeal before this Tribunal asper the liberty given by the Hon'ble High Court inW.P. No.6410/2021 dated 23.04,2021 within aperiod of limitation, theAppellants rather opted to avail remedy ofrevision in Crl.Revision
r.a.No.1319/2022 in 5.A.No.318/2022
12
\
Petition No.224l2021on the file of the LearnedCity Civil Judge, at Bangalore ltis seen from the copy of the Crl Misc' No.5821/2020produced by the Appellants alongwiththe appeal memo that1st Respondent has publishedthe demand notice dated 23.05.2019in two leading newspapers viz"'The New Indian Express",EnglishEditionand "Samyukta Karnataka", KannadaEdition, in vernacular language, both dated 06.06.2019.After more than a year, 1't Respondent published possession notice dated24.07.2O2O'When the demand notice waspublishedon 06.06.2019in the aforesaid newspapers, theAppellantsshould have taken stepsto approach the appropriateauthoritiestoaddresstheir grievance. As stated above, theTribunalhas no power to extend theperiod of limitation on equitable grounds and has nopower to ignorethat provisionto relievewhat it considers a distress resultingfrom its operation.Therefore, allowing the application forcondonationof detay which is devoid of bona fide reasonsand sufficient cause wouldnot only be beyond the mandateof Section 5 of the LimitationAct, but would be counter tothe very objects of the SARFAESI Act, which is legistatedfor expeditious realization of NPAdues by enforcement ofsecurityinterest by Banks and Financial Institutions likeRespondentherein. This Tribunal, therefore, finds that theI.A. No.1319/2022 cannotbe entertained andis
I.A.No.1319/2022 in S.A. No.318/2022
13
liable to be dismissed. Consequently, S.A.No.31B/2o22is also liable to be dismissed. In thatview of the matter, it is not necessary to examine othergrounds urgedby the Appellants in the SA, in light of our conclusion thatthe Appellants have failed to make out a case for condoningthe delayin preferring the SA. I, therefore, Pass following:
ORDER
In the result, I.A. No.1319/2022 forcondonation
of delay is dismissed.
Consequently, S.A. No.318/2022is also dismissed.
Interim order, if any, standsvacated. PendingIAs, if any, also stand closed.
There will be no order as tocost.
(Dictated to the StenoqraDher, after its transcription and necessary corrections, signedand pronounced by me in the Open Court on this17th day of August 2022)
\lt,b'" (IMTIAZ ALI) PRESIDING OFFICER DRT-I, BENGALURU
3 issues framed by the court
Whether the DRT can condone a delay of 380 days in filing an appeal under Section 17 of the SARFAESI Act applying Section 14 of the Limitation Act
Whether the SARFAESI Act excludes the application of Section 5 of the Limitation Act for condoning delays in appeals
Whether the Appellants established due diligence and good faith required under Section 14 of the Limitation Act by pursuing remedies in other courts
Colour shows how this judgement treated each authority
P.K. Ramachandran vs. State of KeralaExplained¶64
P.K. Ramachandran vs. State of Kerala (1997) 7 SCC 556 · Who else cites this
K.P. Jayan vs. Hong Kong & Shanghai Banking Corporation LtdApplied¶71
K.P. Jayan vs. Hong Kong & Shanghai Banking Corporation Ltd
3 provisions across 3 enactments
Mr K.C.S. Nair
Mrs Ammini K Nair
The Authorized Officer, FEDBANK Financial Services Limited
M/s B.S.R. Enterprises
Mr G. Praveen Kumar Reddy
Mr B. Raghavendra Reddy
IMTIAZ ALI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
