Dismissed

Mr Deepak K Wadhwa v. Fedbank Financial Services Ltd.

DRT17 Aug 2022SA/322/2022

Case brief

AI extract

What is this about?

Appeal admitted against a possession order under SARFAESI Act. Application for condonation of 380-day delay dismissed. Tribunal held it lacks statutory power to condone delay under Section 17 as Limitation Act provisions are excluded by Section 14(3) of SARFAESI Act. Main appeal barred by limitation.

What did the court decide?

IA No.1317/2022 for condonation of delay dismissed; consequently, S.A. No.3221/2022 dismissed; interim order vacated.

Mr Deepak K Wadhwa versus Fedbank Financial Services Ltd. — Company and Corporate | DRT (2022)

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LA.No.737712022 in s.A.No.32212022

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would be counter to the very objects of the^{SARFAESI Act,} which is legislated for expeditious^realization of^{NPA dues by} enforcement of security interest by^Banks and^Financial Institutlons like Respondent herein. This^{Tribunal, therefore,} finds that the I.A. No.l3t7/2022 cannot be entertained^andis liable to be dismissed. Consequently, S.A'^{No.322l2O22is} also liable to be dismissed. In that^{view of the matter, it is} not necessary to examine other^grounds urged^{by the} Appellants in the SA, in light of our^{conclusionthat the} Appellants have failed to make out a case for^{condoning the} delay in^preferring the SA.^{I, therefore,passfollowing:}

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ORDER

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In the result, LA. No.1317/2022 for^condonation

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of delay is dismissed.

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Consequently, S.A. No.3221^{2022 isalso dismissed.}

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Interim order, if any, stands^{vacated. PendingIAs,} if any, also stand closed.

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There will be no order as to cost.

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(Dictated to - pronounced the Stenographer, after its transcription and by me in the open Court on this 17ti^{n-ecessary dayof August 2022)co.rections,signed and}

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*!shq

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\nro' (IMTIA! ALI) PRESIDING OFFICER DRT-r, BENGALURU

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I.A.No.1317l2022 in S.A.No.32212022

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Appellants have not established^{due diligenceand good faith} Instead of filing an appeal before this^{Tribunalas perthe} liberty^given by the Hon'ble^{High Court in W.P. No.6410/2021} dated 23.04.2021^{within a period of limitation, the Appellants} rather opted to avail remedy of^{revision in Crl. Revision} Petition No.224l2021 on the^{flle of the LearnedCityCivil} ludge, at Bangalore. It^{is seen from the copy of the Crl.Misc'} No.5821/2020^produced by the^{Appellants alongwiththe} appeal memo that 1st^{Respondent has publishedthe demand} notice dated 23.05.2019^{in two leading newspapers viz. "The} New Indian Express", English^{Edition and "Samyukta} Karnataka", Kannada^{Edition, in vernacular language, both} dated 06.06.2019.^{After more than a year, 1't Respondent} pubtished possession notice dated ?4.O7.2020.^{When the} demand notice^{was publishedon 06.06.2019in the aforesaid} newspapers, the^{Appellantsshould have taken steps to} approach the appropriate^{authoritiestoaddresstheir} grievance. As stated above, the^{Tribunalhas no powerto} extend the^{periodof limitation on equitable grounds and has} no power to ignore that^{provisionto relieve what it considers} a distress resulting^{fromits operation.Therefore, allowingthe} application for^{condonation of delaywhich is devoid of} bona fide reasons and^{sulficient cause wouldnot only be} beyond the mandate of^{Section 5 of the LimitationAct, but}

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1.A.No.1317 /2022 in S.A.No.322l2022

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5 of the Limitation Act also does^{not arise. Section14(3) of} the SARFEASI Act excludes the^application of^{the Limitation} Act 1963 and that the statute does not^{give express power to} the DRTS to condone delay.

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The Tribunal relies on the^judgment of the Hon'ble^High Court of Kerala in the case tilled^{K.P layanvs. Hong Kong&} Shanghai Banking Corporation Ltd and^{othersdecidedon} 31.08.2015, wherein the Hon'ble^{DivisionBench has} categorically held that^power to condone^{delay in entertaining} an application under Section¹⁷ of^{the SARFAESI Act is not} conferred on the Debts Recovery^{Tribunal. It has furtherheld} that the Debts Recovery Tribunal cannot^consideran application for condonation of^{delay in an applicationunder} Section 17 of the SARFAESI Act.^{In the condonationof delay} application, the Appellants^{have contendedthat they were} bonaFidely^pursuing their remedy^{before other courts and in} view of Section 14 of the^{LimitationAct, the presentappeal} preferred by the Appellants are within the^period of^the limitation. Rebutting the contentions^{of the Appellants,the 1st} Respondent in its statement^{of objections to the condonation} of delay application has stated^{that Section 14 of the} Limitation Act^provides that the^{ingredients requiredto be} satisfied before invoking^{Section 14 of the Limitation Act are} due diliqence and^good faith. In^{the facts of thecase,the}

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r.A.No.1317/2022 in S.A.No.322l2022

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authorized officer^{under this chapter, [may makean} application along^{with such fee, as may be prescribedlto the} Debts Recovery^{Tribunal having jurisdictionin the matter} within forty five^{daysfrom the date on which such measures} had been taken.

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Further, the Tribunal^{hasno power to extend the period} of limitation on^{equitable grounds and has no power to ignore} that^provision to^{rellevewhat it considers a distressresulting} from its operation^{as per the Judgmentof Hon'ble Supreme} Court in the matter^{ofP.K.Ramachandran vs State of} Kerala, reported in^{(1997) 7 SCC556, whereinthe Hon'ble} Supreme Court^{has held thus:-}

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"Law of limitation^{may harshlyaffect a particular} party but it has to be applied^{with all its rigour when} the statute so^{prescribesand the courts haveno} power to extend the^{period of limitation on equitable} grounds",

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Hence, the legal^{maxim "dura lex sed /ex" which means} "the law^{is hard but it is the law", stands attracted'}

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Furthermore, in^{a special law when the statutedoes not} prescribe for condonation^{of delay, the applicationof Section}

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I.A.No.1317/2022 i^ s.A.No.322/2022

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the same is^pending consideration and were bonafldely pursuing their remedy before other courts and on the advice, they are before this Tribunal with the^present appeal.

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Admittedly the Appellants have filed the present appeal memorandum on 12.05.2022 challenging the Learned Magistrate's order dated 16.03.2021^passed under Section 14 of the Act to take^{physicalpossession} of the secured asset and to hand over the same to the secured creditor. Along with the application filed by them under Section 17(1) of the Act, the Appellants have also filed the above I.A. under Section 22(2XH) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993, seeking to condone the delay of 380 days in^preferring the main application. The Appellants have not^preferred the securitization application within 45 days from the date of the impugned order^passed by the Learned l"lagistrate on 16.03.2021. The Appellant have filed the securitization application on 72.05.2022 and they themselves state that there is a delay of 380 days in filing the main application.

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It is apt to call out Section 17(1) of SARFAESI Act which states, "Right to appeal:⁽¹⁾ Any^{person(including} borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his

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|.a.No.1317 12022 in S.A.No,322l2022

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On the above^{background, I have gone throughthe} available records^{of the case, heard the argumentsaddressed} by the Counsels of^{both sides and the following points arise} for my consideration:

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a) Whether the^{Appellants have made out the case} for condonation of^{delay in flling the Appeal?} and

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b) To what relief,^{the parties are entltled?}

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REASONS

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The Appellants are^{third parties and they have} challenged the^{impugned order dated 16.03'2021passedby} the Learned^{XXXVUAdditional Chief MetropolitanMagistrate,} Bangalore under^{Section 14 of the Act inCrl Misc'} No.5821/2020.^{The contentionsof the Appellantsare'} immediately on^{coming to knowabout the impugned order'} they filed Writ^{Petition beforethe Hon'bleHigh Courtof} Karnataka in^{W.P.No.641ol2021 and the Hon'ble High Court} dismissed their^{petitlon reserving liberty to the Appellantsto} seek appropriate^{relief under Section17 of the Act beforethis} Tribunal.^{Appellantshave further contended that they} subsequently^{preferred Criminal Revision Petition} No.22412027^{on the file of the City Civil Court,Bangaloreand}

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l.A.No.1317 /2022 in s.a.No.322/2022

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objections to the above I.A. 1st Respondent^{contendedthat} the law is well settled that the delay could^{not be condoned as} a matter of right and the^party 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 Act^provides that the ingredients required to^be satisfied before invoking Section 14 of the Limitation Act are due diligence and^good faith. In the^facts of the^case,the Appellants have not established due diligence and^goodfaith. Instead of filing an appeal before this Tribunal as^{per the} liberty^given by the Hon'ble High Court in WP^No.6410/2021 dated 23.04.2021 within a^period of limitation, the^Appellants rather opted to avail remedy of^revision in Crl.^Revision Petition No.224l2021 on the file of the Learned City^Civil Judge, at Bangalore. The 1st Respondent^{further contended} that the Appellants have not exercised due diligence in^the matter, they were totally callous about^{pursuing their appeal} and they have not been able to^give any^plausibleor justifiable reason for condonation of delay. In view of the foregoing objections, the 1st Respondent has^{prayed for the} dismissal of the application with cost.

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LA.N0.1317/2022 in S.A.No.32212022

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Respondent^{No.1 also erred in followingdue procedureas} contemplated^{in the provisions of the Act. With the foregoing} contentions and^{grounds, the Appellants have filed the} present appeal memorandum^{seeking for settingaslde the} impuqned order^{passedby the LearnedMagistrate'}

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Along with^{the main application, Appellants have filed} the above I.A.^{with affidavit seeking to condone the delay of} 380 days in^{filing the appeal memorandumln the affidavit,} inter alia, it^{is contendedthat the Appellantsalong with other} Apartment^{Owners on the advice preferredthe present} application^{beforethis Tribunal.Appellantsfurthercontended} that in vie,v of^{Section 14 of the LimitationAct, the present} appeal^{preferred by the Appellantsis within the period of the} limitation. It is^{further contended that upon advice, the} Appellants^{were pursulng the matter before other courtsand} subsequently^{upon comingto know about the provisionsof} the Act, the^{Appellants have preferredthe present application} before this^{Tribunal; hencetheyhave sought for condoning} the delay in^{approachingthis Tribunal as it was for the} bona fide^{reasons and not intentional'}

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UPon service of^{notice, the} 1st Respondent^entered appearance through^{its counsel} and subsequentlY^filed

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l.A,No.13t7 12022 i. s.A.No.32212022

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Property has not been registered under^{the CERSAIas} required under the^provisions of^the Act;^{1st Respondentis} trying to dispossess the Appellants in a^{clandestinemethod} without having any authority over the^same; lst^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 Appellantswould} have been reflected in the^{encumbrance certificate;1st} Respondent erred in registering^{the 14emorandumof Deposit} of Title Deeds with incomplete details^{viz. the floor in which} the apartment is situated at, undivided^{sharein the Schedule} 'A' Property in respect of^{eachapartment, car parking slots} etc., and in respect of entire^Schedule 'A'^{Property,the 1't} Respondent hand in^glove with other^{Respondents has} intentionally not mentioned the conversion^{order detailsand} BBMP Khata number with a sole^{intention to benefit the} Respondent No.2 and if the same^{had beenmentioned in the} schedule of the alleged^mortgage deed,^{the innocent} purchasers like the Appellants herein would not have^got cheated from the Respondents^{No.2to 4; because of the fault} committed by the Respondent^No.1, till^{date the entries of the} indenture of mortgage deed dated 03.O2.2O!7^{are not being} reflected in the encumbrance^certificate and^furtherthe

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1.A.No.1317 12022 in S.A.No.322l2022

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under the Act. Immediately the^{Appellants along with other} Apartment owne6^{challenged the impugned order dated} 16.03.2021^passed in Crl.Misc.^{No.5821/2020, by flling Writ} Petition No.6410/2021 before the^{Hon'bleHigh Courtof} Karnataka which came to be^{dismissed by the Hon'bleHigh} Court vide its order dated^{23.O4.2021 reserving Iiberty to the} Petitioners to seek appropriate^{relief under Section 17 of the} Act before the Debts Recovery Tribunal.^{The Appellantsalong} with other Apartment Owners who were^aggrieved by^the impugned order flled Criminal Revision^{PetitionNo.224/2021} on the file of the City Civil And^{SessionsJudge, Bangalore} which is pending consideration. The^{grounds, inter alia, urged} by the Appellants in the appeal memorandum are,^the Appellants^prior to^purchase of the Schedule-B^propertyhad verifled the encumbrance certificate, but^{no entries of deposit} of title deeds or title deeds or^{mortgage deedwere reflected} and as such. the Appellants were not aware^{and do not admit} the transaction between the 1"t^Respondent and the^2nd RespondenU no notice under Sections^{13(2) and 13(4) of the} Act and rules made thereunder is^{issued, pasted on the} schedule^property as^per Rule^{3 of the SecurityEnforcement} Rules nor^published as required under^{Act and the rulesmade} thereunder; 1st Respondent has not complied with^the requirement of Section 20 of the^{Act and} the^Schedule'A'

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r.a.No.1317 /?022 in 5.A.No.32212022

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The facts leading to the^{presentapPealin a nutshell} are. the Appellants are the^{third partyto the present appeal} Respondents No.2 to^{4 are Developersand registered General} Power of Attorney^holders of^{land owners and Respondent} No.2 has sold Schedule 'B'^{Propertyconstructed on Schedule} 'A' Property to^{the Appellantsthrough a registeredsaledeed} dated 10.11.2017 and^{the Appellantsprior to purchase of the} Schedule'B' Property^{had verified the encumbrance certificate} as per which^{Schedule'A' Propertywas free fromall} encumbrances,^{liens, mortgages,etc. It is contendedthat the} Respondent No.1-Fedbank^{Financial ServicesLtd withoutany} prior notice or intimation to the^{Appellantsor the residentsof} the Apartment complex^{affixed possession noticedated} 24.O7.2020 claiming^{that the Schedule-Bproperty and} another 25 apartments^{have been takenpossession under} Section 13(4) of^{the Act whereinthe descriptions of the} apartments^{mortgagedwere not clearlymentioned'The} Appellants along^{with other Flat Owners preferred Writ} Petition before the^{Hon'bleHigh Court of Karnataka in} W.P.No.940612020^{challenging the impugned possession} notice dated 24.07.2020^{which came to be dismissed as} rendered infructuous^{vide its order dated22'O4} '2OZl^when Counsel for Respondent^{madea submissionthat Respondent} No.1 has already^{obtained Section14 order dated f5'O3 '2021}

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l.A-No.1317 /2022 in s.A.No.32212022

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3, Mr G. Praveen Kumar Reddy, No.15, Curve Road, Tusker Town (Queens Circle), Bangalore-560 051

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Mr B. Raghavendra Reddy, No.145, Kapaleeswar Nagar, Sun Rise Avenue, Neelankarai, Chennai-600 041

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M/s BSR Builders Engineers & Contractors, D. No.24- 1- 1641, Beside TVS Show Room, Daragamitta, Nellore, Andhra Pradesh-524 002 Represented by its .. RESPONDENTS

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Authorized Slgnatory

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counsels on record/aooealed tor: : Sri V. Ravi Prakash Appellants Respondent No.1 i Mr Francis Xavier of^FX &^Co. Respondents No,2 to 5: Absent

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FINAL ORDER

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The^present appeal is filed^{by the Appellantsseeking} for setting aside the impugned order^{dated 16.03.2021} passed by the Learned XXXVU Additional Chief^Metropolitan Magistrate, Bengaluru, under^{Section 14 of SARFAESIAct (for} short 'Act') in C.Misc.^{No.5821/2020with respectto taking} physical possession of the mortgaged^property and^handingit over to the secured creditor-Fedbank^{FinancialServices Ltd to} recover Rs.6,46,57,900/-^{with further interest thereon, cost,} etc. from the borrowers.

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\ {

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IN THE DEBTS RECOVERY TRIBUNAL-I,^KARNATAKA AT BENGALURU

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Dated this the 17th day of August²⁰²²

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Presentr Sri IMTIAZ ALI Presiding officer

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l,A,No'131712022 in S.A. No.322l2O22

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BETWEEN:

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t"lr Deepak K Wadhwa, Aged about 50^years, S/o Mr Kishandas K Wadhwa

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Mrs Varsha D wadhwa Aged about 43^years, W/o Mr Deepak K Wadhwa

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Both are residing at No.316, 3rd Floor, BSR Koorla Residency, Property No.56/2, Kogilu^Village, Yelahanka Hobli, Bangalore North Taluk, .. APPELLANTS Bangalore-560 063

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AND:

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The Authorized officer, FEDBANK Financial Services^Limited, Having its corporate office^at Unit No.5o1, 502, 511 to 513,

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'A' wing, sth Floor, Kanakia Wall Street, Andheri Kurla Road, Chakala, Andheri East,

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M/s B.S.R. Enterprises, No.15, Curve Road, Tusker Town (Queens circle), Bangalore-560 051 Represented by its Partner l"1r Praveen Kumar Reddy

Mr Deepak K Wadhwa v. Fedbank Financial Services Ltd.

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Mr Deepak K Wadhwa v. Fedbank Financial Services Ltd.

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