Dismissed

Mr Mohammed Ismail v. State Bank of India

DRT20 Jul 2022SA/330/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal II, Bengaluru dismissed an application for condonation of delay under Section 5 of the Limitation Act challenging a Section 17 SARFAESI order filed over 900 days late. Relying on Supreme Court and Kerala HC precedents, the Tribunal held it lacks equitable jurisdiction to condone delay as Section 17 restricts appeals to 45 days exclusively.

What did the court decide?

The interim application seeking condonation of delay was dismissed, and consequently, the Securitization Application challenging the possession order was dismissed.

Mr Mohammed Ismail versus State 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 20^th day of July, 2022

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Present: S. V. Gowramma, B.A., LL.B

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Hon’ble Presiding Officer

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IA.No.1989/2022 in SA.No.330/2022

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Between

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Mr. Mohammed Ismail, S/o. Late Peer Sab, No.27, Ring Road, Geddalahalli, Tumakuru – 572102 Tumakuru Taluk & District

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…Applicant

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And

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The Authorised Officer State Bank of India, Siddaganga Extension Branch, B.H. Road, Tumakuru - 572102

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…Respondent

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Counsels on record/appeared for:

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Applicant : Sri. M.A. Rajendra Respondent : Sri. Nandish N.J.

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ORDER ON IA.NO.1989/2022

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The present Securitization Application (SA) 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

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measure taken by the secured creditor under the Security Interest [Enforcement Rules, 2002 [for short the Rules]

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2 SA.No.330/2022

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The orders passed by the Dy.

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Commissioner/District Magistrate dated 18.11.2019, in Ref.No.MSC(R-7) CR:11/2019-20 (Annexure-A2) is impugned in the present SA and the amount outstanding due in the loan account is Rs.50,20,089/- (Rupees Fifty Lakhs Twenty Thousand Eighty Nine only).

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The applicant has availed Housing loan of Rs.48.00 Lakhs- from the erstwhile State Bank of Mysore by executing various documents including mortgage of the property as security towards credit facilities. Due to default in the repayments the bank after classifying the account as NPA has initiated measure under SARFAESI Act. The present SA is filed aggrieved by Annexure –A2 orders passed by the Dy. Commissioner/District Magistrate dated 18.11.2019, in Ref.No.MSC(R-7) CR:11/2019-20.

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Admittedly the applicant has challenge to the CJM Order dated 18.11.2019 is not within the period of 45 as mandated under the Act. Hence the applicant has filed IA.1989/2022 a petition to condone the delay of 965 days in challenging order dated 18.11.2019 U/s. 5 of the Limitation Act. The applicant has filed Affidavit along with the application that to condone the delay of 53 days in filing this application

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3 SA.No.330/2022

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from the date of passing the order by the Dy.Commissioner/District Magistrate as on 18.11.2019 (from 18.11.2019 to till 07.07.2022 delay of 965 days = till 31.03.2022 limitation period is relaxed and hence from 01.04.2022 to 07.07.2022 – 98 days – 45 grace period to file the application = 53 days) as the applicant is not aware of the proceedings initiated by the respondent bank, he came to know only when a letter addressed to the Jurisdictional Police was issued by Tahasildar. The applicant obtained the copies from the Hon’ble District Commissioner, office and hence from the date of gaining knowledge, there is no delay. However, as an abundant caution, delay application is filed under S.5 of the Limitation Read with Provisions of S.22(2) (h) of the RDB Act.

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The respondent bank has filed statement of objection to the delay application along with certified documents in support of their case. In their objections the bank contends that the delay cannot be condoned under SARFAESI Act and Limitation Act does not apply to Securitization Act. The delay of 965 days can’t be condoned, since all the notices issued under the Act are duly served on applicant and applicant is well aware of proceeding of the respondent bank from day one.

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4 SA.No.330/2022

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It is contended that the Order copy of the Deputy Commissioner & District Magistrate, Tumkur in petition No. MSC(R-7) CR:1/2019-20 was also sent to applicant on 22.11.2019 and affixed on the property on 16.12.2019.

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The respondent bank relied on judgment of Calcutta High Court in AIR 2010 Calcutta 138 and the ruling passed by the Hon’ble High of Madras (D.B) reported in 2013(1) DRTC 226 Zubida Begaum v/s Indian Bank & others. The said order has been upheld by the Hon’ble Supreme Court of India in SLP.No.35643/2012 vide order dated 28.02.2012. Therefore S.5 of the Limitation Act does not apply to SARFAESI Act.

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Further submits the application/appeal is bald, vague and not in accordance with law and liable to be dismissed at threshold. The averments made in Para 4 of the SA is denied. The respondent bank issued demand notice dated 12.02.2019 and sent through registered post and duly served on the applicant. The applicant failed to discharge his liability in full within the period specified. The possession notice dated 30.04.2019 issued under S.13(4), is duly served on the applicant and affixed on the secured asset and published in Indian Express and Samyukta Karnataka dated 04.05.2019. The applicant has obtained all the certified copies from the

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5 SA.No.330/2022

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District Commissioner office, Tumkur, but with malafide intention not produced the other documents. The applicant has not approached Tribunal with clean hands and has filed this application with malafide intention to delay the recovery of the respondent bank.

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The respondent bank has taken measures against

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the secured asset under the provisions of SARFAESI Act in accordance with law and same is sustainable with law. The present application is barred by limitation and the applicant has sought to set aside and quash the impugned Order copy of the Deputy Commissioner & District Magistrate, Tumkur in petition No. MSC(R-7) CR:1/2019-20, where the applicant was aware of the SARFAESI proceeding initiated by the bank. Hence the application deserves to be dismissed and the same is filed only for the purpose of filing this application with an aim to derail the measures taken by the bank and prays for not to condone the delay of 965 days.

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Heard the submissions of both the counsels and perused the records.

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Records reflects that there is no dispute with regard to availing the credit facility and mortgage of the properties and

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6 SA.No.330/2022

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also default in repayments. Admittedly, there is a delay of 965 days in challenging the Order dated 18.11.2019 of the Deputy Commissioner & District Magistrate, Tumkur in petition No. MSC(R-7) CR:1/2019-20.

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Though the applicant has taken contention that there is only a delay of 53 days under limitation column, that there is a delay of 960 days from the date of order i.e., 18.11.2019 till 7.7.2022. As the limitation period was relaxed on account of Covid -19 pandemic till 31.03.2022 taking limitation from 01.04.04.2022 to 07.07.2022 there is a delay of 91 days.

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It is evident from Annexure R-9 that the S.14 order was pasted on the secured asset and the photographs of the affixture of the S.14 order is done on 16.12.2019. Hence the applicant trying to take shelter under Hon’ble Supreme Court on Limitation during pandemic would not come to the aid of the applicant. Furthermore, the demand notice dated 12.02.2019 is received by the applicant as per the postal acknowledgement cards produced at Annexure – R2 possession notice dated 30.04.2019 is received by the applicant as per Annexure – R4. The possession notice is affixed on the property as per Annexure –R5.

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7 SA.No.330/2022

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The affixture of the S.13(4) notice on the secured asset as per Annexure – R5 and affixture of DC order on the secured asset as per Annexure –R9 is on 16.12.2019. Hence the contention of the applicant that limitation period in lockdown relaxation due to Covid-19 from 01.04.2022 to 07.07.2022 cannot be considered. It is evident from the records that the applicant was aware of the DC order way back on 16.12.2018 when the copy of the order was affixed on property. Hence the contention that there is only 53 days delay is not sustainable, the actual delay of 960 days – 5 days mandatory period = 920 days delay.

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It is also to apt to mention that, as per S.14 [3] no act of the Chief Metropolitan Magistrate or the District Magistrate done in pursuance of this section shall be called in question in any court or before any authority Chief Metropolitan Magistrate or District Magistrate to assist secured creditor in taking possession of secured asset.

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The statute 17(1) clearly mandates any person aggrieved by any of the measures initiated by the bank is required to file their appeal under S.17(1) within 45 days from the date of the measures. Admittedly the present SA is filed on 07.07.2022 challenging the Deputy Commissioner & District

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8 SA.No.330/2022

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Magistrate, Tumkur in petition No. MSC(R-7) CR:1/201920with a delay of 965 days.

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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 Judgment of 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:-

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"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".

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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.

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The Tribunal relies on the judgment of the Hon’ble High Court of Kerala in the case titled K.P. Jayan Vs. Hong Kong & Shanghai Banking corporation Ltd and others decided on 31.08.2015 wherein the Hon’ble Division Bench has categorically held that power to condone delay in entertaining an application under Section 17 of the SARFAESI Act is not

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9 SA.No.330/2022

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conferred on the Debts Recovery Tribunal. It has further held that the Debts Recovery Tribunal cannot consider an application for condonation of delay under Section 5 of the Limitation Act in an application under Section 17 of the SARFAESI Act.

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The relevant paragraph 7 of the said judgment, the Hon'ble Division Bench of Kerala High Court has held thus:

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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.

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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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In the case in hand also, the provisions of Section 5 of the Limitation Act are excluded from the scheme of Section 17 of the SARFAESI Act by not making any provisions enabling the Tribunal to condone the delay in filing an application under the said provisions of the Special Act.

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The prescribed period of 45 days u/s. 17 of the SARFAESI Act for preferring an appeal against

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10 SA.No.330/2022

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the measures taken by the secured creditor under S.13[4] of the Act cannot be condoned by application of Section 5 of the Limitation Act”.

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The Tribunal would also like to place reliance on the

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judgment of the Hon’ble of Kerala in the case title the Authorised Officer, Indian Bank V/s K.P. George wherein Hon’ble High Court has also referred to case of K.P. Jayan Vs. Hong Kong & Shanghai Banking corporation Ltd and others and referred to the judgment of the Hon’ble Supreme Court in respect of applicability of the limitation act to the application under S.17 of Act and has held that the Tribunal cannot condone the delay in an application under the S.17 of the Act.

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Thus the impugned Order copy of the Deputy Commissioner & District Magistrate, Tumkur in petition No. MSC(R-7) CR:1/2019-20, is not challenged within the period of 45 days and does not require any interference as there is no illegality pointed in the S.14 measures.

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The applicant has failed to make out a case for justifiable reason is not filing the application within 45 days under S.17 of the Act and in absence of any power under the Statue to condone the delay in filing an appeal under S.17, Tribunal cannot condone the delay. The present IA. No. 1989/2022 fails and stands dismissed. Consequently

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SA.330/2022 stands dismissed. Interim order granted if any stands vacated. Pending IA/s id any stands disposed of. No Order as to cost.

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(Dictated to [PR], after its transcription and necessary corrections, signed and Order passed by me on this 20^th day of July, 2022]

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Sd/-

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PRESIDING OFFICER

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APPENDIX

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LIST OF DOCUMENTS PRODUCED BY THE APPLICANT

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Sl No.	Particulars	Annexures	Page. No.
1	The copy of the notice letter dated: 20.06.2022	A1	34-36
2	The Copy of the MSCR (7)CR: 1/2019-2020 Order	A2	37-38
3	the copy of the petition along with Affidavit	A3	39-46

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LIST OF DOCUMENTS PRODUCED BY THE RESPONDENT

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Sl No.	Particulars	Annexures	Page. No.
1	Demand notice dated 12.02.2019	R1	7 to 8
2	Postal acknowledgment for having received possession notice by applicant	R2	9
3	Possession notice dated 30.04.2019	R3	10
4	Postal Acknowledgment for having received possession notice by applicant	R4	11
5	Photographs for having affix the possession notice on mortgage property	R5	12 & 13

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12 SA.No.330/2022

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6	Paper publication of possession notice dated 30.04.2019 for having published in Indian Express and Samyuktha Karnataka dated 04.05.2019	R6 & R7	14 & 15
7	Order dated 18.11.2019 passed by District Magistrate, Tumkur	R8	16 & 17
8	Photographs for having served the DC Order on applicant by affixing/pasting on mortgage property on 16.12.2019	R9	18

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Sd/-

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(S.V. GOWRAMMA) Presiding Officer DRT-II, Bengaluru

Mr Mohammed Ismail v. State Bank of India

Case brief

What is this about?

What did the court decide?

Mr Mohammed Ismail v. State Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

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