Dismissed

Sri B K Anantharaju v. Karnataka State Financial Cor-poration

DRT15 Sept 2023SA/316/2023

Case brief

AI extract

What is this about?

The Appellant filed an appeal and application for condonation of delay under the SARFAESI Act. The Debts Recovery Tribunal held that the Tribunal lacks statutory power to condone delay under Section 14(3) of the Act, as it expressly excludes the Limitation Act, 1963. Relying on Supreme Court and High Court precedents, the Tribunal dismissed the condonation application and consequently dismissed th

What did the court decide?

Application for condonation of delay (I.A. No. 1444 of 2023) and the Appeal (S.A. No. 316 of 2023) are dismissed.

Sri B K Anantharaju versus Karnataka State Financial… — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL-II KARNATAKA

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AT BENGALURU

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Dated this the 15th day of September, 2023

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Present: Sri. IMTIAZ ALI

Presiding Officer

tA No.L444 I 2'J23

sA No. 316/2023

BETWEEN:

Sri B.K. Anantharaju S/o Sri D.M. Kuntegowda Aged about 62 years Proprietor M/s S.L.N. Commercial Complex Katha No.r/92/69312

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Bus Stand Road, Pandavapura Town Mandya District 571 434

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PETITIONER/ APPELLANT

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AND:

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The Authorised Officer/ Assistant General Manager, Karnataka State Financial Corporation, Branch Office, No.153/A, K.R. Road Subahs Nagara Mandya 571 401

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... RESPONDENT/ RESPONDENT

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Counsels on r€cordlAooeared for: Appellant : Sri Nagendra T Respondent : Sri K.C. Mahesh

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FINAL ORDER

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The Appellant has filed the present Appeal under Section 17(1) of the SARFAESI Act, 2OO2 (for short^.Act,), seeking for quashing/setting aside the order passed by the Learned Senior

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lA No. 144412023 ln SA No,316/2023

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Civil Judge and Chief Judicial l4agistrate, Mandya in Crl. Misc. No. 38/2020, dated 05.09.2020 under Section 14 of the Act in respect of the Schedule Property for recovery of loan amount of Rs.20,95,423.50 along with interest thereon, charges, cost etc.

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The facts leading to the present Appeal in a nutshell are that, the Appellant had availed the Term Loan of Rs.10,00,000/- from the Respondent on 04.OG.2OO1 and deposited the title deeds of the schedule property, agreeing to repay the loan liablilty along with applicable rate of interest. It is submitted that the Respondent took physical possession of the schedule property on 03.06.2023. Appellant alleges that he has not been personally served with demand notice and possession notice or by way of paper publication under the provisions of the Act. Appellant also alleged that at the time of sanction of the loan facility, Respondent took the signatures on blank documenu Respondent had charged very high excessive interest and he had given offer for One-Time Setuement and has paid more than Rs.5O,OO,OOO/- towards dues till date which is not at all considered by the Respondent. The Appellant has, inter alia, urged various grounds and submitted that he is ready

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tA No. 7444/2023 in SA No.316/2023

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to regularize his loan account, if an opportunity is given. Irr light of above contentions and grounds, the Appellant has sought to allow the securitization application and also sought amongst other reliefs to direct the Respondent to redeliver the physical possession of the schedule property which is taken over by the Respondent on 03.06.2023 pursuant to the impugned order passed by the Learned Magistrate.

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The Appellant has also filed application with affidavit to condone the delay of 997 days in filing the securitization application. In the affidavit, the Appellant has stated that the delay in filing the application is that he was having breathing problem from the year 2021 to 2023 and prayed to allow the application by condoning the delay.

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Upon service of notice, the Respondent Corporation entered appearance through its Counsel and subsequenfly filed detailed statement of objections to the main application and also filed list of documents separately marking the copies as Documents No.l to 16. According to the Respondent, the Appeal filed by the Appellant is not maintainable either in law or on facts and the same is liable to be dismissed. The

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1A No. 744412023 in SA No.316/2023

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Appellant has filed the appeal making false allegations against the Respondent-KSFC suppressing the true and correct facts.

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The Respondent Corporation has contended that, the Appellant had availed Term Loan of Rs.1O,OO,O00/- from the Respondent subject to terms and condtions incorporated in the communication of sanction letter dated 12.06.2001. It is submitted that the said loan is secured by schedule properties. Thereafter, the Appellant became a willfull defaulter and never shown any interest in the matter of repayment of loan. It is conteded that, the account of the Appellant has become NpA in the year 2003. In spite of repeated reminders and notices and show cause notices, the Appellant has never shown any interest in clearing the dues. Thereafter, the secured assets have been taken over under section of SARFAESI Act on 02.09.2004 and the same was brought for sale on several times by issuance of paper publications.

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The Respondent has further contended that in the instant case, the Respondent had extended OTS facilites twice, once on 19.06.2007 for an amount of Rs.12,51,900/- and again under GOK OTS as per communication dated 13.08.2007 iniorming him to pay Rs.7,55,894/-. Respondent submitted

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lA No. 1444/2023 in SA No.316/2023

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that the cheques issued by the Appellant towards OTS amount of Rs.7,55,894/- came to be dishonoured and hence OTS was cancelled and the Respondent has filed a case against the Appellant under Section 138 of the Negotiable Instruments Act before the District Court, Mandya. Respondent further contended that as the Appellant became a chronic defaulter, it issued demand notice dated 03.07.2010 under Section 13(2) of the Act (vide Document No.4), receipt of which is stated to have been duly acknowledged by the Appellant; after the expiry of stipulated period, the Respondent issued possession notice dated 27.OL.2011 under Section 13(a) of the Act by publishing the same in two leading newspapers ANDOLANA Kannada daily and Business Line, English daily and took symbolic possession (vide Documents No.7,8 and B(A) respectively) and thereafter, obtained the impugned order dated 05.09.2020 by filing Crl.Mis.No.38/2020 before the Learned Judge. Respondent Corporation further submitted that it has followed the due procedure while taking possession of the schedule property and there is no illegality committed by the Respondent.

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Respondent further submitted that the Court Commissioner Sri D.N. Naveena pursuant to the impugned

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1A No. 1444/2023 in SA No.316/2023

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order has taken physical possession of the secured property i.e. portion of the Rice Mill building which is situated at North-East portion of the property, drawn the mahazar and handed over the possession to AGM/ Authorized Officer and the remaining portion could not be taken as there was no time. Further, security personnel have been deployed to safeguard the property through M/s Unik Services, Mysore. It is further contended that subsequent to possession of the portion of the schedule property, the promoter has paid only 3,5O,OOO/- on 74.06.2023 to his loan account and the same has been accounted to his loan account in normal course, not towards OTS and now the total outstanding balance as on 19.07.2023 is Rs.7,37,58,287 /- (vide Document No.20). Denying the allegations of the Appellant made in the appeal memorandum, Respondent has sought for the dismissal of the appeal memorandum with cost, in the interest of justice and equity.

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The Respondent Corporation has filed its objections to the condonation of delay application, inter alia, contending that the condonation of delay application is not maintainable and the

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lA No. 1444/2023 in SA No.316/2023

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same deserves to be dismissed as there is no merit in the application and sought for the dismissal of the condonation of delay application, in the interest of justice and equity.

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On the above background, I have gone through the available records of the case, heard the arguments addressed by the Counsels of the Appellant and considered the written arguments filed by the Respondent. The following points arise for my consideration:

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(a) Whether the Appellant has made out a case for

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condonation of delay in filing the appeal? and

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(b) To what relief, the parties are entitled?

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REASONS

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The Appellants have filed the securitization application along with condonation of delay application l.A No.1444/2023 on t3.O7.2O23 seeking to condone the delay of 997 days in approaching this Tribunal to file the present Securitization Application. As pointed by the Respondent, the condonation of delay application has been filed without giving any proper reasons for the delay in submitting the appeal. In this context, it will be proper to mention that this Tribunal has no power to

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lA No. 1444/2023 in SA No.316/2023

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extend the period of limitation on equitable grounds and has also no power to ignore that the 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

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P.K.Ramachandran Vs. State of Kerala, reported in L997 (7) SCC 556 where the Hon'ble Supreme Court has held that when the law so prescribes, the courts have no power to extend the period of limitation. In this case, Section 14(3) of the SARFAESI Act excludes the application of the Limitation Act, 1963 and as such, the statute does not give any power to the DRTs to condone delay. When the statute does not prescribe for condonation of delay, the application of Section 5 of Limitation Act does not arise. In a case titled K.p,Jayan V/s Hong Kong

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and Shanghai Banking Corporation Limited and Others, the Hon'ble High Court of Kerala has categorically held 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 was 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.

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lA No. 144412023 in SA No.316/2023

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Therefore, the Appeal in question appears to be barred by limitation. In that view of the matter, the Applicant has failed to make out a case for condoning the delay.

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Accordingly, I pass following:

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ORDER

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In the result, I. A. No. L444 of 2023 for condonation of delay is dimissed.

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Consequently, S.A.No. 316 of 2023 is also d ismissed.

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Interim order, if any, stands vacated.^pending IAs, if any, also stand closed.

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There will be no order as to cost.

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(Dictated to the Stenographer, directly on computer, corrected signed by me and then pronounced by me in the Open Court on this the 1sth day of September, 2023)

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.sR/ASH.

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Virt" (IMTIAT ALI) PRESIDING OFFICER DRT-r' BENGALURU

Sri B K Anantharaju v. Karnataka State Financial Cor-poration

Case brief

What is this about?

What did the court decide?

Sri B K Anantharaju v. Karnataka State Financial Cor-poration

Case brief

What is this about?

What did the court decide?

What the court decided

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