Dismissed

Mrs Aliya Banu v. the Malleshwaram Co. Operative Bank Ltd.

DRT18 Sept 2023SA/576/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal-I, Bengaluru, dismissed the appellant's appeal under Section 17 of the SARFAESI Act as it was filed after the 45-day limitation period expired. The court held that the Tribunal lacks statutory power to condone delay or extend the limitation period, citing Supreme Court precedents.

What did the court decide?

The appeal (SA No. 576/2022) was dismissed as it was barred by limitation due to failure to file within the 45-day period prescribed under Section 17 of the SARFAESI Act.

Mrs Aliya Banu versus the Malleshwaram Co. Operative Bank Ltd. — Banking and Recovery | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL-I, KARNATAKA AT BENGALURU

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Dated this the l8th day of September, 2023

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Present:Sri IMTIAZ ALI

Presiding Officer

S.A No.576/2o22

BETWEEN:

Mrs Aliya Banu Aged about 50 years W/o. Mr Mohammed Yusuff Residing at No.B/1 Charminar Mosque Road 'C' Street, Shivajinagar Bangalore 560 005.

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,. APPELLANT

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AND:

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The Malleswarm Co-operative Bank Ltd., NO.1O2, 7th Cross Ma lleshwa ra m Bengaluru 560 003 Counsels on record /aooeared for: Appellant : Sri Chanu RaR Ahmed

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.. RESPONDENT

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Respondent: Sri K.V Lokesh (Caveator)

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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,2002 seeking for quashing/setting aside the impugned order passed by the Learned 2gth Additional Chief Metropolitan Magistrate, Bengaluru in C. Misc. No.50126/2022, dated O5.O7.2022 in respect of the schedule property for recovery of loan amount

SA.No.57 612422

of Rs.98,1a,113/- along with interest thereon, charges, cost etc.

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The facts leading to the^present appeal in a nutshell are, the Appellant stated that the Respondent Bank has sanctioned a mortgage loan of RS.77,00,0OO/- on 25.11.2019 and the Appellant availed loan for the improvement of business run in the name and style of l4ls Sigma Fertilizers. The Appellant stated that they could not repay the loan amount owing to business loss, unfortunate pandemic conditions etc., and their loan account was classifled as NPA on 30.06.2020.

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The Appellant further stated that, a major part of dues to the tune of huge amount was paid and the bank adjusted the same towards the interest and other charges. It is also not out of place to mention that major part of the limit was used for clearing the interest and other charges, even then a substantial amount is shown as dues. Further, the Appellant have already leased out the schedule property to different lessees by way of Lease Deeds to repay the loan amount bank interest and other private financers. However, it is not out of place to state the the loan was availed only for Ground Floor, First Floor and Second Floor which was in the schedule

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SA.No -57 612022

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property. The Appellant offered a proposal to settle the amount of Rs.77,00,000/- shown in sanction letter dated 26.11.2079. Further, the Appellant submitted that she has offered a proposal for settlement vide letter dated 19.O8.2022 to avoid multiplicity of litigation Appellant offered to clear the outstanding dues as on OTS that is Rs.77,00,000/-. For mortgage property shown in the schedule which is acknowledged by the bank on 22.08.2022 to show the bonafide intention to settle the matter and the said proposal has not been considered in a fair manner. The Appellant is ready and willing to settle the matter by paying the aforesaid amount as detailed in the proposal letter. It is an acceptable and most reasonable offer even for settlement. Further, the Appellant is sincerely and seriously attempting and putting efforts toward settlement as she is a law abiding citizen and has no intention to avoid or delay the payments of Respondent Bank. However, the Respondent Bank has not considered the same in its proper perspective and due application of mind and initiated action in a ritual manner which is against the spirit of law. The Appellant further submits that the Respondent Bank has not followed the procedures under the SARFAESI Act while issuing the notices

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SA.No .516/2022

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with lack of transparency, fair dealings, the OTS^proposals submitted was blankly rejected on spot by the Respondent Bank without considering the same for amicable settlement of the matter, the Respondent Bank is trying to sell the property and with regard to the taking a possession, the matter is pending before the City Civil Court, Bengaluru but Respondent Bank has obtained an order from the Learned ACMM Court for which the Appellant has approached this Tribunal seeking relief.

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Along with the appeal memorandum, the Appellant has filed this appeal on 30.08.2022, which is filed after the expiry of its prescribed time limit of 45 days. Hence there is delay of about 12 days.

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Upon service of notice, the Respondent Bank entered appearance through its Counsel and subsequently filed detailed statement of objections to the appeal. According to the Respondent Bank, the Appellant is not at all entiHed for any of the reliefs sought and the present appeal is false, frivolous and not maintainable in law or facts. The appeal is

SA.No.576/2022

deliberately filed with the malafide intention of delaying the recovery of dues of the Respondent and hence on this ground itself, the appeal needs to be dismissed in limine.

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The Respondent Bank has contended that, the Appellant and Co-Borrower had approached the Respondent Bank for mortgage loan facilities of Rs.77,00,000/- and the said loan is secured by schedule mortgage property. Thereafter, the Appellant and Co-Borrower became chronic defaulters and failed to repay the said credit facilities to the Bank. The Respondent Bank further contended that, the account of the Appellant has become NPA on 30.06.2020. Since, the Appellant has failed to repay the said amount, the Respondent Bank has issued the demand notice dated 09.ll.212t under Section 13(2) of the SARFAESI Act, 2OO2 and called upon for the payment of huge loan of Rs.98,18,113/- along with future interest and other charges within 60 days from the date of the notice, The notice was duly served on the Appellant through RPAD. Further, the said notice has been personally acknowledged by the Appellant and thereafter, they have not made any payment in respect of the loan facility. The Appellant later again failed to

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6 SA-No -s7 6/ 2022

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regularize the loan account and hence, the Respondent Bank has taken the symbolic possession of the schedule property under section 13(4) on O|.O2.2O22 and the same has published in two leading newspapers in',The New Indian Express", English daily and "Kannada^prabha,, Kannada daily, both on 04.02.2022.

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The Respondent further contended that, after giving several opportunities to the Appellant, the Respondent Bank had flled section 14 application to recover such huge loan amount. Further, the Respondent Bank has followed all the legal procedure provided under the law. Further, all other averments are denied as false and baseless. Wherefore, the Respondent Bank has prayed that this Tribunal be pleased to dismiss the above appeal with exemplary costs in the interest of justice and equity. In that view of the matter, the Respondent Bank prayed for dismissal of the appeal with costs.

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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 both sides and the following points arise for my consideration:

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SA. No.57612022

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a) Whether the Appellant has made out the case for 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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B. The Appellant has filed the Securitization Application for setting aside / quashing the impugned order passed by the Learned 29th Additional Chief Metropolitan Magistrate, Bangalore in C. Misc. No. 50126/2022, dated O5.O7.2022 in respect of the schedule property for recovery of loan amount of Rs.77,00,0OO/-/- along with interest thereon, charges, costs etc. A perusal of records reveals that the Appellant has availed a Loan of Rs.77,00,000/- from the Respondent Bank. As per the documents submitted by the Respondent Bank, it appears that there were defaults committed by the borrowers in respect of the loan availed. As such, the Respondent Bank declared the loan account as NPA and proceeded under the SARFAESI Act. At the time of availing the loan in question, the Appellant had created mortgage in favour of the Respondent Bank and in terms of the said mortgage deed, the borrowers had offered the secured asset as security for

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8 SA.No.576/2022

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availment of the said loan. It is pertinent to mention that after obtaining an order from Learned 29th Additional Chief Metropolitan l,'lagistrate, Bangalore on 05.07.2022 the Respondent Bank has made attempts to take physical possession of the secured asset, the mortgaged property. As per records, the Appellant had availed loan in question from the Respondent. The mortgage deed executed by the Appellant side in favour of Respondent and had offered the secured asset as security towards the loan transaction. The said mortgage deed was executed on 25.!l.2O7g Therefore, as the secured assets has been mortgaged in favour of the Respondent Bank by deposit of original title deeds. According, the Respondent Bank after initiation of proceeding under the SARFAESI Act had obtained the impugned order on 05.O7.2022. Thereafter, the Appellant approached this Tribunal with the present appeal. Accordingly, the Appellant fited this SA on 30.08.2022. Although there was a delay of about 12 days but the Appellant in her Appeal stated that the same could not be filed within 45 days as she had to collect certain copies from various departments in order to establish her possession over the secured asset. Therefore, according to the

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SA.No -57 6/ 2022

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Appellant, there is delay and the appeal was not filed within the^prescribed time period. In this regard, it is seen that the Appellant did not take any steps against the Respondent Bank when the Bank issued the demand notice as well as the possession notice. The impugned order was passed under Section 14 of the SARFAESI Act on 05.07.2022 but the appeal was preferred by the Appellant before the Tribunal on 30.O4.2022. Therefore, the Appellant was fully aware about each and every step taken by the Respondent Bank towards recovery since the possession notice was affixed on the secured asset and the same was also published in two newspapers. Instead of approaching this Tribunal immediately within 45 days, rather the present SA was filed after the period of limitation was over with an application seeking condonation of delay. The Respondent Bank has not admitted any irregularity in its objection, so any averment made by the Respondent cannot be read in favour the Appellant. There is no dispute on the point that the impugned order was passed on 05.O7,2022 and present SA was filed on 30.O4.2022. Thus, there is delay of about 12 days in filing the SA. Such Appellant who is aware of the proceeding of SARFAESI Act did not choose to challenge the same earlier

sA.No.575/2022

thereby negligent in pursuing the matter and as such, she is not entitled for condonation of delay. I4oreover, there is delay and the explanation given does not constitute a sufficient cause, so the Appellant is not entitled for condonation of delay in view of the judgment of the Hon,ble Supreme Court in Estate Officer, Haryana Urban Development Authority Vs. Gopi Chand Atreja.

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In this context, it will also be proper to mention that this Tribunal has no power to 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 p.K. Ramachandran Vs, State of Kerala, reported in f997 (7) SCC 556 where the Hon,bte 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, filing of application under Section S of Limitation Act

SA.No.57 6/2022

does not arise. In a case titled K.P. Jayan V/s Hong Kong 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. Moreover, it seems that the Respondent Bank has complied with the provisions of the SARFAESI Act, 2OO2 and Security Interest (Enforcement) Rules, 2002. Therefore, the Appeal in question appears to be devoid of merit and the same is barred by limitation. In that view of the matter, the Applicant has failed to make out a case for condoning the delay. The Respondent Bank has not admitted any irregularity in its objection. Thus, it appears that there is delay of 12 days in filling the SA. Therefore, it seems that the Appellant is negligent in pursuing the matter and is not entitled for condonation of delay. Hence, it is clear that the period of limitation cannot be extended. There is no statutory provision in the SARFAESI Act which is undoubtedly a special Act to condone delay in taking recourse to the remedy

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SA. No.576/2022

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prescribed by Section 17 of the said Act. After expiry of limitation period, a varuabre right has been accrued in favour of the Respondent Bank. In that view of the matter, the appeal is liable to be dismissed as barred by limitation. Accordingly, I pass the following:

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ORDER

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In the result, the SA No. 576/2022 is dismissed as barred by limitation.

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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, direcuy on computer, corrected signed by me and then pronounced by me in the Open Court on this the l8rh day of September, 2023)

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I ;o t^b' (rMrrA* KLr) PRESIDING OFFICER DRT-T, BENGALURU

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..sR..

Mrs Aliya Banu v. the Malleshwaram Co. Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Mrs Aliya Banu v. the Malleshwaram Co. Operative Bank Ltd.

Case brief

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What did the court decide?

What the court decided

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