Dismissed

Mr Ashwani Kumar v. Bank of Baroda (Vijaya Bank)

DRT26 Jul 2023SA/59/2023

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal dismissed an appeal filed under Section 17(1) of the SARFAESI Act challenging a sale notice. The Tribunal held that the application was barred by limitation as the Tribunal lacks power to condone delay under Section 14(3) of the Act, following P.K. Ramachandran and K.P. Jayan.

What did the court decide?

IA for condonation of delay dismissed; consequently, the main Appeal under Section 17(1) dismissed.

Mr Ashwani Kumar versus Bank of Baroda (Vijaya Bank) — Money Laundering | DRT (2023)

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IN THE DEBTS RECOVERY TRIBUNAL.I. KARNATAKA

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AT BENGALURU

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Dated this the 26th day of July, 2023

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Present! Sri IMTIAZ ALI

Presiding Officer

|.A.No.274712022

SA No,59/2023

BETWEEN:

Sri. Ashwani Kumar

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S/o. Sri Desraj

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Aged about 45^years

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Smt. Palvi Jojra

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w/o. Sri Ashwani Kumar

Aged about 42^years

Both Residino at-

No.oB, Lake View

I4eenakshi Layout, 1't Main Road

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Opp. KSRP Compound Parappana Agrahara Bangalore Taluk Bangalore District

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Sri Ashwani Kumar Rashwana S/o. Sri Prem Chand Rashwana

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Smt. Mamta Rashwana Wo.^{Sri Ashwani KumarRashwana}

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Both 3 and 4 residino at-

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Flat No. 106, Saraswathi Nivas 5th Main, channal Road Saraswathipuram Halasuru .. APPELLANTS Bangalore 560 008

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AND:

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The Authorised Officer Bank of Baroda (Erstwhile Vijaya Bank) Zosar Branch

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\ v I

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t.A.No.2747 /2022 in SA No.59/2023

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Trinity Circle

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Bangalore 560 001 Represented by its Authorised^Officer

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Mls. shree Reddy Properties^{Private Limited} Represented through its director Sri. G Sirish Kumar Reddy Office at Flat No. 401, Sreedhanyatha Apartments, 2nd Main Road Gopal Reddy Layout Dodda Banaswadi Bangalore 560 043

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The Authorized Representative state Bank of India MCPC BZ-1 Branch M a lleshwa ra m Bangalore 560 020

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Mls. Satyanarayana Educational Trust Represented by its trustee Office at-

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No.25, New Baldwin School Ramamurthy Nagar Main Road Dodda Banaswadi Bangalore 560 043 Counsels on record/Aooeared for: Appellants : Smt. Mruthika J Gowda Respondents : Sri Vignesh Shetty

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.. RESPONDENTS

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FINAL ORDER

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The Appellants have filed the present Appeal under Section 17(l) of the SARFAESI Act, 2OO2, seeking for quashing/setting aside the Sale Notice dated 04.07.2022 issued by the Respondent No.1 Bank to the Appellants, in respect of the Schedule Properties for recovery of loan amount of Rs.4,34r1O,925.A3/- along with interest thereon, charges, cost etc.

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l.A.No ,27 47 /2022 in SA No.59/2023

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The facts leading to the present Appeal in a nutshell are that the Appellants, after entering an agreement for sale and construction with Respondent No.3 have availed a Home Loan a Rs. 46 Lakhs from Respondent No.3, and 50o/o of loan amount has been deposited to the Respondent No.1 and 2 for construction of a house by entering with an agreement. Though, the Appellants were neither Borrower nor Guarantor to the Respondent. No.1 bank, the Appellants have purchased the property through an agreement which was later on auctioned by the Respondent No.1 without serving any notices intimating the auction sale to the Appellants. The Appellants alleged that the Respondent No.1 fixed and conducted the E-auction behind the back of the Appellants and now came to know the Respondent No.1 has auctioned the property and sold to the successful bidder, the Respondent No.4 for lesser value. The Appellants prays this Tribunal to protect the interest in order to protect the honest and bona-fide Appellants on principle of natural justice, otherwise the Appellants will be in great loss, hence prays the intervention of this Tribunal.

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Further, the Appellants prays this Tribunal to set aside and quash the impugned sale notice dated O4.O7.2022, based on the circumstances and facts produced by the Appellants, as the

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t.A.No.2747 /2022 in SA No.59/2023

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Appellants are aggrieved by the^measures initiated^{by the} Respondent No.1 under the existing^provisions of the Act^by which the Appellants were forced to file this SA.

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. Along with the appeal memorandum, the Appellants have also filed .A.No.2747/2022 with affidavit seeking condonation of delay of 41 days, whereas as^per the Respondent Bank's statement of objections, the delay is 42 days.

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Upon service of notice, the Respondent Bank^entered appearance through its Counsel and^{subsequentlyfiled} statement of objections to the above main^{appeal. In the} objections, the Respondent No.1 has^contended that,^the Appellants have filed the^present application^{which is not filed} within the limitation^period and same being admitted^{fact by the} Appellants and the Appellants have filed an IA for delay to that effect too. It is evident from the reading of the SARFAESI application that the same is^prima facie barred by the Laws of Limitation. The Application under Section 17 is nothing but an afterthought which is an attempt on the Appellant to harass the Respondent No.1 Bank. Further, the Respondent No.2 approached the Respondent Bank, for certain credit facility. Upon default, the loan account was declared as NPA on

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L4.No.2147/2022 in SA No.59/2023

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31.12.2018 and SARFAESI action initiated vide Demand Notice dated 01.01.2019 demanding an amount of Rs.4,0A,92,776.60.

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The Respondent No.1 bank has further contended that under Section 13(2) of the SARFAESI Ac.,2OO2, Demand Notice was duly served under section 13(4) of the SARFAESI Act, 2002. Possession Notice was issued on 11.03.2019 with due compliance of law upon the Respondent No.2. The same is being affixed and the paper publication was done on 16.03.2019 in two daily widely circulated newspapers.

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Finding no other alternative, the Respondent No.1 proceeded with the sale of the mortgaged properties vide Sale Notice dated O4.O7.2022. The E-auction was held on 05.08.2022 wherein the property was successfully auctioned for Rs.2,12,50,000.00. The Appe ants on the basis of the Sale agreement have proceeded with the flling of the present application in order to frustrate the recovery actions of the Respondent Bank. The Appellants in connivance with the Respondent No.2 have filed the present application, being an afterthought and based on frivolous allegations against the Respondent No.1

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1.^.No.2747 /2022 an SA No.59/2023

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4 It is contended that the Appellants cannot claim any interest in the mortgaged property on account of the Sale Agreement. In fact, Sale agreement was not registered as expressly provided by the provisions of Section 54 of the Transfer of Property Act, 1882. Such document does not create any title over said property,

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The Appellants have with such mala-fide intention have preferred the instant SARFAESI application after passing of more than 42 days thereby there was violation of the very provision of law and with the sole intent to harass the Respondent No.1 and cause undue hardship in the process of recovery. Section 17(1) of the SARFAESI Act provides a limitation period 45 days for flling any application by any aggrieved party against any step taken by any Bank or Securitisation company under the said Act. The Appellant if aggrieved in any manner by any step taken by the Respondent under the said Act could have filed the instant SARFAESI Application within 45 days. The Respondent No.1 bank has further contended that the Tribunal shall therefore have no powers to condone the delay, unless expressly conferred by the Statute creating it. The Appellants after passing of 42 days from the limitation which is to be ascertained from the date of the

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| .A.No .27 47 /2022 in SA No.59/2023

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Sale Notice dated O4.O7.2022, have filed the present application. The basis of the present application on such Sale Agreement has no locus standi. It is contended that the instant SARFAESI application is prima facie barred by limitation, not maintainable and liable to be dismissed.

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On the above background, I have gone through the available records oF the case, heard the arguments addressed by all the three Counsels and the following points arise for my consideration:

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a) Whether the Appellants have made out the 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 entiUed?

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REASONS

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After hearing the Learned Counsels for the Appellants and the Respondent No.1 Bank and also on going through the available materials on record, it is observed that the Appellants have filed the present main application challenging the Sale Notice dated O4.O7.2022 issued by the Respondent No.1 Bank in respect Schedule^properties. It is seen that the Appellants have admitted availing of loan and default in making

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l.A.No.2747 /2022 in SA No.59/2023

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repayments of the secured debt. Respondent No.1 Bank has produced copies of relevant documents, which proved that the Respondent No.1 Bank has enforced security interest created in favour of the Respondent No.1 Bank by the concerned in accordance with the provisions of the Act and the Rules. Demand Notice under Section 13(2) of the Act was issued by the Respondent side to the Appellants on 01.01.2019, thereafter Possession Notice under Section 13(4) of the Act was issued on 11.03.2019. So far, the Possession Notice was concerned, the same was affixed on the secured asset. The paper publication was done for publication of possession Notice. Sale Notice was issued on O4.O7.2022. However, it is observed that the Appellants have filed the present Appeal on 30.O9.2022 along with the present l.A. No.2747/2022 stating that there is a delay of 41 days in challenging the impugned Sale Notice dated 04.O7.2022. The contentions of the Appellants are that due to some bona-fide reasons, the Appellants could not file the appeal within limitation and there was a delay of 41 days in preferring the appeal. However, there is no proper explanation provided by the Appellants as to why they had failed to flle the appeal in question within the period of limitation. In this context, it will be proper to mention that this Tribunal has no power to extend the

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l.A.No.27 47 /2022 in SA No.59/2023

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period of limitation on equitable grounds and has no power to ignore that the^provision to relieye 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 7997 (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 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. lvloreover, it seems that the Respondent No.1 Bank has complied with the provisions of the law while initiating measures against the Appellants. Therefore,

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1.4.No.2747 /2022 in SA No.59/2023

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the appeal in question appears to be devoid of merit and the same is barred by limitation. In that view of the matter, the Appellants have 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.2747 of 2022 for

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condonation of delay is dismissed.

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Consequently, SA No.59 of 2O2Z is also dismissed.

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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, after its transcription and necessary corrections, signed and pronounced by me in the Open Court on this Z6th Oiy of:uly, 2dZ3j

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.\ ,Lh t,.t \ro (IMTIAZ ALI) PRESIDING OFFICER DRT-T, BENGALURU

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*s r+

Mr Ashwani Kumar v. Bank of Baroda (Vijaya Bank)

Case brief

What is this about?

What did the court decide?

Mr Ashwani Kumar v. Bank of Baroda (Vijaya Bank)

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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