Allowed

Sri Shashikiran M S v. Karnataka Bank Limited

DRT13 Dec 2023SA/614/2023

Case brief

AI extract

What is this about?

The Tribunal allowed an interlocutory application for condonation of a 345-day delay in filing an unregistered securitisation application. The delay was condoned based on the Supreme Court's observation regarding the exclusion of the period from 15.03.2020 to 28.02.2022 for calculating limitation periods.

What did the court decide?

Delay of 345 days in filing the application under Section 17(1) of the Act was condoned; the application was directed to be registered.

Sri Shashikiran M S versus Karnataka Bank Limited — Company and Corporate | DRT (2023)

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

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PRESENT: SRI IMTI AZ ALI PRESIDING OFFICER

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Dated the 13th day of December,2O23

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INTERLOCUTORY APPLICATION^{No.2078 of 2021}

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UNREGISTERED SECURITISATION^{APPLICATION Dy No.1658OF 2021}

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Between

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Shashikiran M S, 2040, Shivakrupa, 19th Main Road,2nd^Lock, Raj aj inagar, Bangalore, Karnataka - 560010. . . ...Petitioner/Applicant

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And

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Karnataka Bank, ARM Branch, 3'd Floor, Karnataka Building. Kodlabail, Mangaluru, Karnataka - 575003, represented by its authorised officer. Respondent/Defendant This Interlocutory^APPlication having been heard on21.06.2023^{in the presence} of Advocates M/s Nithin^ChandraM, Vinod Kumal, Sudha R and Divya^{ShreeB R for} the respondent/defendant,^{and stood} over to this day for^{consideration,the Tribunal} delivered the following:-

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ORDER

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This petition has been^{filedon 27.10.2021underS.5 of the LimitationAct,1963} praying to condone the delay of^{340 days in filing the UnregisteredSecuritisation} Application^(SA) on^{027.10.2021 under S.17(1)of the Securitisation and Reconstruction} of Financial Assets^{and Enforcementof SecurityInterest Act, 2002as amended from} time to time -^{hereinafter referredto as 'the Act'- with Dy No.165812021 aggrievedby} ord.r dated 01.10.2020 of^{the 30th Additional Chief Metropolitan Magistrate,} :j:.

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IA No.2078/2021 in Unregistered^{SA DyNo. 1658/2021}

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Bengaluru in Crl Misc No.424912020. The^{petitioner is none other than the applicantin} the USA.

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' 2. The case set out by the petitioner through his^{notaryattestedaffidavit} accompanying the IA in brief is as follows:-^{This petitioner was totally unaware of the} fact that the order had been^passed under S.l4 of the Act^{by the 30th Additional Chief} Metropolitan Magistrate, Bengaluru in Crl^{Misc No.424912020dated 01.10.2020.This} petitioner was not informed nor served with any kind of notice earlier^{with regard to his} loan due to which there was no delay in^approaching the^{Tribunal. On the above} contentions, the petitioner/applicant^{prayed for} condonation^{of delayof 340 days in filing} the USA.

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The respondent/defendant filed a statement of objection contending^as follows:- The demand notice and the^{possessionnotices} were^{dulyservedon the} applicant. This clearly establishes that the applicant^was in^knowledge of^{the recovery} proceedings initiated by the bank since 11.03.2020 itself. On the above contentions, the respondent/defendant prayed for dismissal of the IA.

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The only point arises for consideration is as to whether the^petitioner/ applicant is entitled to the relief^prayed for?

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The Point:- The petitioner/applicant was represented by the counsel-onrecord throughout the proceedings. But when the case was taken^up on^{08.02.2023,Ld} counsel for the petitioner/applicant submitted that she had^{given NOC} to^{the party for} engaging any other counsel.

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Aggrieved by the order dated 01.10.2020 of the 30tr'Additional Chief Metropolitan Magistrate, Bengaluru in Crl Misc No.424912020,^{the petitioner/applicant} on21.10.2021 filed an application under S.l7(1) of^{the Act before this Tribunal praying} to set aside the impugned order dated 01.10.2020. Thus, an application^{under S.17(l)of} ought to have been filed on or before 16.11.2020. However, the^petitioner/ lj_:"",

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lA No.2078/2021 in Unregistered SA^{Dy No. 1658/2021}

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applicant filed an application under S.17(1)^{of the Act only on27.l0.2021witha delay of} 345 days.

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According to the petitioner/applicant, he^was totally^{unawareof the fact} , that the order had been^{passed under S.14} of^{the Act by the 30th Additional Chief} Metropolitan Magistrate, Bengaluru^{in Crl Misc No.424912020 dated 01.10.2020 and he} was not informed nor served with any^{kind of noticeearlier withregard to his loan due to} which there was no delay in approaching the^{Tribunal.It appearsto be his casethat he} was totally unaware of the^proceedings initiated by^{the respondent/defendantinvoking} the provisions under the Act^{including the order dated 01.10.2020 and hence the delay.} However, the respondent/defendant^submitted that^{he was dulyserved with demand} notice and the possession notice and^{hence he was well awareof the proceedingsinitiated} by the bank.

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A copy of the demand notice dated^{11.10.2019 produced} by^the respondent/defendant along with^{the statement} of^{objectionshows that the petitioner/} applicant had personally received a^copy of^{the same as could be inferred from the} endorsement at the bottom of^{the said notice.The possessionnotice dated07.03.2020} also was duly served upon the^{petitioner/applicant} on^{11.03.2020.Thephotograph} produced along with the same shows that the said notice had^been affixed^{at a} conspicuous place of the^property on^07.03.2020 at^{04.27 p.m. In theabove} circumstances, there is no substance in^{the contention of the petitioner/applicant that he} was unaware of the proceedings initiated by the^{respondent/defendantandhencethe} delay.

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However, notwithstanding to the merits of the case^proposed by^the petitioner/applicant, the Hon'ble Supreme Court in In Re : Cognizance -for^Extensiono.f Limitation [reported in 2022^(1t KLT 315^{(SCUtaking into considerationthe impact of} the surge of covid viruses on^{public health} and^{the adversities faced by the litigants}

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lA No.2078/2021 in Unregistered SA Dy No. 1658/2021

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directed that the period from 15.03.2020 ttll 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all^judicial or quasi-judicial proceedings and that in cases where the limitation would haye expired during the period between 15.03.2020 till28.02.2022,notwithstanding the actual balance period of imitation remaining, all person shall have a limitation period of

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90 days from 0l .03.2022, and the relevant^portion reads as below:-

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"Taking into consideration the orguments advanced by counsel and the impact ofthe surge ofthe virus on public heqlth and adversities J'aced by litigants in the prevailing conditions, we deem it appropriate to dispose of the MA No.21 of 2022 withthefollowingdirections:^{The order dated23.03.2020} is restored ond in continuation of the subsequent orders dated 08.03.202 1, 27.04.202¹ and 23.09.202 l,^it is directed that the period from I 5.03.2020 till 28.02.2022 shall stand excluded for the^purposes of limitation as may be prescribed under any^general or special laws in^respect of all^judicial or^{quasi-judicial} proceedings. Consequently, the balance period of limitation remaining as on 03.10.202 I, d ony, shall become available with effect from 01.03.2022.^In cases^where the limitation^{wouldhaveexpired duringthe} period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a lintitation period of 90 daysfrom 01.03.2022. In the event the aclual balance^period of limitation remaining, with ffictfrom 01.03.2022^{is greater than 90 days,that longer} period shall apply. It isfurther clarified that the periodfrom 15.03.20920 till 28.02.2022 shall also stand excluded in computing the periods^prescribed under 5s.23(4) and^29A of the Arbitration and Conciliation Act, 1996, S.l2A of the Commercial Courts Act, 2015 and^{provisos (b)} and^{(c) of} 5.138^{of the Negotiable} Instruments Act, l88l and any other lqws, which^prescribe period(s) of limitation for^instituling proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings. "

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In view of the above direction issued by the Hon'ble Supreme Court, the petitioner/applicant was entitled to present an application under S.l7(l) of the Act aggrieved by the measure taken by the respondent/defendant^{by virtue of the orderdated} 01.10.2020 of the 30th Additional Chief Metropolitan^{Magistrate, Bengaluru in Crl Misc} No.4249/2020, on or before 30.05.2022 as the limitation^(stipulated date of^{'16.11 .2020')} had expired during the period between 15.03.2020 and 28.02.2022.^{However, he} presented the same on 27.10.2021, well before such date^prescribed by the Hon'ble Supreme Court. In the above circumstances,^{notwithstanding to the merits of the grounds} urged by the petitioner/applicant in^the application,^{the delay of 345 daysin presenting} the unregistered SA with Dy No.1658/2021^comes within^{the outerlimit within which} this Tribunal can condone as directed by the Hon'ble^{SupremeCourtin the decision} supra.

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lA No.2078/2021 in Unregistered SA Dy No. 1658/2021

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lr^

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I l. In the result, the delay of 345 days in presenting the unregistered SA with Dy No.165812021is condoned and the Registry is directed to register the same,^provided otherwise in order. As the matter is^pending for^passing of final orders, the SA after registration, if any, shall be placed before the Tribunal for passing of final orders within three weeks from the date of registration. Posted for the needful, as above, before the Registrar, on 20.12.2023.

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