The DRT dismissed the Applicant's Securitization Application as time-barred. The court held that approaching the High Court knowingly without seeking a reference to the DRT precludes the exclusion of time under Section 14 of the Limitation Act.
The Securitization Application and all pending Applications inter alia are dismissed and disposed of.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
SA No.02/2024
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DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH
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SA No.02/2024 lshpreet Singh Versus. Punjab National Bank and another
24.01.2024 Item No.61
Argued by: Sh.Akhilesh Vyas, Counsel for the Applicant. Sh.CS Pasricha, Counsel for Respondent No.1/Bank. Ms.Jasleen Kam, Counsel for respondent No.2.
Yashpreet Singh (Applicant) has filed this Secuatization Application under Section 17 of the $ecuritization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act), against the Authorized O#icer, Punjab National Bank (PNB) and another (Respondents).
3' AdmittedIY, PNB had sanctioned credit facilities to the tune of Rs.4.50 crores to M/s A Square Charitable Society. M.Yashpreet Singh (Applicant) is the PTesident of the SocietY' He (Applicant) and one Mr.Gurinderjit Singh were the ttl Warantors for this loan. To secure the loan, M/s A Square Charitable SocieW; Applicant and Guanderjit Singh had created security interest in respect of the.b prcWettles’ m favour of the bank. M/s A Square Charitable Society failed to make the payment and PNB initiated SARFAESI proceedings and issued notices under Secd011 13(2) and 13(4) of the SARFAESI Ad. PNB ,1„ i„„,d th, „I, n,ti,e ofl the property of dIe applicant and Gurinderjh SWh. The pI-opeHy was put to 1 atlctlon on seven occasions' However) PNB did not receive any bid. Ultimately t he P r o P e IIF i e s \A11 nr e au: t i o n e d fo r ei ghthUme for 27 p 10 p 2022 eM/sA Square I Charitable SOGieV and Applicant bled CWP No.3382-2022 in the Hon9bIe High IC 0 t1r t o (brFgJr UUri n d ed it S i n gh a 1 S O fi led CWPN o918825 n 2022 v Howe vu) vi de order I dated 25'08.2022, the Hon'ble Ha disposed of CM, No.18825_20223 Mh thel 1 i b e11 y t o 1]E1iH 11][H t o apP ro ac h th e ]:} ]FWe On 03 + ol82024 ) AppH cantIde dale present I S A' Wtb this background I come to the impugned SA.
4 n 1[1 1•Lt1 e nna1pP Ugn e d S JIIIepIIIL ) JI&ppI i cant has dIe ged that M/sA Square Chaltabbl S o c i e t y i s a 1C h adt ab 1 : 1C) rg IIa[][M z ati on 1wh ch had set UP a schooI on Ibe land /
SA No.02/2024
DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH
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measuring 23 I<anal 17 marlas. In 2017, it (M/s A Square Charitable Society) had availed Term Loan of Rs.4.50 crore from PNB. Subsequently, during C:ovid, PNB had sanctioned Working Capital Term Loan under (}ECL of Rs.86 lacs. 1 On 31.03.2021, the account of M/s A Square Charitable Society was declared NPA. On 29.04.2021, PNB had issued the notice under Section 13 (2) of the SARFAESI Act, demanding a sum of Rs.5,59,76,285.52p, as on 01.04.2021 (Annexure A-3). On 15.06.2021, M/s A Square Charitable Society had submitted representation under Section 13(3-A) of the Securitization Act (Jbmexure A-4). However9 PNB without deciding the same, on 09.02.2022> issued the notice under Section 13(4) of the SARFAESI Act. On 03.10.2022, PNB issued the sale notice, for 27.10.2022 (Annexu1n„ A-6) with the reserve price of Rs.1.23 crore. On 27.10.2022, single bidder submitted a bid equivalent to the reserve price. Applicant has alleged that PNB had not complied with the provisions of Rule 8 of the SecuritY Interest ®nfowement) Rules, 2002. The bank was under obligation to obtain aesh valuation before carrying out each sale. Applicant alleged that one Ml-Sukhjiwan Singh Brar had also approached him with an oM of Rs.1.30 ctotes' it is alleged that two properties were sold. However, Applicant has challenged the sale of one propertY. Earlier, M/s A Square Charitable Society had Ned C:WP No'3382-202-2 in th Hon’bIc High CouN, which directed the Society to deposit Rs-1 crore in two installments. Since, the school had not sufficient Rmds9 the paYment could not be paid. Subsequently9 Applit,.ant hled c-wp No-25572-2022, which was dismissed by the Hon'b Ie High Courtp ade order dat“i 29'11-2023, ak”lg'“m: CWP Nc).3382-2022 (Ann.xure A-r Oj. It is ,11,g,dJ that GuMnderjh Singh had DIed CWP No.18825e022> which was dbp03Gd of by He Hon’bIG High Coun, via order dated 25.08.2022 (Amexure A_11). it is alleged that PNB had issued the sale notice on 03.10.20229 for 27.10.2022. NowI the bank has issued a leYte' dat'd 27.12.2023 R)1' possession of the propelV sold.I On these facts, Applicant filed the present SA for seUng aside dIe sade notice dated 03.10.2022 (Jm:xwe A_8); possession notice dated 09.02.2022 aInd theJ
possession order for tahng the possession on 05.01.2024
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SA No.02/2024
DEBTS RECOVERY TRIBUNAL-I, CHANDIGARH
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SA No.02/2024
DEBTS RECOVERY TRIBUNAL-I, CHAF{DIGARH
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Counsel submitted that since the possession was fixed up for 05.01.2024, which date has been extended to 23.01.2024, the present SA is within time-
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101 have considered the rival contentions.
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SA No.02/2024
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DEBTS REC'OVERY TIUBUNAL-I, CHANDIGARH
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was disposed of by the Hon’ble High (noun vide order dated 25.08.2022 with the liberty to him to approach the DRT. Thereafter, Applicant med C:WP No.2557220227 in the Hon’bIc High Court, which vide order dated 29.11.2023 dismissed CWP No.3382-2022 and CWP No.25572-2022. 1n CWP No.25572-2022, Applicant had prayed for setting aside sale notice dated 03.10.2022, putting up the propaty for auction for 127,10.2022. The property in the case in hand was sold fOI Rs. 1.24 crore against the reserve price of Rs. 1.23 crore. Mr.Pasricha has argued that the Hon’ble High Court while disposing of CWP No.3382-2022 (O&M) and CWP No.25572-2022 (O&M), vide order dated 29.11.2023 did not relegate the petitioner to approach this DRT. The Hon’ble High Court only ordered that the petitioner would be at liberty to avail the remedies as are available to him in accordance with the law. In these circumstances, Applicant is not entitled to the exclusion of time taken from the date of filing CWP No.3382-2022 and CWP No.25572-2022, till theliisposal of the same on 29.11.2023 . The present SA was filed on 03.01.2024. Applicant had 45 days time from the date of knowledge of sale. Applicant had approached the Hon’bIc High CouN on 09.11.2023. Applicant filed the present SA on 03.01.2024. Accordingly, the SA is time barred,
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SA No.02/2024
DEBTS RECOVERY TRIBUNAL-I, CnANDIGARH
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chance before the Hon’ble High Court. In SARFAESI matters, the time is of the esgence of the matter_ Ib fact, the gARFAEgI Act hag been enacted to expedite the dues of the banks. I am of the considered view that the applicant was not pursuing his remedy before the Hon’bIc High CouN in a bona fIde manner. It has been observed that despite the fact the Hon’bIc Supreme Court has ordered that the borrowers/guarantors should approach the Debts Recovery Tribunal in SARFAESI matters, still the borrowers/guarantors rush to the Hon’ble High Court with the intention to get the SARFAESI proceedings stayed, even though they have no case on merits. The purpose is to somehow to gain thne. After enjoying the stay order, they a$preach this Tribunal. This practice of rushing to the Hon’ble High Court and then approaching this Tribunal requires to be deprecated. I am of the considered view applicant is not entitled to the exclusion of time taken by him before the Hon’bIc High Coun.
rule' Thereafter, file be consiwed to record room after due [email protected].
t Pronounced MANOJ/24.01.2024in open court q Chandigarh
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2 issues framed by the court
Whether the securitization application filed on 03.01.2024 is beyond the statutory limitation period.
Whether time taken in approaching the High Court can be excluded under Section 14 of the Limitation Act.
Colour shows how this judgement treated each authority
Celir LLP versus Bafna MotorsReferred¶19
Celir LLP versus Bafna Motors
4 provisions across 1 enactments
Yashpreet Singh
Punjab National Bank
Other
Manoj
As recorded by the court registry
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