Allowed

Uco Bank v. E. Thirugnansambandam

DRT8 Apr 2025MA/223/2024

Case brief

AI extract

What is this about?

The Tribunal allowed MA No.223/24 condoning delays in filing an Original Application. Despite rejecting the explanation of delay as insufficient, the court allowed condonation as the bank is a financial institution. The bank must pay costs and waive interest for the delay period if successful.

What did the court decide?

MA allowed to condone delay in filing physical copy and re-presentation of OA subject to payment of costs and waiver of interest for the delay period.

Uco Bank versus E. Thirugnansambandam — Insolvency and Bankruptcy | DRT (2025)

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 08^th day of April, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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M.A. No.223 of 2024 in O.A. Dy. No.2119 of 2024

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UCO Bank Asset Management Branch Chennai Represented by its Chief Manager Chennai – 600 001

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….Applicant

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-Vs-

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Mr. E. Thirugnansambandam S/o Shri Elumalai

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New No.74, Old No.139, Swamy Naicken Street Chintardripet, Chennai – 600 002

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Mrs. V. Vasanthi

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W/o Mr. E. Thirugnansambandam

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New No.74, Old No.139, Swamy Naicken Street Chintardripet, Chennai – 600 002

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M/s Infonet Asia Private Limited

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Rep. by IRP, Mr. Ebenezar Inbaraj

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New No.74, Old No.139, Swamy Naicken Street Chintardripet, Chennai – 600 002 ….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : M/s O. Padmaprakash

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: - ORDER ON MA NO.123 OF 2025- :

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The present MA is filed by applicant bank praying to condone delay

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of 757 days in presentation of physical copy and re-presentation of OA.

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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The Original Application is filed by the Petitioner/Applicant Bank against the Defendants, seeking main relief to order the Defendant Nos.1 and 2 jointly and severally to pay a sum of Rs.5,01,78,541.05p (Rupees Five Crores One Lakh Seventy Eight Thousand Five Hundred and Forty One and Five Paise only) with further interest and costs.

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In the affidavit of Mr. Arun Mozhi, Assistant Manager representing the Applicant Bank, it is submitted that the OA was initially e-filed into DRT-II, Chennai on 03.06.2022 under Diary No.915 of 2022 and physical copy of OA was filed on 08.09.2022. After scrutiny, OA was returned by the Registry on 13.10.2022 to be re-presented before DRT-III, Chennai in view of bifurcation of jurisdiction. The OA was re-presented before DRTIII in Dy. No.2119 of 2024.

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It is submitted by applicant bank that pending security of OA, borrower / 1^st defendant expired on 14.10.2022 leaving behing his wife and daughters as legal heirs. Morever, the applicant bank had filed an insolvency petition before NCLT against 3^rd defendant and Mr. Ebenezer Inbaraj, was appointed as IRP. 3^rd defendant was attempting to settle the case before NCLT. In the meanwhile, 1^st defendant who was then alive along with 2^nd defendant had approached applicant bank for OTS and the applicant bank vide their communication dated 25.03.2024 had granted OTS. However, defendants 1 and 2 could not comply with the terms of

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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OTS but had remitted only Rs.50 lakhs. Since the OTS was not complied with, applicant bank had sold both the secured assets which were adjacent to each other and inseparable and realized a sum of Rs.5,65,70,000/- which is since been appropriated to the borrower’s loan account and a balance sum of Rs.3,49,82,456.28p is still due and payable by the defendants. Hence the delay of 89 days had occurred in presenting the physical copy of OA and 668 days delay in re-presenting OA due to aforesaid reason and applicant bank prayed for condoning the delay in presenting the physical copy and re-presenting the OA.

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Heard the arguments of the applicant’s counsel and perused the records of the case.

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The applicant bank has not explained each day’s delay diligently as settlement between the parties cannot be taken as a reason for huge number of days of delay, when the bank had subsequently sold the property and realized a sum of Rs.5,65,70,000/- which has since been appropriated to the borrower’s loan account but did not comply with the defects and prosecute the OA diligently.

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Further the delay cannot be condoned on equitable grounds and the Tribunal places reliance on the Judgement of Hon’ble Supreme Court in the case titled Lingeswaran Vs. Thirunagalingam, where it is observed that an application for condonation of delay has to be dismissed if it is

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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found that the delay is not properly explained and that the period of limitation cannot be extended on equitable ground. Otherwise, it would be giving a premium to a person who fails to explain the delay and who is guilty of delay and laches. The court also observed "The Court has no power to extend the period of limitation on equitable grounds. The statutory provision may cause hardship or inconvenience to a particular party but the Court has no choice but to enforce it giving full effect to the same.

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The Hon’ble Apex Court also noted the following observations made in Maniben Devraj Shah v. Municipal Corporation of Brihan

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Mumbai, (2012) 5 SCC 157 , while dismissing the SLP:

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"The law of limitation is founded on public policy. The limitation Act, 1963 has not been enacted with the object of destroying the rights of the parties but to ensure that they approach the court for vindication of their rights without unreasonable delay. The idea underlying the concept of limitation is that every remedy should remain alive only till the expiry of the period fixed by the legislature. At the same time, the courts are empowered to condone the delay provided that sufficient cause is shown by the applicant for not availing the remedy within the prescribed period of limitation."

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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It is a settled legal proposition that law of limitation may harshly affect a particular party, but it must be applied with all its rigour when the statute so prescribes. The Tribunal has no power to extend the period of limitation on equitable grounds and has no power to ignore that provision to relieve what it considers a distress resulting from its operation as per the Judgement of Hon’ble Supreme Court in the matter of P.K. Ramachandran vs. State of Kerala, reported in (1997) 7 SCC 556, the Hon’ble Supreme Court has held thus:-

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"Law of limitation may harshly affect a particular party but it has to be applied with all its rigour when the statute so prescribes and the courts have no power to extend the period of limitation on equitable grounds".

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Hence, the legal maxim “dura lex sed lex” which means “the law is hard but it is the law”, stands attracted in such a situation.

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However, in view of the fact that the bank being a financial institution is the custodian of the public money held under trust, the Tribunal relying on the judgment of Hon’ble High Court of Madras (At Madurai) in the judgment of V.P. Rajula -Vs.- K.J. Sakadeva Raja reported in LAWS (MAD)-2020-8-441 feels it apt to condone the delay and give last opportunity to applicant to prosecute their case.

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Accordingly, MA Nos.223/24 praying to condone delay of 89 days in filing physical copy of the OA stand allowed, with regard to condonation of

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MA 223/24 in OA Dy. No.2119/2024

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08.04.2025

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delay of 668 days delay in re-presentation, the same is allowed subject to payment of costs of Rs.50,000/- to the Tamil Nadu State Legal Services R Buildings, High Court Campus, A.D, N Fort Rd, Parrys, George Town, Chennai, Tamil Nadu 600 104 on or before 05.05.2025 by the applicant bank and to file the payment of compliance report before the Registrar Court on 04.06.2025.

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Further, the Tribunal, placing reliance on the judgment Hon’ble High Court of Madras (At Madurai) in the judgment of V.P. Rajula - Vs.- K.J. Sakadeva Raja , directs that in case if applicant bank succeeds in the OA, applicant bank shall not claim interest for the said period of 668 days from the defendants and file a memo of calculation at the time of adjudication of OA claim. The copy of this order be placed in the OA enabling to claim the exemption of interest at the time of final adjudication of OA.

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In case of the applicant complying with the order, Registry is directed to number the OA, if otherwise found to be in order. It is clarified that in case if the applicant bank fails to comply with the conditional order above, MA stand dismissed automatically without there being any need to pass separate order. Sd/-

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(S.V. GOWRAMMA) PRESIDING OFFICER, DRT-III, CHENNAI

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(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 08^th day of April, 2025)

Uco Bank v. E. Thirugnansambandam

Case brief

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Uco Bank v. E. Thirugnansambandam

Case brief

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