Allowed

Indian Overseas Bank v. M/s. Aks Alloys Pvt. Ltd.

DRT9 Apr 2025MA/271/2024

Case brief

AI extract

What is this about?

The Chennai Debt Recovery Tribunal allowed Misc. Applications to condone a 491-day delay in restoring a Tax Arbitration dismissed for default. While acknowledging negligence, the Tribunal relaxed strict legal limits because the applicant is a financial institution holding public money in trust, ordering restoration contingent on payment of costs and waiver of interest for the delayed period.

What did the court decide?

MA Nos. 271/24 and 183/25 allowed; OA restored on condition of paying Rs. 50,000 costs and waiving interest for the 491-day delay period.

Indian Overseas Bank versus M/s. Aks Alloys Pvt. Ltd. — Execution and Attachment | DRT (2025)

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

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Dated this the 09^th day of April, 2025

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Present: SMT. S.V. GOWRAMMA Presiding Officer

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Misc. Application Nos. 271/24 & 183/25 in

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OA No. 259 of 2021

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Prudent ARC Limited Asset Reconstruction Company Registered Office at No.611, D-Mall, Plot No.A-1 Netaji Subhash Place, Ptampura New Delhi – 110 034 ….Applicant -Vs-

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M/s. AKS Alloys Pvt. Ltd. Rep. by its Managing Director

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Mr. Nemi Chand Kothari Corporate Office “Arihant Plaza”, III Floor Old No.84/85, New No.193/232 Waltax Road Chennai – 600 003 & 07 others .….Defendants

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Counsels on record / appeared:

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Counsel for Applicant : Mr. K.K. Sivasshanmugam

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: -ORDER ON MAs 271/24 & 183/25-:

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MA 271/24 is filed by applicant bank praying to condone delay of

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491 days in filing restoration petition and MA 183/25 is filed to restore TA, which was dismissed for default on 28.04.2023.

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The Original Application is filed by the Petitioner/Applicant Bank

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against the Defendants, seeking main relief to order the Defendants to

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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pay a sum of Rs.27,10,56,280/- (Rupees Twenty Seven Crores Ten

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Lakhs Fifty Six Thousand Two Hundred and Eighty only only) together with future interest @ 12.65% p.a. with monthly rests along with overdue interest @2% p.a. and costs.

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The Applicant Bank has filed the present petitions i.e., MA Nos. 271/24 and 183/25 along with affidavit of Sh. Amar Jit Kochar, Senior Executive Vice President of applicant institution seeking to condone delay of 491 days in filing restoration petition and to restore OA which was dismissed for default on 28.04.2023.

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It is submitted by applicant bank that the assignor bank had filed the above OA against M/s AKS Alloys Pvt. Ltd. & others for recovery of debts due. During the pendency of OA, financial assets were assigned in favor of applicant company by virtue of Assignment Deed dated 14.09.2022 registered as Document No.10933/2022. IA No.1500/22 filed

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by applicant bank for substitution was allowed vide order dated 15.02.2023 and accordingly amended OA was also filed.

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It is further submitted by applicant that official of the applicant who filed the proof affidavit could not be present on 28.04.2023 for marking of documents. Hence the OA came to be dismissed for default and nonprosecution. As the registered office is situated in New Delhi, the office who deposed the proof affidavit could not travel on that particular day to Chennai for the purpose of marking the documents due to ill health.

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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Subsequently, there was a change in the officer’s position and by oversight, the dismissal of OA for default was not properly placed before the concerned official for necessary steps towards restoration. Hence the delay of 491 days has occurred in filing necessary applications. There has been no wanton negligence or default on the part on the applicant. Thus submitting, counsel prayed for condonation of delay and restoration of TA.

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Heard and perused the records of the case .

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The applicant, being a financial institution has filed the present restoration petition for recovery of a sum of Rs.27,10,56,280/- along with interest and for sale of mortgaged properties. On verification of proceedings dated 28.04.2023, it is observed that the applicant bank has taken substantial time for marking of documents despite PA and OD was found to be in order on 28.10.2022 instance. The reason attributed by the applicant for delay in filing the restoration application shows the negligence on the part of applicant in prosecuting the case involving recovery of sum of Rs.27 crores and odd with interest.

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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

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is observed that an application for condonation of delay has to be dismissed if it is 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

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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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 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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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

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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matter of P.K. Ramachandran vs. State of Kerala, reported in

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(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 applicant 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.271/24 and 183/25 stands allowed subject to payment of costs of Rs.50,000/- to Tamil Nadu State Legal Services R

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Buildings, High Court Campus, A.D, N Fort Rd, Parrys, George

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Town, Chennai, Tamil Nadu 600 104 on or before 05.05.2025 by the applicant and to file the payment of compliance report before the Registrar Court on 03.06.2025.

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Further, the Tribunal, placing reliance on the judgment of Hon’ble High Court of Madras (At Madurai) in the judgment of V.P. Rajula -

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Vs.- K.J. Sakadeva Raja , directs that in case if applicant bank succeeds

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MAs 271/24 & 183/25 in OA 259/2021

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09.04.2025

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in the OA, applicant bank shall not claim interest for the said period of 491 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, OA stands restored to file for marking of proof affidavit and documents before the Registrar’s Court on 03.06.2025. It is clarified that in case if the applicant bank fails to comply with the conditional order above, MAs stand dismissed automatically without there being any need to pass separate order.

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Sd/- (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 09^th day of April, 2025)

Indian Overseas Bank v. M/s. Aks Alloys Pvt. Ltd.

Case brief

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Indian Overseas Bank v. M/s. Aks Alloys Pvt. Ltd.

Case brief

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