Dismissed

Laksha Hospitals v. Encore Asset Reconstruction Company Private Limited

DRT24 Apr 2026SA/172/2026

Case brief

AI extract

What is this about?

The Debt Recovery Tribunal dismissed an application seeking condonation of a 228-day delay in filing a Section 17 appeal against a Section 14 order. The Tribunal held that the 45-day limitation period under the SARFAESI Act is mandatory and cannot be extended on equitable grounds.

What did the court decide?

The application to condone the delay of 228 days in filing the Section 17 appeal was dismissed.

Laksha Hospitals versus Encore Asset Reconstruction Company… — Company and Corporate | DRT (2026)

¶1

IA 440/26 in SA No.172/2026

¶2

24.04.2026

¶3

¶4

IN THE DEBTS RECOVERY TRIBUNAL-III, CHENNAI

¶5

Dated this the 24^th day of April, 2026

¶6

Present: SMT. S.V. GOWRAMMA Presiding Officer

¶7

I.A. No.440 of 2026 in S.A. No.172 of 2026

¶8

Laksha Hospitals, Rep. by T. Senthilkumar, No.15, P.S. Sivamamy Salai, Mylapore, Near Axis Bank, Chennai – 600004.

¶9

Mr. T.Senthilkumar, S/o V.R. Thirunarayanan, No. 2/7, Indirani Ammal Street, Mylapore, Near Axis Bank, Chennai – 600 004.

¶10

Mrs. S. Rekha, W/o T. Senthilkumar, No. 2/7, Indirani Ammal Street, Mylapore, Near Axis Bank, Chennai – 600 004.

¶11

Mr. Gopi, S/o, Ramakrishnan, 29/70, Contractor Ponnusamy Street, Arunagirisathiram, Arani, Near Arani Bus Stand, Tiruvannamalai – 632 301.

¶12

Mrs. Shanthi, D/o. Govindaraj, Old No. 20/2, New No. 39, Dr. Rangachari Road, Mylapore, Near to Valluvar Statue, Chennai – 600 004.

¶13

Also at:

¶14

83/30, Batcha Street,

¶15

Uploaded on 24.04.2026 at 17:20 hours

¶16

IA 440/26 in SA No.172/2026

¶17

¶18

24.04.2026

¶19

Arunagirisathiram, Arani, Near Arani Bus Stand, Tiruvannamalai – 632 301.

¶20

Mr. Anbu Ganapathy, S/o, Ramakrishnan, No. 29, CPM Street, Arunagirisathiram, Arani, Near Arani Bus Stand, Tiruvannamalai – 632 301. ….Applicants

¶21

-Vs-

¶22

M/s Encore Asset Reconstruction Company Private Limited Represented by its Authorised officer Chief Manager, No.101, Executive Zone, Shakthi Tower 1, Ground Floor, 766, Anna Salai, Chennai -600 002. …..Respondent

¶23

Counsels on record / appeared:

¶24

Counsel for Applicants : M/s Acuity Law Associates

¶25

Counsel for Respondent : M/s C.P.R. Kamaraj

¶26

: - ORDER ON IA NO.440 OF 2026 in SA No.172 of 2026- :

¶27

The present SA is filed by applicant challenging the Section 14 order

¶28

dated 25.03.2025 passed by Ld. Chief Metropolitan Magistrate, Egmore in

¶29

Crl.M.P. No.11092 of 2024, pursuant to SARFAESI measures initiated by

¶30

respondent bank for recovery of a sum of Rs.85,58,293/- as on 14.07.2023.

¶31

Admittedly, there is a delay of 228 days in filing the SA and hence the applicant had filed IA No.440/26 to condone the delay in filing the SA.

¶32

In the affidavit filed by 2^nd applicant along with IA, it is submitted that

¶33

the applicants approached M/s. Indostar, a Non-Banking Financial Company,

¶34

Uploaded on 24.04.2026 at 17:20 hours

¶35

IA 440/26 in SA No.172/2026

¶36

¶37

24.04.2026

¶38

in the year 2018 for availing a Loan Against Property (LAP) to meet the financial requirements of Laksha Hospital. After due verification, M/s. Indostar sanctioned a loan of ₹74,02,369/- vide sanction letter dated 04.09.2018 and the Applicants executed various loan documents including Loan Agreement dated 11.09.2018.

¶39

It is further submitted by the applicants that they had been repaying the loan in good faith and never had any dishonest intention to default. However, due to temporary financial constraints caused by operational issues of the hospital, there were delays in repayment, which the Applicants were always willing to regularise. At the time of availing the loan facility, M/s.Indostar obtained the signatures of the Applicants on several blank papers and further insisted upon execution of a Memorandum of Deposit of Title Deeds in respect of the schedule properties. Accordingly, a Memorandum of Deposit of Title Deeds was executed and registered as Document No. 2960 of 2018 on the file of the Sub-Registrar, Mylapore, purportedly creating a secured interest in favour of M/s. Indostar

¶40

It is submitted that M/s. Indostar failed to register the said mortgage with CERSAI, as mandatorily required under Sections 20, 23 and 26D of the SARFAESI Act. Subsequently, the Applicants were informed that the loan account has been assigned to the present respondent. The Applicants were not informed outstanding of the exact loan amount. When the 1^st and 2^nd Applicants approached respondent for closure of the loan account, the

¶41

Uploaded on 24.04.2026 at 17:20 hours

¶42

IA 440/26 in SA No.172/2026

¶43

24.04.2026

¶44

¶45

respondent offered a One Time Settlement (OTS), pursuant to which the Applicants paid a sum of ₹11,00,000/-. While the settlement discussions were ongoing, the Applicants were shocked to learn from their tenants that the respondent had descended upon the schedule property along with hooligans and threatened the tenants with forcible eviction.

¶46

Under these circumstances the respondent had intimated the applicants that the loan availed by them from M/s.Indostar Capital Finance has been assigned to them. The applicants informed the respondent that they were not aware of the exact loan outstanding. Thereafter, the applicants instructed their counsel to verify the web copy of the said order, and upon verification it was found that the order had been passed in the month of March, 2025. The applicant's counsel immediately applied for a certified copy of the order on 24.12.2025. Due to the above stated reason, a delay of 228 days delay occurred in filing the SA, which is neither wilful nor wanton only due to the abovesaid reason.

¶47

It is the further case of the Applicants that they were never served with any notice under Sections 13(2) or 13(4) of the SARFAESI Act and were completely unaware of initiation of SARFAESI proceedings until the respondent attempted to take possession of the schedule property. Thus submitting, applicants prayed for condonation of delay of 228 days in filing the above SA.

¶48

Uploaded on 24.04.2026 at 17:20 hours

¶49

IA 440/26 in SA No.172/2026

¶50

24.04.2026

¶51

¶52

Respondent institution filed their counter to the IA inter alia submitting that the Petitioner had availed a loan against Property to the tune of Rs.74,02,369/- (Rupees Seventy Four Lakhs Two Thousand Three Hundred and Sixty Nine only) (LAP) from M/s Indostar Capital Finance Ltd., in the year 2018. The Petitioners were quite irregular in making the repayments even after several requests and reminders and finally their loan account was classified as NPA on 08.05.2023 due to said reason.

¶53

It is submitted by the respondent that the Memorandum of Deposit of Title Deed was executed by the Petitioners on their own volition, they have offered their property as security. After the execution of the mortgage, the security interest is duly registered with CERSAI.

¶54

The respondent submits that the Indostar Capital Finance Ltd has assigned the financial asset pertaining to loan account of petitioners along with all rights title, interest & underlying securities to Encore Asset Reconstruction Company Private Ltd vide registered Assignment Agreement dated 30-12-2023 under Section 5 of SARFAESI Act. Consequent to said assignment, Encore Asset Reconstruction Company Private Ltd. has entered into the shoes of Indostar Capital Finance Ltd. with regard to financial asset pertaining to the loan account of Petitioners, and as such are entitled to recover entire outstanding dues from Petitioners. The petitioner approached the respondent only after getting the intimation from the Advocate Commissioner appointed by the Chief Judicial Magistrate, Egmore after the

¶55

Uploaded on 24.04.2026 at 17:20 hours

¶56

IA 440/26 in SA No.172/2026

¶57

¶58

24.04.2026

¶59

respondent obtained the Order Under Section 14 of the SARFAESI Act. They came for an amicable settlement with the respondent and they assured to settle the loan accounts if some time is granted.

¶60

Taking into consideration of the submission, the respondent had approved the OTS Proposal dated 16.04.2025 vide our letter Ref No. EARC/25- 26/50/LH-OTS/01 dated 25.05.2025 and granted 4 months time to settle the loan account. The Petitioners after submitting their OTS proposal, have paid a sum of Rs.1,00,00/- on 23.04.2025, Rs.8,00,000/on 29.04.2025 and finally paid a sum of Rs.2,00,000/- on 25.06.2025 totally Rs.11,00,000/- only. The Petitioners failed to comply with the conditions mentioned in the OTS sanction letter and they have not turned even after several requests and reminders from respondent for further payments.

¶61

The petitioners did not respond to the reminders of the respondent and approached this Tribunal with unclean hands. Moreover, the delay of 228 days in filing the above application is not properly explained and no sufficient cause is shown for the huge delay of 228 days. As per the settled law of the Honourable Supreme Court and various High Courts, each day delay has to properly explained in a Petition for condoning the delay. The Petitioner was well aware of the Section 14 Order dated 25.03.2025. They came for an amicable settlement only after getting the knowledge of the

¶62

Uploaded on 24.04.2026 at 17:20 hours

¶63

IA 440/26 in SA No.172/2026

¶64

24.04.2026

¶65

¶66

above said order. The petitioners have cheated the respondent by giving false promises and prevented us from taking any further action for recovery.

¶67

The contention with regard to non-service of statutory notices are denied as false. The notices U/s 13(2) & and 13(4) were duly served on ail the petitioners and also effected the paper publication of the notices. The respondent had followed all the procedures stipulated in the act while issuing the Demand Notice U/S 13(2) 14.07.2023 & Possession notice U/S 13(4) dated 30.07.2023. No reply was given by the Petitioner to the 13(2) notice though the same was duly received by them. The order passed by the Ld. Chief Metropolitan Magistrate dated 25.03.2025 in Crl. M. P. No. 11092 of 2024 is proper and after due perusal of the records only the said Court has allowed the above said case. Thus submitting, respondent institution prayed for dismissal of IA with costs.

¶68

Heard counsel for applicant, respondent and perused records

¶69

of the case.

¶70

Admittedly, there is no dispute with regard to the availing of the credit facility and mortgage created for the loan, although it is contended that M/s Indostar Capital Finance had demanded to execute MoDT and the same has been executed by the petitioners, which is misrepresentation of facts. The only contention raised by the applicants in the IA to condone the delay is that owing to temporary financial constraints due to operational issues of

¶71

Uploaded on 24.04.2026 at 17:20 hours

¶72

IA 440/26 in SA No.172/2026

¶73

¶74

24.04.2026

¶75

the hospital, the applicants could not repay the loan and hence committed default in repayment. However, there is no justifiable reason that has been stated in the IA for condonation of delay of 228 days to file the present SA challenging the impugned order passed by the Chief Metropolitan Magistrate, Egmore in Crl.M.P. No.11092 of 2024 dated 25.03.2024.

¶76

Now, considering the delay application IA No.440/26, the Tribunal is posed with the question whether the Tribunal can condone the delay under S.17 of the SARFAESI Act?

¶77

For appreciation of the facts S.17(1) is extracted as under: -

¶78

Section 17(1):

¶79

Application against measures to recover secured debts (1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorized officer under this Chapter, [may make an application along with such fee, as may be prescribed,] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:

¶80

[Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.]

¶81

[Explanation.- For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section(1) of section.17.]

¶82

Uploaded on 24.04.2026 at 17:20 hours

¶83

IA 440/26 in SA No.172/2026

¶84

¶85

24.04.2026

¶86

A reading of the above provision is clear that any person aggrieved by any measures under Section 13[4] is required to approach the Tribunal under S.17 within 45 days from the date of the measure. Evidently, the present IA is filed for condonation of delay of 228 days in preferring the SA.

¶87

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:-

¶88

"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".

¶89

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.

¶90

The question whether the Debt Recovery Tribunal can entertain an application under S.17 of the Act after 45 days of measure referred to in sub section [4] of S.13 is no more res integra.

¶91

Uploaded on 24.04.2026 at 17:20 hours

¶92

IA 440/26 in SA No.172/2026

¶93

¶94

24.04.2026

¶95

The Hon'ble Division Bench of Hon’ble High Court of Kerala in Writ Appeal No.1797 of 2009 in W.P.(C) No.22192 of 2007 in the case titled

¶96

K.PJayan vs. Hong Kong & Shanghai Banking Corporation Ltd and

¶97

others decided on 31.08.2015 had categorically held that 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 further held that the Debts Recovery Tribunal cannot consider an application for condonation of delay under Section 5 of the Limitation Act in an application under Section 17 of the SARFAESI Act. The relevant paras are extracted as under:

¶98

“7. Referring to these provisions the contention urged before us is that since section 24 of the RDB Act makes Limitation Act applicable and as the DRT constituted under the RDB Act is conferred with jurisdiction under section 17, Limitation Act governs applications made in a proceedings under section 17 also. We are unable to accept this contention. Both the RDB Act and the SARFAESI Act are independent enactments, although certain provisions of the RDB Act are made applicable in respect of the proceedings under the SARFAESI Act also. However, that does not mean that every provision of the RDB Act would apply to every proceedings initiated under the SARFAESI Act. In so far as this case is concerned, proceedings were initiated under SARFAESI Act and in view of the provisions contained in section 17 conferring jurisdiction on the DRT constituted under RDB Act application is made by the appellant before the DRT. That does not mean that provisions of section 24 of the RDB Act governing the proceedings taken thereunder would get

¶99

Uploaded on 24.04.2026 at 17:20 hours

¶100

IA 440/26 in SA No.172/2026

¶101

24.04.2026

¶102

¶103

automatically attracted to such proceedings before the DRT. Therefore, the contention raised relying on section 24 in so far as this case is concerned is only to be rejected and we do so. This is further clear from section 36 of the SARFAESI Act, which confines the applicability of the Limitation Act to measures under section 13(4) of the said Act.”

¶104

Further, the Hon’ble High Court of Kerala has also considered the issue in the case titled The Authorised Officer, Indian Bank Vs. K.J. George,

¶105

order dated 02.11.2020 has placed reliance on K.P. Jayan V. Hong Kong

¶106

& Shanghai Banking Corporation and has held that DRT has no power to condone the delay u/s.17 of the Act.

¶107

The Tribunal places reliance on the recent judgement of the Hon’ble Supreme Court in the case titled Bank Of Baroda vs Parasaadilal Tursiram Sheetgrah Pvt. Ltd., where it observed that a time limit of 45 days for filing an application under Section 17 of SARFAESI Act is provided for quick enforcement of the security.

¶108

As per Section 17 of the SARFAESI Act, an application against measures to recover secured debts, has to be filed before the Debts Recovery Tribunal within forty-five days from the date on which such measure had been taken. It further observed that "The reason for providing a time limit of 45 days for filing an application under Section held that the SARFAESI Act is enacted for quick enforcement of the security, which can

¶109

Uploaded on 24.04.2026 at 17:20 hours

¶110

IA 440/26 in SA No.172/2026

¶111

¶112

24.04.2026

¶113

easily be inferred from the purpose and object of the enactment. In Transcore v. Union of India and Anr, the Court held that the SARFAESI Act is enacted for quick enforcement of the security.

¶114

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 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”.

¶115

The Hon’ble Apex Court also noted the following observations made

¶116

in Maniben Devraj Shah v. Municipal Corporation of Brihan Mumbai ,

¶117

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

¶118

"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

¶119

Uploaded on 24.04.2026 at 17:20 hours

¶120

IA 440/26 in SA No.172/2026

¶121

¶122

24.04.2026

¶123

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."

¶124

It is significant to refer that the securitization Act is for quick enforcement of the security interest created favouring the respondent bank for the recovery of the amount due.

¶125

The Hon’ble Supreme Court in Bank of Baroda –vs- Parasaadilal Tursiram Sheetgrah Pvt. Ltd., was of the view that the DRT does not have jurisdiction to condone the delay in filing an SA. In other words, the Statutory time period of 45 days provided under Section 17(1) of the SARFEASI Act is mandatory and no discretion has been conferred upon the DRT to extend such period. The provisions of the Act and Rules (9) framed thereunder cast upon the secured creditor an obligation to strictly comply with the said provisions and the rules and serve upon the borrowers’ notices in advance before taking measures under Section 13(4) of the Act read with Rule 8 and 9, thus giving the borrowers ample of time and opportunities to assail measure within a period of 45 days. In other words, the provisions of the Act and Rules framed thereunder ensure that the borrowers have advance notice of the proposed measure to be taken by the secured creditor, and for this reason, also the DRT does not have jurisdiction to condone the delay in filing an SA. The judgement of the Hon’ble Supreme Court in Parasaadilal Tursiram (supra) has given a quietus to the conundrum which

¶126

Uploaded on 24.04.2026 at 17:20 hours

¶127

IA 440/26 in SA No.172/2026

¶128

24.04.2026

¶129

¶130

existed hitherto on the power of the DRT to condone the delay in filing an SA after the statutory period of 45 days provided under Section 17(1) of the SARFEASI Act.

¶131

The Tribunal placing reliance of the above judgments comes to inevitable conclusion that in absence of any enabling provision to condone the delay, this Tribunal has no power to condone the delay in filing the SA.

¶132

On the other hand, the respondent institution had established through their counter, wherein it is evident that applicants are very well aware of the Section 14 order dated 25.03.2025, as the applicants had immediately approached the respondent with OTS proposal dated 16.04.2025, which was accordingly approved vide letter dated 25.05.2025, thereby granting four months time to settle the loan account. In terms of the said OTS, the applicants had also remitted a sum of Rs.11 lakhs on various dates and thereafter did not comply with the OTS terms. The applicants had waited till the last minute and now approached this Tribunal contending that they had knowledge of the Section 14 order only after respondent visited the schedule property and threatened to vacate the tenants, which is not supported by any documentary evidence. The applicants have filed this present IA only to frustrate the actions of the respondent from recovery of its legitimate dues. The applicants have not approached this Tribunal with clean hands and the present IA lacks merits.

¶133

Uploaded on 24.04.2026 at 17:20 hours

¶134

IA 440/26 in SA No.172/2026

¶135

24.04.2026

¶136

¶137

For the foregoing reasons, IA.No.440/2026, petition to condone the delay of 228 days stands dismissed. Consequently, SA No.172/2026 also stands dismissed. Interim Order granted if any stands vacated. All pending IA/s if any, are closed. No order as to cost.

¶138

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

¶139

(Dictated to PS, transcribed by her, corrected, signed and pronounced by me on this the 24^th day

¶140

of April, 2026)

¶141

Uploaded on 24.04.2026 at 17:20 hours

Laksha Hospitals v. Encore Asset Reconstruction Company Private Limited

Case brief

What is this about?

What did the court decide?

Laksha Hospitals v. Encore Asset Reconstruction Company Private Limited

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

Coram

Case details

Similar cases

Indian Bank versus Mr D Kalaiselvam And Other

State Bank of India versus Mahesh Ayar Viswanathan

Karur Vysya Bank versus M/S Sri Saha Agencies

State Bank of India versus Sri P Sakthivel

Mr R Suresh Kumar versus Karur Vysya Bank

State Bank of India versus The Opera International