Mr Krishnamurthy O Vs Karnataka Bank — Banking and Recovery | Karnataka HC (2025)

Mr Krishnamurthy O Vs Karnataka Bank — Banking and Recovery | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Writ petition allowed: (i) writ petition allowed; (ii) order dated 31.01.2025 in S.A.No.89/2024 passed by the Debt Recovery Tribunal quashed; (iii) matter remitted to the DRT to consider the issue on its merit and dispose expeditiously; (iv) liberty to petitioners or respondents to seek early disposal.

Issue for consideration

From which date does the 45-day limitation under Section 17(1) of the SARFAESI Act run for challenging the possession measure - the date the possession notice was affixed (29.12.2023) or the date it was published (02.01.2024)? +1 more

Court's answer

The beginning of the cause of action for computing the 45-day limitation under Section 17(1) is taken to be 02.01.2024, the date on which the possession notice was published, not the earlier date of affixation (29.12.2023).

Ratio / Principle

Computed from 02.01.2024, the 45-day period expires on 15.02.2024; the securitisation application filed on 13.02.2024 (the 43rd day) was therefore within time.

Key takeaways

Since the application was within limitation, it ought to have been answered/decided on its merit rather than dismissed on limitation grounds.ratio¶44
The DRT's observation of a one-day delay and consequent dismissal resulted from an erroneous calculation of dates (taking 29.12.2023 instead of 02.01.2024); the error was the DRT's miscalculation, warranting the relief sought by the petitioners.ratio¶51

Detailed headnote1 paragraphs

SARFAESI - Section 17(1) limitation - commencement date. Borrowers filed S.A. No. 89/2024 before DRT-I, Bengaluru on 13.02.2024 against a possession notice published on 02.01.2024; the Bank contended, and the DRT computed, limitation from the date of affixation of the Section 13(4) notice on the doors (29.12.2023), dismissing the S.A. by order dated 31.01.2025 as time-barred by one day and declining condonation. Before the High Court of Karnataka (M. Nagaprasanna, J., 18.03.2025), the Court took the beginning of the cause of action for calculating 45 days to be the date of publication (02.01.2024), on which footing the period expired on 15.02.2024 and the application, preferred on the 43rd day, was in time; the dismissal flowed from the DRT's erroneous calculation of dates. Held that the application ought to have been answered on its merit. Writ petition allowed; the impugned order quashed; matter remitted to the DRT for expeditious decision on merits, with liberty to seek early disposal. A Division Bench decision (W.P. No. 11273/2024, disposed 20.02.2025) was cited by the Bank's counsel for the proposition that Section 17(1) limitation cannot be condoned even for a day; the Court did not expressly engage with it (referred).

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NC: 2025:KHC:11153 WP No. 7097 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18^TH DAY OF MARCH, 2025

BEFORE

THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 7097 OF 2025 (GM-DRT)

BETWEEN:

MR. KRISHNAMURTHY O, S/O OBAPPA, AGED ABOUT 33 YEARS, PROP OF SREE GAVI RANGANATHA PRINTS AND HARDWARE, AT GROUND FLOOR NO. 7-1-503-35A, WARD NO. 7, KAHATA NO. 5309/7862/A, MYSORE BANK ROAD, VIJAYANAGARA, CHITRADURGA - 577 501.

MR. MOHAMMED MUSTAQ, S/O LATE MOHAMED ROSHAN ALI, AGED ABOUT 50 YEARS, PROPRIETOR: HONEY SNOOKER

Digitally signed by NAGAVENI Location: High Court of Karnataka

AND GAME POINT, AT 2ND LFOOR, NO. 7, KAHATA NO. 5309/7862/A, MYSORE BANK ROAD, VIJAYANAGARA, CHITRADURGA - 577 501.

C.M. PREMA,

W/O C.G. GANGADHARA, AGED ABOUT 38 YEARS, PROPRIETOR: AJANTHA DIGITAL STUDIO, AT GROUND FLOOR, NO. 7-1-503-35A, WARD NO. 7, KHATA NO. 5309/7862/A, MYSORE BANK ROAD, VIJAYANAGARA, CHITRADURGA - 577 501.

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MR. SANTHOSHA, S/O LAKSHMINARAYANA, AGED ABOUT 33 YEARS, PROPRIETOR: S.R. MOBILES, AT GROUND FLOOR, NO. 7, KHATA NO. 5309/7862/A, MYSORE BANK ROAD, VIJAYANAGARA, CHITRADURGA - 577 501.

…PETITIONERS

(BY SRI. VIGNESH S. SHETTY, ADVOCATE FOR SMT. NATASHA N. MURTHY, ADVOCATE)

AND:

KARNATAKA BANK, ARMB-HUBBALI, POST BOX NO. 499, KARNATAKA BANK BUILDING, 2ND FLOOR, NEW COTTON MARKET, HUBBALLI - 580 029, REPRESENTED BY ITS AUTHORISED OFFICER/MANAGER.

KIRAN S.C, S/O CHANDRASHEKAR S.C, MAJOR, R/AT AT VP EXTN MAIN ROAD, CHITRADURGA - 577 501.

…RESPONDENTS

(BY SRI. NITIN CHANDRA M, ADVOCATE FOR C/R1)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO-SET ASIDE THE ORDER DATED 31.01.2025 IN S.A NO. 89/2024 PASSED BY THE HONBLE DRT-I AT BENGALURU - ANNX-C AND ETC.,

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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NC: 2025:KHC:11153 WP No. 7097 of 2025

CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA ORAL ORDER

The petitioners are before this Court calling in question an order of the Debt Recovery Tribunal dated 31.01.2025 rejecting S.A.No.89/2024 on the ground that it is presented beyond limitation.

Heard Shri Vignesh Shetty, learned counsel for Smt. Natasha N. Murthy, learned counsel appearing for the petitioners and Shri Nitin Chandra M., learned counsel appearing for respondent No.1.

The petitioners are the borrowers. The loan

becomes sticky and the Bank issues a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002 ('the Act' for short), which is replied too by the petitioners and later issues a possession notice on 02.01.2024. The petitioners approaches the Debt Recovery Tribunal calling in question the said possession notice by filing an securitization application on 13.02.2024. The Debt Recovery Tribunal rejects

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the application on the score that it is presented by a day's delay. That is what is called in question in the case at hand.

Shri Vignesh Shetty, learned counsel appearing for the petitioners submits that there is no delay in the case at hand. The possession notice was published on 02.01.2024 and the S.A. was filed on 13.02.2024. He would further submit that the S.A. is preferred on the 43rd day, which is before 45days as mandated under the statute.

The learned counsel appearing for the respondent - Bank submits that the possession notice under Section 13(4) of the Act was affixed on the door of the petitioners on 29.12.2023. Therefore, it becomes the date on which the cause of action would arise and 45days should be calculated from 29.12.2023, which the Debt Recovery Tribunal has done. He would seek to place reliance upon the judgment of the Division Bench in W.P.No.11273/2024 disposed on 20.02.2025 , in which the Division Bench holds that the limitation prescribed under Section 17(1) of the Act cannot be condoned even for a day.

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The afore-narrated facts are not in dispute. The petitioners files an application under Section 17 of the Act upon the publication of the possession notice under Section 13(3) of the Act. Section 17(1) of the Act reads as follows:

"17. [Application against measures to recover secured debts.] [Substituted 'Right to appeal' by Act No. 44 of 2016.]

(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 authorised officer under this Chapter, [may make an application alongwith such fee, as may be prescribed,] [Substituted by the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Act, 2004 (30 of 2004), Section 10, for "may prefer an appeal" (w.r.e.f. 21.6.2002).] to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken:"

In terms of Section 17(1) of the SARFESI Act measures taken by the secured creditor to recover the secured debts as obtaining under Section 13(4) may make an application to the Debt Recovery Tribunal within 45days from the date on which measures had been taken. The measure in the case at hand is in dispute.

The learned counsel appearing for the respondent -

Bank submits that it is affixed on the door, but the notice in the newspaper with regard to the possession of the petitioners'

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property is admittedly issued on 02.01.2024. Therefore, I deem it appropriate to take the beginning of the cause of action in the case at hand for calculation of 45days to be from 02.01.2024, as it was a date on which it was published. If the date of 02.01.2024 is taken as the date of publication, 45 days will have to be calculated from the said date and if calculated, it would be 15.02.2024. The application is preferred by the petitioners on 13.02.2024, two days prior to the completion of 45days, taking the date as 02.01.2024. In that light, the application ought to have been answered on its merit. What the Debt Recovery Tribunal would do is as follows:

In fact, no lawful explanation has been furnished by the applicants in their pleadings for the delay of one day occurred in filing the pleadings. The delay in this case reflects the inactivity and the inaction on the part of the applicants. The law does not permit one to sleep and to seek one's relief as and when one desires. When parties claiming to be aggrieved by the measures taken under S.13(4) of the Act by the secured creditor approach this Tribunal at their own leisure and pleasure, this Tribunal within the four corners of the Act and the Rules made thereunder is under legal obligation rather dutiful to scrutinise as to whether the grievance at a belated stage could be considered or not. The law does not permit a really aggrieved person to sleep and approach a legal forum as he desires. If he does so it is at his risk and responsibility only. In the instant case, though the factum of taking possession of A to E schedule immovable properties on 29.12.2013 by the authorised officer of the 1" defendant was within the knowledge of the applicants, they were in a hesitation of 'to be or not to be' and finally approached this Tribunal with a delay of one day, which cannot be appreciated

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bearing in mind the avowed object of the Act. Indolent persons cannot expect any indulgence and interference from any court of law or Tribunal. The failure on the part of the applicants in not showing due diligence in filing the SA at the right time and the delay taken in filing the same can only be construed, in the absence of any valid explanation, as gross negligence and lack of bonafides on their part. In the above facts and circumstances of the case, the delay of one day in filing of the pleadings cannot be condoned by this Tribunal as the same has been filed well beyond the period of limitation as prescribed under S.17(1) of the Act. Therefore, looking at any angle, the delay of one day in filing of SA No.89/2024 cannot be condoned in any way.

In the above facts and circumstances of the case and in view of the discussion as above, the delay of one day in presenting SA No.89/2024 cannot be condoned and thus the same cannot be entertained by this Tribunal. Suffice it to say that SA 89/2024 fails and thus is liable to be dismissed.

In the result, SA 89/2024 is dismissed as not maintainable for barred by limitation. In view of the dismissal of SA 89/2024, the pending IAs would not survive and thus stand closed. No costs."

The Debt Recovery Tribunal goes on to observe that there

is a delay of one day in preferring the application by the petitioners on an erroneous calculation of dates, taking the date as 29.12.2023 and not 02.01.2024. Therefore, the error has led to the dismissal of the petition. The error is due to the miscalculation of the Debt Recovery Tribunal. In that light, I deem it appropriate to grant the relief that the petitioners are seeking for.

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NC: 2025:KHC:11153 WP No. 7097 of 2025

For the aforesaid reasons, the following:

ORDER

(i) Writ petition is allowed.

(ii) The order dated 31.01.2025 in S.A.No.89/2024 passed by the Debt Recovery Tribunal stands quashed.

(iii) The matter is remitted back to the hands of the Debt Recovery Tribunal and the Debt Recovery Tribunal shall consider the issue on its merit and expeditiously dispose the matter.

(iv) It is open for the petitioners or the respondents to file necessary application seeking such early disposal.

Sd/(M.NAGAPRASANNA) JUDGE

JY List No.: 1 Sl No.: 33 CT: BHK