Kolla Nehru Mala vs Bank Of Maharastra And Others

Dhiraj Singh Thakur, CJ

The petitioner preferred a Securitization Application accompanied by an application for condonation of delay before the Debts Recovery Tribunal, Visakhapatnam. The Securitization Application was filed challenging the notice, dated 09.01.2024, issued by the Advocate Commissioner, who had been appointed by the Chief Metropolitan Magistrate, Vijayawada, in regard to the secured asset with the Bank of Maharastra – respondent No.1 herein.

The Debts Recovery Tribunal noted that the period of limitation prescribed for filing an appeal under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (hereinafter referred as “the Act”) was 45 days from the date on which measures had been taken. The Debts Recovery Tribunal noted that the Chief Metropolitan Magistrate, Vijayawada, had passed an order in Crl. M.P. No.384 of 2022 appointing an Advocate Commissioner to take possession of the house, which was a secured asset, on 02.03.2022.

Against the said order, the Debts Recovery Tribunal noted that the petitioner had filed a writ petition before this Court, which petition came to be dismissed by virtue of order, dated 28.06.2023, whereafter the Securitization Application was filed on 23.02.2024. The Debts Recovery Tribunal noted that the order impugned, which was challenged in the Securitization Application, was within the knowledge of the petitioner, despite which there was a delay of more than seven months in filing the Securitization Application. In those circumstances, holding that the Securitization Application is time barred and that the petitioner had no right to get the delay condoned, the Securitization Application was dismissed.

Challenging the said order, the present petition has been filed by the petitioner primarily on the ground that the dismissal of the Securitization Application on the ground of limitation, was not warranted in law inasmuch as issuance of a notice by the Advocate Commissioner on 09.01.2024 was a subsequent cause of action, which could not be connected with the dismissal of the writ petition in which the petitioner had challenged the order passed by the Chief Metropolitan Magistrate, Vijayawada, dated 02.03.2022.

Learned counsel for the petitioner further urged that the Tribunal committed an error in law in holding that the Tribunal had no right to condone the delay and therefore by holding so, it had ignored the settled legal position that if delay was sufficiently explained, the same could be condoned even beyond the period of 45 days prescribed under Section 17 of the Act.

The relevant paragraphs of the order passed by the Debts Recovery Tribunal, which is impugned, are reproduced hereunder:

“5. As per Sec. 17 the filing of appeal limitation period is 45 days from the date on which measures had been taken. In the present case Ld. CMM, Vijayawada has passed order in Crl.MP No. 384 of 2022 in C.F.No. 837/2022 appointing an Advocate Commissioner to take possession of the house bearing D.No. 22-52 in L.P.No. 1956/16, Gollapudi Panchayath, Ibrahimpatnam, Krishna District.

After perusal of the order of Ld. CJM, I find that Hon'ble CJM has passed order under Sec. 13(4) on 02.03.2022 and the applicant has filed Writ Petition before Hon'ble High Court of Andhra Pradesh at Amaravathi. After hearing the Writ Petition, the Hon'ble High Court have dismissed the Writ Petition on 20.06.2023. After that the applicant has filed the present SA on 23.02.2024.

Accordingly the applicant has knowledge about the order of Ld. CJM against which the applicant has filed Writ petition. Hence this SA is time barred under Sec. 17 and this Tribunal has no right to condone the delay.

In the present case after the order of Hon’ble High Court also the applicant has also delayed about more than 07 months.”

The order certainly is not a very happily worded order. Paragraph Nos.5 and 6 of the order suggest as if the Debts Recovery Tribunal is aware of the fact that it can condone the delay but was not doing so on account of the fact that the petitioner had knowledge regarding the dismissal of the writ petition on 20.06.2023 and that between the date of the dismissal of the writ petition and filing of the Securitization Application, almost seven months had elapsed.

However, on a reading of paragraph No.7 of the order impugned, it is clear that the Tribunal has held that it has no right to condone the delay i.e., beyond the period of 45 days prescribed under Section 17 of the Act. This view that the Tribunal has no right to condone the delay is contrary to the position settled by the Division Bench of the combined High Court of the Andhra Pradesh in Porus Laboratory Private Limited v. Indian Bank, Asset Recovery management Branch, Hyderabad 2018 SCC OnLine Hyd 161 wherein it was held:

“20. More importantly, it may be noted that if an aggrieved person, including a borrower, is prevented from availing the statutory remedy provided under Section 17(1) of the SARFAESI Act merely because the application thereunder was not presented within the stipulated 45 days, the hierarchy of remedies provided under the SARFAESI Act would be denied to him and rendered nugatory on that short ground. Such an aggrieved person would then be left with no remedy but to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution. As the very purpose of creating statutory Tribunals and Appellate Tribunals is to provide efficacious alternative means of resolution of disputes so as to lessen the burden that would otherwise be visited upon the High Court in exercise of its extraordinary jurisdiction under Article 226, the statutory remedy provided under Section 17(1) of the SARFAESI Act cannot be interpreted in such a narrow and pedantic compass. Be it noted, by virtue of the proviso to Section 20(3) of the RDDB Act, the Appellate Tribunal has been held to have the power to condone the delay in the presentation of an appeal under Section 18 of the SARFAESI Act beyond the 30 day period stipulated therein. There is no logic or rationale in not extending the same power to the Tribunal while entertaining a belated application under Section 17 of the SARFAESI Act, by taking recourse to Sections 17(7) and 37 of the SARFAESI Act read with Section 24 of the RDDB Act.”

Be that as it may, the impugned order is set aside. The matter is remanded to the Debts Recovery Tribunal for considering the issue of condonation of delay in the correct perspective by passing a well considered speaking order. The writ petition is, accordingly, allowed. No costs.

Pending miscellaneous applications, if any, shall stand closed.