Prakash Malli vs The Authorised Officer

B.V. Nagarathna, J.—The order of the Debts Recovery Appellate Tribunal, Chennai (hereinafter referred to as ''the DRAT'') in AIR(SA) No. 65 of 2011, dated 31-10-2012 (Annexure-E) is assailed in these writ petitions. Briefly stated, the facts are that the petitioners had borrowed a housing loan from the first respondent-Bank to an extent of Rs. 6,36,000/- in the year 2003. As the petitioners did not repay the said amount, the Bank initiated recovery proceedings under the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act"), Demand notice under sub-section (2) of Section 13 of that Act was issued followed by possession notice under sub-section (4) of Section 13 of the Act. Those notices were assailed by the petitioners in IR No. 1460 of 2010 before the Debts Recovery Tribunal (hereinafter referred as "the DRT") at Bangalore. There was a delay of eight days in filing that appeal. The DRT by its order dated 1-10-2010 dismissed the application seeking condonation of delay in filing the appeal. Being aggrieved by that order, the petitioners preferred AIR(SA) No. 65 of 2011 before the DRAT. Once again there was a delay of sixty-one days in preferring the appeal. The DRAT by its order dated 31-10-2012, dismissed the appeal by following the orders of the Madras High Court. It is against that order, these writ petitions have been preferred.

We have heard the learned Counsel for the parties.

Learned Counsel for the petitioners has drawn our attention to a judgment of the Division Bench of this Court in Sri C. Laxman Gowda and Sri Vasudevagowda Vs. Debt Recovery Appellate Tribunal and Others, and contended that the Appellate Tribunal has the jurisdiction to condone delay in filing the appeal before it. He, therefore, stated that the order of the Appellate Tribunal would have to be quashed.

At this stage, learned Counsel for the respective parties have also drawn our attention to the fact that the DRT at Bangalore had also dismissed the appeal filed u/s 17 of the SARFAESI Act as the application for condonation of delay was not entertained as there was no provision to condone the delay. In this regard, learned Counsel contended that as the matter has not been heard on merits either by the DRAT at Chennai or by the DRT at Bangalore, the matter may be remanded to the DRT at Bangalore, to consider the application for condonation of delay filed by the petitioners herein.

Submissions of the learned Counsel on both sides are placed on record.

Following the decision of this Court in the aforementioned case, we hold that the Appellate Tribunal had the jurisdiction to consider the application for condonation of delay, particularly having regard to sub-section (2) of Section 18 of SARFAESI Act, which is in pari materia with sub-section (7) of Section 17 of the Act. In that view of the matter, the impugned order of the Appellate Tribunal at Annexure-E is quashed. As the appeal filed by the petitioners before the DRT at Bangalore has not been heard on merits inasmuch as the application for condonation of delay was dismissed, we find that the DRT ought to consider the application for condonation delay afresh. In that view of the matter, the order dated 1-10-2010 passed by the DRT at Bangalore is also quashed.

The matter is remanded to the DRT to consider the application for condonation of delay filed by the petitioners on merits and thereafter to dispose of the appeal in accordance with law. Till then, the amount of Rs. 10.00 lakhs, which has been deposited by the petitioners pursuant to the interim order of this Court with the respondent-Bank shall remain with the bank and shall be subject to the orders of the DRT.

In the result, the writ petitions are allowed in the aforesaid terms. In view of disposal of the writ petitions, I.A. No. I of 2013 would not survive for consideration and the same stands disposed of.