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Judgment
Krishna Shripad Dixit, J
A successful auction buyer of security property is invoking the writ jurisdiction of this Court for assailing the order dated 14.02.2025 made by the Debts Recovery Appellate Tribunal (DRAT), Kolkata whereby Appeal No.76 of 2024, filed by Opposite Party No.1 (hereinafter ‘borrower’) having been favoured, order dated 29.02.2024 made by DRT dismissing borrower’s S.A. NDN 2519 of 2019 has been set at naught and matter is remitted to the DRT for disposal afresh, on merits.
Learned counsel appearing for the Petitioners submits that under the statutory policy enacted by the Parliament in Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; there is a specific period of limitation for filing the S.A. before the DRT; once the period of limitation expires, the right to challenge coercive proceedings of loan recovery would wither away; there is no provision like Section 5 of the Limitation Act, 1963 providing for condonation of delay; that being the position, the DRT was more than justified in negativing the challenge laid by the borrower on the ground of delay.
After service of notice, learned Panel Counsel of the Bank has put in appearance. However, the borrower has chosen to remain absent & unrepresented despite proven service of notice, as vouched by Postal Track Record. His name was called out by the Court Master on our instruction thrice, loudly and there is no response. That would not deter the Court from deciding the cause brought before it in accordance with law. Learned Panel Counsel appearing for OP Nos.2 & 3 (hereafter ‘lender-Bank’) makes submission in justification of order of the DRT, in variance with that of the DRAT.
Having heard learned counsel for the parties and having perused the petition papers, we are inclined to grant indulgence in the matter as under and for the following reasons:
4.1. The outstanding debt is not in dispute. The subject property has been mortgaged in favour of the lender-Bank for securing the repayment of debt which is about Rs.60,00,000/- only, after adjusting the auction proceeds of the security property. The e-auction was scheduled vide notice dated 24.08.2018 in terms of Section 13(4) of SARFAESI Act, 2002 read with Rule 8(6) of the Security Interest (Enforcement) Rules, 2002. The S.A. NDN 2519 of 2019 was filed by the Borrower on 17.12.2019 laying a challenge to the coercive proceedings. The period of limitation prescribed under section 17 of the Act is 45 days. Arithmetically, there was a long delay of 418 days in filing the said SA. Therefore, the same was rightly rejected by the DRT vide order dated 24.12.2019, since delay application in I.A. No.827 of 2019 itself was rejected by the very same order. This view gains support from the Karnataka High Court decision in Kailasam P. v. The Karnataka Bank Ltd., 2025 : KHC : 7606-DB. It is relevant to mention here what the Apex Court observed in Union of India v. Popular Construction Co., AIR 2001 SC 4010:
“…it is not essential for the special or local law to, in terms, exclude the provisions of the Limitation Act. It is sufficient if on a consideration of the language of its provisions relating to limitation, the intention to exclude can be necessarily implied. As has been said in Hukum Narain Yadav v. Lalit Narain Mishra.
‘If on an examination of the relevant provisions it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act.’
Thus, where the legislature prescibed a special limitation for the purpose of the appeal and the period of limitation of 60 days was to be computed after taking the aid of Sections 4, 5 and 12 of the Limitation Act, the specific inclusion of these sections meant that to that extent only the provisions of the Limitation Act stood extended and the applicability of the other provisions, by necessary implication stood excluded….
4.2. Since S.A was filed after brooking a long delay of 418 days, the application in I.A. No.827 of 2019 was filed on 24.12.2019 itself, i.e., the date on which the SA was filed. Subsequently, I.A. No.492 of 2023 was filed for the same purpose. The former application was rejected as not-pressed whereas the latter application is dismissed on merits & maintainability. This, the DRT did vide order dated 29.02.2024. There is reason & logic in the version of the DRT. Firstly, Section 17(1) of the Act prescribed a period of 45 days to approach the DRT for laying a challenge to the coercive recovery proceedings. The same reads as under:
“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,] [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..”
(Other parts not being much relevant, are not reproduced)
Secondly, the Parliament in its wisdom has not provided for condoning delay of any length, regardless of plausibility of explanation offered for the same. It is a matter of legislative policy and therefore, the impugned order of the DRAT, which ignores the same is liable to be set aside, as being one without jurisdiction.
4.3. There is one more final aspect to the matter: Arguably there are two conflicting views of two Coordinate Benches, we are told at the Bar, without mentioning full particulars of said cases. One view is that the power lies with the DRT to condone delay if plausible explanation is offered therefor whereas the other is that in the absence of enabling provision in the SARFAESI Act, any application for condonation of delay howsoever meritorious, is not maintainable. We need not much undertake their jurisprudential assessment to declare which has precedential value, something in this regard having already been voiced in the preceding paragraph in a tentative way. That pure question of law may be considered in an appropriate case. Now suffice it to say, the explanation offered for condoning the long delay of 418 days in approaching the DRT is nothing but a cock & bull story, which every unscrupulous Borrower would like to sell for delaying the recovery of outstanding loans. Therefore, his application for condonation of delay, assuming that DRT had power to condone, has been rightly rejected on the basis of facts emerging from the records. It is an inevitable order woven consistent with the statutory policy. The application for condonation of delay lacked bona fide. After all, orders made on such applications are a product of exercise of discretion and therefore, DRAT could not have substituted its views for that of DRT, in the absence of demonstrable breach of rules of reason & justice which animate exercise of discretion. Much is not necessary to deliberate in this regard.
4.4. Learned counsel for the Petitioners is right in telling us that the public auction is of 2018 and his client had already remitted a huge sum of Rs.75.14 lakh, being the highest bid amount. Learned Panel Counsel for the lender-Bank points out that the Borrower is unscrupulous by any standards since he has been dodging the recovery proceedings with one or the other excuse and therefore, he does not deserve any remedy, even on mercy grounds. When conduct of a party is iniquitous, no relief can be granted to him. Both they are justified in fervently saying that the order of DRT should be restored with a direction to put the Petitioners in possession so that the Sale Certificate issued to them fructifies. From the record, it emerges that all these years, the occupation of the auctioned property is retained by the Borrower with no justification whatsoever. Justice of the case warrants making an appropriate direction to effectuate the auction sale, lest potential auction buyers should turn away from auction proceedings of the kind fearing unending litigation, though frivolous. If intending buyers do not come forward, that would affect the interest of borrowers, inasmuch as there would be less scope for market forces to operate for fetching maximum auction price.
In the above circumstances, this petition is allowed with the following directions:
i. A Writ of Certiorari issues quashing the impugned order of DRAT, Kolkata; Borrower’s Appeal No.76 of 2024 is dismissed; consequentially DRT order dated 17.12.2020 negativing Borrower’s S.A. NDN 2519 of 2019, is restored.
ii. A Writ of Mandamus issues to OP No.1 to deliver peaceable possession of the security properties, i.e., Khata No.71/22, Plot No.149/842, area Ac.0.005 decimals, Plot No.150/843, area Ac.0.015 decimals, total area Ac.0.020 decimals situated at Unit No.17, Machhua Bazar, District & DSRO-Cuttack, Tahasil-Cuttack Sadar No.218, Thana-Mangalabag No.3.
iii. A direction issues to OP Nos.2 & 3 to take all further steps to put the Petitioners in peaceable possession and that the Mangalabag Police, on production of a copy of this order, shall remove OP No.1 from the above properties and put the Petitioners in occupation thereof, immediately after the expiry of period prescribed hereinabove.
iv. Compliance of the above directions be reported to the Registrar General of this Court within an outer limit of eight weeks, failing which contempt action would follow, at the personal risk & cost of erring persons.
Costs reluctantly made easy.
Web copy of judgment to be acted upon by all concerned.