SOUTH INDIAN MODERN HIGHER SECONDARY SCHOOL vs STATE BANK OF INDIA on 3 October 2023

**ORDER**

1. 1. The Applicant has filed the present application for condonation of delay of 18 days in filing Securitisation Application for challenging the action taken by the Respondent Bank under the SARFAESI Act and Rules framed thereunder and for other incidental reliefs.

2. 2. It is averred by the Applicant that notice u/s 13(2) of SARFAESI Act was issued to the Respondent No.2 to 9 in the month of June & July 2021 stating the outstanding dues payable by them to the Respondent No.1-Bank. Thereafter, on 21/08/2021 symbolic possession was taken in presence of authorized officer of Respondent 2MA 25 of 2023

No.1-Bank and the same was published in two local leading newspapers. It is further submitted that on 21/01/2023, 14 days' notice was affixed on the conspicuous part of the property in presence of the Applicant and Respondent Nos.2 to 9 for taking physical possession of the property and therefore, the Respondent Bank claims that the Applicant was in knowledge of taking physical possession of the property in question since 21/01/2023 and thereafter, the physical possession of the said property was taken on 12/05/2023.

1. 3. During the hearing held before this Hon'ble Tribunal on 21/09/2023, the Ld. Counsel for the Applicant submitted that the Applicant preferred a writ petition being Special Civil Application No.9246 of 2023 before the Hon'ble Gujarat High Court, wherein the Hon'ble Court passed a final order on 05/07/2023 rejecting the writ petition on the ground of alternative remedy available to the petitioner, i.e. the present Applicant herein. It is also submitted that after passing of the aforesaid order, the Applicant has filed the present delay condonation application being MA No.25 of 2023 in SA for condoning the delay of 18 days in preferring the SA. During the hearing, the Ld. Counsel for the Applicant relied an order dated 14/11/2022 passed in SLP(C) No.11225 of 2022 in the case of **M/s. Laxmi Srinivasa R & P Boiled Rice**

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3MA 25 of 2023**Mill v/s. The State of Andhra Pradesh &Anr.Ld.**

Counsel for the Applicant further submitted that the Applicant has acted bona fide and under legal advice in pursuing the remedy before Hon'ble High Court. The said remedy before the Hon'ble High Court took about two months. Hence, the Applicant cannot be considered to be responsible for delay of the period spent in pursuing remedy before Hon'ble High Court. She further submitted that the petition of the Applicant was not summarily dismissed or thrown out by the Hon'ble High Court, but it was considered in detail by the Hon'ble High Court and ultimately, considering the facts from the pleadings, the Hon'ble High Court came to the conclusion that the issue involves disputed questions of facts and therefore, the Applicant was relegated to the alternative remedy before this Tribunal. The Applicant remained vigilant and has immediately approached the Hon'ble High Court against the action of Respondent No.1 - Bank. Therefore, the said period is required to be excluded while computing the period of limitation u/s 14 of the Limitation Act. Hence, Ld. Counsel for the Applicant requested to allow the present application.

1. 4. Per contra, the Respondent-Bank has filed its Affidavit opposing the application of condonation of delay and denied the averments made therein. It has contended that the Applicant has failed to make out any case for 4MA 25 of 2023

condonation of delay, either by documentary evidence or otherwise. The Applicant have not properly explained the reason for the delay occurred in filing the Securitisation Application. The Applicant has failed to satisfy this Tribunal that it had sufficient cause for not preferring the Securitisation Application within the limitation period. Ld. Counsel for Respondent No.1 – Bank further submitted that the Applicant is not entitled to the benefit of Section 14 of the Limitation Act. The Applicant has failed to prove that its case falls within the ambit of Section 14 of the Limitation Act. In support of his contention, he relied on the judgment of the Hon'bleHigh Court of Madras in the case of **Velar Engineering Works Pvt. Ltd. v/s. The Authorized Officer / Chief Manager, Indian Bank, Kanchipura&Ors., decided on 05/09/2019 in Writ Petition No.31241 of 2018.**

1. 5. I have heard Ld. Counsel for both the parties and perused the documentary evidences produced on record.

2. 6. Considering the facts, circumstances, and submissions made by Ld. Counsel appearing for the respective parties, it appears that the Applicant approached the Hon'ble High Court of Gujarat in May 2023 after possession of the secured asset was taken on 12/05/2023. After culmination of SCA No.9246/2023 into dismissal on 05/07/2023, it has come to this Tribunal by filing 5MA 25 of 2023

Securitisation Application along with the present application for condonation of delay on 27/07/2023.

1. 7. In view of the aforesaid facts, it is difficult to agree to the proposition of Ld. Counsel for Respondent No.1 Bank that the Applicant was negligent in pursuing its remedy against the actions taken by Respondent No.1 Bank under SARFAESI Act. It is a different matter that there was little delay in approaching this Tribunal after order passed by the Hon'ble High Court on 05/07/2023. But that would not lead to the conclusion that the Applicant approached wrong forum deliberately and not in good faith. It is required to be noted that the Hon'ble High Court made following observations while relegating the Applicant herein to this Tribunal vide order dated 05/07/2023 passed in SCA No.9246/2023:

"5. Considering the law laid down by the Hon'ble Apex Court and for the reasons recorded hereinabove, the present petition stands rejected with liberty being reserved in favour of the petitioner to approach the learned Debt Recovery Tribunal in case it is deemed appropriate by the petitioner."

1. 8. Now the question arises whether the Applicant can get benefit of the time spent in the said proceedings u/s 14 of the Limitation Act?

6MA 25 of 2023

9. In this context, it would be pertinent to refer to and reproduce the provisions of Section 14 of the Limitation, which read as under:

**14 Exclusion of time of proceeding bona fide in court without jurisdiction. —**

(1) *In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.*

(2) *In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.*

(3) *Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.*

*Explanation.— For the purposes of this section,—*

(a) *in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;*

(b) *a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;*

(c) *misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.*

10. A reference also deserves to be made to the following observations made by the Hon'ble Apex Court in M/s.

**LaxmiSrinivasa's case (Supra)**, relied on by Ld.

Counsel for the Applicant:

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7MA 25 of 2023

*"It is an accepted position that the appellant had filed a writ petition before the High Court on 24.02.2018, which was not entertained vide the order dated 07.03.2018 on the ground that the appellant should approach the Appellate Authority. The appellant is entitled to ask for exclusion of the said period in terms of Section 14 of the Limitation Act, 1963. Exclusion of time is different, and cannot be equated with condonation of delay. The period once excluded, cannot be counted for the purpose of computing the period for which delay can be condoned. Of course, for exclusion of time under Section 14 of the Limitation Act, 1963, the conditions stipulated in Section 14 have to be satisfied.*

*In the facts of the present case, we find that the period from the date of filing of the writ petition on 24.02.2018 and the date on which it was dismissed as not entertained viz. 07.03.2018, should have been excluded. The writ proceedings were maintainable, but not entertained. Bona fides of the appellant in filing the writ petition are not challenged. Further, immediately after the dismissal of the writ petition, the appellant did file an appeal before the Appellate Authority. On exclusion of the aforesaid period, the appeal preferred by the appellant would be within the condonable period. Accordingly, we direct that the application for condonation of delay filed by the appellant would be treated as allowed. The delay is directed to be condoned."*

1. 11. As discussed hereinabove, the Applicant approached the Hon'ble High Court by way SCA No.9246/2023 as per the legal advice and in good faith. Therefore, the time spent in such proceedings is required to be excluded while computing the period of limitation and the Applicant is entitled to take benefit of Section 14(2) of the Limitation Act. As such, on exclusion of the aforesaid period upto 05/07/2023, the Securitisation Application preferred by the Applicant before this Tribunal would be within the period of limitation. Accordingly, the application for 8MA 25 of 2023

condonation of delay filed by the Applicant should be treated as allowed. Hence, the following order is passed:

**ORDER**

- ➤ The present application for condonation of delay is allowed. Registry is directed to register and number the accompanying Securitisation Application.

- ➤ No order as to cost.

- ➤ List the matter for hearing on 18/10/2023.

Pronounced in open Court today on this 3^rd day of October 2023.

(LAXMAN MADNANI) Presiding Officer, DRT-II, Ahmedabad

\*ykb