MS JAMNADAS AND COMPANY vs BANK OF BARODA on 9 April 2019

J U D G M E N T

Delivered on this 9 t h day of April, 2019

01.00 This is an application filed by the applicants requesting this Tribunal to condone the delay U/s 5 of the Limitation Act. 02.00 APPLICATION AVERMENTS: Applicants question the action taken by R1 bank U/s 13(4) of the SARFAESI Act, 2002 as it is contrary to the provisions. The S.A. is required to be preferred within 45 days from the date of action being taken SIC U/s 13(4) of the SARFAESI Act on 17.12.2015. The period of 45 days expired by 1.2.2018. However, there is delay of 37 days in preferring the S.A. The delay has been caused in view of the fact that deliberations were going on between the applicant and Respondent no.1 bank to the extent of granting permission for selling the properties for settlement of matter. As there had been communications to that effect between applicant and R1 bank dated 1.1.2018 and 10.1.2018 and as such since the applicant is expecting from Respondent no.1 bank, 37 days delay was caused while approaching this Tribunal U/s 17 of the SARFAESI Act. 2.1 37 days delay is bonafide and this Tribunal is empowered to excuse the same or extend the period of limiation while passing the order in the interest of justice U/s 17(7) of

Gvp/- the SARFAESI Act. The delay being so caused is required to be condoned by extending the period of limitation whi le passing the order U/s 17(7) of the SARFAESI Act. 03.00 Respondent no.1’s reply averments in Exh.9: on 31.03.2012, the bank sanctioned credit facilities to the applicant firm with conditions mentioned in the sanction letter and the same was acknowledged by the applicant s. Applicants defaulted to repay the loan amount by regular installments and hence as per the norms of RBI, applicants’ account declared as NPA on 28.07.2017. Respondent no.1 requested applicant to regularize the loan account, but applicant failed to do so. Respondent no.1 issued notice U/s 13(2) of the SARFAESI Act dated 25.09.2017 and demanded the dues, but applicant failed to deposit the same within 60 days. Respondent no.1 waited for more than sufficient time to recover the loan amount, but all the efforts of respondent no.1 failed and hence Respondent no.1 initiated further action against the applicants. 03.01 Respondent no.1 took symbolic possession of the property on 15.12.2017. Bank filed O.A. No.361/2018 against the applicants and others for recovery of Rs.15,34,60,855/ -. The settlement proposal of the applicants was already refused by Respondent no.1. 03.02 The applicants in the delay application have not raised sufficient grounds as to why the application is not filed within time. Applicants in the delay application have not explained

Gvp/- the day to day delay. The Hon’ble Supreme Court a nd various High Courts in their various judgements stated that the applicants should explain the cause of delay. The grounds raised by the applicants in the delay application are weak grounds and there is no substance in it. Therefore, the Tribunal is requested to reject the application with costs. 04.00 Respondent no.4’s reply averments in Exh.13: - The present M.A. with main S.A. became infructuous for the reasons that the present M.A. has challenged the action of symbolic possession dated 17.12.2017 U/s 13(4) of the SARFAESI Act taken by R1 bank on the fact of the record . The stipulated time to file that application was expired on 1.2.2018 and the present M.A. is filed somewhere on 1.3.2018 and 37 days delay is caused to challenge the action dated 17.1 2.2017. 04.01 The present application is not maintainable since the applicants had not challenged the District Magistrate’s order for taking physical possession nor challenged the e-auction conducted by the bank on 12.10.2018 and there are no pleadings incorporated in the S.A. / M.A. and the said sale in favour of Respondent no.4 became absolute and no cause of action survives as the right of redemption is s eized. Applicants failed to explain the delay caused in filing this case by explaining the day to day delay. The reasons mentioned in M.A.70/2018 are without any documentary evidence and without

Gvp/- any base, substance and hence entire M.A. may be dismissed with costs. 04.02 The applicants were not vigilant in exercising their rights to file the applicati on U/s 17 of the SARFAESI Act within the prescribed period. During pendency of the present M.A., respondent bank has conducted auction sale on 12.10.2018 and the said auction is duly confirmed in favour of Resp. No.4 as highest successful bidder. Further, Respondent no.4 has received the Sale Certificate from the bank and also registered the sale certificate in its favour on 28.11.2018. Hence, all the rights, interest and notional possession is transferred in favour of Resp. No.4. Hence, this M.A. is not maintainable due to subsequent developments. 04.03 It is denied that the delay is caused because of deliberations between the applicants and respondent no.1 bank. The alleged communications mentioned in para 4 dated 1.1.2018 and 10.1.2018 are also not filed on record. Hence, the said pleadings are imaginary and after -thought. The present M.A. may be dismissed for want of suppression of facts and further for playing mischief with this Tribunal by not informing subsequent developments in this regard. 04.04 Para no.1 to 4 are pleaded in very casual manner . The applicants are not serious in prosecuting the matter. The applicants got enough opportunity to take suitable steps as per Law from time to time but the applicants were very negligent in

Gvp/- exercising their rights. Applicants are not interested in the properties but only wants to prolong the matter on one or other pretext. 04.05 Applicants moved an application for quashing e- auction held on 12.10.2018 and Respondent no.4 purchased one of the property and the sale is confirmed in R4’s favour and Sale Certificate is issued and it is also registered in the O/o the Sub Registrar and, thus, said auction is concluded. Applicants have not challenged the said auction by filing S.A. U/s 17 of the SARFAESI Act and there is no prayer for setting aside the said auction in the pending M.A. or S.A. and thus, when sale/auction dated 12.10.2018 is not under challenge, the said sale cannot be quashed and set aside by way of interim relief as there is no main relief sought in the M.A. or S.A. 04.06 Even, no letter for redemption of mortgage is given after service of auction notice which is also affixed on the mortgaged property and it was also published in two daily newspapers having wide circulation at Nagpur but when it is made known, the mortgaged properties sold to Resp. No.4 on 12.10.2018. The applicants have lost the opportunity in view of Section 13(8) of the SARFAESI Act. The M.A. is devoid of merit and liable to be rejected summarily. 05.00 Now, the points for consideration are:-

(i) Whether, the delay caused in filing the S.A. can be condoned?

Gvp/-

(ii) To what reliefs? 06.0 Arguments heard. 07.0 Point no.(i): Learned Advocates for Respondent no.1 and 4 contended that the only reason assigned by the applicants in filing this M.A. after 37 days delay is that during the said 37 days, the applicants had deliberations with respondent no.1 bank. In fact, Respondent no.1 bank is an opposite party and adverse party to the applicants even on their own showing. It is not known as to how the applicants well versed with men and matter running a partnership firm, failed to exercise their rights within the time simply on the basis of their so called oral deliberations with Respondent no.1 bank. Applicants have not obtained any documentar y proof from the Respondent bank that Respondent no.1 bank is going to settle their matter irrespective of challenging the SARFAESI action within time. Even according to both sides, OTS proposal dated 3.9.2018 submitted by the applicants for Rs.8 Crores was rejected by Respondent no.1 bank and out of the 5 properties, 3 properties were sold for Rs.8 Crores. So, when Respondent no.1 bank is going ahead with SARFAESI action and made attempts to sell 3 properties and in fact sold the properties, it is not known as to how the applicants believed the version o r deliberations of Respondent no.1 bank. In this regard, Respondent no.4’s advocate relied on two decisions as under: -

Gvp/- Case between Ahmednagar Zilla Vidya Prasarak Samaj –Vs- Rameshwar Shriram Dhoot – Civil Application No.08898 of 2018 on the file of Bombay High Court, Aurangabad Bench dated 15.02.2019 wherein it was observed as follows: - “It is to be noted that the decree was passed on 18.10.2010 by the learned trial Court. Thereafter, within limitation , the said judgement and decree was challenged before learned Principal District Judge, Ahmednagar, in Regular Civil Appeal No.386 of 2010. The appeal was dismissed on 09.03.2016. The applicants are not coming with a case, that they were not aware about decision of the appeal. They are coming with a case, that there were settlement talks going on for about two years. Only vague and omnibus statements are made to that effect and details have not been given. If such statements which are made in paragraph 07 in the application are accepted without any further details, then it would be very much easy for any party to make vague statements because it further says, that for some or other reason (without giving further details), the talks could not materilize. Any supporting affidavit of the person who had taken part in the settlement talks has not been filed.

Another case between Gotiram S/o. Laxman Pawar – Vs- Pravin S/o. Babasaheb Borde and others – Citation 2012 LawSuit(Bom) 38 in which the Hon’ble Bombay High Court observed as follows:- “Therefore, for the reasons aforesaid, when this Court is of the opinion that, the delay in filing the

Gvp/- appeal before the lower appellate Court was not properly explained, no sufficient cause was shown, in that case, the question of adjudicating the second appeal on merits would not arise. Therefore, the impugned judgement and order dated 30.09.2010 needs no intereference. The second appeal does not raise any substantial question of law, same stands dismissed. Consequently, the Civil Application is rejected.” 07.01 In view of the said rulings, when the applicants are claiming that they simply made vague statements with regard to deliberations, it need not be given much credence and if accepted without any further details, then it would be very much easy for any party to make vague statements. That apart, the applicants have not filed any supporting affidavit of the person who had taken part in the so called deliberations. In view of the said rulings, the above 2 decisions are applicable to the present facts and circumstances of this case. 07.03 Applicants’ Advocate relied on a case between S. Ganesharaju (Dead) Through his LRS and another –Vs- Narasamma (Dead) Through LRs and others – (2013) II Supreme Court Cases 341, wherein the editorial board lucidly mentioned the rulings as under:- A. Civil Procedure Code, 1908 – Or.47 R.1 and S.96 – Review – Condonation of delay – Review against order in regular first appea l – On facts, held delay explained properly – Sufficient cause was shown and proved before Single Judge – Delay only for 53 days, held,

Gvp/- would certainly not fall in the category of exorbitant or inordinate delay – Looking to short delay, as a routine, it should have been condoned and the matter should have been heard on merits – Limitation Act, 1963, S.5. B. Practice and Procedure-Delay/Laches/Limitation – Review Petition – Touching the merits of the case while refusing to condone delay – Held, on facts, basic ground on which the review was filed by appellants was not considered by Single Judge of High Court – Thus, appellants were put to dual hardship – On the one hand, the delay had not been condoned and on the other hand even the merits were touched, for which no arguments had been advanced – Reiterated that such practices are disapproved – Impugned order set aside and quashed – Matter remitted to Single Judge of High Court who had decided the main matter, as per his convenience, to be heard only on merits of the review petition, in accordance with law – Delay stands condoned – Civil Procedure Code, 1908 – Or.47, R.1-Review-Limitation Act, 1963, S.5. C. Limitation Act, 1963-S.5 – Sufficient cause – Liberal construction-Held, the expression has to be given a liberal construction so as to advance substantial justice -Unless the respondents are able to show mala fides in not approaching the court within the period of limitation, generally as a normal rule, delay should be condoned.”

Gvp/- 07.04 In the above Hon’ble Supreme Court’s ruling, the Hon’ble Apex Court observed that it is appropriate to hear the matter on merits rather than shutting the doors of justice at the threshold. Generally, opportunities are to be given to the aggrieved to challenge each measures and steps taken in the SARFAESI Act. In the present case, the applicants have not challenged the District Magistrate’s order, the symbolic possession taken by Respondent no.1 bank, the physical possession taken by respondent no.1 bank, e-auction conducted by respondent no.1 bank in which Respondent no.4 became the highest bidder and that sale certificate was issued to R4 and registered document was also executed in favour of Respondent no.4 for the property purchased by him in the e - auction and registered document was also executed in favour of R4 by R1 bank before the concerned Sub Registrar. These aspects show that applicants were not diligent in challenging the various measures and steps taken by respondent no.1 bank under the SARFAESI Act. The applicants approached this Tribunal leisurely with a delay of 37 days on the simple premise that they participated in the deliberations during these 37 days with Respondent no.1 bank, though R1 bank is taking various steps under the SARFAESI Act to recover its dues from the applicants on their secured assets. These aspects show that the applicants are not diligent in exercising their rights in challenging the measures and steps under the SARFAESI Act,

Gvp/- which is a technical Act, under which the challenge has to be made within a specified time frame. 07.05 That apart, as per leading decisions of the Hon’ble Supreme Court and various High Courts, “the day to day delay has to be explained” for condoning the delay U/s 5 of the Limitation Act. In the present case, the applicants are not even explaining as to what took place during these 37 days delay and the various steps that alleged to have taken place during those deliberations. No documentary proof is filed to show that deliberations took place and that the affidavit of the person who participated in the deliberations and their details were also not filed nor explained. Hence, ‘day to day delay’ is not at all properly explained by the applicants. Therefore, this Tribunal does not see any reason to condone the delay. Hence, this M.A. is liable to be dismissed.

In the result, M.A. is dismissed. Each party do bear their own costs. Interim protections, if any and pending I.A.s, if any are deemed to have been vacated / closed.

Inform the Hon’ble High Court, Nagpur Bench that this M.A. is disposed of well within time fixed by t he Hon’ble High Court vide its orders dated 3.4.2019 in W.P. No.2773/2019.

Nagpur

Dt.: 09.04.2019 (Chikkam Vijay Mohan) Presiding Officer Debts Recovery Tribunal Nagpur.