SMT SANGEETA PRAMOD LOHIYA vs The Akola Urban Cooperative Bank Ltd on 3 October 2019

J U D G M E N T

(Delivered on this 3 rd day of October, 2019)

This is an application for condonation of delay of 398 days in preferring the appeal under section 17 of SARFAESI Act. 02.00

The brief facts of the applicants‟ case are that the appellants have never been served upon the mandatory notices as contemplated under the provisions of section 13(2) of the Act. Respondent bank to avoid legal service of notices have published the notice in the daily newspapers which have very less circulation in Akola and that respondent bank is well aware of the fact that the appellants do not stay in Akola and shifted long back for more than 8.10 years and are now residing at the addresses mentioned in the title clause of application. The appellants should have filed present appeal within 45 days from the date of symbolic possession i.e. 05.03.2016. As there was negotiations in between the appellants and the respondent bank to settle the dispute under OTS, the appellants visited the respondent bank repeatedly but respondent bank was avoiding to settle the dispute and that due to continuous loss in the business, the appellants could not liquidate the amount within stipulated time. Respondent bank filed the proceedings u/s dtg/- 14 by which the respondent bank is trying to t ake physical possession. The Collector has passed the order on 04.03.2017 and the said order was served upon the appellants on 04.04.2017. Since the date of demand notice, the appellants are raising their objection by way of representation. Even, the appellants have filed the objection before the Collector, Akola, but appellants are not getting any relief. Due to above said reasons, the appellants could not approach within stipulated time before the Tribunal and therefore according to the appellants there is no delay in filing the present appeal but to avoid further legal complication, the appellants are filing the delay application. Therefore, whatsoever delay caused in filing the present appeal, the same may kindly be condoned. There is no malafide intention. If the delay is not condoned, the appellants will suffer great injustice and loss which cannot be compensated in terms of money. From the date of knowledge of passing orders u/s 14 i.e. when it was served on 04.04.2017, the appeal is within time and limitation. However, as the applicants were prosecuting other remedies, the delay of 398 days has been caused and the same be condoned by taking liberal view. 03.00

Respondent bank filed composite reply at Exh. 8 and resisted the application filed by the applicants and submitted that the applicants alongwith respondent nos. 2 to dtg/- 4 have colluded with two high ranking bank officers in committing fraud on the respondent bank in order to fraudulently secure financial credits from respondent no. 1 bank and that respondent no. 1 initiated criminal proceedings by filing an FIR against the applicants, respondent nos. 2 to 4 and the officials of the respondent no. 1 bank and the criminal trial in this case is still pending before competent court. The delay of 398 days is no where explained in the application and applicants failed to explain as to how they got the knowledge of the notice. The contents of para 5 to 7 do not explain any bonafides which have caused the delay in filing the application. On the contrary, the applicants admit of contesting the bank‟s application u/s 14 before the Collector Akola.

Applicants‟ claim on limitation is without any substance. As the applicants challenged the notice u/s 13(2) which was issued on 29.09.2015, the delay calculation stated in the application is not 398 days but more than 575 days which is completely unexplained. The application further does not state the reasons for delay in filing the appeal to challenge action u/s 13(4). Applicants have suppressed material facts and further failed to disclose a single reason for explaining even one days delay. In such circumstances, the application for delay alongwith its prayer deserves rejection with costs.

dtg/- 04.00

Heard arguments of both sides. Perused record. 05.00

Now the points for determination are :-

Whether there was delay in filing SARFAESI appeal and if so, how many days and whether day to day delay was explained ?

To what reliefs? 06.00

Point no. 1 :- As can be seen from the pleadings and the tenor of the arguments of the contesting parties, the undisputed facts can be culled out are ; that applicants and R2 to R4 were the borrowers and they obtained the loans from R-1 bank whose dues are Rs. 28 crores in the year 2013 and now they are said to be around Rs. 40 crores as on today as per R-1 bank‟s contention. R1 further submits that applicants and R2 to R4 colluded with two high ranking bank officials of R1 bank and fraudulently secured financial credits from R1 bank and that R1 bank initiated criminal proceedings by filing FIR against the applicants, R2 to R4 and officials of R1 bank and that the case is pending before competent court. The pendency of the criminal case on applicants, R-2 to R4 and R-1‟s officials is not being disputed. 06.01 R1 bank in its reply at page no. 12, para (ix) gave the chronology of the events as follows:- dtg/-

a) Notice u/s 13(2) – 29.09.2015.

b) Representation of the Borrowers – 25.11.2015.

c) Reply of the Bank – 9.12.2015.

d) Paper publication of notice u/s 13(2) :- 20.12.2015 in prominent newspapers as required by law. e) Notice u/s 13(4) :- 26.2.2016(symbolic possession).

f) Symbolic possession :- 2.3.2016.

g) Paper publication as required by law :- 8.3.2016.

h) Order u/s 14 :- 4.3.17. 06.02 Learned advocate for R1 bank further contended that though the applicants requested for condonation of delay of 398 days, infact, said delay is more than 575 days. In support of his contention, R-1‟s advocate contended that the applicants are challenging action under section 13(2) of SARFAESI Act and said notice was dated 29.09.2015 and within 45 days, said action has to be challenged under section 17(1) of SARFAESI Act, which reads as follows:- “17(1) 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 alongwith such fee, as may be prescribed to the Debts Recovery dtg/- Tribunal having jurisdiction in the matter within forty -five days from the date on which such measures had been taken” 06.03 Admittedly, the applicants are questioning said notice dated 29.09.2015 under section 13(2) of SARFAESI Act. Borrowers filed representation dated 25.11.2015 and its reply is dated 09.12.2015. So, action has to be challenged by the applicants by 22.01.2016. Admittedly, this application is filed on 18.05.2017 i.e. after one year, 3 months and 27 days, amounting nearly to 482 days‟ delay. In that way, exact days of delay to be condoned under section 5 of the Limit ation Act are not calculated and mentioned by the applicants which is a minus point on their part. The notice under section 13(2) dated 29.09.2015 was sent by Registered Post, A/D on 01.10.2015 to the applicants and R2 to R4 informing them that their loan became NPA and SARFAESI action was initiated. Xerox copies of receipts and acknowledgements of the applicants and R2 to R4 were filed at page nos. 105 to 122 of the respondent bank‟s reply through paper book. Said section 13(2)‟s notice dated 29.09.2015 which was booked by RPAD was served on most of the applicants and R2 to R4. Admittedly, there is no conflict of interest among the applicants and R2 to R4. So, the notice under section 13(2) of SARFAESI Act served on some among the applicants and R2 to R4 must be the deemed notice on other applicants also. In dtg/- that way, the S.A. challenging the notice under section 13(2) of SARFAESI Act has to be filed on 22.01.2016, but admittedly, this application is filed on 18.05.2017 with a delay of 482 days. That apart, R1 bank got published the section 13(2) SARFAESI Act‟s notice in the prominent newspapers and that it also should be taken as the deemed notice to the borrowers. Subsequently, R1 bank issued notice under section 13(4) of SARFAESI Act dated 26.02.2016 stating that they will take possession of the secured assets on 02.03.2016 as can be seen from page no. 181 submitted by R1 bank‟s reply in the paper book. Symbolic possession said to have been taken on 02.03.2016. On 08.03.2016, paper publication was effected in „Tarun Bharat Daily‟ dated 08.03.2016 stating that account became NPA and that the dues are Rs. 2,53,26,269.29 ps as on 31.08.2015 + further interest and that the dues be cleared within 60 days. As the dues were not cleared, R1 published its intention to recover the dues as per the provisions of SARFAESI Act. The possession notice published in „Tarun Bharat Daily ‟ on 08.03.2016 must be the deemed notice to the applicants. Even thereafter also, applicants have not challenged SARFAESI action of R1 bank. R1 bank further contended that several notices were published in newspapers i.e. „Lokmat‟ on 20.12.2015 and „Deshonnati‟ on 20.12.2015 and these must

dtg/- be the deemed notice to the borrowers. There is force in this contention particularly when there is an inordinate delay in filing S.A. and more particularly when the borrowers are in constant touch through their correspondence for settlement by way of negotiations with R1 bank. In order to drive home that point, R1‟s advocate drew the attention of this Tribun al to the letter dated 26.07.2013 submitted by R3 to the Chairman of R1 bank stating that the borrowers are compromising with the R1 bank and requested the bank not to proceed with any action against them as can be seen from document no. 14 at page no. 206 of R1 bank‟s reply in the form of paper book. Similarly, R3 herein addressed the original of another letter dated 29.08.2013 vide document no. 14 at page no. 207 of R1‟s reply in the form of paper book to the Chairman of R1 bank stating that in the meeting held between the parties, the borrowers are revising their proposal for payment schedule. R3 further mentioned as previously mentioned in his earlier dated 26.07.2013 of 36 months, the borrowers are going to make payment in 24 months and requested R1 bank to consider their revised proposal and oblige as can be seen from page no. 207 of R1‟s reply in the form of paper book. These aspects are showing that the borrowers are in constant touch with R1 bank‟s officials and are fully aware of R1 bank‟s proceedings, more so, under the dtg/- provisions of SARFAESI Act. But still, they have not challenged SARFAESI action of the R1 bank within the prescribed period under SARFAESI Act. On their own showing, applicants approached this Tribunal with an inordinate delay of 398 days though it is more than 575 days as per R1 bank‟s contention. 06.04 Undisputedly, this M.A. is not filed after 398 days from the last date of limitation in challenging SARFAESI action. That goes to show that applicants‟ calculation of 398 days delay is not correct. Applicants have not even chosen to mention exact days of delay. 06.05 As per established Rulings of the Hon‟ble Supreme Court and different High Courts, „party invoking the provisions of section 5 of the Limitation Act, has to explain day to day delay properly and satisfactorily‟. In the present case, applicants simply contended that they have shifted to different places as mentioned in the cause title of the M.A. after the loan transactions. Even according to the applicants, some of the borrowers i.e. R2 to R4 are still staying in Kholeshwar of Akola District. Paper publication was effected in „Tarun Bharat‟ at Akola and there was no change of addresses of some of the borrowers. So, they can also pass on the information to the applicants who are co-borrowers. Admittedly, there are 8 borrowers to challenge SARFAESI

dtg/- action and all of them or either one of them can challenge SARFAESI action within the period prescribed period under SARFAESI Act, but none of them had chosen to challenge SARFAESI action within time. Applicants caused inordinate delay of 482 days in filing this case and this inordinate delay was not at all explained in the pleadings or through necessary documentary proof as is required under section 5 of the Limitation Act. 06.06 As the applicants miserably failed to explain “day to day delay”, they are not entitled to the relief prayed for in clause (a) of this M.A. As there are no merits in this case, this M.A. is liable to be dismissed with costs. Hence this point is answered in favour of R1 bank and against rest of the parties.

In the result, this M.A. is dismissed with costs .

Interim protections/I.As., if any pending, are deemed to have been vacated/closed.

Nagpur

Dt.: 03.10.2019

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