Ms SATYA SAI COTTON COMPANY vs ANDHRA BANK on 4 February 2020

ORDER

The petition MA 99 of 2019 is filed by petitioner to condone the delay of 46 days in filing the the present SA appeal in the interest of justice.

1. 2. According to the case, petitioner availed credit facility from 2^nd respondent bank and disputing declaring the loan account as

NPA. Petitioner further submitted that the loan limit was Rs.60 lakhs and on 06.09.2019, 2^nd respondent granted further loan of Rs.12 lakhs without knowledge of petitioner and petitioner further submitted that petitioner paid Rs.9 lakhs on 29.01.2019 into the loan account of the petitioner and further submitted that respondent bank took possession of the schedule property and petitioner failed to file the present SA appeal within 45 days from the date of taking possession i.e. from 20.06.2019 thus there was delay of 46 days in filing the present SA appeal and therefore prayed to condone delay of 46 days in filing the present SA appeal.

3. Counter filed on behalf of respondent bank denying the averments made in the petition and further stated that as the principal borrower availed credit facility and has failed to repay the amounts as per sanctioned terms its account became NPA as such the respondent bank, has initiated proceedings under SARFAESI Act, 2002 issued demand notice and the petitioner received the demand notice and failed to comply the demand notice as such respondent bank took possession of the schedule property on 20.06.2019 and affixed the same on the schedule property and also published the same in two newspapers as per mandatory requirements of SARFAESI Act, 2002 and thereafter respondent took fresh valuation of the schedule property by its approved valuer and issued notice u/r 8(6) of Security Interest (Enforcement) Rules, 2002 and not responded by petitioner herein and therefore keeping in view of the above, respondent bank prayed to dismiss the present petition.

4. Heard both the Ld. Counsels. Perused the petition and counter averments.

5. Now, Tribunal has to verify whether the Tribunal has powers to condone delay under Section 5 of Limitation Act or not. As per the decision of Hon'ble Supreme Court of India in the matter of BALESHWAR DAYAL JAISWAL Vs. BANK OF INDIA & OTHERS DATED 5-8-2015. In the above said decision, the point for consideration is whether under Section 18(1) of SARFAESI Act 2002 and under Section 20(3) of RDB Act where the Appellate Tribunal has the power to condone delay in filing an appeal under Section 18(1) and whether the Appellate Tribunal under SARFAESI Act 2002 was not a Court and therefore Section 29(2) of the Act 1963 was not attracted in this decision.

6. The Hon'ble Supreme Court has considered question whether the Appellate Tribunal under the SARFAESI Act, has power to condone the delay in filing an appeal under Section 18(1) of the said Act. The Hon'ble Supreme Court of India observed that Section 24 of RDB and FI Act makes Limitation Act applicable to an application made to a Tribunal. Section 36 of the SARFAESI Act makes period of limitation prescribed under the Limitation Act applicable to measures taken under Section 13(4). Thus, thereby, no exclusion of the Limitation Act. It is also further observed by the Hon'ble Supreme Court of India that provisions of Limitation Act can stand excluded not only by express provision of local or special Law. A scheme of SARFAESI Act by making the Limitation Act expressly applicable to measures under Section 13(4) of the Act impliedly excludes the said Acts from the appeals or other proceedings. In the same decision, the Hon'ble Supreme Court Held that " we have thus no hesitation in holding that the Appellate Tribunal under the SARFAESI Act has the power to condone the delay in filing an appeal before it by virtue of Section 18(2) of SARFAESI Act and proviso to Section 20(3) of the RDB Act".

7. In the above said decision, the Supreme Court approved the decisions of High Court of Andhra Pradesh in SAJIDA BEGUM Vs STATE BANK OF INDIA AIR 2013 AP 24 = MANU/AP/0546/2012 is based on applicability of Section 29(2) of the Limitation Act. 'In our view, Section 29(2) of the Limitation Act has no absolute application, as the statute in question impliedly excludes applicability of the provisions of Limitation Act to the extent a different scheme is adopted. If no provision of Limitation Act was expressly adopted, it may have been possible to hold that by virtue of Section 29(2) power of condonation of delay is available. The Hon'ble High Court of Andhra Pradesh in SAJIDA BEGUM case in holding the Tribunal to be Court, has relied on Section 22 & 24 of the RDB Act. Section 22 vests powers of Civil Court on the Tribunal only for purposes mentioned therein, such as summoning witnesses, discovery and production of documents, receiving evidence, issuing commission for examining witnesses etc. and deems Tribunals to be courts for specified purposes'.

8. It is also further observed by Hon'ble Supreme Court of India that "we are also in agreement with the principle that even though Section 5, of the Limitation Act may be impliedly inapplicable, principle of Section 14 of Limitation Act can be held to be applicable even if Section 29(2) of the Limitation Act does not apply. Therefore, Hon'ble Supreme Court held that delay in filing an appeal under Section 18(1) of the SARFAESI Act can be condoned by the Appellate Tribunal under proviso to Section 20(3) of RDB Act read with Section 18(2) of SARFAESI Act. The Hon'ble Supreme Court overruled the judgments of Madhya Pradesh High Court in between SETH BANSHIDGHAR MEDIA RICE MILLS PVT LTD in which contrary view taken by the Madhya Pradesh High Court.

9. As per the above said decision, the Hon'ble Supreme Court has approved the decision of Andhra Pradesh High Court in between Sajida Begum Vs State Bank of India and Others. In the decision of Hon'ble High Court of Andhra Pradesh in between Sajida Begum Vs SBI in WP No.22317 of 2012 reported in AIR 2013 AP 24. As per this decision, it was observed in Para No.37 of the said decision that though " Section 17 of SARFAESI Act is styled as a right to appeal, it is, in fact, a forum for original proceedings against the security measures. Sub-section (7) of Section 17 provides that any application made under Section 17

A handwritten signature in black ink, appearing to be "D. N. Rao" or similar, with a long horizontal stroke extending to the right.

of SARFAESI Act shall be disposed of in accordance with the provisions of the DRT Act and the Rules made there-under. Section 18 of SARFAESI Act provides a right to appeal to DRAT against orders of DRT passed under Section 17 of SARFAESI Act. Such appeal is also required to be disposed of in accordance with the provisions of the DRT Act and the Rules made there-under. In Para No.7, the Hon'ble High Court of AP in Sajida Begum vs State Bank of India that " the following provisions of the DRT Act may also be noticed. The DRT and DRAT are established under Section 3(1) and 8(1) respectively and the respective exclusive jurisdiction of the Tribunal or Appellate Tribunal are provided for under Section 17 of the DRT Act. In Para No.12 of the said judgment, the Hon'ble High Court observed that "we are of the view that Section 29(2) of the Limitation Act is clearly attracted and thereby Sections 4 to 24 of the Limitation Act would be applicable to the proceedings under Section 17 and 18 of the SARFAESI Act before the DRT as well as DRAT'.

10. In view of the above said observation of the Hon'ble High Court of Andhra Pradesh, the DRT has got power to condone the delay of the appeals filing under Section 17 of SARFAESI Act.

Therefore, if Section 5 of the Limitation Act 1963 would made inapplicable to the application under Section 17(1) of the Act, it would virtually defeat valuable right of redemption available to the mortgagor.

However, application of Section 5 of the Act 1963 to the proceedings under Section 17(1) of the Act 2002 would neither defeat rights of secured creditor nor cause irreparable hardship to the secured creditor. Thus it would be more appropriate to made Section 5 of the Limitation Act 1963 applicable to the proceedings initiated under Section 17(1) of the Act 2002. Therefore, in view of the above said decision, I am of the opinion that the provision of Section 5 of Limitation Act would also applicable to the appeals filed under Section 17(1) of SARFAESI Act and I am of the further opinion that this Tribunal by invoking Section 5 of Limitation Act and by applying principles laid down in the above said decisions, can condone the delay in filing the above said SA. On perusal of the petition averments, the petitioner stated that there was delay of 46 days in filing the present SA appeal and the delay in filing the present SA was not will-full and wanton. However, in the interest of justice, it would be just and necessary to give an

MA. 99/2019 in SA(UN)

opportunity to the petitioner to contest his case and to redress his grievances as stated in the petition, the delay can be condoned. Therefore, I am of the opinion to allow the petition by condoning the delay of 46 days in filing the SA.

In the result, MA No. 99/2019 is allowed however without costs and the delay of 46 days in filing the SA is hereby condoned. The Registry is directed to number the SA if otherwise is in order.

Let the copy of the order be made available to the parties as per rules. [Typed to dictation, corrected and pronounced by me in the open court on 4^th day of February, 2020]

PRESIDING OFFICER DEBTS RECOVERY TRIBUNAL VISAKHAPATNAM