INDIAN OVERSEAS BANK vs M/s.. TMV Hospitality Services on 10 July 2026

ORDER

1. This application is filed by the Applicant praying to condone the delay of 936 days in filing the substitute application and restoration application in TA No.698 of 2023.

2. It is stated that the erstwhile applicant bank i.e., Indian Overseas Bank filed OA No.785 of 2019 before DRT-I Chennai for recovery of outstanding dues in the loan account of M/s TMV Hospitality Services, the 1st Respondent herein. It is also stated that while so, on 15.11.2022 the above OA was transferred to this Tribunal and renumbered as TA No.698 of 2023 and this Tribunal was pleased to dismiss the said TA for default of the erstwhile applicant bank.

3. It is also stated that during the interregnum, the erstwhile applicant bank had assigned the entire liability, debt over the above loan account vide Assignment Agreement dated 11.05.2023 in favour of Reliance Asset Reconstruction Company Limited i.e., the applicant herein.

4. It is further stated that thereafter, the applicant has been scrutinizing the details of various cases and account statements of the above loan account and after cogently collecting the required documents to contest the case the applicant has filed the present application before the Tribunal and due to this, there was a delay in filing the substitution application in TA No.698

of 2023. It is stated that the delay is neither willful nor wanton but only due to the above said bonafides reasons stated above.

5. It is stated that the applicant has made out a prima facie case and the balance of convenience is clearly on the side of the applicant. It is also stated that if the application is not allowed the applicant would be put to severe hardship and loss, on the other hand, no prejudice would be caused to the Respondents, if the present application is allowed.

6. This Tribunal has carefully considered the averments made in the affidavit filed in support of the application, the records available on file and the submissions made.

7. The relief sought in the present application is to condone the delay of 936 days in filing the applications for substitution and restoration. It is an admitted fact that the debt was assigned by the erstwhile Applicant Bank, namely, Indian Overseas Bank, in favour of the present Applicant, Reliance Asset Reconstruction Company Limited, under the Assignment Agreement dated 11.05.2023. Thus, from the date of assignment, the Applicant became fully vested with the rights in respect of the subject debt and was competent to prosecute the proceedings before this Tribunal.

8. The explanation offered by the Applicant is that after the assignment it was scrutinizing the records of various accounts, collecting documents and verifying the details of the case before taking steps to prosecute the proceedings. This Tribunal is unable to accept the said explanation as constituting "sufficient cause" within the meaning of law. The Applicant is an Asset Reconstruction Company engaged in the business of acquisition and recovery of financial assets. Verification of records, scrutiny of documents and internal administrative processes are routine commercial activities and cannot furnish a valid ground to explain an inordinate delay extending over 936 days.

9. Significantly, the Assignment Agreement is dated 11.05.2023. From the date of assignment till the filing of the present applications, no satisfactory explanation has been offered for the prolonged inaction on the part of the Applicant. The affidavit is completely silent as to the specific dates on which the records were received, the steps taken by the Applicant, the reasons for not approaching this Tribunal within a reasonable time, or the circumstances preventing it from filing even a substitution application immediately after the assignment. The explanation is vague, omnibus and bereft of material particulars. Mere assertion that the Applicant was scrutinizing records cannot justify such enormous delay.

10. The law is well settled that while the expression "sufficient cause" occurring in the provisions relating to condonation of delay is to receive a liberal construction, such liberal approach cannot be extended to condone gross negligence, inaction or lack of bona fides. The party seeking condonation must explain the delay in a satisfactory manner covering the entire period of delay.

11. The Hon'ble Supreme Court in Basawaraj&Anr. v. Special Land Acquisition Officer, (2013) 14 SCC 81, has held that the law of limitation is founded on public policy and that in the absence of sufficient cause, delay cannot be condoned merely on equitable grounds. It was further held that where negligence, inaction or lack of bona fides is imputable to the applicant, there cannot be a justified ground for condonation of delay.

12. In Postmaster General &Ors. v. Living Media India Ltd. &Anr., (2012) 3 SCC 563, the Hon'ble Supreme Court held that even Government departments cannot seek condonation as a matter of course on the basis of administrative delays and that condonation of delay is an exception and should not be used to defeat the law of limitation where there is no plausible and acceptable explanation.

13. Likewise, in Balwant Singh (Dead) v. Jagdish Singh &Ors., (2010) 8 SCC 685, the Hon'ble Supreme Court held that liberal construction of "sufficient cause" does not mean that negligence, inaction or lack of diligence should be condoned and that a valuable right accrues to the opposite party by lapse of limitation, which cannot be lightly disturbed.

14. Further, in P.K. Ramachandran v. State of Kerala, (1997) 7 SCC 556, the Hon'ble Supreme Court categorically held that the law of limitation has to be applied with all its rigour and courts have no power to extend limitation on equitable considerations when sufficient cause has not been established.

15. It is also a settled principle that an assignee steps into the shoes of the assignor and is bound to prosecute the proceedings with due diligence from the date of assignment. Once the rights stood transferred under the Assignment Agreement dated 11.05.2023, the Applicant was expected to take immediate and appropriate steps for substitution and continuation of the proceedings. The Applicant cannot indefinitely postpone such action on the ground of internal scrutiny or administrative formalities. No convincing explanation has been furnished as to why no action whatsoever was taken for an extraordinarily long period after the assignment.

16. This Tribunal is therefore of the considered view that the Applicant has failed to establish sufficient cause for condonation of the inordinate delay of 936 days. The reasons assigned are wholly inadequate and do not satisfactorily explain the prolonged inaction after the execution of the Assignment Agreement. Entertaining such an application would amount to defeating the very object of the law of limitation and would encourage indolence in prosecuting proceedings.

17. In view of the foregoing discussion and the settled principles laid down by the Hon'ble Supreme Court, this Tribunal finds no merit in the present application.

18. Accordingly, the following:

ORDER

(a) MA No.42 of 2026 filed for condonation of delay is dismissed.

(b) Consequently, the applications viz., MASR No.625/2026 for substitution and MASR No.623/2026 for restoration also stand dismissed.

(c) No order as to costs.

Sd/- (SHARANG DHAR UPADHYAY)

PRESIDING OFFICER

DRT-II, CHENNAI (Dictated to PS, who typed in the system directly, corrected, signed and pronounced by me in Open Court, on this 10th day of July, 2026)