Smt Shakunthala S Rao vs Karnataka State Financial Corporation on 11 July 2025

:ORDER:

1. This review application is filed the applicant to the SA which was disposed of as early as on 2012; wherein the challenge was made by the LRs of deceased borrower/guarantor against the possession notice dated 06.02.2012 issued by the respondent. This Tribunal vide Order dated 24.01.2014 dismissed the SA with cost holding that the loan in question were secured by equitable mortgage of property and Article 62 of the limitation Act applies. Based on the above fact, this Tribunal rejected the claim of the applicant that the measures are initiated are continued on a time barred debt. It is further contended that in the SA that, the NPA is of 1999 and no action has been taken till 2011. The competence of the respondent to invoke the provisions of the Act was also called in question in the above SA. The other contention taken is that the schedule property being a joint family property acquired out of joint family funds, the applicants being the LRs of Late Sadashiva Rao are entitle for a share in schedule property and the mortgage, if at all to be found to be in existence, is not a valid one as the same is created without concurrence of all the owners of the property. Serious contention is also taken as to the validity of the mortgage in favour of 1st respondent. After hearing the respective sides this Tribunal dismissed the SA after discarding all the contention of the applicant.

2. Now the applicant seeks to review the order contending that the documents produced by the Respondent Corporation itself prove that the Memorandum of Entry was dated 13.03.1989 and the security was extended only up to a credit of Rs.20,000/-. According to the Review applicant the Memorandum of Entry as referred above will indicate that the claim of the respondent corporation that there exists security interest on the schedule property for the entire loan amount is not sustainable. Hence, according to the review applicant, this Tribunal failed to consider the above legal aspect. During the course of hearing it is also pointed out that the application filed by the respondent before the City Civil Court, wherein the schedule property was deleted from the plaint to enable the respondent to pursue under the provisions of the Act, got subsequently dismissed. Hence, the Order is sought to be reviewed mainly on two grounds 1) on the ground of limitation as according to the review applicant the claim of the respondent was hopelessly barred by the limitation even at the time of initiation of the measures by issuance of Demand Notice and 2) There is no valid security interest created in respect of the debt as claimed by the respondent in their measures as no security is extended for the same. Heard and perused the records.

3. The Ld. applicant placing reliance on the decision of the Madras High Court in WP.No.15386, 8099, 8381, 12970, 13456/2012 (Dr. Zubida Begam B/s Indian Bank), contending that the measures under the SARFAESI Act cannot be initiated beyond the limitation. The said decision also laid down that there is no enabling provision to apply S.5 of the Act, in respect of measures taken under the SARFAESI Act. The reliance was also place on the decision of High Court of Kolkata, where in the Kolkata High court has held that the measures cannot be continued in time barred debts.

4. The applicant had also contended that while disposing the matter under S.17 of the Act, Rule 5(a) of the Debt Recovery Procedural Rules and the S.22(2) of the RDB Act., are applicable and hence this review is maintainable.

5. Though the 1st respondent has filed statement of objections along with the documents, this Tribunal is not adverting the same as the applicant needs to substantiate that the prayer for reviewing Order sought to be reviewed is to be entertained. The applicant has also produced and relied upon plethora of decisions to contend about the limitation aspect which they are now trying to put forth in the review.

6. The only question that is to be gone into, whether the mis-reading of the document by this Tribunal for mis-interpretation of documents by this Tribunal will entitle the applicant to maintain a review as sought for in the review petition. Now the applicant contends that, this Tribunal failed to take note of vital document and hold that there is a valid mortgage. Whereas, according to the review applicant that there is no mortgage creating security beyond Rs.20,000/-. The Next contention is that this Tribunal failed to take note of the fact that the measures are initiated and continued in a time barred debt.

7. Going by the order sought to be reviewed this evident that this Tribunal had considered the issue as the validity of the mortgage and held “ All these documents, referred above, shall be read cumulatively and in juxtaposition to one another; and the contents of these documents clearly establish that late Sadashiv Rao has mortgaged the property in question in favour of the Respondent-Corporation by deposit of title deeds by creating equitable mortgage. Therefore, there is valid mortgage in favour of Respondent-Corporation. In this context it is also relevant to place on record that, in the light of production of Original Release Deed dated 04/02/1961, by which full ownership of the Schedule Property was created in favour of Sadashiva Rao, non-production of original sale deed dated 14/09/1959 has no consequence at all and adverse inference cannot be drawn against the Respondent-Corporation, as the said Release Deed has been acted upon, the name of Sadashiva Rao came to be entered as the owner of the property and he has paid Taxes; and it was recognised by all the competent authorities and other 3 co-owners who have executed the Release Deed never raised any objection. Therefore, absolutely, non-production of said original sale deed does not have any legal consequences and impact of the validity of the mortgage “. Even though the Ld. counsel contended that there is no Memorandum of Entry beyond entering for a debt more than Rs.20,000/-, this Tribunal is of the view that by sitting in the limited jurisdiction for review this Tribunal cannot re-visit the said issue and to enter into a different finding than what has been entered into by the final order. This Tribunal cannot assume the jurisdiction of an Appellate Tribunal and sit in appeal and decide as to the legality of the findings entered by this Tribunal, once final order is passed.

8. The other issue as to the limitation is also dealt within the final order by this Tribunal wherein it is held as follows “The fourth major ground urged by the Appellants is that, the loan in question which was sanctioned on 13/03/1989 had become NPA in 1990 itself. Further, there is no Acknowledgement of Debt, by payment or in writing by lade Sadashiva Rao and no suit for recovery has been by 1993. Therefore, it is contended that the claim of the Respondent-Corporation was barred by Limitation way back in 1992 itself. Per contra, the Respondent-Corporation vehemently denies the said contention and submits the loan in question was advanced in 1989 and the repayment period was of 7 years and the period of limitation for debts secured by mortgage is 12 years; and with the period of limitation, legal actions have been initiated by the Respondent-Corporation for recovery and law has been put in motion i.e., by filing Petitions in Misc. Case No.766/1998 and Misc.

Case No.42/2000. Therefore, the claim of Respondent-Corporation is well within limitation. In the case on hand, it is clear from the records and documents filed by both the parties, as referred above, that the loans in question (Term Loans) were secured by equitable mortgage of property in question by Guarantor-D.S. Sadashiva Rao; the said Loans were repayable over a period of 7 years; and the account became NPA in 1990. It is relevant to note that, as per Article 62 of the Limitation Act 1963, the period of limitation for debts secured by mortgage is 12 years; and in the case on hand, as noted above, the loan account became NPA in 1990 and within he period of limitation legal action for recovery of debt has been initiated by the Respondent-Corporation under the State Financial Corporations Act, i.e, by filing Petitions in Misc. Case No.766/1998 and Misc.Case No.42/2000. Therefore, the claim of Respondent- Corporation is well within limitation. In the case on hand, it is clear from the records and documents filed by both the parties, as referred above, that the loans in question (Term Loans) were secured by equitable mortgage of property in question by Guarantor-D.S. Sadashiva Rao; the said Loans were repayable over a period of 7 years; and the account became NPA in 1990. It is relevant to note that, as per Article 62 of the Limitation Act 1963, the period of limitation for debts secured by mortgage is 12 years;

and in the case on hand, as noted above, the loan account became NPA in 1990 and within the period of limitation legal action for recovery of debt has been initiated by the Respondent-Corporation under the State Financial Corporations Act, i.e., by filing Petitions in Misc. Case No.766/1998 and Misc. Case No.42/2000, before the XVII Addl. City Civil Court, Bangalore, which cases are pending disposal. Under these circumstances, the claim of Respondent- Corporation is well within the period of limitation.” The findings as entered above even if not correct is on the basis of evaluation of the available evidence and the documents and hence cannot sought to be corrected by invoking the limited power of the review.

9. The new circumstances put forth by the applicant that the City Civil Court rejected the case of the respondent will not alter the situation as the power of review cannot be extended to apply a new fact which was not in existence at the time of disposal of the matter.

10. The review jurisdiction is extremely limited and unless there is mistake apparent on the face of the record, the order/judgment does not call for review. The mistake apparent on record means that the mistake is self-evident, needs no search and stares at its face. Surely, review jurisdiction is not an appeal in disguise. The review does not permit rehearing of the matter on merits. Haridas Das vs Smt. Usha Rani Banik & Ors (2006 (4) SCC 78), the Hon’ble Supreme Court held that: “But, there are definitive limits to be exercise of the power of review. The power of review may be exercised on the discovery of new and important matter of evidence which, after the exercise of due diligence was not within the knowledge of the person seeking the review or could not be produced by him at the time when the order was made; it may be exercised where some mistake or error apparent on the face of the record is found, it may also be exercised on any analogous ground. But, it may not be exercised on the ground that the decision was erroneous on merit. That would be in the province of a court of appeal. A power of review is not to be confused with appellate power which may enable an appellate Court to correct all manner of error committed by the Subordinate Court."

11. It is also pertinent to mention the observations of the Hon’ble Apex Court in the case of Parsion Devi v. Sumiri Devi (1997(8) SCC 715). Wherein the Hon’ble Supreme Court placing reliance upon the judgments in the cases of Aribam's citation and Smt. Meera Bhanja citation it was observed as under: "Under Order XLVII, Rule 1, CPC a judgment may be open to review inter alia, if there is a mistake or an error apparent on the face of the record. An error which is not self-evident and has to be detected by a process of reasoning, can hardly be said to be an error apparent on the face of the record justifying the Court to exercise its power of review under Order XLVII, Rule 1, CPC. In exercise of the jurisdiction under Order XLVII, Rule 1, CPC it is not permissible for an erroneous decision to be reheard and corrected. A review petition, it must be remembered has a limited purpose and cannot be allowed to be an appeal in disguise."

12. Hence, on consideration of above facts, this Tribunal is of the conclusion that the Review is not liable to be entertained and accordingly, the TRA. No.6/2017 dismissed. All pending IAs stand closed. The parties to bear their respective costs. Copy of this order be communicated to the parties concerned. [Dictated to the Stenographer (PR), transcribed by her, corrected and signed and pronounced by me in the Open Court, this the 11th Day of July 2025].

Sd/-

(T. RAJESH) PRESIDING OFFICER