Dwarika Prasad vs Union Bank Of India & Ors.

The present appeal has been filed under section 18 of the Securitization and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the SARFAESI Act") against an order dated 08.07.2021, whereby the Securitization Application No. 34/2020 filed by the appellant has been dismissed on the ground of delay.

Brief facts of the matter are that an education loan for Rs.20.00 lacs was granted by the respondent-bank to one Jitendra Kumar, to which the appellant stood as guarantor and created equitable mortgage over his immovable property by depositing original title deed with the respondent-Bank. Since the borrowers did not adhere to the terms of loan agreement, therefore, the account was classified as NPA on 03.09.2013 and a demand notice dated 12.09.2013 u/s 13(2) of the SARFAESI Act was issued for a sum of Rs.27,82,186/-. Since the borrowers did not pay any heed to the said demand, therefore, the symbolic possession of the property in question was taken by the Bank by issuing possession notice dated 17.12.2013 u/s 13(4) of the said Act, which was published in the newspapers on 20.12.2013.

It appears that the co-borrower namely Jitendra Kumar filed a Civil Miscellaneous Writ No. 56385/2014 before the Hon'ble High Court, Allahabad challenging the demand notice and possession notice as mentioned above. The Hon'ble High Court vide its order dated 05.12.2014 directed the borrower to pay the entire amount in three installments, which will include the recovery charges, if any, but the same could not be complied with. Thereafter, the respondent-Bank published the auction sale notice dated 27.02.2015 scheduling the auction of the property in question on 31.03.2015.

It is averred that the appellant-borrower challenged the entire actions of the Bank including the auction sale notice dated 27.02.2015 before the Tribunal below by filing S.A. No. 176/2015. Since the sale notice dated 27.02.2015 could not materialize, therefore, the respondent-Bank issued another sale notice dated 22.12.2015 scheduling the auction of the property in question on 30.01.2016 and the property was sold for a sum of Rs.54,41,476/-. The sale was confirmed by the Bank on 02.02.2016 and the sale certificate was issued on 05.04.2016. Since the first sale notice could not materialize, therefore, the S.A. No. 176/2015 was dismissed as having become infructuous vide order dated 09.04.2018, against which the appellant had filed M.A. No. 78/2018, which was also rejected by the Tribunal below vide order dated 29.07.2019.

It transpires that the appellant had filed a Civil Misc. Writ Petition No. 10877/2016 before the Hon'ble High Court with a prayer to deposit the entire loan amount within a period of one month. The Hon'ble High Court vide order dated 15.03.2016 directed the appellant to deposit Rs.7.00 lacs on or before 18.03.2016 and the remaining on or before 30.04.2016.

It further appears that the S.A. was listed before the Tribunal below on 01.02.2016 and during course of the argument, the appellant-borrower had stated that he would move the redemption application before the respondent-Bank within 3 days and accordingly the same was moved by the appellant on 03.02.2016 and filed a Writ Petition No. 10877/2016 before the Hon'ble High Court, which was dismissed as withdrawn with liberty to pursue before the Tribunal below vide order dated 28.03.2016 and thereafter, the sale certificate was issued on 05.04.2016 in favour of the respondents no. 3 & 4, which was registered vide sale deed dated 12.04.2016 and physical possession of the property in question was taken by the said respondents.

It further transpires that the appellant-borrower had again filed a Writ Petition No. 24089/2016 before the Hon'ble High Court contending therein that without considering his offer for redemption, the auction sale is illegal and void. The Hon'ble High Court vide order dated 24.05.2016 had dismissed the said Writ Petition considering the right of the appellant for redemption, which was challenged by the appellant before the Hon'ble Supreme Court by filing SLP (C) No. 26428/2016, which was disposed off vide order dated 06.03.2018 in which it has been held that the appellant failed to comply with Section 13(8) of the SARFAESI Act.

It appears that the appellant has filed the S.A. No. 34/2020 before the Tribunal below on 10.01.2020 challenging the sale certificate dated 05.04.2016 and also for restoration of the possession of the property and for quashing all the actions, steps and measures u/s 13(4) of the SARFAESI Act along with application for condonation of delay, which has been rejected vide order impugned and consequently, the S.A. of the appellant also. Being aggrieved by the said order, the present appeal has been filed by the appellant.

Learned counsel for the appellants submitted that the Tribunal below vide order impugned has dismissed the S.A. solely on the ground of limitation and has also held that all the issues have been decided by the Hon'ble Supreme Court, which is incorrect. Learned counsel has referred to page no. 59 of the memo of appeal, which is order impugned. It was further contended that the appellant came to know about the proceedings of the bank, when the sale certificate was provided by the Bank on 28.11.2019 and thereafter, the present S.A. was filed, which is well within the period of limitation as prescribed under the Act and Rules made thereunder.

Learned counsel further submitted that the Tribunal below has quoted para 6 of the order dated 06.03.2018 passed by the Hon'ble Supreme Court passed in Civil Appeal No. 000148/2018 in its order impugned, wherein the issue of Section 13(8) of the SARFAESI Act was only decided and not the merits of the case, therefore, it was prayed that the order impugned may be set aside and the matter may be remanded back to the Tribunal below for deciding it afresh.

Learned counsel for the respondent-Bank submitted that the sale certificate dated 05.04.2016 was well within the knowledge of the appellant, as it was indicated in para 6 of the order dated 06.03.2018 passed by the Hon'ble Supreme Court and the same is quoted in para 6 of the order impugned at page no. 60 of the paper book. It was further contended that the subsequent sale notice dated 22.12.2015 was issued by the Bank, but the same has never been challenged by the appellants. It was also contended that the appellant had filed a Review Application No. 42390/2024 before the Hon'ble Apex Court in SLP No. 26428/2016, which was dismissed vide order dated 25.04.2025.

Learned counsel further submitted that the contention of the appellant regarding redemption of the property in question has already been decided by the Hon'ble High Court vide order dated 24.05.2016 in Writ Petition-C No. 24089/2016 as well as the Hon'ble Supreme Court vide its judgment/order dated 06.03.2018 in Civil Appeal No. 148/2018 arising out of SLP No. 26428/2016. It was further contended that in compliance of the order passed by the Hon'ble Supreme Court, the amount deposited by the appellant has already been refunded along with interest @ 9% p.a. It was, therefore, prayed that the appeal filed by the appellant may be dismissed with heavy costs.

Learned counsel for the Auction Purchaser has adopted the arguments as advanced by the learned counsel for the respondent-Bank and prayed that the appeal filed by the appellant may be dismissed with heavy costs.

I have considered the rival contentions of the learned counsels for the parties and perused the material available on record.

The questions involved in the present case are, as to whether the Tribunal below has rightly dismissed the S.A. of the appellant on the ground of limitation and the appellant has right to redeem his property or not?

It is settled proposition of law that the length of delay is not material, if there are sufficient grounds to condone the delay and also that generally, the court should be liberal in condoning the same, but for this purpose, the applicant has to show the sufficient reason, which may entitle for condonation of delay. It is to be seen that the present S.A. was filed by the appellant on 10.01.2020 challenging the sale certificate dated 05.04.2016, thus the same was admittedly barred by limitation of about 3 years and 9 months. In this regard, it has been contended on behalf of the appellant that the appellant for the first time had received the copy of the sale certificate dated 05.04.2016 on 28.11.2019 and the S.A. was filed on 10.01.2020 and as such it was stated that if the limitation is counted from the date of receipt of the sale certificate, the S.A. was filed well within the period of limitation, but the said contention cannot be accepted, because the same is contrary to the averments made in para 5.5 of the memo of appeal. In the said para, the appellant itself has stated "In the meantime, the bank rejected the application for redemption, which was challenged through the Writ (C) No. 24089 of 2016. It is further submitted that the above-mentioned writ petition was dismissed on 24.05.2016 observing that the sale certificate dated 12.04.2016 and registered on 12.04.2016". Besides it, it is also relevant to point out that in the Civil Appeal No. 000148/2018 filed by the appellant, the Hon'ble Apex Court in para 6 of its order dated 06.03.2018 has observed "the sale was confirmed, the sale certificate was issued and a registered sale deed was executed on 12.04.2016", thus it is clear that the appellant was well aware about the sale certificate, which is impugned in the present S.A., hence the contention of the appellant that the sale certificate for the first time was received by the appellant on 28.11.2019 is not acceptable. Except the said plea, no other ground has been taken by the appellant for condoning such inordinate delay of approximately 3 years and 9 months in filing the present S.A., therefore, the Tribunal below has rightly dismissed the S.A. of the appellant on the ground of delay. As such the order impugned to this extent does not call for any interference by this Tribunal.

So far as the another question with regard to right of redemption of the appellant is concerned, the said issue has already been decided by the Hon'ble Apex Court in the aforesaid Civil Appeal filed by the appellant vide order dated 06.03.2018, which is quoted in the order impugned. Thus the said issue cannot again be dealt with by this Tribunal. Hence the order impugned to this extent also does not call for any interference by this Tribunal.

In view of the discussions as held above, the order impugned does not call for any interference by this Tribunal, hence the appeal filed by the appellant is liable to be dismissed. Accordingly, the same is dismissed with no order as to costs.

A copy of this judgment be forwarded to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.