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Judgment
Ashok Menon, Chairperson
Both these Interlocutory Applications (I.As) are filed for condonation of delay in filing of the appeals challenging the orders dated 05.07.2022 and 08.04.2022 allowing Misc. Application (M.A.) No. 36 of 2022 and the Chamber Appeal No. 01 of 2022 filed by the first Respondent herein to get the delay condoned and restore the Original Application (O.A.) No. 65 of 2013 to files of the Debt Recovery Tribunal-I, Mumbai (D.R.T.).
There is a delay of 193 days in filing the Misc. Appeal at Diary No. 376 of 2023 and a delay of 281 days in filing the Appeal at Diary No. 377 of 2023.
The facts in brief are thus:
The Bank of Baroda (BoB) had filed the O.A. No. 28 of 2007 against Phoenix Alchemy Pvt. Ltd. (in liquidation) and its guarantors before D.R.T.-II, Mumbai for recovery of amounts due. Vide order dated 24.09.2009 read with the order dated 08.02.2012 in Review Application No. 3 of 2011, the said O.A. was allowed and the second charge of the Appellant International Asset Reconstruction Pvt. Ltd. on the mortgaged property located at Plot No. A-211, TTC Industrial Area, MIDC, Pawne, Navi Mumbai admeasuring 5700 sq. mtrs was confirmed.
The first Respondent Maharashtra State Financial Corporation (MSFC)had filed O.A. No. 65 of 2013 against Phoniex and its guarantors without making the Appellant a party therein, though there was a charge decree in favour of the Appellant in O.A. No. 28 of 2007. The first Respondent had proceeded against the same property referred to above and therefore, the Appellant filed an intervention application as I.A. No. 303 of 2014 on 27.08.2014 in O.A. No. 65 of 2013. No reply was filed on the intervention application by the Applicant in O.A. No. 65 of 2013. On 19.11.2014, the Applicant’s counsel in the said O.A. filed a letter before the D.R.T. withdrawing the vakalatnama. Consequently, the counsel was discharged and time was granted to the Applicant therein till 24.12.2014 for appearance.
On 24.12.2014, none appeared for the Applicant in the O.A. and the D.R.T. dismissed the O.A. No. 65 of 2013 for default.
The intervention application filed by the Applicant herein as I.A. No. 303 of 2014 was never considered while the O.A. was dismissed.
The Appellant took measures under the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short) and sold the mortgaged property.
However, in November 2022 the first Respondent MSFC applied for restoration of O.A. No. 65 of 2013 and also an Appeal No.13 of 2022 before the D.R.T.-II, Mumbai challenging the order of the Recovery Officer under Sec. 30 of the Recovery of the Debts and Bankruptcy Act, 1993 (‘RDB Act’, for short).
The restoration application filed by MSFC at diary No. 9726 of 2016 was dismissed by the Registrar, D.R.T. on 11.09.2019 for not curing the defects pointed out. MSFC filed the Chamber Appeal No.1 of 2022 with a delay of 847 days and filed I.A. No. 84 of 2022 in the Chamber Appeal to condone the delay. M.A. No. 36 of 2022 was filed for restoration of the O.A. No. 65 of 2013. I.A. No. 84 of 2022 was allowed by the D.R.T. vide order dated 03.02.2022 subject to the payment of costs of ₹25,000/-. Thereafter, the Chamber Appeal was also allowed. M.A. No. 36 of 2022 was allowed after condoning delay and the order of dismissal of the O.A. No. 65 of 2013 dated 24.12.2013 was set aside and the O.A. was restored to the file.
The Appellant states that no notice whatsoever was issued to the Appellant on the application for condonation of delay or the restoration of the O.A. No. 65 of 2013. Since the I.A. No. 303 of 2014 filed by the Appellant for intervention was pending while the said O.A. was dismissed, the Appellant ought to have been served with the notice before restoring the O.A. after condoning the unreasoned and unexplained delay.
It is pointed out that the claim of the MSFC over the mortgaged property was already barred by limitation and the property was sold by the Appellant under the provisions of the SARFAESI Act. The distribution of the sale proceeds among the creditors is pending consideration before the D.R.T. -II, Mumbai.
The Appellant was not aware of the restoration application filed by the MSFC and hence, there was a delay in filing these appeals challenging the impugned orders. The Appellant, therefore, seeks condonation of delay.
MSFC filed a detailed reply to these applications for condonation of delay justifying the impugned orders condoning the delay and stating that the Appellant was not yet made a party to the O.A. and the intervention petition was still pending consideration when the O.A. was dismissed. Hence, there was no necessity for serving notice on the Appellant on the application for restoration or condonation of delay. There is no justification in these applications for condonation of delay in filing the appeals.
After hearing both sides, I found that the Appellant was not a party to the O.A. when it was dismissed. Necessarily the Appellant did not know about allowing these applications by the D.R.T. Hence, the delay is explained by the Appellant. However, the Appellant will have to be burdened with costs in allowing the applications. Hence, I.A. Nos. 468 and 469 of 2023 are allowed subject to the payment of costs of ₹5000/- each to the D.R.T. Bar Association, Mumbai for the purchase of the books and periodicals within one week failing which the applications shall stand dismissed.
List before the Registrar for compliance on 15.01.2024.