Madhu Arora vs Punjab National Bank And Ors.

S.N.H. Zaidi, J

Mr. Madan submits that Bank is the only necessary party for the purposes of this appeal and the presence of respondent Nos. 2 and 3 who are the principal borrowers/mortgagors is not necessary, although notices were sent to them by Registered Post as well as through Courier and the same were received by Mr. Sunil Chaudhary, the husband of Smt. Anju Chaudhary, respondent No. 3, who is one of the Directors of respondent No. 2. Service of notice upon respondent Nos. 2 and 3 is, therefore, held sufficient. Heard parties Counsel on these appeals which have been directed against a common order dated 14.1.2013 passed in S.A. (Dy. No. 2/2013), Madhu Arora v. Punjab National Bank and S.A. (Dy. No. 3/2013)-Usha Kumari v. Punjab National Bank, by the DRT-I, Delhi whereby after hearing the parties on interim relief, the Tribunal below has dismissed both the S.As. as barred by limitation.

The record shows that the said S.As. were filed by the appellants challenging the possession notice dated 29.10.2012 issued by the respondent Bank qua their respective flats on the first and second floors, in the front portion of property bearing No. F-130-A, Gautam Nagar, New Delhi and seeking interim relief of restraining the Bank from taking possession or further action under the SARFAESI Act in respect of the said flats. While hearing the parties on the interim relief, the maintainability of the said S.As. was challenged by the respondent Bank on the ground of being barred by limitation. The learned Tribunal below, without entering into the merit of the matter, while holding that the appellants had not shown any justified reason for condoning the delay and relying upon the judgment of the Bombay High Court in Govindrao Thaware v. Central Bank of India, has dismissed the S.As. by the order impugned on the ground of limitation.

It appears that a plea was raised before the Tribunal below that the provisions of the Limitation Act are not applicable to an application filed under Section 17 of the SARFAESI Act and the DRT has no power to condone the delay in filing the said application. There is no provision in the said Act specifically empowering the Tribunal below to condone the delay in filing such application. It is. however, pertinent to note that a Division Bench of the Bombay High Court in UCO Bank v. Kanji Manji Kothari, 2008(110) Bom LR 744, has considered the said question at length in the light of the judgment of the Apex Court in Mardia Chemicals Ltd. v. Union of India, 110(2004) DLT 665 (SC) : II (2004) BC 397 (SC) : II (2004) SLT 991 : 2004(4) SCC 311 and has held that Section 5 of the Limitation Act is applicable to the proceedings under Section 17(1) of the SARFAESI Act.

The Gujarat High Court taking a similar view in Union Bank of India v. Chairperson, The Debts Recovery Appellate Tribunal & Ors., II(2011) SLT 790 : AIR 2010 Guj. 63, has held that the provisions of Section 5 of the Limitation Act would apply to the discretion to be exercised by the Tribunal below for the entertainment of the appeal after the period of 45 days after taking into consideration the facts and circumstances on the aspect of sufficiency of cause to condone the delay.

A Division Bench of the Madhya Pradesh High Court has also held in M/s. Seth Banshidhar Kedia Rice Mills Pvt. Ltd. & Ors. v. State Bank of India & Anr. I (2013) BC 667 : AIR 2011 M.P. 205, that, the DRT can give benefit of Section 5 of the Limitation Act while dealing with an application under Section 17 of the SARFAESI Act.

In my view since Section 17(7) of the SARFAESI Act provides that the DRT shall dispose of the application (S.A.) in accordance with the provisions of the RDDBFI Act and Section 24 of the RDDBFI Act provides that the provisions of the Limitation Act, 1963 shall apply to the application made to a Tribunal, therefore, a combined reading of the aforesaid provisions clearly indicates that the provisions of the Limitation Act shall apply to an application filed under Section 17(1) of the SARFAESI Act and as such the DRT is empowered to condone the delay under Section 5 thereof.

The observation of the Tribunal below that there is nothing on record on behalf of anybody to show that the copy of the notice dated 29.10.2012 was given to the applicant only on 27.12.2012 is against this circumstance that an affidavit was filed by the appellants in support of the said averments of the Second Appeal. It appears that the Tribunal below has lost sight of the circumstance that the averments in the S.As. were supported by the affidavit which were not controverted by any counter affidavit filed on behalf of the Bank The further observation of the Tribunal below that the applicants had not shown any justified reason for condoning the delay is also not tenable in the absence of proper appreciation of the relevant circumstances of the case.

In the light of the views expressed by the Hon'ble High Courts in the cases. referred to above, with which I am in respectful agreement, the view of the Bombay High Court in Govindrao Thaware's case (supra) relied upon by the Tribunal in the order impugned cannot be accepted. I am, therefore, of the considered view that the DRT has power, under Section 5 of the Limitation Act, to condone the delay in filing the application under Section 17(1) of the SARFAESI Act.

Since the learned Tribunal below has dismissed these S.As. apparently on the ground that the provisions of the Limitation Act are not applicable to the applications under Section 17(1) of the SARFAESI Act, the order impugned cannot be allowed to sustain and the same is accordingly set aside. The Tribunal below is directed to decide whether or not the Second Appeals, were filed within the period of limitation prescribed under Section 17(1) of the SARFAESI Act as contended by the S.A. applicants, who are admittedly not the borrower, guarantor or mortgagor, on the ground that respondent No. 3 had disclosed to them for the first time on 27.12.2012 about the receipt of the possession notice dated 29.10.2012 of the respondent Bank and had also given a copy of the same to them. In view of above, both the appeals are allowed and the matter is remitted back to the Tribunal below for deciding the question of limitation afresh in the light of the observation made above. Both the parties are directed to appear before the DRT on 19.4.2013.

Copy of this order be furnished to the parties as per law and be also sent to the concerned DRT.