Mr Anil Kamalakar Kawale vs LIC Housing Finance Ltd. & Anr

Ashok Menon, Chairperson

This appeal impugns the order of the Debts Recovery Tribunal-III Mumbai in Exhibit 19 dated 21/01/2010, an application for condonation of delay in filing Securitisation Application No. 58/2007, inasmuch as the delay was refused to be condoned.

The Securitisation Application was filed under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’, for short). The 1st Respondent is LIC Housing Finance Ltd., the secured creditor which lends money to the Appellant for the purchase of a house which is the secured asset. The Appellant defaulted on payment as a result of which the debt was classified as Non-Performing Assets (‘NPA’ for short). The Appellant did not regularise the loan as a result of which a demand notice was issued to the Appellant under section 13 (2) of the SARFAESI Act on 24/09/2004. Further Sarfaesi measures were initiated under section 13 (4) and a possession notice was affixed at the door of the subject flat on 06/10/2006. Subsequently, a sale notice was issued on 22/05/2007 which was also published in a newspaper. On 20/06/2007 the sale was conducted and the 2nd Respondent, being the highest bidder, purchased the property. The Appellant filed the Securitisation Application on 12/07/2007 and an application for condonation of delay on 28/03/2008.

The application for condonation of delay (Exhibit 19) states that the officers of the Respondent No. 1 had visited the secured asset flat and pasted a vacation notice on the front door of the flat. The relatives of the Appellants were residing in the flat. Thereafter, forcible possession of the flat was taken on 06/10/2006 and the relatives of the Appellant were evicted. The Appellant thereafter allegedly approached an advocate for legal advice and he advised him that the property could not be sold without proper notice and also assured him to take care of the matter. The said lawyer was regularly practicing in the criminal courts at Thane. Due to a lack of proper legal advice, the Appellant could not approach the DRT within the stipulated time. The sale notice published in a newspaper on 22/05/2007 informing about the sale on 20/06/2007 was brought to the notice of the Appellant by his friend on 28/06/2007. The Appellant approached the authorized officer seeking a week’s time to arrange for funds to pay the outstanding dues. When he went back to the authorized officer on 04/07/2007 after arranging funds from his relatives and friends, he was informed that the flat was already sold on 13/06/2007 for a sum of ₹ 5.9 lakhs. Thereafter he got advice to file an application before the DRT. He seeks the delay of 233 days to be condoned.

The 1st Respondent opposes the application for condonation of delay stating that the actual cause of action for the Appellant arose on receipt of notice under section 13 (2) of the SARFAESI Act dated 24/09/2004. Therefore, there is a delay of 1322 days. It is also stated that the Appellant was aware of the notice that the 1st Respondent opposed the application for condonation of delay stating that the actual cause of action for the Appellant arose on receipt of notice under section 13 (2) of the SARFAESI Act dated 24/09/2004.

Notice of eviction was admittedly affixed on the door of his flat and in consequence of that, the occupants who were the relatives of the Appellant got evicted. The reasons stated in the application for condonation of delay are, therefore, not sufficient.

The 2nd Respondent auction purchase has also opposed the application by stating that the Applicant was aware of all Sarfaesi measures taken with regard to the subject flat and did not take any action to challenge them.

The Ld. Presiding Officer has in the impugned order observed that the Applicant has not come up with any sufficient reason to get the unreasonable delay condoned. It is observed that the Applicant was aware of the Sarfaesi measures taken against him and did not oppose any of those measures until the sale was confirmed in favour of the 2nd Respondent. The application for condonation of delay was therefore dismissed.

Heard the Ld. Counsel appearing for the Appellant Shri Alok D. Mishra and Shri Sandeep Barve, the Ld. Counsel for the 1st Respondent. Records perused.

The only question that arises for consideration in this appeal is whether the Ld. Presiding Officer was justified in declining to condone the delay in filing the Securitization Application. Section 17 of the SARFAESI Act insists on filing an application challenging the Sarfaesi measures within 45 days of arising the cause of action. In the instant case, there was admittedly a delay of 233 days. The Appellant/Applicant has considered the date of taking over the possession of the secured assets as a starting point for the running of the period of limitation. During the argument, the Ld. Counsel for the Appellant submits that there is only a delay of 6 days because the sale notice was published in the newspaper on 22. 05.2007 and the S.A. was filed on 12.07.2007. Per contra the Ld. Counsel for the Respondent submits that the time of limitation begins to run from the date of issuance of notice under sec. 13(2) of the SARFAESI Act which would make the delay of 1322 days.

The Ld. Counsel for the Appellant relies on several decisions in support of his arguments in the State of Bihar & Ors. V/s Kameshwar Prasad Singh & Ano. (2000) 9 SCC 94 wherein it was held that the power to condone the delay in approaching the court has been conferred upon the courts to enable them to do substantial justice to parties by disposing of matters on merits. Relying on an earlier decision of the Hon’ble Apex Court in Collector, Land Acquisition V/s Katiji (1987) 2 SCC 107 it was observed that the expression “sufficient cause” employed by the legislature in the Limitation Act is adequately elastic to enable the courts to apply the law in the meaningful manner which subserves the end of justice. ‘Every day’s delay must be explained’ does not mean that a pedantic approach should be made. Why not every hour’s delay, every second’s delay? The doctrine must be applied in a rational common sense pragmatic manner. Relying on the decision of Collector, Land Acquisition (supra) the Hon’ble Sikkim High Court has in Ram Kumar Goyal & Ors. V/s Bhuwan Singh Pradhan 2006 SCC OnLine Sikk 8 supported the same proposition while explaining every day’s delay. The Ld. Counsel relies on the decision of the Hon’ble Apex Court in Authorised Officer, Indian Overseas Bank & Ano V/s Ashok Saw Mill (2009) 8 SCC 366 to support his contention that jurisdiction of D.R.T. under Sec. 17 is not confined only to the stage contemplated under Sec. 34 but also extends to post Sec. 13(4) situations and events. The Ld. Counsel also relies on the decision of the Hon’ble Supreme Court in Arunoday Singh V/s Lee Anne Elton 2021 SCC OnLine SC 3285 to vouch for the position that when an apparently meritorious Appeal on the ground of limitation is pitted against deciding the appeal on merits, the Courts are entitled to take a liberal approach in deciding an application for condonation of delay.

Per contra the Ld. Counsel for the Respondent relies on the decision of the Hon’ble High Court of Judicature at Bombay, Nagpur Bench to argue that the conduct of the Appellant showing a lack of diligence is a reason for refusing to condone the delay. The Ld. Counsel also relies on the decision of the Hon’ble Supreme Court in Estate Officer Haryana Urban Development Authority & Ano V/s Gopi Chand Atreja 2019 ALL SCR 1688 to vouch for the position that the delay was caused because of the lawyer of the party not taking timely steps was not sufficient to cause within the meaning of Sec. 5 of the Limitation Act to condone the delay. The decision of Hon’ble Bombay High Court in Vansant Vithal Gawand V/s Shantaram Tukaram Gawand 2016 (2) ALL MR 235 is relied upon to submit that the case of the Applicant that his advocate did not inform him about the decision in the suit is not a sufficient cause considering the party is an educated person staying in an upmarket area in Mumbai. The standard applicable to him would be different than a lay villager. It was also held that the payment of costs cannot be a panacea for a such unexplained delay which cannot be condoned. The Ld. Counsel also relies on the decision of the Hon’ble Supreme Court in the State of Jharkhand & Ors V/s Ashok Kumar Chokhani & Ors. 2009 (2) SCC 667 to argue that while deciding the condonation of delay under Sec. 5 of the Limitation Act, the court cannot go into the merits of the case.

After having gone through the decisions cited on both sides, it is seen that the Appellant was aware of the Sarfaesi proceedings initiated against him by the Bank. He states that he did not receive the notice under Sec. 13(2). But it is also pertinent to note that he was aware of the possession notice affixed on the front door of the flat which was occupied by none other than his own relatives. They were also dispossessed by the Bank. All these actions did not persuade the Appellant to take appropriate action. The sale notice was published in a newspaper having circulation in the area where the Appellant resides. Still, he pretends to be ignorant of that. He states that it was his friend who informed him about the notice that appeared in the newspaper. Even if the Appellant is not purchasing or reading the newspaper in which the publication had appeared, he cannot say that he was not aware of the notification. There is a presumption that he was aware of the public notice.

The Hon’ble Supreme Court has in Standard Chartered Bank V/s MSTC observed that RDB Act is a special law and the proceedings are before a statutory Tribunal. The scheme of the Act manifestly provides that the legislature has provided for the application of the Limitation Act to the original proceeding before the Tribunal under Sec. 19 only. And that while preferring an Appeal under Sec. 30 the legislative intent for exclusion was expressed. The application of Sec. 5 of the Limitation Act by resort to Sec. 29 (2) of the Limitation Act 1963, therefore, does not arise. And it was held that an Appeal preferred beyond the period of 30 under Sec. 30(1) of the RDB Act cannot be condoned by the application of Sec. 5 of the Limitation Act, as held by the Hon’ble Apex Court in an earlier decision in International Asset Reconstruction Co. of India Ltd. V/s Official Liquidator (2017) 16 SCC 137 and concluded that for an application for review under Rule 5 A of the D.R.T. Rules also delay cannot be condoned by an application of Sec. 5 of the Limitation Act. The instant case is with regard to the application of Sec. 5 of the Limitation Act for an application filed under Sec. 17 of the SARFAESI Act beyond the period of 45 days. There is no provision in the said Act to condone the delay and therefore, the application of Sec. 5 of the Limitation Act is out of the question. There is no reason to interfere with the findings of the Ld. Presiding Officer in the impugned order.

For the foregoing reasons, the Appeal has no merits and deserves to be dismissed, and I do so.