Mr. Anthony Samy vs Authorised Officer, State Bank of India

S. Ravi Kumar, Chairperson

This Appeal is against the Order dated 20.01.2021 in IA 1001/2020 in SA SR No.2591/2020 of DRT, Madurai.

Brief facts leading to this Appeal are as follows:-

Appellant herein filed SA SR 2591/2020 challenging the action of Bank taken under SARFAESI Act, 2002. Office of DRT, returned said SA SR on the point of limitation. Appellant approached Hon’ble High Court of Madras at Madurai Bench by filing WP (MD) 7879/2020, wherein Hon’ble High Court held that it is open to Appellant to file an Application for condonation of delay under Section 17 of SARFAESI Act, 2002, and disposed of the Writ with that observation. Basing on that, Appellant filed IA 1001/2020, to condone delay of 945 days in filing SARFAESI Application.

Said Application is opposed by Bank and Auction Purchaser and on a consideration of contentions and rival contentions of both parties, Tribunal below dismissed said Application holding that Appellant failed to explain the delay of 945 days with convincing and bona fide reasons. Aggrieved by the same, present Appeal is preferred.

Parties filed Written Submissions and the same were reiterated during oral submissions.

Advocate for Appellant contended that Bank has not followed the provisions of SARFAESI Act, 2002, and did not give any opportunity to Appellant, and unilaterally sold the property. He submitted even while taking possession, it has not followed Security Interest (Enforcement) Rules, 2002 (hereinafter called as the Rules), but Learned Presiding Officer failed to consider these aspects, and dismissed Delay Condonation Petition, though it is stated in the Affidavit filed in support of Petition, the reasons for delay. He submitted an opportunity may be given to Appellant so that the rights of parties can be determined on merits.

On the other hand, Advocate for 1st Respondent Bank submitted, Tribunal below is perfectly right in dismissing the Application as Appellant failed to show sufficient and convincing reasons for inordinate delay of 945 days. He further submitted, as per the decision of Hon’ble High Court of Madras in Velar Engineering Works Private Limited Vs. The Authorized Officer, Indian Bank, Kanchipuram & Ors., there is no provision under Section 17 of SARFAESI Act, 2002, for condoning the delay in filing Application. He submitted that Hon’ble High Court of Madras distinguished the status of remedy under Section 17 SARFAESI Act, 2002, prior to amendment and after amendment, and held that, after amendment, the Application filed under Section 17 of SARFAESI Act, 2002, is an original proceeding, therefore, Section 5 of Limitation Act, is not applicable for condoning the delay. He submitted, a Special Leave Petition (SLP) filed against said Order, is dismissed by Hon’ble Supreme Court on 09.07.2020, therefore, in view of that, the very Application is not maintainable. He also cited decision of Hon’ble Supreme Court in Bank of Baroda and Anr. Vs. M/s. Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors., decided on 11.08.2022, reported in 2022 LiveLaw (SC) 671, wherein it is held that the reason for providing a time limit of 45 days for filing an Application under Section 17 of SARFAESI Act, 2002, can be inferred from the purpose and object of the enactment. He further submitted Tribunal below rightly dismissed the Application and there are no grounds to interfere with the same.

Advocate for Auction Purchaser while adopting the arguments of Advocate for Bank, submitted that Order of Tribunal below is a reasoned Order, and there are no grounds to interfere with the same.

I have perused material papers, impugned Order, Affidavit filed in support of Delay Condonation Petition and Counters filed by Bank and Auction Purchaser to Delay Condonation Petition.

It is not in dispute, the Sale Notice was issued on 07.03.2017 fixing auction date as 27.03.2017. It is also not in dispute, in the said auction, 2nd Respondent herein has become a successful bidder and he paid the bid amount as per Rules. It is also not in dispute that a Sale Certificate is issued on 28.06.2017. According to the Affidavit of Appellant, the delay is calculated from 03.08.2017, the date of execution of Sale Certificate. Tribunal below considered the reasons for the delay and recorded a finding that no convincing and satisfactory reason is given for inordinate delay of 945 days. In fact, Tribunal below extracted the relevant portion from the Affidavit of Appellant concerning the delay. I have also examined the Affidavit filed in support of Delay Condonation Petition, except the portion extracted in the impugned Order, remaining averments of Affidavit are about the merits of the case. Advocate for Bank submitted as Division Bench of Hon’ble High Court Madras held that Section 5 of Limitation Act, has no application to the Application filed under Section 17 of SARFAESI Act, 2002, as it is an original proceeding, even if there are convincing reasons, the same cannot be considered. Hon’ble High Court of Madras clearly held in Velar Engineering Works Private Limited case that, on a perusal of Section 17 of SARFAESI Act, 2002, it is clear that there is no provision made under the said Section for condoning the delay in filing the SARFAESI Application, and Application must be filed within 45 days. Hon’ble Supreme Court in Bank of Baroda and Anr. Vs. M/s. Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors., also, held that the reason for providing a time limit of 45 days, can be inferred from the purpose and object of the enactment. So, a combined reading of these two decisions, makes it very clear that, 45 days fixed in Section 17(1) of SARFAESI Act, 2002, is mandatory, and Section 17 Application, being original in nature, after amendment, question of applying Section 5 of Limitation Act, does not arise.

Division Bench of Hon’ble  High Court of Madras in Central Bank of India Vs. The Registrar, DRAT, Chennai & Ors., in WP No. 10053/2019 and W.M.P.Nos.10628, 10629 & 15968 of 2019, also held in the same line that Section 5 of Limitation Act, has no application to the Application filed under Section 17(1) of SARFAESI Act, 2002, and also held that Application under Section 17(1) of SARFAESI Act, 2002, is an original proceeding.

As rightly pointed out by Advocate for Bank, even for the sake of argument, if it is treated that Delay Condonation Application is maintainable, as there is no convincing and sufficient reason, for inordinate delay of 945 days, request of Appellant cannot be considered.

On a scrutiny of entire material, I am of the view that, viewed in any angle, the Appeal is completely devoid of merits and Tribunal below is perfectly right in dismissing the Application and there are no grounds to interfere with the same.

For the above reasons, the Appeal MA (SA) 32/2021 is dismissed. Both parties shall bear their own costs. All pending IAs, if any, stand closed.