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Judgment
R. S. Kulhari, Chairperson
This appeal has been preferred under section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "the SARFAESI Act") challenging the order dated 18.09.2015 passed by the Tribunal below, whereby the securitization application (S.A.) filed by the appellants was dismissed on the ground of delay.
The relevant facts for disposal of this appeal are, that the appellant no. 1 through its proprietor availed certain credit facility from the respondent-Bank, which was secured by mortgage of immovable property and the appellants no. 2 to 5 stood as guarantors. The borrowers failed to adhere to the terms of the agreement, hence the Bank classified the account as NPA and issued demand notice dated 1.2.2010 under section 13(2) of the SARFAESI Act for a sum of Rs. 48,04,254/-. Since no heed was paid, therefore, the possession notice dated 06.06.2010 was issued under section 13(4) of the SARFAESI Act. Thereafter, the subject property was put for auction by issuing sale notices dated 19.06.2010 and 24.07.2010, which were challenged by the appellants by filing S. No. 106/2010. However, the sale was not conducted for want of bidders and ultimately, the S.A. was dismissed for non-prosecution. Again the auction notice was issued on 30.11.2012, but the same was also of no avail.
It appears that the respondent-Bank obtained an order dated 31.01.2011 from the District Magistrate (DM) under section 14 of the SARFAESI Act and in compliance thereof, took the physical possession on 28.12.2012. Thereafter, the sale notice dated 13.11.2013 was issued and the property was auctioned on 13.12.2013. The sale certificate was issued on 31.12.2013 in favour of the respondent no. 3-auction purchaser and the sale deed was executed on 21.05.2014.
It is averred that the physical possession of the property was handed over to the auction purchaser on 22.05.2014 and the household movables lying in the house were also given in possession of the auction purchaser. The auction purchaser filed writ petition no. 43817 of 2014 before the Hon'ble Allahabad High Court praying for removal of movable household goods lying in the premises. The Hon'ble High Court vide order dated 16.09.2014 directed the Bank to ensure the vacant possession of the secured asset to be given to the auction purchaser within two weeks by taking steps to move before the DM for the purpose. The respondent-Bank pressed the matter before the DM in compliance of the order of the Hon'ble High Court. The notices were also served upon the appellants. The appellant no. 2-Kanhaiyalal appeared in the proceedings. The DM vide its order dated 27.10.2014 allowed the application and directed the Bank to provide the possession to the auction purchaser. Thereafter, the respondent-Bank sent a letter dated 15.11.2014 to the appellants directing them to remove the movable articles lying in the premises within a week.
It is thereafter, the appellants filed the present S.A. on 23.12.2014 alleging that no sale notice was served and they came to know about the sale only on receipt of letter dated 15.11.2014. Thus, according to them, the proceedings were challenged within 45 days from the receipt of that letter on 27.11.2014. However, an application for condonation of delay was filed with prayer to condone the delay, if any, in challenging the proceedings of the Bank.
The Tribunal below after hearing the parties on the application for condonation of delay observed that the SA-applicants have failed to explain the delay of more than one year and have not pleaded or argued any sufficient cause to explain such delay. Accordingly, the application for condonation of delay was dismissed and consequently, the S.A. was also dismissed. Hence the present appeal.
Learned counsel for the appellants submitted that the physical possession was given to the auction purchaser on 25.11.2014. The appellants were having no knowledge about the sale before 27.11.2014 when the letter dated 15.11.2014 was received. Thereafter, the S.A. was filed on 23.12.2014. Thus, it was within 45 days from the date of receipt of this letter. Hence there is no delay in challenging the proceedings. Even if, there was any delay, it was liable to be condoned. In support of his contention, the learned counsel referred a judgment passed by the Hon'ble Allahabad High Court in Civil Misc. Writ Petition No. 22882 of 2011-Narendra Kumar Dwivedi Vs. Surendra Kumar Maurya & Ors, decided on 07.07.2011 to contend that the limitation starts from the date of possession taken by the Bank, therefore, the Tribunal below ought to have decided the S.A. on merits.
On the contrary, the learned counsel for the Bank contended that the physical possession of the property was taken on 28.12.2012 on the basis of the order of the DM and the same was handed over to the auction purchaser on 22.05.2014. However, a letter dated 15.11.2014 was issued for removing the movables lying in the premises, by which no fresh cause of action has arisen in favour of the appellants. The sale notices were duly served to the borrowers, which were sent by registered post on 14.11.2013. Earlier notices were also served on the same address.
Learned counsel for the auction purchaser, while adopting the arguments as advanced on behalf of the Bank, further added that the sale deed has been executed in favour of the auction purchaser and the possession of the property has also been handed over, therefore, it cannot be disturbed at this belated stage.
I have considered the rival contentions of the learned counsels for the parties and perused the record.
It is apparent that the earlier sale notices dated 19.06.2010 and 24.07.2010 were challenged by filing the S.A. No. 106/2010. Therefore, the stage upto the symbolic possession and the earlier sale notices were challenged in that S.A., which was dismissed for want of prosecution. The appellants have admitted not only the earlier sale notices, but also the subsequent sale notice dated 30.11.2012. The present sale notice dated 13.11.2013 was also sent on the same address, postal receipts of which are placed at page no. 129 of the reply of the Bank. This has not been denied by the appellants by any cogent evidence that the sale notices so dispatched by the registered post were not received by them. Thus, it cannot be said that the appellants were not having the knowledge of auction sale dated 13.12.2013. The S.A. was filed on 23.12.2014 challenging the said sale, therefore, it was with a delay of about one year. The appellants have not shown any reason whatsoever for not challenging the sale notice dated 13.11.2013 within 45 days. Hence the relief qua the auction sale became time barred and there was no ground for condonation of delay.
The contention that the appellants came to know about the sale only on receipt of letter dated 15.11.2014, is equally fallacious. It is matter of record that the notices were sent to the appellants for appearance before the Hon'ble High Court in Writ Petition No. 43817 of 2014, but the appellants have not appeared in that writ petition. The factum of auction was very much there in that writ. After decision of the writ petition on 16.09.2014, the DM has again issued a notice dated 13.10.2014 to the appellants and the appellant No. 2-Kanhaiyalal appeared there. Thus the appellants were otherwise having knowledge of the sale and all the proceedings before 27.10.2014, when fresh order was passed by the D.M. These facts were concealed by the appellants. Thus, they are not entitled for any relief on this count also.
It is also worthwhile to mention that after obtaining the order dated 31.01.2011 from the DM, the appellants approached before the Tehsildar on 6.10.2012 with a request to grant them one week's time and not to proceed in compliance of the order dated 31.01.2011 (Page No. 105 of reply). Thus, the appellants were having knowledge of the order of the DM on 06.10.2012. Thereafter, the physical possession of the property was taken on 28.12.2012 in compliance of the said order of the DM.
Admittedly, neither the order of the DM dated 31.01.2011 nor the physical possession dated 28.12.2012 was challenged by the appellants despite knowledge, therefore, the order of the DM had attained finality and the cause of action to challenge the physical possession arose on 28.12.2012. A fresh litigation with regard to the writ petition and the issuance of order dated 27.10.2014 were only with regard to removal of the movables belonging to the appellants and lying in the subject property. Thus, it cannot be said that the physical possession of the property was taken on 25.11.2014 as alleged by the appellants. The judgment of the Hon'ble Allahabad High Court in Narendra Kumar Dwivedi Vs. Surendra Kumar Maurya (Supra) referred to by the learned counsel does not come to the rescue of the appellants because in that case, the physical possession of the property was taken on 02.12.2008 and the S.A. was filed on 19.12.2008. Hence the S.A. was found to be within limitation considering that the cause of action has arisen on the date of physical possession, but in the instant case, the physical possession was taken way back on 28.12.2012, which was not challenged at all by the appellants.
Thus the appellants by their own lapses and conduct have waived their right to challenge the proceedings within limitation and no credible reason, much less the sufficient one has been shown in the application for condonation of delay of one year.
In view of the above, there is no infirmity in the impugned order and accordingly, the appeal is dismissed with no order as to costs.
A copy of this judgment be sent to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.