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Judgment
S. Ravi Kumar, Chairperson
This Appeal is against Order dated 13.07.2018 of DRT-II, Ernakulam in SA 150/2016.
Brief facts leading to this Appeal are as follows:-
Appellant herein filed Securitisation Application SA 150/2016 challenging Sale conducted on 25.07.2016 and praying to set aside the same, and also set aside confirmation of sale on 29.08.2016.
Respondent Nos. 1 and 2, who are Financial Institution, resisted Securitisation Application, mainly contending that Application is barred by limitation, and Sale conducted on 25.07.2016, is in accordance with law.
Tribunal below decided preliminary objection of Respondent Institution with regard to limitation, and recorded a finding that Securitisation Application is filed beyond statutory period of 45 days, and Appellant is not entitled to invoke Section 14 of Limitation Act, 1963, holding so, dismissed Securitisation Application. Aggrieved by said Order, present Appeal is preferred by Appellant.
Appellant herein filed WP (C) No. 29249/2022 before Hon’ble High Court of Kerala at Ernakulam for a direction to this Tribunal to dispose of RA (SA) 75/2019 within a time frame to be fixed by it. Hon’ble High Court, called for a report from this Tribunal to intimate reasonable time required for disposal of the Appeal, accordingly, a reply was sent on 12.10.2022 seeking three months time from 14.11.2022, to which date the Appeal stood posted. On a consideration of said Letter, Hon’ble High Court passed Order dated 19.10.2022, granting three months time from 14.11.2022 for disposal of RA (SA) 75/2019, which time is going to expire tomorrow i.e., 14.02.2023.
Appellant and Respondent No.3 filed Written Submissions and Advocates for respective parties also submitted oral arguments.
Before dealing with merits and demerits, I must appreciate the co-operation of Advocates appearing for the parties for disposal of this case within the time schedule fixed by Hon’ble High Court.
Learned Senior Advocate appeared on behalf of sole Appellant, submitted that, Appellant availed Housing Loan from Financial Institution, but he could not repay the amount as his Visa got expired in April, 2016, and he lost his job, therefore, he was unable to come back from UAE. He further submitted Financial Institution, i.e., Respondent Nos. 1 and 2, without following the procedure, put the property for sale and Appellant challenged Auction Sale Notice dated 24.06.2016 before Hon’ble High Court of Kerala in WP (C) 24459/2016, which was disposed of on 27.07.2016 with a direction to Appellant to pay the overdue amount in four equated monthly instalment along with regular EMI and directed Financial Institution, not to confirm the sale. He submitted that Appellant filed IA 15377/2016 in Writ Petition to direct Respondent Nos. 1 and 2 to receive Demand Drafts, but IA was dismissed on 26.10.2016 leaving open to Appellant to approach appropriate forum. Appellant filed Writ Appeal No. 2199/2016, which was also dismissed on 15.11.2016 leaving open to Appellant to approach appropriate forum, thereafter, Appellant filed SA challenging Auction Sale, pleading that there is no delay in filing SA as period from 27.07.2016 till 15.11.2016, are to be excluded under Section 14 of Limitation Act, 1963, but, Tribunal below failed to consider the same, and held that requirements of Section 14 of Limitation Act 1963, have not been satisfied, and as such, Section 14 of Limitation Act, 1963, has no application. He submitted that Tribunal below, in holding so, dismissed Application, therefore, Order of Tribunal below has to be set aside, and matter has to be remitted back to decide the same, on merits. He submitted Hon’ble Supreme Court in M. P. Steel Corporation Vs. Commissioner of Central Excise, reported in (2015) 7 SCC 58, held that where principles of Section 14 of Limitation Act, 1963, is attracted said provision has to be applied. He submitted, Appellant approached Hon’ble High Court, and if period spent before Hon’ble High Court is excluded, SA is well within time, therefore, relying on said judgement, it has to be held that SA is in time.
On the other hand, Advocate for Financial Institution submitted that, Appellant has not filed any Application seeking exclusion of time under Section 14 of Limitation Act, 1963, nor he prayed in Securitisation Application to exclude that period. He submitted, only in the pleading portion, it is stated that period has to be excluded, therefore, Section 14 of Limitation Act, 1963, cannot be applied, and Tribunal below is right in holding so. He further submitted, for applying Section 14 of Limitation Act, 1963, certain conditions have to be fulfilled, and here in this case, those conditions are not attracted, on the other hand, when Appellant approached Hon’ble High Court challenging Sale Notice, Hon’ble High Court granted favourable Order to Appellant, but Appellant has not fulfilled the conditions put forth by Hon’ble High Court, and having not complied with, it is not open to Appellant to contend that period spent before Hon’ble High Court has to be excluded. He submitted, Appellant filed IA in Writ Petition seeking extension of time for payment, but Hon’ble High Court dismissed said Application, and that was not challenged, on the other hand, original Writ Order, which is favourable to Appellant, is challenged in Writ Appeal, and Writ Appeal is also dismissed recording, even a lenient view is taken in favour of Appellant, he has not utilized the same. He further submitted, when there is no Application to condone delay by excluding time, and when there is no pleading as to why alternate remedy is not availed, Appellant waived his right, therefore, not entitled for availing the second remedy of approaching DRT, having availed remedy before Hon’ble High Court obtaining favourbale Order. He submitted, Tribunal below is absolutely right in holding that Application is barred by time.
Advocate for Auction Purchaser while adopting arguments of Financial Institution, submitted that in para 13 of impugned Order, it is specifically recorded that Appellant has got knowledge, and reasons are given as to why Section 14 of Limitation Act, 1963, cannot be applied. He submitted that impugned Order is a well reasoned Order, and there are absolutely no grounds to interfere with the same. It is further submitted after confirmation of sale, Sale Certificate is registered and Auction Purchaser is also put in possession of the property, and at this stage, it is not open to Appellant to request this Tribunal to put the clock back. He submitted, Appeal is devoid of merits, and is liable to be dismissed.
From the submissions of Learned Advocates appearing for Appellant, Financial Institution and Auction Purchaser, main issue involved in this case is as to whether Tribunal below was right in holding that case on hand, is not an appropriate case, to apply Section 14 of the Limitation Act,1963, while dismissing Securitisation Application.
Now, it may be relevant to examine Section 14 of the Limitation Act, 1963, in order to appreciate the submissions and counter submissions of parties.
“14. Exclusion of time of proceeding bona fide in court without jurisdiction.—(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.”
Referring to the above provisions, Advocate for Financial Institution submitted, certain conditions have to be fulfilled in order to invoke Section 14 of the Limitation Act, 1963, and three Judges Bench of Hon’ble Supreme Court in Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Ors., reported in (2008) 7 SCC 169, formulated five conditions for invoking Section 14 of the Limitation Act, 1963, and Appellant failed in establishing those five conditions, therefore, Tribunal below is right in saying that Section 14 of the Limitation Act, 1963, has no application.
On the other hand, it is the contention of Learned Senior Advocate for Appellant that Hon’ble Supreme Court in M.P. Steel Corporation Vs. Commissioner of Central Excise, reported in (2015) 7 SCC 58, in which the decision relied on by Advocate for Financial Institution is also referred, held that when principles of Section 14 of the Limitation Act, 1963, are attracted, benefit of that Section has to be given, and as in this case, the principles are attracted, Tribunal below was wrong in not applying Section 14 of the Limitation Act, 1963, to case on hand.
Main contention of Appellant is that he filed Writ Petition and Writ Appeal, the period spent there has to be excluded, and if that is done, the Appeal is not barred by time. Appellant filed Writ Petition (C) No. 24459/2016 challenging Auction Sale Notice. Hon’ble High Court disposed of said Writ Petition on 27.07.2016. Referring to said Order, Advocate for Financial Institution submitted when Appellant got a favourable Order in Writ, it is not open for him to contend that period spent before Hon’ble High Court has to be excluded, because as per Section 14 of the Limitation Act, 1963, if the relief is rejected by Hon’ble High Court on the ground of jurisdiction or party has got alternate remedy, then, in those cases, such period can be excluded, but here, Appellant, having obtained favourable Order, he cannot have both the benefits. Now, it is necessary to examine the Order of Hon’ble High Court of Kerala dated 27.07.2016, which is as follows:-
“1 ……………….
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Having regard to the fact that the petitioner had approached this Court with an offer to settle the liability and to regularize the loan account, it will be appropriate to give the petitioner one more opportunity to save his property from being proceeded for realizing the debt.
Accordingly, this writ petition is disposed of as under:-
(i) That the petitioner shall pay the overdue amount in 4 equal monthly instalments starting from 23/8/2016.
(ii) In addition to the aforesaid payment, petitioner shall also pay the regular monthly instalments as per the agreed terms.
(iii) The respondent Bank shall not confirm the sale and shall inform the purchaser about pending proceedings.
(iv) If there is default in payment of any of the aforesaid amounts, it shall be open for the respondent Bank to confirm the sale.
(v) On payment of the aforesaid amount within four months as foresaid and on payment of the regular instalments during the aforesaid period, the sale shall stand set aside and the auction purchaser shall be repaid the amount he had already deposited.”
From a reading of the above, as rightly pointed out by Advocate for Financial Institution, Hon’ble High Court granted relief to Appellant, but subject to fulfillment of certain conditions. Admittedly, Appellant has not complied with the conditions imposed by Hon’ble High Court in Order dated 27.07.2016. The very Order empowers Financial Institution to confirm the sale in default of payment by Appellant. In fact, the relief claimed in Securitisation Application namely to set aside Sale dated 25.07.2016 is granted by Hon’ble High Court in the Order dated 27.07.2016, because last portion of Order says that on payment of the aforesaid amount within four months as foresaid and on payment of the regular instalments during the aforesaid period, the sale shall stand set aside and the Auction Purchaser shall be repaid the amount he had already deposited. But for the reasons best known to Appellant, in spite of such favorable Order, he has not complied with the conditions imposed by Hon’ble High Court.
Appellant, thereafter, filed IA 15377/2016 seeking extension of time, but that IA was dismissed on 26.10.2016 by recording that due to non compliance of directions, as sale was confirmed on 29.08.2016 and Auction Purchaser remitted the balance amount on 31.08.2016. Appellant filed Writ Appeal challenging Order dated 27.07.2016 and Writ Appeal is dismissed on 15.11.2016. Though in the Written Submissions, Appellant has contended that Writ Appeal is preferred as against dismissal of Order dated 26.10.2016, a reading of Order dated 15.11.2016, it is clear that Writ Appeal is against Order dated 27.07.2016 in Writ. When Writ is disposed of and a favourable Order is passed in favour of Appellant, I failed to understand on what ground the Appellant filed Writ Appeal. Hon’ble Division Bench in Writ Appeal, passed the following Order:-
“ 1. ……………………..
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Despite such leniency shown in W.P.(C) No. 24459 of
2016, there was delay in paying the first instalment of over due amount and hence the Bank wanted to confirm the sale. Immediately thereafter, the appellant made an application before this Court, I.A. No. 15377 of 2016, praying for extension of time, but the said application came to be dismissed on 26.10.2016 with an observation that it is open for the appellant to challenge the sale in appropriate proceedings, if so advised.
From the aforementioned conduct of the appellant, it is clear that the appellant somehow wants to drive out the proceedings. At this stage, learned Advocate for 1st and 2nd respondents submits that the sale is confirmed in favour of the auction purchaser and he is put in possession of the property. Thus, as of now, the secured property is possessed by the auction purchaser.
Since the sale is already confirmed and the auction purchaser is put in possession of the property and as we do not find any ground to take any lenient view in the matter in favour of the appellant, particularly when there is no illegality in the impugned judgement, the appeal needs to be dismissed and accordingly the same stand dismissed. It is open for the appellant to challenge the sale in appropriate proceedings, if so advised, as per law.”
After dismissal of Writ Appeal, SA is filed.
Hon’ble Supreme Court, in Consolidated Engineering Enterprises Vs. Principal Secretary, Irrigation Department and Ors., held that five conditions must be satisfied before Section 14 of Limitation Act 1963, is pressed into service. Those five conditions are as follows:-
“ (1) Both prior and subsequent proceedings are civil proceedings prosecuted by the same party;
(2) The prior proceedings had been prosecuted with due diligence and in good faith;
(3) The failure of the prior proceedings was due to defect of jurisdiction or other cause of like nature;
(4) The earlier proceedings and the latter proceedings must relate to the same matter in issue; and
(5) Both the proceedings are in a court.”
According to Advocate for Financial Institution, none of these conditions are fulfilled by Appellant. As per the condition No.(2), the prior proceeding had been prosecuted with due diligence and in good faith; Appellant nowhere pleaded that he filed Writ Petition and Writ Appeal and prosecuted them with due diligence and in good faith, having no knowledge about alternate remedy available under the provisions of SARFAESI Act, 2002. According to condition No.(3), there should be failure of the prior proceedings either due to defect of jurisdiction or other cause of like nature; on the other hand, Writ is disposed of giving favourable Order to Appellant. So, these conditions namely condition Nos. (2) and (3) are not at all fulfilled. In fact, these two conditions are main ingredients that are incorporated in Section 14 of Limitation Act, 1963.
Learned Senior Advocate for Appellant contended that when principles of Section 14 of Limitation Act, 1963, are attracted, the benefit of which has to be given to Appellant, as held in the Judgement of M. P. Steel Corporation Vs. Commissioner of Central Excise.
As seen from the above said judgement, in that case, out of five conditions, four conditions are met with, and only condition No.5 is not met with, in such circumstances, it is held that same is not a fatal, in view of peculiar facts of that case, and in that way, Hon’ble Supreme Court held that principles of Section 14 of Limitation Act, 1963, will be attracted to the facts of that case, but, that cannot help this Appellant, to the case on hand, because Appellant has failed even to plead the required conditions, and as already referred to above, main ingredients of prosecuting proceedings with due diligence and in good faith and failure of prior proceedings due to defect of jurisdiction or other cause of like nature, are not at all attracted, and on the other hand, they are against the Appellant, therefore, above decision relied on by Appellant is not applicable to the case on hand.
After dismissal of Securitisation Application, Appellant again approached Hon’ble High Court and filed WP (C) 33030/2018 and Hon’ble High Court dismissed said Writ Petition on 23.10.2018 and only after dismissal of that Writ, this Appeal is preferred with delay condonation Petition. Hon’ble High Curt in its Order dated 23.10.2018, observed as follows:-
“ 1. ………..
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Taking one the from the learned Senior Counsel’s submissions, the petitioner’s counsel now wants leave from this Court to approach the Debt Recovery Appellate Tribunal. Having consciously come before this Court, the petitioner cannot turn back and approach the judicial forums as he wishes.
Nevertheless, I dismiss the Writ Petition holding that if the petitioner may, as observed in the judgement of the Division Bench dated 15.11.2016, “challenge Ext. P2 order in appropriate proceedings, if so advised, as per law”.”
A combined reading of observations made by Hon’ble High Court, which are referred to above in Writ Appeal and Writ Petition No. 33030/2018, can Appellant be treated as a person, that prosecuted the case before Hon’ble High Court in good faith, in my view, the answer would be in negative.
Tribunal below elaborately dealt with point namely application of Section 14 of Limitation Act, 1963, to the case of Appellant, and recorded a finding that it is not an appropriate case to invoke said benefit, I do not find any wrong in the findings of Tribunal below in holding that, the case on hand is not an appropriate case to invoke Section 14 of Limitation Act, 1963,.
On a scrutiny of the entire material, I am of the considered view that Tribunal below has not committed any error in not giving benefit of Section 14 of Limitation Act, 1963, to Appellant and Order of Tribunal below do not suffer from any illegality, therefore, the same cannot be interfered with.
For the above reasons, it is held that Appeal is devoid of merits and is liable to be dismissed.
In the result: Appeal RA (SA) 75/2019 is dismissed. Both parties shall bear their own costs. All pending IAs, if any, stand closed.