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Judgment
Ashok Menon, Chairperson
The above-mentioned appeal is filed by the Appellant impugning the order of the Learned Presiding Officer, Debts Recovery Tribunal-II, Ahmedabad dated 16/08/2012 in Securitisation Application No. 52 of 2011. The present application is filed for amendment of the Memorandum of Appeal.
The above-mentioned SA No. 52 of 2011 was dismissed by the impugned order and the appeal is filed challenging that order of dismissal. While the appeal was pending consideration, the Respondent Bank went ahead with the sale of the secured assets which were sold by way of a private treaty to a person named Kamaleshbhai Chhotalal Ganatra on 03/08/2016. Possession of the property has also been handed over to the said purchaser. The Sale Certificate has been issued on 04/08/2016. It is submitted that the aforesaid purchaser of the property is a necessary party to proceedings and hence he needs to be impleaded as an additional Respondent No. 3. The Appellant also seeks to incorporate pleadings challenging the sale by private treaty and to set aside the sale as also the Sale Certificate.
The 1st Respondent has filed a reply affidavit objecting to the amendment sought. The Appellant had challenged all Sarfaesi measures up to the sale before the D.R.T. u/s 17 (1) of the SARFAESI Act. The learned P.O. had rejected the S.A. on grounds which are well founded and stand challenged before this Tribunal in Appeal. A borrower or any other person affected by the Sarfaesi measures is at liberty to challenge it before the D.R.T. u/s 17 (1) of the SARFAESI Act. Each Sarfaesi measure consequent to section 13 (4) constitutes a separate cause of action for the applicant to file an application. In case, the Applicant was aggrieved by the confirmation of sale and issuance of Sale Certificate, he could have challenged the same before the D.R.T. u/s 17 (1) of the SARFAESI Act. Without challenging the sale before the D.R.T., the Applicant is not entitled to approach the Appellate Authority directly with a new relief which was not sought before the D.R.T. The Respondent also contends that the sale of the secured asset was attempted several times by way of a public auction notice. In response to that the highest bid that was received was for only Rs.40 Lakhs. Thereafter, a public notice of the auction was made in the newspaper on 05.03.2012. The borrowers, guarantors, and public, in general, were informed that a bid was already received for Rs.40 Lakhs and that any bids higher than Rs.40 Lakhs were invited. However, no higher bid was received in response to the public notice in newspapers dated 05.03.2012. Thereafter, a fresh sale notice was again published on 24.05.2015inviting bids. In response to that, the highest bid received was for Rs.51 Lakhs. Since the Respondent Bank thought that the amount offered was still less, the Appellant was addressed by means of a letter dated 29.03.2016 to find anyone offering a bid higher than Rs.51 Lakhs and was also informed that if no other offers for a higher amount are received, the bid for Rs.51 Lakhs would be accepted. There was no response to the letter from the Appellant. Despite that, the Bank again issued a fresh public notice in a newspaper on 30.03.2016 but still, no higher bids were received. The Bank decided to call the sole bidder who had offered a sum of Rs.51 Lakhs for the property, for negotiations. Fortunately, the purchaser revised the offer and was willing to raise the amount to Rs.89.37 Lakhs which was accepted and confirmed on 04.08.2016. The Sale Certificate was also issued. It is pointed out that the Application for amendment incorporating a prayer to set aside the sale was filed long after the period of limitation prescribed under Section 17(1). It is submitted that a plea that is barred by limitation cannot be incorporated by way of amendment.
Heard both sides. Records perused.
The argument of the learned counsel appearing for the Appellant is that subsequent events can be taken note of even at the Appellate stage because an appeal is a continuation of the original application. The amendment has, therefore, to be allowed to avoid a multiplicity of proceedings. The Appellant has a very good case in challenging the impugned order of the D.R.T. He was, therefore, given a full waiver of the mandatory deposit u/s 18(1) of the SARFAESI Act.
Per contra, the learned counsel appearing for the Respondent Bank submits that the only intention of the Appellant is to protract the proceedings. It is pointed out that the Appellant had raised a contention before the D.R.T. that the 1st Respondent Bank being a cooperative society is not entitled to resort to Sarfaesi measures and that it is not a bank or financial institution coming within the purview of the SARFAESI Act. The said preliminary objection was disregarded and it was challenged by the Appellant right up to the Hon’ble Supreme Court by filing Writ Petition (Civil) No. 329 of 2014 which was dismissed on 9. 01.2015. A rejoinder affidavit was filed by the Appellant explaining the circumstances under which the Writ Petition was filed before the Hon’ble Apex Court.
It is seen that the application for amendment was filed only on 05.01.2017 whereas the sale was confirmed on 04.08.2016 in favour of the auction purchaser. Any person including the borrower, aggrieved by any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor is at liberty to file an application u/s 17 (1) before the D.R.T. having jurisdiction in the matter within 45 days from the date on which such measures had been taken. Each measure which is taken u/s 13 (4) gives rise to an independent cause of action to the Applicant to approach the D.R.T. The Appellant herein had approached the D.R.T. challenging the Sarfaesi measures taken u/s 13 (4) and had in the interregnum sought for a stay of the auction sale which was declined. The S.A. was found not sustainable and rejected vide the impugned order dated 16/08/2012 and consequent to that, the Appellant filed this Appeal, but no stay was granted. The auction sale proceeded and several times the secured asset was put up for auction and failed for want of bidders. Right from 2011, the Respondent Bank has been attempting to sell the property in vain. Ultimately, when the property was sold on 04.08.2016 and the Sale Certificate was issued, the Appellant comes up with this application for an amendment to implead the auction purchaser and also to incorporate specific pleadings in the memorandum of Appeal challenging the sale on various grounds. The application for amendment, if allowed, would relate back to the date of filing of the Appeal. It is true that subsequent events can be taken note of, but even this application for amendment was filed beyond the period of 45 days stipulated u/s 17 (1) of the SARFAESI Act for challenging the Sarfaesi measures. The auction of the secured asset is undoubtedly a Sarfaesi measure coming under the purview of section 13 (4) and hence any challenge to that should have been made within 45 days. The Appellant did not take any action within the stipulated time and, therefore, the action is barred by limitation.
All amendments ought to be allowed which satisfy two conditions: (a) of not working injustice to the other side, and (b) for being necessary for the purpose of determining the real questions in controversy between the parties. Where an applicant/ appellant/ plaintiff seeks to amend by setting up a fresh claim in respect of a cause of action which since the institution of the Suit/Appeal had become barred by limitation, the amendment must be refused; because to allow it would be to cause the Respondent an injury which could not be compensated in costs by depriving the Respondent of good defence to the claim. As a rule, amendments which would cause injustice to the other side cannot be allowed. [L.C. Hanumantappa (since dead) represented by his L.Rs. Vs. H. B. Shivakumar (2016) 1 SCC 332 relied upon]. A fresh application u/s 17 (1) of the SARFAESI Act, if filed beyond the period of 45 days could not have been accepted as barred by limitation, and cannot be allowed by way of the amendment also.
In view of the above, the amendment sought in the application cannot be allowed. Resultantly I.A. No. 8 of 2017 stands dismissed.
Post on 22.11.2022 for a hearing on the main Appeal.