State Bank Of India And Others vs Giridhari Sahoo

Anil Kumar Srivastava, Chairperson

This Appeal has been preferred by the Appellant against the judgment and order dated 18th September, 2020 passed  by Learned Debts Recovery Tribunal, Cuttack in M.A. 12 of 2019 arising out of Diary No. 777 of 2018 whereby application of the Appellant/Petitioner, moved under Section 5 read with Section 14 of the Indian Limitation Act, was allowed condoning the delay in filing the S.A.

It appears that Respondent No. 1 had applied for sanction of Cash Credit Facility of Rs.10.00 lac with the Applicant Bank in the year 2009. Respondent No. 2, Makar Dhawaja Sahoo, executed the Deed of Guarantee and created equitable mortgage in respect of the property situate at Mouza Pratap Sahar (Balikati) under Khata No. 1616/981, Plot No. 2504, Area 0.70 decimals by depositing Sale Deed No. 1091 of 2007. Respondent No. 1 enjoyed the said loan but failed to repay the dues to the Applicant Bank. Subsequently, on 31st July, 2011, the loan account was classified as N.P.A. Thereafter, Appellant invoked provisions of the SARFAESI Act, 2002 (hereinafter referred to as the ‘Act’) and issued Demand Notice on 6th February, 2012. After expiry of sixty days, symbolic possession was taken by the Applicant Bank on 26th September, 2012.

No representation was preferred by the Respondents under Section 13 (2) of the Act. Respondents, on 22nd December, 2013, approached the Applicant Bank with an offer of Rs.9.00 lac towards settlement of the loan account, which, however, failed and/or did not materialize. Valuation of the property was taken by the Bank under Rule 8 (5) of the Act.

Initially, the property was put to sale on 21st  October, 2016, which, however, did not materialize for want of bidder. Thereafter, the property was again put on e-auction, on 19th February, 2018. Fifteen days notice, under Rule 8 (6) of the Act was issued on 22nd January, 2018 and  the same was published in newspaper on 3rd February, 2018. By the e-auction, held on the 19th  of February, 2018, the property was sold for a sum of Rs.11,03,000.00 and the said sum was paid by the Auction Purchaser.  Sale Certificate was issued on 6th March, 2018.  Sale Deed was executed on 14th March, 2018.

Respondents, after a lapse of eight months of sale and ten months of issuance of the Sale Certificate, moved an application for quashing of the auction sale. Respondents also moved a Misc. Application, being M.A. 12 of 2019, praying for condoning the delay in preferring the appeal. In spite of being vehemently opposed by the Appellant, Learned Tribunal allowed the said M.A. Feeling aggrieved, the Applicant Bank has preferred the present appeal.

Service upon Respondents No. 1 and 2 was completed. Despite service, Respondents neither appeared nor filed any counter affidavit. The sole Respondent, being Respondent No. 3, the Auction Purchaser, has entered appearance in the appeal.

I have heard the Learned Counsel for Appellant Bank as well as Respondent No. 3 and have perused the record.

Learned Counsel for the Appellant submits that Tribunal below had failed to appreciate the law on the subject of condonation of delay under Section 5 of the Limitation Act. Learned Counsel submits that when a prayer for condoning the delay is made, day to day delay should have been explained; which the Respondents No. 1 and 2 failed to explain. Learned Counsel further submits that no satisfactory explanation was given by the Respondents as to why the delay in moving the application under the SARFAESI Act, should be condoned; which the Tribunal below failed to appreciate. Learned Counsel further submits that Tribunal below failed to appreciate that the grounds taken by the Respondents were contradictory; and thereby erred in recording contradictory findings, as is apparent on the face of the record and, hence, the order is bad and is liable to be set aside. Lastly, Learned Counsel submits that Tribunal below, while dealing with Section 5 application, had exceeded its jurisdiction by entering into the merits of the case.

Learned Counsel for Respondent No. 3 submits that his client, Asish Das, is the bona fide Auction Purchaser.

Admittedly, as per the SARFAESI Application filed by the Applicant, Giridhari Sahoo, Respondent No. 1 herein, and Makar Dhawaja Sahoo, Respondent No. 2 herein, approached the Applicant Bank for sanction of Cash Credit Facility of Rs.10.00 lac wherein the Respondent No. 2, Makar Dhawaja Sahoo, is the Guarantor. It is also not in dispute that the loan account became N.P.A. on 31st July, 2011 and Notice under Section 13 (2) of the Act was issued by the Bank. Proposal for One Time Settlement was also made by the Respondents, which, however, failed and/or did not materialize. Ultimately, the property was taken over by the Bank and the property was put to sale through e-auction.

In a writ petition, being W.P. 2526 of 2016, filed by Respondent No. 1, Giridhari Sahoo, confirmation of sale was stayed by the Hon’ble High Court, subject to the condition that Rs.4,00 lac should be deposited by the petitioner. Since the Respondent No. 1 failed to comply with the condition put forth by the Hon’ble High Court; the property in question was e-auctioned; sale certificate was issued and the sale was confirmed.

Under the backdrop of the above facts, an application, under SARFAESI Act, 2002, was filed by Respondent No. 1, Giridhari Sahoo, alongwith an application under Section 5 of the Limitation Act, on the ground that the petitioner was suffering from different age old ailments and he was unable to move due to fever. His wife was seriously ill. He had engaged Counsel to file the case before DRT, Cuttack, but due to communication gap, the application could not be prepared. Thereafter, the Applicant changed his Advocate and handed over the documents to the newly engaged Advocate in August, 2018. The newly engaged Advocate, after going through the facts of the case, sought for necessary documents. After collecting the required documents, the Applicant’s Advocate prepared the application. However, due to cessation of Advocates, the Applicant could not file and/or was unable to file the S.A. and waited nearly for about two and a half months; thereby causing delay in filing the S.A. Hence the Applicant contended that such delay was neither intentional nor deliberate one and prayed for condoning the delay as in the event delay is not condoned, the petitioner, the Applicant herein, would suffer irreparable loss and injury.

The Tribunal below holding that the Bank had not conducted the auction in a fair manner and that delay has duly been explained by the Applicant, allowed the application. Accordingly, the delay was condoned and the S.A. was registered.

The petitioner, Respondent No. 1 herein, in the application under Section 5 of the Limitation Act, has taken the ground that the petitioner himself was suffering from different old age ailments and his wife was seriously ill. He had engaged a Counsel to file the case before DRT, Cuttack but due to communication gap, application could not be prepared. Thereafter, the petitioner changed his Counsel and handed over the documents to his Counsel in August, 2018. The application was prepared, thereafter, due to cessation of Advocates, application could not be filed.

Settled legal position is that Section 5 of the Limitation Act is a statutory beneficial provision intended to mitigate the hardship of a suitor from rigours of limitation because the party may have a justifiable reason for not approaching the Court on time.

Section 5 enables the Court to admit an appeal or an application after the expiry of the prescribed period on sufficient cause being shown for the dely. Section 5 provides that an appeal may be admitted after the limitation period has expired, if the Appellant satisfied the Court that there was sufficient cause for the delay.

The expression ‘sufficient cause’ employed by the legislature is adequately elastic to enable the Courts to apply the law in a meaningful manner which sub serves the ends of justice. The matter has to be dealt with in a rational common sense pragmatic manner and justice.

Since sufficient cause has not been defined, the Courts are left to exercise discretion to conclude whether circumstances exist establishing sufficient cause. The only guiding principle to be seen is whether a party has acted with reasonable diligence and had not been negligent and callous in the presentation of the matter. The entire gamut of facts is to be carefully scrutinized and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

The law is well settled that delay cannot be excused as a matter of ‘judicial generosity’ in any special case. An order extending time should give sufficient indication that the discretion given by the law has been judicially exercised. The law is also well settled that an order excusing delay is not final and is liable to be questioned at a later stage. But an Appellate Court will not ordinarily interfere with the discretion exercised by the Court below. But the differentiating factor is whether the exercise of discretionary power is just and proper.

Now we have to see whether or not in the instant case sufficient cause has been shown by the Respondents for condonation of delay.

It is stated that Respondent No. 1, Giridhari Sahoo, was himself suffering from old age ailments and his wife and nephew were seriously ill. Respondent No. 1 contacted Counsel but application could not be prepared. This ground is magnified by medical papers, filed by Respondent No. 1 wherein it is shown that the wife of Respondent No. 1 died on 30th June, 2016. Respondent No. 1 was also under the treatment of Sanjeevani Medicare and was hospitalized on

9 th July, 2014 and was discharged on 8th August, 2014. This itself nullifies the ground taken by Respondent No. 1 in his application under Section 5 of the Limitation Act.

It appears that Tribunal below had placed reliance upon the ground that Respondent No. 1 being a senior citizen, could not contact his Counsel. Mere fact that Respondent No. 1 is a senior citizen and could not contact his Counsel itself is no ground for condoning the delay. Settled law is that each and every day delay is to be satisfactorily explained by the Applicant. Although, it is true that DRT can travel beyond the scope of Civil Procedure; only fetter put on its power is that principles of natural justice should be observed. But at the same time, it does not mean that DRT should exceed its jurisdiction without any sufficient cause having been shown by the Applicant. Sufficient cause has to be shown by the Applicant and facts and circumstances of each case must contain certain grounds to enable the Court to exercise discretion; for the reason that whenever the Court exercises discretion, it has to be exercised judicially.

In the case at hand, option was given by the Hon’ble High Court to the Applicant, the Respondent No. 1 herein, to deposit Rs.4.00 lac and in the event deposit is made by the Applicant, the Bank was restrained from proceeding with the sale/e-auction. But the Applicant/Respondent No. 1 failed to comply with the said direction and/or option given by the Hon’ble High Court. Moreover, the grounds taken by Respondent No. 1, regarding his own illness and illness of his wife and nephew could not be substantiated from the record. Hence, it could not be accepted that Respondent No. 1 was prevented from moving an application under the SARFAESI Act within the period of limitation. Respondent No. 1 neither could give satisfactory explanation for the delay nor could show sufficient cause for which the delay could be condoned.

Before parting with the judgment, I would like to observe that Tribunal below had exceeded its jurisdiction by entering into the merits of the case. It is settled law that when an application for condonation of delay, under Section 5 of the Limitation Act, is moved, it is to be seen as to whether sufficient cause is shown for condoning the delay; merits of the case have no role to play. But, in the present case, it appears that Tribunal below, in allowing the application under Section 5 of the Limitation Act, has also gone into and considered the merits of the matter. This is against the law.

On the basis of discussion made above, I am of the view that Respondents No. 1 and 2 failed to show sufficient cause for condoning the delay in their application filed under Section 5 of the Limitation Act and moving an application under the Sarfaesi Act.

Accordingly, the impugned order dated 18th September, 2020, cannot be sustained and is liable to be set aside and the application under Section 5 of the Limitation Act is liable to be dismissed.

ORDER

The appeal, being Diary No. 424 of 2020, is allowed. The order dated 18th September, 2020 is hereby set aside. The application, under Section 5 of the Limitation Act is dismissed.

No order as to costs.

File be consigned to Record room.

Copy of the Judgment/Final Order be uploaded in the Tribunal’s Website.

Order pronounced by me in the open Court on this the 20th day of April, 2022.