State Bank of India vs Deccan Florabase Ltd

This Appeal  has  been  filed  against  the  order  dated 10.08.2022 passed by the Adjudicating Authority rejecting I.A. No. 679 of 2021 in C.P./IB/3408/MB/2019. The Appellant filed an application for condonation of delay of 1150 days under Section 5 of the Limitation Act. The account of the Corporate Debtor was declared NPA on 28.02.2013. The financial facility was extended by the State Bank of Patiala and after account of Corporate Debtor having been declared NPA, proceedings under SARFAESI Act, 2002 was initiated by filing an OA on 05.11.2014. The proceedings under SARFAESI are still pending. Under the scheme of the Central Government the State Bank of Patiala was amalgamated with State Bank of India vide Gazette Notification dated 22.02.2017. Thereafter, on 20.09.2019 Section 7 application has been filed by the State Bank of India, the Appellant before us. An application for condonation of delay under Section 5 of Limitation Act was filed. The Adjudicating Authority has rejected the Section 5 application holding that there is no sufficient cause for condoning delay of 1150 days.

Learned  counsel  for  the  Appellant  submits  that  in  the  process  of amalgamation about two years’ time was taken and after process was complete, the State Bank of India came to know about the NPA, hence application was filed.

We have considered submissions of learned counsel for the Appellant and perused the record.

The State Bank of Patiala after declaration of account of Corporate Debtor as NPA has already initiated proceedings under SARFAESI Act, 2002, hence, the Financial Creditor was well aware of the default and could have initiated action under Section 7 of the Code against the Corporate Debtor. The mere fact that the State Bank of Patiala was amalgamated with the State Bank of India by notification of the Central Government issued in the year 2017 i.e 22.02.2017, the filing of application under Section 7 by the Appellant on 20.09.2019 cannot give any sufficient cause for condonation of delay under Section 5 of the Limitation Act. We are of the view that the Adjudicating Authority has rightly rejected the Section 5 application filed by the Appellant by order dated 10.08.2022, which order does not warrant any interference in exercise of our appellate jurisdiction. Appeal is dismissed.