Vilas Vasant Gandhe vs Encore Asset Reconstruction Pvt. Ltd

Ashok Menon, Chairperson

The matter is taken up for hearing by way of a praecipe filed by the appellant for seeking urgent relief.

This is an application for restoration of appeal which was dismissed for non-compliance of the order of payment of pre-deposit within the stipulated time. The appellant has now come up with the payment of the entire pre-deposit amount which was directed to be paid and therefore, seeks a prayer to accept that amount by condoning the delay and also to restore the appeal after condoning the delay of 258.

The application for condoning the delay is filed as Interlocutory Application (I.A.) No. 19 of 2025. The main reason stated by the appellant for condoning the delay is that they were under financial strain and the Ld. Counsel appearing for the appellant relied on two decisions to substantiate the argument that the financial strain by the parties is a good reason for condoning delay.

The Ld. Counsel appearing for the respondent has vehemently opposed the application for condonation of delay along with restoration application for the reason that the property was sold in 2023 and for the last more than a year the auction purchaser has been waiting to take over of possession of the property.

The delay of 258 days needs to be explained. It is pertinent to note that even for paying the pre-deposit, the appellant was granted an extension of time but despite the extension of time granted, the entire payment could not be paid within the extended period and ultimately, the appeal was dismissed. It is pertinent to note that the appellant has been seeking time to pay the amount due to the bank right from the year 2018 when the demand notice under Sec. 13(2) was issued demanding a sum of ₹6,32,55,510.40. The amount has now swelled to approximately ₹15 crores. The property was put up for sale at the reserve price of ₹8.85 crores and the auction purchaser purchased the property for ₹8.90 crores. The main objection against the sale raised in the S.A. was that the reserve price was not proper because the property is worth more than ₹36 crores and the valuation report is that effect has also been produced by the appellant in support of their claim that the property has higher value. However, the DRT was not enthused with the valuation statement produced by the appellant because despite giving opportunity to the appellant bring in an auction purchaser for a higher value the appellant couldn't bring any purchaser to take the property at a higher price and therefore, the property was sold. It is also pertinent that the appellants had thereafter produced a valuation report with a much less value. The Ld. Counsel appearing for the respondent has pointed out that the application for getting the appeal restored is only a ruse to protract the proceedings by deploying dilatory tactics. Therefore, the delay may not be condoned.

a liberal approach indeed is to be taken for condonation of delay but it is equally true that when the delay of 258 days is condoned, there is some injustice done to the opposite side as well. And, it is pertinent to note that despite having purchased the property in the auction after payment of ₹8.90 crores, the auction purchaser has been waiting in the queue for more than a year and therefore, if the delay is condoned there is to be some injustice done to to the auction purchaser because he has earned a favourable order from the DRT and it is challenged by the borrowers before this Tribunal. Sufficient time was granted to pay the pre-deposit amount and the extension of time was also granted to pay the amount. Hence, in the interest of justice, the trauma which has been undergone by the auction purchaser after having paid so much money also needs to be looked into. However, I believe that an opportunity needs to be given to the appellant to contest the matter on merits and for that reason, the application for condonation of delay filed as I.A. No. 19 of 2025 is allowed and the appeal is restored in file subject to the payment of cost of ₹20,000/- to the DRT Bar Association, Mumbai for the purchase of books and periodicals by 13.01.2025.

The Ld. Counsel for the appellant is apprehending that the possession is slated on today and therefore, requested for protection. The possession has already been taken. All contentions are kept open and will be decided on merits. The appeal shall be taken on file in case there are no other defects to be cured.

List the matters before the Ld. Registrar on 13.01.2025.