SYNOPSIS : Whether condone delay petition is allowed for "Securitization Application filed under sub-section 1 of section 17 of SARFAESI Act" under section 5 of the Limitation Act? - HIGH COURT OF MADHYA PRADESH AT JABALPUR.
Whether condone delay petition is allowed for "Securitization Application filed under sub-section 1 of section 17 of SARFAESI Act" under section 5 of the Limitation Act?
A Securitization Application was filed before the Debt Recovery Tribunal (DRT) beyond the limitiation period 45 days specified in the section 17(1) of SARFAESI Act.
DRT held that an application under section of 17(1) is in the nature of suit and therefore the provisions of under Section 5 of Limitation Act are inapplicable. For this decision, DRT relies on the Supreme Court Judgment Citation - Bank of Baroda & Another Vs. M/s Parasaadilal Tursiram Sheetgrah Pvt. Ltd. and Ors. (C.A. No.5240/2022)
The above citation of the Supreme Court Judgment had not addressed issue of applicability of provisions of section 5 of the Limitation Act to an application u/S.17 of SARFAESI Act. Further it clearly evident that the issue of applicability of provisions of Limitation Act to an application u/S.17 of SARFAESI Act were not under consideration and reliance placed by DRT for dismissing Securitization Application as barred by limitation by relying upon the said citation is misplaced.
DISPUTE - The present dispute is whether benefit of Section 5 of the Limitation Act is available in respect of an Securitization Application preferred under section of 17(1) of the SARFAESI Act or not? Here, delay sought to be condoned was of 46 days. In order to answer the Dispute, now let us read sub-section 1 of the section 17 of SARFAESI Act with sub-section 2 of the section 29 of Limitaion Act.
Section 17 of SARFAESI Act is a remedy available to any person aggrieved by the recourse taken by secured creditor to any means under section 13(4) of SARFAESI Act. This remedy is available before DRT by filing an application which is ordinarily termed as securitisation application (SA) to be filed within 45 days from the date on which any of the measures under section 13(4) of the SARDAESI Act are taken. Section 17 of SARFAESI Act does not confer DRT with discretion to extend the period of limitation of 45 days.
Noticeably it is pertinent to mention that Section 17 or any other provision of SARFAESI Act does not expressly exclude the operation of beneficial provisions under the Limitation Act to condone the delay.
The answer to the disputed question in this case lies in the bare reading of Section 29(2) of the Limitation Act and it stipulates that if the special law does not expressly exclude the application of Sections 4 to 24 of Limitation Act, then these provisions of Limitation Act shall apply qua all causes raised under the Special Law. Here, the provisions from Sections 4 to 24 of the Limitation Act includes the section 5 of the limitation act.
Therefore, it is obvious that provisions of Section 5 of the Limitation Act would apply for making a prayer for condonation of delay before the DRT in Securitization Applications under section 17(1) of the SARFAESI act which was filed after expiry of 45 days.
Accordingly, this petition stands allowed, Impugned order of DRT dated 02.09.2023 passed in S.A. No.806/2022 by Debt Recovery Tribunal, Jabalpur is set aside. Further, DRT is ordered to proceed to consider and decide the application for condonation of delay filed by petitioner on merits. Interim order passed by the High Court of HIGH COURT OF MADHYA PRADESH AT JABALPUR shall continue till the Tribunal decides the application for condonation of delay.
In order to
TOPICS