Appeal No. R-164 of 2013. Case: ARCI Ltd. Vs Shamken Multifab Ltd. and Ors.. Allahabad DRAT DRAT (Allahabad Debt Recovery Appellate Tribunals)

Case NumberAppeal No. R-164 of 2013
CounselFor Appellant: Ms. Sushmita Banerji, Advocate and For Respondents: Mr. Syed Fahim Ahmed, Advocate
JudgesR.K. Gupta, J. (Chairperson)
IssueConstitution Of India - Articles 226, 227; Limitation Act, 1963 (36 Of 1963) - Sections 14, 14(2), 2(1), 2(h); Securitisation And Reconstruction Of Financial Assets And Enforcement Of Security Interest Act, 2002 - Sections 13(2), 13(4), 14, 17, 18
CitationI (2014) BC 82 (DRAT)
Judgement DateJuly 25, 2013
CourtAllahabad DRAT DRAT (Allahabad Debt Recovery Appellate Tribunals)

Judgment:

R.K. Gupta, J. (Chairperson)

  1. They are heard. This is an appeal preferred by the appellant under Section 18 of the SARFAESI Act, 2002 challenging the order passed by the Tribunal in S.A. No. 134/13. By this order the securitisation application preferred by the appellant has been dismissed on the ground of limitation. The Tribunal has recorded the finding that the securitisation application preferred by the appellant was barred by limitation and the appellant had been negligent in prosecuting the case and, thereafter, the Tribunal has come to a conclusion that the cause shown by the appellant for the purpose of condonation of delay does not constitute the sufficient cause.

  2. The relevant facts for the adjudication of the present case are that the appellant is claiming itself to be a secured creditor. It was assigned the debt up to the extent of 44% of the total dues against the respondent No. 1. The dues after the assignment were not paid, therefore, the appellant took the steps under Section 13(2) of the SARFAESI Act, 2002 and, thereafter, because of non-payment of the dues as demanded by the appellant being a secured creditor proceeded to take action under Section 13(4) of the Act, 2002.

  3. The appellant applied for handing over the possession by moving an application under Section 14 of the SARFAESI Act, 2002 and, ultimately, the District Magistrate passed an order on 24th March, 2011. The said order was carried out and the possession of the secured asset was handed over by the District Magistrate to the appellant which is the secured creditor.

  4. Thereafter, it was the case of the appellant that the respondent No. 1 forcibly has taken the possession of the secured asset and the relevant information was given to the District authorities, who have not taken any action to protect the secured asset of the appellant. Therefore, the appellant preferred a writ petition before the Hon'ble High Court of Judicature at Allahabad which was registered as Civil Writ Petition No. 50688/2011. The said petition ultimately was dismissed by the Hon'ble High Court by its order dated 4th May, 2012. The said writ petition was dismissed by the Hon'ble High Court on the ground that since the dispute arises to the order passed by the District Magistrate under Section 14 of the Act, 2002, therefore, appropriate remedy for the secured creditor i.e. the appellant is filing of an application under Section 17 of the Act, 2002.

  5. Thereafter, the appellant moved an application to the Tribunal and the same was filed under Section 17 of the Act, 2002. The appellant also moved an application for condonation of delay.

  6. When the respondents were noticed, then they raised an objection that the facts mentioned in the application for condonation of delay does not constitute sufficient cause for condonation of delay. The Tribunal heard the parties and thereafter, came to a conclusion that the facts and circumstances so pleaded by the appellant in their securitisation application do not constitute the sufficient cause, hence the application for condonation of delay was rejected. The order passed by the Tribunal has been challenged in the present appeal.

  7. This is to be seen that in the present case the Tribunal has taken into account that there was delay of 177 days + 80 days in preferring the securitisation application. The Tribunal further was of the view that the 80 days were not explained sufficiently, therefore, there was no reason to allow the application for condonation of...

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