w w w . L a w y e r S e r v i c e s . i n



Piyo-G-Food Products and Others V/S The Mahanagar Co-op. Bank Ltd.


Company & Directors' Information:- B. P. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MP1994PTC032994

Company & Directors' Information:- S P P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412DL2004PTC128666

Company & Directors' Information:- J S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15314OR1991PTC002964

Company & Directors' Information:- H R B FOOD PRODUCTS PVT LTD [Active] CIN = U15146WB1988PTC045281

Company & Directors' Information:- V D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15400DL2012PTC231717

Company & Directors' Information:- P R FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC030483

Company & Directors' Information:- S S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15310MH2003PTC142530

Company & Directors' Information:- B K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15312OR1996PTC004541

Company & Directors' Information:- O H P FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U52205DL1999PTC100269

Company & Directors' Information:- K V FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15122DL2007PTC162739

Company & Directors' Information:- K. C. FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15431JK1982PTC000554

Company & Directors' Information:- K I C FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15316DL1979PTC009757

Company & Directors' Information:- R B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15313DL2010PTC202753

Company & Directors' Information:- R K B FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490KL2013PTC033500

Company & Directors' Information:- S K G FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15419UP1991PTC013771

Company & Directors' Information:- B H FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15134DL1997PTC084273

Company & Directors' Information:- N S FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1992PTC055591

Company & Directors' Information:- H N FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15146UP1990PTC011540

Company & Directors' Information:- V K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15412UP1988PTC010023

Company & Directors' Information:- B M FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15419WB1993PTC060386

Company & Directors' Information:- I K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15412WB1991PTC051852

Company & Directors' Information:- S S V FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15499AP1982PTC003547

Company & Directors' Information:- S Q P FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15100MH2003PTC139217

Company & Directors' Information:- F S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15311MH2000PTC126031

Company & Directors' Information:- Z K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400MH2010PTC209818

Company & Directors' Information:- M B S FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U01112WB2003PTC096375

Company & Directors' Information:- N D FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15131DL2002PTC115754

Company & Directors' Information:- C K M FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U51909KL1998PTC012358

Company & Directors' Information:- G S C FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15316WB1985PTC038398

Company & Directors' Information:- A K G FOOD PRODUCTS PVT LTD [Under Liquidation] CIN = U15412WB1990PTC049789

Company & Directors' Information:- J M D FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15419DL1998PTC097578

Company & Directors' Information:- L K FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15200TG2016PTC103411

Company & Directors' Information:- FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15431JK1966PTC000304

Company & Directors' Information:- R R FOOD PRODUCTS PRIVATE LIMITED [Active] CIN = U15490PN2015PTC154753

Company & Directors' Information:- A N FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400TG2013PTC091969

Company & Directors' Information:- R V S K FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15490DL2012PTC245851

Company & Directors' Information:- K G Y FOOD PRODUCTS PRIVATE LIMITED [Strike Off] CIN = U15400KA1984PTC005909

Company & Directors' Information:- FOOD PRODUCTS (INDIA) PVT. LTD. [Strike Off] CIN = U15311HR1994PTC032356

Company & Directors' Information:- M K FOOD PRODUCTS PVT LTD [Strike Off] CIN = U15209DL1979PTC009924

    Miscellaneous Application No. 11/2016

    Decided On, 27 April 2017

    At, Debts Recovery Tribunal Pune

    By, THE HONORABLE JUSTICE: DEEPAK M. THAKKAR
    By, PRESIDING OFFICER

    For Petitioner: K.B. Deshpande, Advocate And For Respondents: R.L. Kute, Advocate



Judgment Text


1. The Miscellaneous Application is filed by the applicants seeking condonation of delay of 99 days (excluding statutory period of 45 days) in filing the Securitization Application.

2. Factual Matrix of the case is as under:

i. The applicant No. 1 is the partnership firm and the applicant No. 2 is a partner.

ii. Defendant is a Co-operative Bank. The allegations made in the Miscellaneous Application proceeds on the footing that the applicants approached defendant seeking financial assistance. Pursuant to the loan, application made by the applicants, on 03rd May, 2012, defendant sanctioned term loan-I in the sum of Rs. 50 Lakhs to be repaid within a period of 60 months with moratorium period of 6 months, term loan-II of Rs. 150 Lakhs to be repaid within a period of 60 months with moratorium period of 6 months and cash credit facility of Rs. 100 Lakhs.

iii. The allegations made in the Miscellaneous Application further reveal that after availing the loan, the applicants failed to regularize the accounts. Consequently, the accounts of the applicant No. 1 were classified as non-performing assets.

iv. Thereafter, on 14th November, 2013, defendant issued demand notice under sub-section (2) of section 13 of the SARFAESI Act. It further proceeds on the footing that the applicants made representation to the demand notice. By the representation, the applicants insisted to rephrase and reschedule the loan accounts. It further proceeds on the footing that the partners of the applicant firm have already paid a sum of Rs. 1.50 Crores in July, 2015.

v. On 03rd December, 2015, defendant has taken symbolic possession of the house property. Before taking possession, the officers of the secured creditor visited the factory premises on 16th October, 2015 and took physical possession of the factory premises. vi. The allegations in the Miscellaneous Application reveal that the applicants have made grievance about violation of the mandatory rules.

vii. In paragraph No. 5 (XIX), (XI) & (XII) at Page 12 of the Miscellaneous Application, the applicants have sought to give the reason and justification seeking condonation of delay caused in filing the Securitisation Application. Paragraph No. 5 (XIX), (XI) & (XII) of the Miscellaneous Application are reproduced hereunder:

(XIX) Taking into consideration the fact that the respondent is likely to took the said properties to sale in March, 2016 the present applicants have immediately contacted their advocate and have taken steps for initiating an application under section 17 of the SARFAESI Act.

(XI) The present applicants got the legal advice and it was given to the knowledge that necessary arrangements for the court fees will have to be made, as is required under the Act. The present applicants respectfully submit that they were personally in touch with the bank authorities for negotiating and arriving at an amicable settlement and as such never thought that they would be required to be initiated any legal proceedings. The applicants were and still are hopeful that the bank would consider their request for regularizing the loan account by accepting the overdue installments.

(XII) It was in the backdrop of these circumstances, the action was initiated by the respondent bank. The applicants as such could not file the matter to challenge the measures of the respondent bank at an earlier point of time.

3. Based on the aforesaid facts, the applicants seek to condone the delay in filing the Securitisation Application.

4. The Miscellaneous Application is opposed by defendant on the ground that:

i. The applicants have suppressed the material facts. The applicants have played fraud. The applicants have not approached to this Tribunal with clean hands. One Mrs. Swati Tapkir was the partner alongwith Mrs. Rupali Vilas Divate who have availed loan from the defendant in the sum of Rs. 250 Lakhs by way of term loan and Rs. 1 Crore by way of cash credit facility. The said partnership firm committed default and the accounts became non-performing asset.

ii. On 14th November, 2013, demand notice under sub-section (2) of section 13 of the SARFAESI Act was issued. Since the applicants defaulted the payment, defendant issued pre-possession notice dated 22nd January, 2014 fixing 21st February, 2014 for taking possession. Pursuant thereto, defendant took possession of the secured assets.

iii. The applicants/borrowers requested defendant to permit them to sell certain properties. Therefore, defendant handed over back to them the property on 31st March, 2014. The borrowers and the applicants herein misused the process of law. The borrowers and the applicants did not deposit the entire amount with the defendant. Therefore, defendant once again issued notice under sub-section (4) of section 13 of the SARFAESI Act on 27th June, 2015.

iv. Despite notice to take possession, the applicants and borrowers failed to repay the loan. Therefore, on 16th October, 2015, defendant took possession and the panchnama was made accordingly. Mrs. Swati Tapkir (borrower) has signed the panchnama of taking possession on 16th October, 2015. The panchnama dated 16th October, 2015 is deliberately not produced before this Tribunal in the Miscellaneous Application. The applicants have made false statement that they came to know about the said action of taking possession in the month of March, 2016. The action of taking possession of the factory premises was known to the applicants which was taken on 16th October, 2015 and also published in March, 2016.

v. The delay caused by the applicants is intentional. The applicants have also made the false statement with respect to the facts of the case as set out in paragraph No. 5 of the affidavit in reply. The applicants have not approached to this Tribunal with clean hands and have suppressed the material facts. The applicants are aware of the actual possession being taken on 16th October, 2015 in the presence of the borrower which was also published in the newspaper. The property was also put to sale by issuing notice on 05th November, 2015. Since the auction failed, the property was once again put to sale on 13th April, 2016.

5. Based on the aforesaid facts, defendant seeks dismissal of the Miscellaneous Application.

6. Heard the learned counsels for the parties. The applicants argued the case for condoning the delay mainly on the merits of the case. According to the applicants, defendant has proceeded against them without first initiating action against the borrower for the recovery of dues and enforcement of securities. From the arguments advanced by the applicants, it revealed that they are not disputing the liability. Per contra, defendant submitted that the law laid down by the Hon'ble Supreme Court in this regard is no more res integra. Defendant submitted that the action can be taken against the applicants without initiating the action against the borrowers. In support of his argument, the learned counsel for defendant relied upon the Judgment in the case of United Bank of India Vs. Satyawati Tondon & ors., reported in : AIR 2010 SC 3413. Defendant relied upon paragraph No. 14 of the Judgment of Satyawati Tondon (Supra) which is reproduced hereunder for the sake of convenience:

(14) The question whether the appellant could have issued notices to respondent No. 1 under Section 13(2) and (4) and filed an application under Section 14 of the SARFAESI Act without first initiating action against the borrower, i.e. respondent No. 2 for recovery of the outstanding dues is no longer res integra. In Bank of Bihar Ltd. v. Damodar Prasad : (1969) 1 SCR 620 : (AIR 1969 SC 297), this Court considered and answered in affirmative the question whether the bank is entitled to recover its dues from the surety and observed:

"It is the duty of the surety to pay the decretal amount. On such payment he will be subrogated to the rights of the creditor under Section 140 of the Indian Contract Act, and he may then recover the amount from the principal. The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety. In the present case, the creditor is banking company. A guarantee is a collateral security usually taken by a banker. The security will become useless if his rights against the surety can be so easily cut down." In State Bank of India v. M/s. Indexport Registered and others : (1992) 3 SCC 159 : (AIR 1992 SC 1740 : 1992 AIR SCW 1939), this Court held that the decree-holder bank can execute the decree against the guarantor without proceeding against the principal borrower and then proceeded to observe:

"The execution of the money decree is not made dependent on first applying for execution of the mortgage decree. The choice is left entirely with the decree-holder. The question arises whether a decree which is framed as a composite decree, as a matter of law, must be executed against the mortgage property first or can a money decree, which covers whole or part of decretal amount covering mortgage decree can be executed earlier. There is nothing in law which provides such a composite decree to be first executed only against the (principal debtor)." In Industrial Investment Bank of India Limited v. Biswanath Jhunjhunwala : (2009) 9 SCC 478 : (2009) AIR SCW 5359), this Court again held that the liability of the guarantor and principal debtor is coextensive and not in alternative and the creditor/decree-holder has the right to proceed against either for recovery of dues or realization of the decretal amount.

7. Defendant advanced the argument that the applicants have made false representation by giving wrong statement in the Miscellaneous Application for condoning the delay. Therefore, the applicants have disentitled themselves from any orders and reliefs by their conduct and behavior. In support of his case, defendant has relied upon the Judgment in the case of Dr. Vijay Kumar Kathuria Vs. State of Haryana & ors., reported in : AIR 1983 SC 622. Defendant relied upon the paragraph No. 3 of the Judgment of Dr. Vijay Kumar Kathuria (Supra) which is reproduced hereunder:

(3) Before parting with the case, however, we cannot help observing that the conduct or behavior of the two petitioners as well as their counsel (Dr. A.K. Kapoor who happens to be a medico-legal consultant practicing in Courts) is most reprehensible and deserves to be deprecated. The District Judge's report in that behalf is eloquent and most revealing as it points out how the two petitioners and their counsel, (who also gave evidence in support of the petitioners' case before the District Judge) have indulged in telling lies and making reckless allegation of fabrication and manipulation of records against the College Authorities and how in fact the boot is on their leg. It is a sad commentary on the scruples of these three young gentlemen who are on the threshold of their careers. In fact, at one stage we are inclined to refer the District Judge's report both to the Medical Council as well as the Bar Council for appropriate action but we refrained from doing so as the petitioners' counsel both on behalf of his clients as well as on his own behalf tendered unqualified apology and sought mercy from the Court. We, however, part with the case with a heavy heart expressing our strong disapproval of their conduct and behavior but direct that the petitioners will pay a sum of Rs. 2,500/- each by way of costs to the respondents. The two S.L.Ps. and CM.P. are thus dismissed with the aforesaid direction in regard to payment of costs.

8. Defendant has further advanced the argument that the applicants made wrong statement in the Miscellaneous Application for seeking condonation of delay. It is submitted that Mrs. Swati Tapkir (borrower) was present on 16th October, 2015 when the possession of the secured assets was taken. Mrs. Swati Tapkir (borrower) has signed the panchnama made by the defendant. The panchnama dated 16th October, 2015 is deliberately not produced before this Tribunal. The applicants have made false statement that they came to know about the action of taking possession in the month of March, 2016. However, the fact is that Mrs. Swati Tapkir (borrower) was aware and she was present at the time of physical possession of the assets taken by the defendant. Defendant, therefore, prayed that Miscellaneous Application of such litigant who has made a wrong statement should not be condoned. In support of his argument, the learned counsel for defendant relied upon the Judgment in the case of Pundlik Jalam Patil (deceased by Lrs.) Vs. Exe. Eng. Jalgaon Medium Project & another, reported in : AIR 2008 SC (Supp) 1025. Defendant relied upon paragraph Nos. 10 to 13 of the Judgment in the case of Pundlik Jalam Patil (Supra) which are reproduced hereunder:

(10) We have given our anxious consideration to the rival submissions made during the course of hearing of these appeals.

(11) Whether the respondent made incorrect statement in the application seeking condonation of delay?

There is no dispute whatsoever that the respondent being the beneficiary of the acquisition has been duly impleaded as a party respondent in the reference cases as is required in law. It is not only appeared in the matter through a properly instructed counsel but also filed its written statement opposing the claim for enhancement of compensation but did not choose to lead any evidence whatsoever. In the application filed in the High Court the plea taken by the respondent is as under:

"The applicant submits that, although the applicant being Acquiring Body, was arrayed as opponent in the said reference, the opponent No. 4 herein (Original Opponent No. 1) S.L.A.O. or his subordinate contested the said reference by filing written statement. Therefore, this applicant was unaware about the stand taken by S.L.A.O. as well as the impugned judgment and award.: This averment in the application on the face of it is totally incorrect. The Law and Judiciary Department as early as on 13.04.2000, i.e. to say within the period of 15 days from the date of the award of the Reference Court communicated its decision to acquiesce in the decision of the Reference Court and communicated the same to all the concerned including the beneficiary of the acquisition. It is not the case that the Executive Engineer did not receive the said communication. Having received the said communication the respondent did not act in the matter and initiated any steps for filing the appeals if it was really aggrieved by the decision of the Reference Court. There is no doubt whatsoever in our mind that the respondent made totally incorrect statement in the application filed in the High Court. We express our reservation as to the manner in which a public authority conducted itself in its anxiety to somehow get the relief from the court. In our considered opinion incorrect statement made in the application seeking condonation of delay itself is sufficient to reject the application without any further inquiry as to whether the averments made in the application reveal sufficient cause to condone the delay. That a party taking a false stand to get rid of the bar of limitation should not be encouraged to get any premium on the falsehood on his part by condoning delay. (See: (1993) 1 SCC 572).

(12) Whether the High Court properly exercised its discretion?

The High Court in its order having noticed the relevant fact in categorical terms held that there was no substance in the plea that it was unaware about the judgment and award passed by the Reference Court since it was a party before the Reference Court and contested the matter. The High Court also found that the decision of the Joint Secretary to acquiesce was communicated to the beneficiary of the acquisition and therefore, its plea about the unawareness of the award and decision taken by the Government cannot be accepted. The High Court in its order emphatically rejected the ground raised by the respondent in that regard. In such view of the matter can it be said that the High Court properly exercised its jurisdiction? It is true that the power to condone the delay rests with the court in which the application was filed beyond time and decide whether there is sufficient cause for condoning the delay and ordinarily the superior court may not interfere with such discretion even if some error is to be found in the discretion so exercised by the court but where there is no sufficient cause for condoning the delay but the delay was condoned, it is a case of discretion not being exercised judicially and the order becomes vulnerable and susceptible for its correction by the superior court. The High Court having found that the respondent in its application made incorrect submission that it had no knowledge of the award passed by the Reference Court ought to have refused to exercise its discretion. The High Court exercised its discretion on wrong principles. In that view of the matter, we cannot sustain the exercise of discretion in the manner done by the High Court.

(13) Whether the respondent had satisfied the court that it had sufficient cause for not preferring the appeals within the prescribed time?

Section 5 of the Limitation Act provides for extension of prescribed period of limitation in certain cases and confers jurisdiction upon the court to admit any application or any appeal after the prescribed period if it is satisfied that the appellant or applicant had sufficient cause for not preferring such appeal or application within the prescribed period.

9. There cannot be any dispute with respect to the proposition of the Judgments cited by the learned counsel for the defendant. The delay sought to be condoned by the applicants is not a matter of routine and merely for arguing and especially when the delay of 45 days has expired. The delaying tactics of the borrowers in filing the Securitisation Application needs to be deprecated. The delay can be condoned provided the applicants have made out an exceptional case by giving reasons assigned to the satisfaction of this Tribunal. The applicants have not given any reason or demonstrating any circumstances which were beyond their control. Except the reason given in paragraph No. 5(XIX), (XI) & (XII) at Page 12 of the Miscellaneous Application, the applicants have not given any other reason or explanation or justification. Thus, inaction and negligence are relevant factors to be taken into consideration. Whether the delay is a bona fide or there is a lack of bona fide, is significant. In paragraph No. 5(XIX), (XI) & (XII) at Page 12 of the Miscellaneous Application, the applicants have failed to give any details. The attitude and conduct of the applicants is suppressed by their own inaction and negligence. The applicants failed to explain the delay satisfactorily and convincingly cannot take advantage of the time to elapse by not filing the application within 45 days. The applicants cannot take the benefit of approaching the Tribunal belatedly. The applicants have failed and neglected to show any sufficient cause or reason which prevented them from filing the Securitisation Application belatedly. In the present case, there is a delay of 99 days (excluding 45 days). The reading of paragraph No. 5(XIX), (XI) & (XII) at Page 12 of the Miscellaneous Application clearly reveals that the applicants are lethargic and acted negligently with no obligation of accountability and responsibility. Thus, there is negligence, default and inaction on the part of the applicants

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. The applicants have failed to give satisfactory or reasonable explanation for condoning the delay. The applicants could have easily avoided the circumstances of filing the Securitisation Application belatedly. The applicants took their own time to reach at the decision, whether to file the Securitisation Application or not. It is not the case of the applicants that they were prevented by sufficient cause which were beyond their control. 10. I am in agreement with the law laid down by the Hon'ble Supreme Court in the case of Pundlik Jalam Patil (Supra) where wrong statement is made to take advantage in condoning the delay. In the present case, the applicants have made a false statement that they were not aware about the action taken by the defendant. However, Mrs. Swati Tapkir (borrower) was present on 16th October, 2015 and she has also signed the panchnama. This is absolute false statement on the part of the applicants. The averment made in the Miscellaneous Application is, therefore, incorrect. Having said that making false statement for seeking condonation of delay, is sufficient to reject the application without making any further enquiry. The applicants having taken support of the false stand to get the delay condoned, such type of practice should be deprecated and not encouraged by condoning the delay which would amount to giving permission to the litigants making false statement. Therefore, the delay sought to be condoned on falsehood, cannot be condoned. 11. I have scrutinized and examined the case sought to be made by the applicants giving reasons and justification for condoning the delay caused in filing Securitisation Application. 12. The delay in filing the Securitisation Application is neither satisfactory nor reasonable. I do not condone the delay. I am confirmed that the applicants have failed to make out their case for condoning the delay caused in filing Securitisation Application. 13. In view of the above, I pass the following order: ORDER 1) Miscellaneous Application No. 11/2016 is hereby dismissed with no order as to cost. 2) Consequently, the Securitisation Application is dismissed.
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