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State Bank of India, IFB Branch v/s Vitthal Agro Products Pvt. Ltd. & Another

    Writ Petition No. 1988 of 2021
    Decided On, 03 February 2022
    At, High Court of Judicature at Bombay
    For the Petitioner: Mayur Khandeparkar a/w Supriya Majumdar, Tarak Shah i/by Vaish Associates, Advocates. For the Respondents: R1, Drupad Patil, R2, Sankalp S. Golatkar, Advocates.

Judgment Text

1. The petitioner, State Bank of India, is aggrieved by the order of the Chairperson, Debts Recovery Appellate Tribunal, Mumbai [hereafter “the DRAT(M)”, for short] dated 8th April, 2021, refusing to condone the delay of 273 days in presentation of an appeal under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [hereafter “the SARFAESI Act”, for short]. The appeal had been carried by the petitioning bank against an order dated 2nd June, 2018 of the Presiding Officer, Debts Recovery Tribunal, Pune [hereafter “the DRT(P)”, for short], passed on an application under section 17 of the SARFAESI Act of the respondent no.1.

2. The order under challenge dated 8th April, 2021 records that although the application under section 17 of the SARFAESI Act was allowed by the DRT(P) on 2nd June, 2018, certified copy of the said order was received on 5th July, 2018 whereafter the appeal was presented on 10th April, 2019; that the application seeking condonation of delay was completely silent as regards the date on which the applicant instructed its advocate to apply for the certified copy and the date on which the certified copy was actually applied for; that the application contains no detail of the documents that were required to accompany the memorandum of appeal; and that no particulars of misplacement of the file and the correspondence exchanged with the applicant’s advocate had been disclosed except for a vague statement that the papers were recovered by the applicant towards the end of March, 2019. The Chairperson of the DRAT(M), therefore, was of the view that sufficient cause has not been shown for condonation of delay leading to rejection of the application made in this behalf.

3. Mr. Mayur Khandeparkar, learned advocate appearing for the petitioner, contends that the Chairperson of the DRAT(M) adopted a hyper-technical approach in dismissing the application for condonation of delay. He further contends that the Chairperson failed to appreciate the causes and reasons set out by the petitioner in the proper perspective. Being a public sector bank, the principle of leniency in matters of condonation of delay could not have been given a go-bye specially when the petitioning bank, because of reasons beyond its control, had failed to present the appeal within the period of limitation. He also contends that in an institution, as huge as the petitioning bank, there are several matters at any given point of time on which decisions are to be taken and there being a distinct possibility of certain decisions being delayed, such factor ought to have been considered by the Chairperson. In support of his submissions, Mr. Khandeparkar relies on the decision of the Supreme Court in State of Nagaland vs. Lipok Ao & Ors. (2005) 3 SCC 752) for the principle that

“what counts is not the length of the delay but the sufficiency of the cause and shortness of the delay is one of the circumstances to be taken into account in using the discretion.”

as well as

“A pragmatic approach has to be adopted and when substantial justice and technical approach are pitted against each other the former has to be preferred.”

4. We have not considered it necessary to call upon the learned advocate for the respondent no.1 to address us.

5. The petitioning bank appears to have filed a short application for condonation of delay before the Chairperson of the DRAT(M), the contents whereof were spread over 9 (nine) paragraphs. Paragraphs 4, 5 and 6 contain the reasons for which the petitioning bank could not present the appeal before the DRAT(M) within the period of limitation. Such paragraphs are quoted below:-

“4. The Appellant further states that the Annexures which were to be annexed in support of the Appeal were to be received from the previous Advocate, who use to handle the matter in DRT-Pune. The S.A. was handled by the Appellant’s Advocate at Pune, with whom the Bank use to co-ordinate on regular basis for providing the papers which Bank had provided them for the matter. The Appellant states that the Appellant made several reminders to the Advocate for return of documents as they wanted to proceed further and file the Appeal, however, the Appellant were unable to obtain the documents and hence unable to file the Appeal within time. On repeated reminders, the Appellant learnt that their earlier Advocate had shifted their office in Pune and in that process, the papers could not be located.

5. In the mean while the account of Shri Vithal Agro Products Pvt Ltd. got transferred to the SAMB-I, team at Mumbai which was previously handled by SBI, IFB Pune, Wakdewadi, Pune-411003. The papers and proceedings whichever were with the Bank, were forwarded to SAMB-I, Mumbai. In this transfer of papers the communication with the Advocate got delayed, and also the papers were jumbled up as SBI SAMB-I, Mumbai branch were not able to properly trace the papers to hand over the same. The SAMB-I Mumbai branch team tried their best to trace the papers by following up with the past Advocate and also tried to even contacted the concerned branch to obtain the papers.

6. Finally SBI IFB Pune branch at Wakdewadi-Pune was able to trace the papers and they contacted SBI SAMB-I Branch, Mumbai regarding the matter and sent it to them in the end of March 2019. The Appellant then instructed the Advocates and hence filed the Appeal.”

6. A perusal of the aforesaid paragraphs would reveal that the appeal could not be presented within time because the concerned advocate of the petitioner did not return the relevant documents which were required to be annexed to the memorandum of appeal thereby resulting in delay. Also, the account of the respondent no.1 was transferred from one office to another office and in the process some delay had occasioned.

7. It is on consideration of the above reasons that we are tasked to decide whether the same amount to sufficient cause being shown warranting condoning the delay in presentation of the time barred appeal.

8. An appeal under sub-section (1) of section 18 of the SARFAESI Act is required to be presented within 30 days from the date of receipt of the order of the Debts Recovery Tribunal. In terms of subsection (2) of section 18, the Appellate Tribunal is required to dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 [hereafter “the RDB Act”, for short] and the rules made thereunder. In terms of the RDB Act, the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 [hereafter “the 1994 Rules”, for short] have been framed. The procedure for filing appeals is prescribed in rule 5 of the 1994 Rules. Sub-rule (1) thereof ordains that a memorandum of appeal shall be presented in the Form annexed to the 1994 Rules. Serial No.11 of such form provides for “Details of Index” and requires that the index, in duplicate, should contain the details of the documents to be relied upon.

9. If indeed the plea as set forth in the application for condonation of delay is correct that the petitioner did not have in its custody the required documents for being enclosed along with the memorandum of appeal, we are at a loss to comprehend as to why for the purpose of saving the appeal from becoming time barred, the appeal was not presented with the certified copy of the order under appeal but without the relied upon documents. Once the appeal was presented without the documents sought to be relied upon, the leave of the Chairperson could always have been sought for subsequently citing the reasons for which the appeal had to be presented hurriedly to save it from becoming time barred. Admittedly, the petitioning bank had with it the certified copy of the order dated 2nd June, 2018 of the DRT(P), which on perusal appears to be quite a detailed order recording the facts giving rise to the application under section 17 of the SARFAESI Act of the respondent no.1 and the reasons for which the impugned sale of the secured asset was set aside. It is not a case where even after perusal of the order of the DRT(P) the petitioning bank would be at a disadvantage of not knowing what ground to raise in its appeal. We are, therefore, not inclined to believe that it was for want of the necessary documents or that because of shifting of the office of the petitioner that the appeal could not be presented within time.

10. There seems to be much more than what meets the eyes for which we propose to make certain observations before we part with this judgment.

11. The decision in Lipok Ao (supra) has been considered. The observations made by the Supreme Court are in respect of functioning of the impersonal government machinery. The petitioning bank cannot be equated with the government. Being the most reputed and trusted banking institution in India having officers at various levels as well as a pool of experts to advise them on legal matters, it is indeed difficult for us to accept that the same logic, as is applicable to government machinery, ex proprio vigore could be made applicable to the petitioning bank.

12. We are conscious of the decisions of the Supreme Court liberally construing “sufficient cause” while considering applications for condonation of delay. The reasoning is that on technical grounds, injustice ought not to be legalized.

13. Yet, there are later decisions of the Supreme Court which have warned against lenient treatment being extended to a government, which is found to be negligent and careless and where its plea lacks bona fide. The decision in Esha Bhattacharjee vs. Raghunathpur Nafar Academy (2013) 12 SCC 649), upon consideration of earlier decisions, culled out the broad principles as follows:

21.1. (i) There should be a liberal, pragmatic, justice-oriented, non-pedantic approach while dealing with an application for condonation of delay, for the courts are not supposed to legalise injustice but are obliged to remove injustice.

21.2. (ii) The terms ‘sufficient cause’ should be understood in their proper spirit, philosophy and purpose regard being had to the fact that these terms are basically elastic and are to be applied in proper perspective to the obtaining fact-situation.

21.3. (iii) Substantial justice being paramount and pivotal the technical considerations should not be given undue and uncalled for emphasis.

21.4. (iv) No presumption can be attached to deliberate causation of delay but, gross negligence on the part of the counsel or litigant is to be taken note of.

21.5. (v) Lack of bona fides imputable to a party seeking condonation of delay is a significant and relevant fact.

21.6. (vi) It is to be kept in mind that adherence to strict proof should not affect public justice and cause public mischief because the courts are required to be vigilant so that in the ultimate eventuate there is no real failure of justice.

21.7. (vii) The concept of liberal approach has to encapsulate the conception of reasonableness and it cannot be allowed a totally unfettered free play.

21.8. (viii) There is a distinction between inordinate delay and a delay of short duration or few days, for to the former doctrine of prejudice is attracted whereas to the latter it may not be attracted. That apart, the first one warrants strict approach whereas the second calls for a liberal delineation.

21.9. (ix) The conduct, behaviour and attitude of a party relating to its inaction or negligence are relevant factors to be taken into consideration. It is so as the fundamental principle is that the courts are required to weigh the scale of balance of justice in respect of both parties and the said principle cannot be given a total go by in the name of liberal approach.

21.10. (x) If the explanation offered is concocted or the grounds urged in the application are fanciful, the courts should be vigilant not to expose the other side unnecessarily to face such a litigation.

21.11. (xi) It is to be borne in mind that no one gets away with fraud, misrepresentation or interpolation by taking recourse to the technicalities of law of limitation.

21.12. (xii) The entire gamut of facts are to be carefully scrutinised and the approach should be based on the paradigm of judicial discretion which is founded on objective reasoning and not on individual perception.

21.13. (xiii) The State or a public body or an entity representing a collective cause should be given some acceptable latitude.”

The Court thereafter added some more guidelines taking note of the present-day scenario, reading as follows:

“22.1. (a) An application for condonation of delay should be drafted with careful concern and not in a haphazard manner harbouring the notion that the courts are required to condone delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system.

22.2. (b) An application for condonation of delay should not be dealt with in a routine manner on the base of individual philosophy which is basically subjective.

22.3. (c) Though no precise formula can be laid down regard being had to the concept of judicial discretion, yet a conscious effort for achieving consistency and collegiality of the adjudicatory system should be made as that is the ultimate institutional motto.

22.4. (d) The increasing tendency to perceive delay as a non-serious matter and, hence, lackadaisical propensity can be exhibited in a nonchalant manner requires to be curbed, of course, within legal parameters.”

(emphasis ours)

14. The decision in Esha Bhattacharjee (supra) was preceded by two decisions, viz. Postmaster General vs. Living Media India Ltd. (2012) 3 SCC 563)and Amalendu Bera vs. State of West Bengal (2013) 4 SCC 52). These decisions do not appear to have been placed before the Supreme Court in Esha Bhattacharjee (supra) but do have a bearing on the issue before us.

15. In Postmaster General (supra), the Supreme Court sounded caution in the following words:

“28. Though we are conscious of the fact that in a matter of condonation of delay when there was no gross negligence or deliberate inaction or lack of bona fides, a liberal concession has to be adopted to advance substantial justice, we are of the view that in the facts and circumstances, the Department cannot take advantage of various earlier decisions. The claim on account of impersonal machinery and inherited bureaucratic methodology of making several notes cannot be accepted in view of the modern technologies being used and available. The law of limitation undoubtedly binds everybody, including the Government.

29. In our view, it is the right time to inform all the government bodies, their agencies and instrumentalities that unless they have reasonable and acceptable explanation for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process. The government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condonation of delay is an exception and should not be used as an anticipated benefit for the government departments. The law shelters everyone under the same light and shou

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ld not be swirled for the benefit of a few.” (emphasis ours) 16. The trend of not granting concession to the State followed in Amalendu Bera (supra), wherein the Supreme Court reversed an order of the concerned district court condoning delay in exercise of its revisional power, not interfered with by the Calcutta High Court under Article 227 of the Constitution of India, by holding as follows: “10. *** True it is, that courts should always take liberal approach in the matter of condonation of delay, particularly when the appellant is the State but in a case where there are serious laches and negligence on the part of the State in challenging the decree passed in the suit and affirmed in appeal, the State cannot be allowed to wait to file objection under Section 47 till the decree-holder puts the decree in execution. ***” 17. We are, thus, of the considered opinion that reliance placed by Mr. Khandeparkar on the decision in Lipok Ao (supra) does not advance the case of the petitioning bank. The explanation offered is nothing but an afterthought. On the contrary, we hold that negligence and carelessness are writ large in the matter of belated presentation of the appeal before the DRAT(M) and, thus, its Chairperson was perfectly justified in refusing to condone delay and in dismissing the application for condonation of delay. 18. The order under challenge is upheld, with the result that this writ petition stands dismissed. No costs. 19. The Chairman of the petitioning bank may initiate an inquiry to ascertain the real reasons for belated presentation of the appeal before the DRAT(M) and take appropriate action against the erring personnel, in accordance with law.