Madhya Pradesh High Court: Applications filed Post 45 Days Not Barred From Seeking Condonation Of Delay Under Limitation Act

Madhya Pradesh High Court: Applications filed Post 45 Days Not Barred From Seeking Condonation Of Delay Under Limitation Act

The plea of the petitioner was dismissed while relying on the decision of the Supreme Court in a previous case

The Madhya Pradesh High Court has held that Section 5 of the Limitation Act (stipulating condonation of delay) applies to applications under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 before the Debt Recovery Tribunal (DRT) filed beyond 45 days.

Section 17 provides the remedy of appeal for the borrowers against the actions taken by the bank and prescribes 45 days for it.

Similarly, Section 29(2) of the Limitation Act, which inter alia stipulates that if the special law (SARFAESI Act) did not exclude the application of Sections 4 to 24 of the Limitation Act, the provisions would apply qua all causes raised under the special law.

The Bench comprising Justice Sheel Nagu and Justice Vivek Jain observed, "The SARFAESI Act does not expressly exclude the application of the provisions from Sections 4 to 24 of the Limitation Act (including Section 5). Therefore, the benefit under Section 5 of the Limitation Act shall be available to the cause of action raised in an application under Section 17 of the SARFAESI Act.”

The petitioner had applied under Section 17 of the SARFAESI Act. He assailed the demand notice, possession notice, and auction notice issued for the secured assets. He also filed an application under Section 5 of the Limitation Act seeking condonation of delay of 46 days.

The application of the petitioner was dismissed by the DRT while relying on the Supreme Court decision in the Bank of Baroda & Anr vs Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors. (2022) case. Therein, it was observed that the application under Section 17 of the SARFAESI Act was a suit and the provisions of Section 5 of the Limitation Act were not applicable.

However, the High Court ascertained that the Top Court was not seized with the question of the applicability of provisions of the Limitation Act to an application under Section 17 of the SARFAESI Act. Thus, it stated that the reliance placed by the DRT on the decision was misplaced.

It added that though Section 17 did not confer DRT with the discretion to extend the limitation period of 45 days, neither Section 17 nor any other provision of the SARFAESI Act expressly excludes the operation of beneficial provisions under the Limitation Act.

The Bench noted that Section 29(2) provided that Sections 4 to 24 of the Limitation Act applied qua all causes raised under the special statute unless excluded expressly.

Justice Nagu and Justice Jain held, "It is obvious from the plain reading of the SARFAESI Act that while prescribing the period of 45 days for filing an application under Section 17(1), the special Act does not expressly bar the application of Section 5 of the Limitation Act. Thus, it is obvious that provisions of Section 5 of the Limitation Act would apply with full force and are available for making a prayer for condonation of delay before the DRT in applications under Section 17(1) filed after the expiry of 45 days.”

The Court thus allowed the petitioner’s plea and directed the DRT to consider and decide the application for condonation of delay.