S.17 SARFAESI Act | Applications Filed Beyond 45-Day Limit Not Barred From Seeking Condontation Of Delay Under Limitation Act: MP High Court

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

Section 17 of the SARFAESI Act provides the remedy of appeal for the borrowers against the actions taken by the bank, and prescribes the time period for the same as 45 days.

Taking note of Section 29(2) of the Limitation Act which inter alia stipulates that if the special law did not expressly exclude the application of Sections 4 to 24 of Limitation Act, the provisions of the Limitation Act would apply qua all causes raised under the Special Law, the Bench comprising Justice Sheel Nagu and Justice Vivek Jain observed:

"The special law i.e. SARFAESI Act does not expressly exclude the application of the provisions from Sections 4 to 24 of the Limitation Act (including Section 5) and therefore the benefit u/S.5 of Limitation Act shall be available to the cause of action raised in an application u/S 17 of SARFAESI Act". 

The petitioner herein had filed an application under Section 17 of SARFAESI Act, assailing demand notice, possession notice and auction notice issued in respect of the secured assets in question. The petitioner also moved an application under Section 5 of Limitation Act seeking condonation of delay of 46 days in preferring the same.

The DRT dismissed the petitioner's application, relying on the Apex Court decision in Bank of Baroda & Anr. v. M/s Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors. (2022), found that the application under Section 17 of SARFAESI Act was in the nature of a suit and that the provisions of Section 5 of Limitation Act would thus not be applicable, 

The High Court in this case however, ascertained that the Apex Court had not been seized with the question as to the applicability of provisions of Limitation Act to an application under Section17 of SARFAESI Act in Bank of Baroda (Supra). It thus found that the reliance placed by the DRT on the said decision was misplaced. 

Taking note that although Section 17 of SARFAESI Act did not confer DRT with discretion to extend the period of limitation of 45 days, the Court however added that neither 6.5 Section 17 nor any other provision of SARFAESI Act did not expressly exclude the operation of beneficial provisions under the Limitation Act.

Additionally, the Court also took note that Section 29(2) provides that Sections 4 to 24 of Limitation Act would apply qua all causes raised under the special statute (SARFAESI Act in this case), unless expressly excluded. 

"...it is obvious from plain reading of SARFAESI Act that while prescribing the period of 45 days for filing an application u/S.17(1) this special Act does not expressly bar the application of Section 5 of Limitation Act. Consequent upon the above discussion, 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 u/S.17(1) which are filed after expiry of 45 days," it held. 

The plea was thus allowed, and the DRT was directed to consider and decide the application for condonation of delay filed by the petitioner. 

Counsel for the Petitioner: Advocates Sachin Jain and Surbhi Jain

Counsel for the Respondent: Advocates Shashank Verma, Aditi Shrivastava, Malikarjun Khare, and Vedant Agrawal

Citation: 2024 LiveLaw (MP) 8

Case Title: Aniruddh Singh v. Authorized Officer, ICICI

Case Number: M.P. No.5324 OF 2023

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