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In Re: Cognizance for Extension of Limitation

Citation

REED 2021 SC 09011

Court

Supreme Court

Subject 

Suo Moto Cognizance for Extension of Limitation

Date

September 22, 2021

Bench

N.A.

Applicable Law

Sections 23(4), 29A, Arbitration and Conciliation Act, 1996
Section 12A, Commercial Courts Act, 2015
Sections 138(b), 138(c), Negotiable Instruments Act, 1881

Brief

The Apex Court has recalled the suo motu order of April 27, 2021, which had extended with effect from March 14, 2021 the limitation period for filing of cases in view of the COVID second wave. The Court observed that the suo motu extension of limitation period will stand withdrawn with effect from 2 October 2021. The Supreme Court disposed the M.A. No.665 of 2021 with the following directions:
(I) In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021; (II) In cases where the limitation would have expired during the period between 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 03.10.2021. In the event the actual balance period of limitation remaining, with effect from 03.10.2021, is greater than 90 days, that longer period shall apply; (III) The period from 15.03.2020 till 02.10.2021 shall also stand excluded in computing the periods prescribed under Sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings; (IV) The Government of India shall amend the guidelines for containment zones, to state. “Regulated movement will be allowed for medical emergencies, provision of essential goods and services, and other necessary functions, such as, time bound applications, including for legal purposes, and educational and job-related requirements.”

Jagmohan Singh Arora and Others v. India Bulls Commercial Credits Limited and Others

Citation

REED 2021 DRAT Del 08214

Court

DRAT

Subject 

Recovery of loan - Auction sale - Mortgaged property has been sold by the Authorized Officer in gross violation of the Rule 9(3)

Date

August 30, 2021

Bench

Delhi

Applicable Law

Sections 13(2), 13(4), 13(8), 14, SARFAESI Act, 2002
Rules 8, 8(6), 9, 9(1), 9(2), 9(3), 9(4), Security Interest (Enforcement) Rules, 2002

Brief

The impugned order shows that learned DRT has considered violation of Rule 9(3) in correct perspective. It has not considered the effect of 15% of the bid amount by way of a cheque which is not permissible. It has also not considered the effect issuing a confirmation letter dated 31.08.18 confirming payment of 15% when admittedly that cheque was presented for encashment on 4.9.18 and was encashed on 4.9.18 thus confirming the auction without receipt of payment of 25% payment in full on 31.8.18 or even on 1.9.18. DRT did not notice these fundamental defects in payment of 25% which go to the root of the matter and which proved apparent collusion between the authorized officer and respondent no.3. DRT should have set aside the auction sale in favour of respondent no.3. Thus this appeaL is liable to succeed on the short ground that the mortgaged property has been sold by the authorized officer in gross violation of the Rule(3) and in collusion with the respondent no.3.

Deepak Bhagatraj Badgujar and Another v. State Bank of India and Another

Citation

REED 2021 DRAT Mum 08215

Court

DRAT

Subject 

Application filed u/s 18 of the SARFAESI Act - Seeking refund of the deposit made

Date

August 26, 2021

Bench

Delhi

Applicable Law

Section 18, SARFAESI Act, 2002

Brief

The Application was filed seeking refund of the deposit made under Section 18 of the Securitization Act. Advocate for Applicants submitted that Appeal was withdrawn and in view of the same, Applicants were entitled for the refund of the money. Considering the reasons stated in the application and also in view of the Judgment of the Hon'ble Supreme Court in Axis Bank v. SBS Organics Private Limited and Another, REED 2016 SC 04201, Applicants were entitled for refund of the money and application was ordered as prayed for.

Asset Care and Reconstruction Enterprises Limited v. Sheena Textiles Limited and Others

Citation

REED 2021 DRAT Del 08212

Court

DRAT

Subject 

Recovery of debt - Issue of rate of interest

Date

August 22, 2021

Bench

Delhi

Applicable Law

Sections 13(2), 13(4), 17(1), 19, 19(25), SARFAESI Act, 2002

Brief

During the pendency of the O.A. the respondents decided to make the payment of the outstanding dues of the bank in case some relief in case some relief of interest was given by the DRT in their S.A. The DRT accepted that request of the borrower and passed the order. The respondents accepted this order of DRT in their S.A. and agreed to clear the dues of bank with reduced interest from the date of assignment i.e. 12% p.a. The bank, however, filed an appeal against the relief in the rate of interest given to respondents but their appeal was dismissed in limine. Thereafter, the bank did not carry the matter to Hon’ble Supreme Court. Feeling aggrieved by the order the bank has come up in appeal. The respondents had originally filed S.A. in which they had challenged the measures initiated by the appellant under SARFAESI Act on different grounds but did not take their legal fight to its logical conclusion. They instead decided to abandon their challenge to the measures under SARFAESI Act and confined the challenge to the rate of interest only. They volunteered to clear the dues of the bank provided the rate of interest at which bank was claiming, which was quite excessive as per them, is reduced. The DRT had accepted that prayer and allowed them huge relief by directing them to clear the outstanding the dues of the bank within six months with interest @ 12% p.a. from the date assignment of debt in favour of the appellant. The question whether DRT has power to adjudicate the debt or not need not be gone into because the order dated 30.6.15 has attained finality long time back. DRT in the O.A. has held that the liability of respondents stood adjudicated in the S.A. and only illegality committed by it is that the DRT failed to issue recovery certificate. Be that as it may, to a great extent even the DRT has contributed to this abnormal delay in ensuring recovery of crores of public money. After the passing of the order dated 30.6.15 in S.A. 59/14 of the respondents they filed an application in the O.A. for dismissing the same as the amount of debt had been crystalised in pending S.A. The DRT ought to have sraightaway issued recover certificate for the outstanding amount as admitted by the respondents on the reasoning given by me hereinabove. The admission of liability could be once only either in their S.A. or in bank’s O.A. and once they admitted their liability, as recorded in the S.A. order dated 30.6.15 that was final and could not be withdrawn in O.A. proceedings. So, the DRT should have issued direction for issuance of recovery certificate as prayed by the bank. Th that extend appellant bank is right in contending that DRT has not job prescribed under the law. Perhaps that the learned Presiding Officer did not know that without a recovery certificate recovery officer cannot effect recovery otherwise this blunder would not have been committed. In the result, this appeal is allowed with the direction that the DRT shall issue the recovery certificate for a sum of Rs.34,38,53,892.00 with interest thereon @ 13 % p.a. from the date of filing of O.A. till realisation.

Arun Narendra Rudkar v. State Bank of India

Citation

REED 2021 DRAT Mum 08213

Court

DRAT

Subject 

Recovery of loan - Application is filed seeking expeditious hearing of the
Appeal

Date

August 22, 2021

Bench

Mumbai

Applicable Law

SARFAESI Act, 2002
RDB Act, 1993

Brief

Application is filed seeking expeditious hearing of the Appeal. Advocate for Respondent Bank reported no objection. For the reasons stated in the application, application was ordered and post the main Appeal on 1.9.2021 at 2.30 p.m. for final hearing.

Asset Care and Reconstruction Enterprises Limited v. Sheena Textiles Limited and Others

Citation

REED 2021 DRAT Del 08211

Court

DRAT

Subject 

Recovery of debt - lending bank along with its securities assigned the debt to an asset reconstruction company

Date

August 22, 2021

Bench

Delhi

Applicable Law

Sections 13(2), 13(4), 17(1), SARFAESI Act, 2002
Sections 19, 19(25), 25, Recovery of Debts and Bankruptcy Act, 1993

Brief

The respondents had originally filed S.A. in which they had challenged the measures initiated by the appellant under SARFAESI Act on different grounds but did not take their legal fight to its logical conclusion. They instead decided to abandon their challenge to the measures under SARFAESI Act and confined the challenge to the rate of interest only. They volunteered to clear the dues of the bank provided the rate of interest at which bank was claiming, which was quite excessive as per them, is reduced. The DRT had accepted that prayer and allowed them huge relief by directing them to clear the outstanding the dues of the bank within six months with interest @ 12% p.a. from the date assignment of debt in favour of the appellant. The question whether DRT has power to adjudicate the debt or not need not be gone into because the order dated 30.6.15 has attained finality long time back. DRT in the O.A. has held that the liability of respondents stood adjudicated in the S.A. and only illegality committed by it is that the DRT failed to issue recovery certificate. Be that as it may, to a great extent even the DRT has contributed to this abnormal delay in ensuring recovery of crores of public money. After the passing of the order dated 30.6.15 in S.A. 59/14 of the respondents they filed an application in the O.A. for dismissing the same as the amount of debt had been crystalised in pending S.A. The DRT ought to have straightaway issued recover certificate for the outstanding amount as admitted by the respondents on the reasoning given by me hereinabove. The admission of liability could be once only either in their S.A. or in bank’s O.A. and once they admitted their liability, as recorded in the S.A. order dated 30.6.15 that was final and could not be withdrawn in O.A. proceedings. So, the DRT should have issued direction for issuance of recovery certificate as prayed by the bank. That extend appellant bank is right in contending that DRT has not job prescribed under the law. Perhaps that the learned Presiding Officer did not know that without a recovery certificate recovery officer cannot effect recovery otherwise this blunder would not have been committed. In the result, this appeal is allowed with the direction that the DRT shall issue the recovery certificate for a sum of Rs.36,29,27,634.00with interest thereon @ 13% p.a . from the date filing of the O.A. till realisation. The respondents shall be entitled to adjustment of money paid during the pendency of the O.A. The amount under the recovery certificate shall be recoverable from the defendants-respondents as well from the sale of properties mortgaged by them i.e. those mentioned in prayer para 6(1) to (3) and 7 to 9 (other three mortgaged properties having been released). The recovery officer shall execute the recovery certificate in accordance with law particularly the provisions of Section 25 of the Recovery of Debts and Bankruptcy Act, 1993.

Arun Narendra Rudkar v. State Bank of India

Citation

REED 2021 DRAT Mum 08209

Court

DRAT

Subject 

Applicant sought permission to withdraw the Application with liberty to file fresh application.

Date

August 16, 2021

Bench

Mumbai

Applicable Law

Brief

Applicant sought permission to withdraw the application with liberty to file fresh application. Considering the request, the Appellate Authority granted permission.

Hemraj Ratnakar Salian v. HDFC Bank Limited and Others

Citation

REED 2021 SC 08210

Court

Supreme Court

Subject 

SARFAESI Proceedings - Appeal for restraining bank from taking possession of the property in the appellant’s possession

Date

August 16, 2021

Bench

N.A.

Applicable Law

Sections 13(2), 13(13), 14, 17, 35, SARFAESI Act, 2002
Section 65A, Transfer of Property Act, 1882

Brief

In the present case, first of all there was a serious doubt as to the bona fide of the tenant, as there was no good or sufficient evidence to establish the tenancy of the appellant. According to the appellant, he is a tenant of the Secured Asset from 12.06.2012. However, the documents produced in support of his claim are xerox copies of the rent receipts and the first xerox copy of the rent receipt is of 12.05.2013 which is after the date of creation of the mortgage. It is pertinent to note here that the Borrowers have not claimed that any tenant is staying at the Secured Asset. At the time of grant of facility, third-party valuers had also confirmed that the Borrowers were staying at the Secured Asset. Be that as it may. The appellant has pleaded tenancy from 12.06.2012 to 17.12.2018. This is not supported by any registered instrument. Further, even according to the appellant, he is a “tenant-in-sufferance”, therefore, he is not entitled to any protection of the Rent Act. Secondly, even if the tenancy has been claimed to be renewed in terms of Section 13(13) of the SARFAESI Act, the Borrower would be required to seek consent of the secured creditor for transfer of the Secured Asset by way of sale, lease or otherwise, after issuance of the notice under Section 13(2) of the SARFAESI Act and, admittedly, no such consent has been sought by the Borrower in the present case.

Essel Corporate Resources Private Limited v. Yes Bank Limited and Another

Citation

REED 2021 DRAT Mum 08208

Court

DRAT

Subject 

Appeal - Application filed to condone delay of 30 days

Date

August 16, 2021

Bench

Mumbai

Applicable Law

Brief

Considering the delay was not abnormal and it was only 30 days and taking present pandemic situation into consideration without going into the merits and demerits of the case and without prejudice to rights of both parties, the Appellate Tribunal deemed it appropriate that delay can be condoned by leaving open issues like suppression of material facts and locus standi to be decided in the main Appeal.

SKS Power Generation (Chattisgarh)Limited v. Canara Bank

Citation

REED 2021 Bom 08560

Court

High Court

Subject 

Bank Guarantee

Date

August 10, 2021

Bench

Bombay

Applicable Law

Section 145, Indian Contract Act, 1872
Section 2(c), Commercial Courts Act, 2015

Brief

Irretrievable injury, has to be such a circumstance which would make it impossible for the guarantor to reimburse himself, if he ultimately succeeds. This will have to be decisively established and it must be proved to the satisfaction of the court that there would be no possibility whatsoever of the recovery of the amount from the beneficiary, by way of restitution. Commitment of banks must be honoured free from interference by the courts and it is only in exceptional cases, that is to say, in case of fraud or in a case where irretrievable injustice would be done if bank guarantee is allowed to be encashed, the court should interfere. In order to invoke these special equities, that is to say, that the person against whom invocation is made would never be able to recover the amount under the bank guarantees, it must be shown decisively to the satisfaction of the Court that there is no possibility — i.e. not the slightest possibility at all — of restitution in this amount. Again, showing that Cethar is in a precarious financial condition, or that it is in liquidation is insufficient for this purpose. What must be demonstrated must be something far more clear than a mere apprehension.