Delay Not Absolute Bar For Maintainability Of Writ Petition; But Affects Entertainability: Karnataka HC

The Karnataka High Court observved that although delay is not an absolute bar for maintainability of a writ petition, it can affect its entertainability.

The Court dismissed the Petition filed by a Guarantor challenging the order of the Debts Recovery Tribunal (Tribunal) and sought to call in question proceedings/orders of nine years vintage.

The Bench of Justice M.Nagaprasanna observed, “though for bringing a petition under Article 226 of the Constitution of India, delay would not be an absolute bar for maintainability of the petition, but the remedy available is extraordinary and discretionary and therefore, would become unentertainable”.

Senior Advocate K. Suman appeared for the Petitioner and Advocate Vignesh Shetty appeared for the Respondent.

The petitioner, serving as a guarantor for M/s.V.S.Lad and Sons' credit facility from Punjab National Bank, had their property as collateral, valued at 8 crores post-modifications. Despite Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) proceedings, auctions, and a successful bid in the third auction on 22-09-2014, the petitioner's challenge was dismissed on May 13, 2015.

Following the dismissal, the petitioner sought auction information through correspondence with the Bank in 2016, 2017, and after a six-year gap. The Bank provided the sale certificate on September 16, 2015. The petitioner challenged both the Tribunal's dismissal and the sale certificate before this Court in the subject petition, challenging proceedings/orders of nine years vintage.

The Court framed the following issue “Whether the petition is entertainable notwithstanding the fact of gross delay and laches in approaching this Court?”

The Court noted that the petitioner challenged a sale notice dated related to the subject property, claiming a lack of awareness and no paper publication for the third e-auction. However, the Tribunal rejected these contentions, noting that the petitioner was fully aware of the sale notice and had challenged it before. The Tribunal, considering Rule violations and various grounds, dismisses the securitization appeal, and the petitioner doesn't further challenge this decision.

Following the petitioner's failure, the Court noted that the Bank proceeded with the sale, confirmed in favour of the 2nd respondent (​​m/S. Universal Builders), with a possession notice issued. The petitioner challenged this notice, but the application was dismissed, and the petitioner was informed of the sale details in the objections filed by the Bank. Despite being aware, the petitioner, to overcome limitations, initiates a series of emails seeking auction information from the Bank.

The Bench observed that the petitioner questioned the sale certificate received from the Bank, claiming ignorance despite prior involvement in Tribunal proceedings. The Court dismissed the plea, citing a prolonged delay of nine years and several gaps in the petitioner's correspondence.

The Court rejected the argument of fraud, as the petitioner was aware of the property proceedings. The Court emphasized the principle that 'delay defeats equity,' highlighting the petitioner's failure to act in a timely manner.

Furthermore, the Court held that extraordinary remedies under Article 226 become unentertainable in the face of prolonged delay and inaction, referring to a “short story penned by an American author – Washington Irving in the year 1819, of a Dutch – American Rip Van Winkle who falls asleep and wakes up after twenty years, only to see a changed world, having missed the American revolution, on waking up from deep slumber”

Accordingly, the Court dismissed the Petition.

Cause Title: Anil H. Lad V Authorised Officer, Punjab National Bank (2024:KHC:3036)

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