Delay To File Applications U/S. 17 SARFAESI Act Before DRT Can Be Condoned U/S. 5 Limitation Act: Madhya Pradesh HC
The Madhya Pradesh High Court held that Section 5 of the Limitation Act can be invoked for condonation of delay in applications filed under Section 17(1) of the SARFAESI Act before the Debt Recovery Tribunal (DRT).
The petitioner had filed a securitisation application under Section 17(1) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) assailing demand notice, possession notice and auction notice issued in respect of the secured assets. The petitioner had moved an application under Section 5 of Limitation Act ((the Act)) seeking condonation of delay in preferring the same. Delay sought to be condoned was of 46 days.
The Court had to determine whether the benefit of provisions of the Limitation Act, in particular Section 5, are available in respect of an application preferred under Section 17(1) of the SARFAESI Act or not.
DRT dismissed this application for being time barred.
A division Bench of 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.”
Advocate Sachin Jain represented the petitioner, while Advocate Shashank Verma appeared for the respondent.
Section 17 of the SARFAESI Act provides a remedy for any person aggrieved by creditors under Section 13(4), allowing them to file a securitization application (SA) before the Debt Recovery Tribunal (DRT) within 45 days from the measures taken under Section 13(4).
The High Court explained that Section 29(2) establishes that if a special law doesn't expressly exclude Sections 4 to 24 of the Limitation Act, these provisions would be applicable to all causes under Special Laws.
The Court held, “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 Court noted “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.”
The Court set aside the impugned order of the DRT and held that “ benefit of the provisions from Section 4 to Section 24 (both inclusive) of Limitation Act is available to the causes raised u/S.17(1) before DRT.”
Consequently, the High Court allowed the petition.
Cause Title: Aniruddh Singh v. Authorized Officer, ICICI Bank Ltd.