1. Challenge to DRAT order rejecting appeal as time-barred under Section 17, SARFAESI Act. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 )
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2026 Supreme(Raj) 804
IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
ANOOP KUMAR DHAND, J.
Mrs. Rishu Chaudhary, W/o. Shri Neelesh Chaudhary - Petitioner
Versus
Indian Overseas Bank - Respondent
S.B. Civil Writ Petition No. 15726 of 2026
Decided On : 08-09-2026
Important Points
Under the SARFAESI Act, an order passed under Section 14 is a continuation of Section 13(4) proceedings, providing a valid cause of action for a borrower to file a Securitisation Application under Section 17, with the limitation period starting from the date of the last action.
Subject
Banking & Finance Law - SARFAESI Act
Act Referred
Headnote
(A) SARFAESI Act, 2002 - Sections 13(4), 14 and 17 - Limitation for filing Securitisation Application - Action under Section 14 constitutes a continuation of proceedings under Section 13(4) and gives rise to a cause of action to file an application under Section 17 - Limitation to be calculated from the date of the last action against which the aggrieved person has approached the Tribunal. (Paras 12, 13)
(B) Constitution of India - Article 300A - Right to property - Denial of access to the Tribunal while questioning steps taken by the secured creditor to get physical possession of mortgaged assets would be contrary to the constitutional right under Article 300A - Provisions under Section 17 and the limitation prescribed thereunder are to be construed liberally. (Para 14)
Facts of the case:
Secured creditor initiated proceedings under the SARFAESI Act. An order under Section 14 was passed by the Collector, which was communicated to the borrower via e-mail. The borrower filed a Securitisation Application under Section 17 shortly after this communication. The Tribunal rejected the application as time-barred. Subsequently, the Debt Recovery Appellate Tribunal rejected the appeal on the technical ground of delay in filing the original application before the Tribunal.
Findings of Court:
The court found that the last communication was received by the borrower on 25.10.2018 and the application was filed on 29.11.2018. Following the law laid down by the Apex Court, there was no delay on the part of the borrower in approaching the Tribunal. The appellate tribunal erred by deciding the appeal on technical grounds of limitation rather than decided the matter on its merits.
Issues: Whether the Securitisation Application filed under Section 17 was time-barred and whether a cause of action arises after the passing of an order under Section 14 of the SARFAESI Act.
Ratio Decidendi: The court held that an action under Section 14 is a continuation of the stage under Section 13(4) and falls within the ambit of Section 17(1) of the SARFAESI Act. The limitation period for filing an application under Section 17 must be calculated from the date of the last action taken by the secured creditor. Given the stringent powers vested in secured creditors, the remedy under Section 17 must be interpreted liberally to avoid rendering the constitutional right to property under Article 300A meaningless.
Result: Writ petition allowed; impugned order of the appellate tribunal quashed and set-aside, and the appeal restored for decision on merits.
(B) Constitution of India - Article 300A - Right to property - Denial of access to the Tribunal while questioning steps taken by the secured creditor to get physical possession of mortgaged assets would be contrary to the constitutional right under Article 300A - Provisions under Section 17 and the limitation prescribed thereunder are to be construed liberally. (Para 14)
Facts of the case:
Secured creditor initiated proceedings under the SARFAESI Act. An order under Section 14 was passed by the Collector, which was communicated to the borrower via e-mail. The borrower filed a Securitisation Application under Section 17 shortly after this communication. The Tribunal rejected the application as time-barred. Subsequently, the Debt Recovery Appellate Tribunal rejected the appeal on the technical ground of delay in filing the original application before the Tribunal.
Findings of Court:
The court found that the last communication was received by the borrower on 25.10.2018 and the application was filed on 29.11.2018. Following the law laid down by the Apex Court, there was no delay on the part of the borrower in approaching the Tribunal. The appellate tribunal erred by deciding the appeal on technical grounds of limitation rather than decided the matter on its merits.
Issues: Whether the Securitisation Application filed under Section 17 was time-barred and whether a cause of action arises after the passing of an order under Section 14 of the SARFAESI Act.
Ratio Decidendi: The court held that an action under Section 14 is a continuation of the stage under Section 13(4) and falls within the ambit of Section 17(1) of the SARFAESI Act. The limitation period for filing an application under Section 17 must be calculated from the date of the last action taken by the secured creditor. Given the stringent powers vested in secured creditors, the remedy under Section 17 must be interpreted liberally to avoid rendering the constitutional right to property under Article 300A meaningless.
Result: Writ petition allowed; impugned order of the appellate tribunal quashed and set-aside, and the appeal restored for decision on merits.
Legal Category Hierarchy
- practice and procedure
- banking and finance
-
constitutional law
-
right to property
- article 300a (Para 14)
-
right to property
Advocates Appeared:
For the Petitioner: Mr. S.S. Hora with Mr. Ishan Khandelwal, Mr. Himanshu Agarwal.
For the Respondent: Mr. Anurag Kalawatia with Ms. Anjali Sharma & Ms. Suhani Bardia, Mr. Ganesh Sharma.
For the Petitioner: Mr. S.S. Hora with Mr. Ishan Khandelwal, Mr. Himanshu Agarwal.
For the Respondent: Mr. Anurag Kalawatia with Ms. Anjali Sharma & Ms. Suhani Bardia, Mr. Ganesh Sharma.
Table of Contents
2. Petitioner argued cause of action arose from last communication; Bank argued delay in filing Securitisation Application. (Para 2 , 3 , 4 , 5 , 6 , 7 )
3. DRAT erred by rejecting appeal on technical delay; last communication on 25.10.2018 gave fresh cause of action. (Para 12 , 13 , 14 , 15 )
4. Limitation for Section 17 application runs from last adverse action under Section 13(4) or Section 14. (Para 13 )
5. Impugned DRAT order quashed; appeal restored and directed to be decided on merits within four weeks. (Para 15 , 16 , 17 , 18 , 19 )
6. What is the limitation period for filing a Securitisation Application under Section 17 of the SARFAESI Act?
Limitation runs from the date of the last adverse action taken under Section 13(4) or Section 14, providing a fresh cause of action. (Para 12 , 13 )
7. Does an action under Section 14 of the SARFAESI Act give rise to a fresh cause of action?
Yes, an action under Section 14 constitutes a step after Section 13(4) and gives a fresh cause of action to file a Section 17 application. (Para 13 )
8. Should the DRAT decide appeals on merits or dismiss them on technical grounds of limitation?
The DRAT should decide appeals on merits, not dismiss them on technical limitations, to ensure substantive justice and constitutional rights. (Para 14 , 15 )
9. What is the scope of jurisdiction of the DRT under Section 17 of the SARFAESI Act?
The DRT has jurisdiction to adjudicate all actions taken after Section 13(4) proceedings, including restoring possession if action is invalid. (Para 12 )
10. Does the borrower have a constitutional right to challenge possession proceedings under Article 300A?
Yes, denying a borrower access to the DRT to challenge possession steps would violate their right to property under Article 300A. (Para 14 )
ORDER :
Anoop Kumar Dhand, J.
1. The instant writ petition has been preferred by the petitioner for assailing the validity of the impugned order dated 04.06.2026, passed by the Debt Recovery Appellate Tribunal, Delhi (for short, "the DRAT") by which the appeal submitted by the petitioner against the order dated 03.01.2019 of Debt Recovery Tribunal, Jaipur (for short, "the DRT") has been rejected on the ground that a time barred Securitisation Application was submitted by the petitioner before the DRT.
2. Learned counsel for the petitioner submits that SARFAESI proceedings were initiated against the petitioner by the respondent-Bank by way of issuing notice under Section 13(4) of the SARFAESI Act on 17.04.2017. Thereafter, an order under Section 14 of the SARFAESI Act was passed by the District Collector & Magistrate, Alwar dated 08.10.2018 in the absence of petitioner, hence, he was not aware about the aforesaid order being passed by the Collector. Counsel submits that the order dated 08.10.2018 passed by the Collector, was communicated to the petitioner by the respondent-Bank vide e-mail dated 25.10.2018 and immediately thereafter, the petitioner approached the DRT by way of filing a Securitistion Application under Section 17 of the SARFAESI Act on 29.11.2018. Counsel submits that the grounds so raised by the petitioner in the aforesaid application before the DRT were not considered and the DRT rejected the application submitted by the petitioner being time barred vide order dated 03.01.2019 against which an appeal was preferred by the petitioner before the DRAT. The DRAT has not decided the said appeal on its merits, but has rejected the same on a technical count that there was delay in filing the aforesaid Securitisation Application before the DRT.
3. Counsel submits that all orders passed under Sections 13 & 14 of the SARFAESI Act can be assailed by an aggrieved person by way of filing an application under Section 17 of the SARFAESI Act. Counsel further submits that the limitation for such application would not commence with effect from the date of issuance of notice under Sections 13 and 14 of the SARFAESI Act, but in stead, his cause of action would also arise, after passing of the order under Section 14 of the SARFAESI Act.
4. In support of his contention, counsel for the petitioner has placed reliance upon the following judgments:-
1. Vimla Kashyap & Ors. Vs. Union of India & Ors. reported in 2025 SCC OnLine All 5299.
2. Hindon Forge Private Limited & Anr. Vs. State of Uttar Pradesh & Anr. reported in (2019) 2 SCC 198.
3. Kanaiyalal Lalchand Sachdev & Ors. Vs. State of Maharashtra & Ors. reported in (2011) 2 SCC 782.
4. Standard Chartered Bank Vs. V. Noble Kumar & Ors. reported in (2013) 9 SCC 620.
5. Authorised Officer, Indian Overseas Bank & Anr. Vs. Ashok Saw Mill reported in (2009) 8 SCC 366.
6. Vinu Thomas Vs. South Indian Bank Ltd. & Ors. reported in 2022 SCC OnLine Ker 8392.
5. Counsel submits that the impugned order passed by the DRAT is not sustainable in the eyes of law, hence, the same is liable to be quashed and set-aside.
6. Per contra, learned counsel appearing on behalf of the respondent-Bank as well as counsel appearing on behalf of the auction purchaser submits that the petitioner borrowed certain amount from the respondent-Bank and when the said amount was not repaid by her, her account was declared as NPA on 31.12.2016 and thereafter, notice under Section 13(2) of the SARFAESI Act was issued to the petitioner on 01.01.2017. When the petitioner failed to repay the amount despite the aforesaid notice being served to her, the notice under Section 13(4) of the SARFAESI Act was issued to the petitioner on 17.04.2017. Thereafter, a sale notice was issued by the respondent-Bank to auction the secured property of the petitioner, however, the petitioner was allowed an opportunity to go for one-time settlement, but the petitioner failed to obey the conditions of the OTS Scheme and subsequently, the second and third sale no
