The main legal point established in the judgment is that challenges to notices and orders under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 should be made at the appropriate stage and that the question of limitation is a mixed question of fact and law to be determined by the tribunal.

M.M. KUMAR JUDGE, J. - This petition filed under Article 226 of the Constitution prays for quashing order dated 28.9.2007, passed by the Debt Recovery Appellate Tribunal, New Delhi (for brevity ‘the DRAT’), while disposing of Miscellaneous Application No. 300 of 2007 and Miscellaneous Appeal No. 13 of 2007 on a Misc. Application in Misc. Appeal No.13 of 2003 (Annexure P-21). Further quashing of notice dated 14.8.2003, issued by Industrial Finance Corporation of India (for short ‘IFCI’)-respondent No. 2 (Annexure P-1), under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity, ‘the Act’) has been sought on the ground that the same was sent beyond the prescribed period of limitation, which is barred under Section 36 of the Act because it does not fulfill the pre-requisites of Sections 13(2), 13(3) and 13(12) of the Act. Still further a direction has been sought directing the IFCI not to take possession of the assets of the petitioner-company or restraining it from taking any other measure under Section 13(4) of the Act pursuant to notice dated 14.8.2003 (P-1).

2. Brief facts of the case are that on 6.6.1988, the petitioner-company was sanctioned a total term loan of Rs. 500 lacs by the IFCI in participation with the Industrial Development Bank of India Ltd. (for short ‘IDBI Ltd.’) and Industrial Credit and Investment Corporation of India Ltd. (for short ‘ICICI Ltd.’), under the Project Finance Participation Scheme for modernization of its project of manufacture of E.R.W. Steel Tubes, situated at Derabassi, District Mohali (P-2). Rs. 200 lacs each were to be given by the IFCI and IDBI Ltd. and Rs. 100 lacs were to be given by the ICICI Ltd. The loan was to be repaid in 28 quarterly instalments of Rs. 7 lacs each, first instalment starting from 15.4.1990 and last instalment ending on 15.4.1997. As per the terms and conditions settled between the parties, interest at the rate of 11.5% for concessional loan and 14% for normal loan, which were Rs. 160 lacs and Rs. 40 lacs respectively was to be charged.

3. On 28.7.1988, a bridge loan amounting to Rs. 180 lacs out of total loan of Rs. 500 lacs was disbursed to the petitioner-company. On 30.3.1990, a loan agreement and deed of hypothecation was executed between the petitioner-company and the aforementioned financial institutions (P-5). Subsequently, a mortgage deed dated 14.2.1991 (P-6) was also executed to secure the loans of Rs. 500 lacs. The petitioner-company could not adhere to the terms of repayment of loans and committed default even at the time of first instalment, which was due on 15.4.1990. After protracted correspondence between the parties when no result could be arrived, the aforementioned financial institutions i.e. IFCI, IDBI Ltd. and ICICI Ltd. recalled the entire loan granted to the petitioner-company and consequently an amount of Rs. 6,47,78,357/-each were demanded by the IFCI and IDBI Ltd. and an amount of Rs. 3,14,87,078/-was demanded by the ICICI Ltd. (P-15, P-16 and P-17 respectively). The matter was initially brought before the Debts Recovery Tribunal, Jaipur Bench, Jaipur by the financial institutions by filing OA No. 24 of 2000, which was subsequently transferred to Chandigarh Bench of the DRT being OA No. 920 of 2001, which is still pending adjudication there. On 6.1.2003, the Presiding Officer, DRT Chandigarh, passed an order, which reads as under:

“Counsel for the defendants seeks adjournment on the ground that they have submitted one time settlement proposal with the applicant bank on 23.12.2002, however, they have not deposited any amount with their proposal to show their bonafide. It is a very old case and is being adjourned on one ground or other mostly by the defendants. Submissions of one time settlement proposal is not a ground for adjournment, however, 3 weeks time is granted to the defendants to settle the matter under the one time settlement. It is made clear