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2018 Supreme(P&H) 3489
IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH
Ajay Kumar Mittal, Avneesh Jhingan, JJ.
Oswal Spinning And Weaving Mills Limited And Others - Appellant
Versus
UCO Bank And Another - Respondent
Civil Writ Petition No. 21519 of 2018
Decided On : 29-10-2018
Aalok Jagga, Adv., Amit Jhanji, Adv., Munish Jolly, Adv., Rajinder S Rana, Adv., Arav Gupta, Adv., Dishant D Tuteja, Adv., Ashish Verma, Adv., Pankaj Gupta, Adv., Praveen Chauhan, Adv., Rakesh Gupta, Adv., Onkar Rai, Adv., Bakshish Singh, Adv., Salil Bali, Adv., Amit Aggarwal, Adv., Sunil Chadha, Adv., Sorabh Sharma, Adv., Manat Kumar Arya, Adv., Rajat Mor, Adv., Barjinder Singh, Adv., Tegjeet Singh, Adv., Atul Sharma, Adv., Rajesh K Kataria, Adv., Arun Gupta, Adv., Sanjeev Sharma, Adv., Shekhar Verma, Adv., Manreet Kaur, Adv., Sanjeev K Arora, Adv., Vikas Kumar, Adv., Harsh Chopra, Adv., P.S. Sobti, Adv., C.S. Pasricha, Adv., Vikas Mohan Gupta, Adv., Kamal Satija, Adv., Daisy Sharma, Adv., I.P. Singh, Adv., Gaurav Goel, Adv., Anil Kumar Garg, Adv., J.S. Mann, Adv., Harpreet Kaur, Adv., Shobit Phutela, Adv., Shiv Kumar, Adv., Geeta Sharma, Adv., D.K. Singal, Adv., Sanjeev K Aggarwal, Adv., Sandeep Suri, Adv., Kriti Sharma, Adv., Vijay Parkash, Adv., Nonish Kumar, Adv.
The court established that the DRT has the power to condone the delay in filing the Securitisation application under Section 17 of the 2002 Act, and the provisions of the Limitation Act, 1963 are applicable to the proceedings before the DRT.
Headnote:
Delay Condonation - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - Section 17
Fact of the Case:
The petitioners filed a petition seeking to quash the impugned order passed by the Debt Recovery Tribunal (DRT) dismissing their Securitisation application (SA) under Section 17 of the 2002 Act. The petitioners sought condonation of delay in filing the SA and requested to restrain the Bank from taking physical possession of the mortgaged property.
Finding of the Court:
The court found that the DRT has the power to condone the delay in filing the Securitisation application under Section 17 of the 2002 Act. The court also observed that the provisions of the Limitation Act, 1963 are applicable to the proceedings under Section 17 of the 2002 Act before the DRT.
Issues: The main issue was whether the DRT has the power to condone the delay in filing the Securitisation application under Section 17 of the 2002 Act.
Ratio Decidendi: The court held that the provisions of the Limitation Act, 1963 are applicable to the proceedings under Section 17 of the 2002 Act before the DRT, and the DRT has the power to condone the delay in filing the Securitisation application.
Final Decision: The court allowed all the petitions, quashed the impugned orders passed by the DRT, and remitted the matter back to the DRT to decide the application for condonation of delay afresh on merits.
JUDGMENT
Ajay Kumar Mittal, J. - This order shall dispose of a bunch of 23 petitions bearing CWP Nos.21519, 7790, 9017, 18798, 19341, 2134, 2338, 23122, 23057, 26055, 26487, 17893, 18246, 27310, 3689, 4335, 4710, 6118, 13848 and 16889 of 2018, 27382, 26380 and 28230 of 2017, as according to the learned counsel for the parties, the issue involved in all these petitions is identical. However, the facts are being extracted from CWP No. 21519 of 2018.
2. Cwp No. 21519 of 2018 has been filed by the petitioners for quashing the impugned order dated 15.01.2018, Annexure P.6, passed by respondent No.2-Debt Recovery Tribunal-III (in short, "the DRT") in SA No. 466 of 2017 vide which the Securitisation application (SA) filed by them under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, "the 2002 Act") has been dismissed on the ground that the Tribunal does not have the power to condone the delay. Direction has also been sought to respondent No.2 to consider the application for condonation of delay and thereafter decide the above mentioned application. Further prayer has been made for restraining the Bank from taking physical possession of the mortgaged property.
3. A few facts relevant for the decision of the controversy involved as narrated in CWP No. 21519 of 2018 may be noticed. Petitioner No.1 is a company incorporated under the provisions of the Companies Act, 1956. Similarly, petitioner No.5 is also a Public Limited Company. The petitioners are aggrieved by the order dated 15.01.2018 passed by the respondent No.1 vide which SA No. 466 of 2017 (Oswal Spinning and Weaving Mills Limited Vs. UCO Bank) has been dismissed on the ground that it does not have the power to condone the delay. The SA was filed along with the application, seeking condonation of 30 days of delay in filing the same along with an application seeking condonation of 15 days of delay in re-filing. The Tribunal relied upon the judgment of the Apex Court in International Assets and Reconstruction Company of India Limited Vs. Official Liquidator, Aldrich, reported in , (2017) AIR SC 5013 CA No. 16962 of 2017.
4. Petitioner No.1 pleaded before the Tribunal that it was a company which was set up in 1992, having 100% export oriented cotton spinning unit with an installed capacity of 26208 spindles for manufacturing of cotton yarns at its unit located at Village Doraha, District Ludhiana. It had availed certain credit facilities from respondent No.1-Bank. Petitioner No.1 company was also engaged in the Vanaspati Ghee and Vegetable Oil. It was diversified in Steel Industries. On account of deep recession in the aforesaid two fields, the company ran into financial problems. It was also registered with Board for Industrial and Financial Reconstruction in March 2002 for rehabilitation under Sick Industries (Special Provisions) Act, 1985 (in short, "the 1985 Act"). As far as spinning unit was considered, it was doing exceedingly well. In 2007-08 till 2009-10, it had an extensive turnover. Since it was an export oriented unit credit facility in the nature of packing credit was made available to the Company for preparation of export consignment and the recovery used to be effected through bill discounting facility which included the process of discounting of bills by the respondent Bank and consequent recoveries, which used to clear off the packing credit outstanding. In the first week of April 2010, respondent No.1 Bank suddenly refused to allow FBN facility and without any default from any of the reputed overseas customers of the petitioners. The said FBN facility was being allowed by the Bank for the last 15 years as per petitioners' requirement. Thus, the only source of recovery, was intentionally and willfully stalled by the Bank, forcing the account to turn into NPA. The petitioners made various efforts to convince the officers of the Bank but of no avail. Finally on 16.05.2016, respondent No.
