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2014 Supreme(All) 1983

ALLAHABAD HIGH COURT
SANJAY MISRA, J.
Allahabad Bank – Appellant
Vs.
Rajesh Pal and others – Respondents
Writ C. No. 3782 of 2014
Decided On : 21/01/2014

The main legal point established in the judgment is the importance of pleadings and the circumstances surrounding the borrower's pursuit of remedies in granting the benefit under Section 14 of the Limitation Act.

Headnote:

Limitation Act - Remand Order - SARFAESI Act - [Section 14 of the Limitation Act, 1963, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act)] - The court discussed the applicability of Section 14 of the Limitation Act and the legality of the direction to restore possession under the SARFAESI Act. It emphasized the importance of pleadings and the circumstances surrounding the borrower's pursuit of remedies, ultimately upholding the grant of benefit under Section 14 and setting aside the direction to restore possession.

Fact of the Case:

The writ petitions were connected as they related to the same proceedings, property, and parties, challenging an order passed by the Debts Recovery Appellate Tribunal. The main contention was the legality of the remand order and the direction to restore possession.

Finding of the Court:

The court upheld the grant of benefit under Section 14 of the Limitation Act, emphasizing the borrower's bona fide pursuit of remedies. It set aside the direction to restore possession, highlighting that the possession handed over to the auction purchaser was in accordance with the law and had not been set aside.

Issues: The main issues revolved around the legality of the remand order, the grant of benefit under Section 14 of the Limitation Act, and the direction to restore possession.

Ratio Decidendi: The court emphasized the importance of pleadings and the circumstances surrounding the borrower's pursuit of remedies in granting the benefit under Section 14. It also highlighted that the possession handed over to the auction purchaser was in accordance with the law and had not been set aside.

Final Decision: The court upheld the grant of benefit under Section 14 of the Limitation Act and set aside the direction to restore possession. The matter was remanded to the Debt Recovery Tribunal for further decision.

ORDER :

Connect with Writ Petition No. 2584 of 2014 (Kamal Kumar Bhatu v. The Debts Recovery Appellate Tribunal and 3 others)

2. Both the writ petitions have been connected since they relate to the same proceedings, the same property, between the same parties and directed against the same judgment hence are being decided together by a common order passed in this writ petition.

3. Heard Sri P.N. Tripathi learned counsel for the Allahabad Bank in both the petitions Sri D. P. Tripathi holding brief of Sri K.K. Tripathi learned counsel for the auction purchaser K.K. Bhatu in both the writ petitions Sri Kaushal Kant learned counsel for the borrower Rajesh Pal in both the writ petitions and learned Standing Counsel.

4. These writ petitions are directed against an order dated 18.12.2013 passed by the Debts Recovery Appellate Tribunal, Allahabad in Appeal No. 421 of 2013 (Rajesh Pal v. Allahabad Bank and others) whereby the Appellate Tribunal has set aside the order dated 26.09.2013 passed by the Debt Recovery Tribunal in SA No. 116 of 2011 and has remanded the matter to the Tribunal for fresh decision and also directed that the Bank shall restore possession of the premises in question to the appellant (borrower).

5. Sri P. N. Tripathi learned counsel for the respondent Allahabad Bank has submitted that the remand order of the Appellate Tribunal is illegal for the reason that the benefit of Section 14 of the Limitation Act, 1963 could not have been granted to the borrower by the Appellate Tribunal for the reason that it was neither pleaded by him before the Appellate Tribunal nor any such application under Section 14 of the Limitation Act was made by him. He also submits that the directions issued by the Appellate Tribunal to the Bank to restore possession to the borrower is illegal for the reason that in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) the auction of the property was held on 25.08.2008 and sale certificate was issued to the auction purchaser on 04.10.2008 where after possession was handed over to him however the proceedings before the Debt Recovery Tribunal in SA No. 116 of 2011 were started on 02.05.2011 wherein the orders passed under Section 14 of the Act were assailed. He submits that the Debt Recovery Tribunal has not set aside the proceedings or orders passed under Section 14 of the Act but has rejected the application of the borrower on the ground of limitation. According to him when the measures under Section 14 of the Act including the auction have not been set aside by the Debt Recovery Tribunal and also by the Appellate Tribunal then possession could not be restored to the borrower and such a direction issued in the appellate order to the Bank is illegal and as such the impugned appellate order requires to be set aside.

6. Learned counsel for the borrower Sri Kaushal Kant has submitted that the remand order is in accordance with law for the reason that the Debt Recovery Tribunal had illegally rejected the application of the borrower on the ground of limitation whereas it was quite apparent that the borrower was bona fide pursuing his remedy before the Civil Court and it was only after the Civil Court dismissed his civil suit on 18.11.2010 that the borrower after having filed a writ petition which was dismissed on 11.04.2011 filed the petition before the Debt Recovery Tribunal on 02.05.2011. According to Sri Kaushal Kant the benefit of Section 14 of the Limitation Act has been rightly given to the borrower appellant since it was established from record that the borrower was pursuing a remedy bona fide and therefore was entitled to such benefit.

7. Sri Kaushal Kant further states that even if such pleadings were not made by the borrower appellant and an application under Section 14 of the Limitation Act was not made by him however the entire pleadings regarding filing of the suit in the Civil Court its dismissal and filing of t










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