The court ruled that time spent pursuing a civil suit in a court without jurisdiction should be excluded from the limitation period under Section 14 of the Limitation Act, emphasizing the importance of good faith in legal proceedings.

JUDGMENT : On 20th February, 2025 THE APPELLATE TRIBUNAL :

Instant Appeal has been preferred against an order dated 23rd August, 2018 passed by Learned DRT-III Kolkata in Dy. No. 23 of 2018 (Bengal Rajnagar Realtors (P) Ltd. versus Union Bank of India).

2. Heard the Learned Counsel for the parties and perused the records.

3. An Application under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as ‘the Act’) was filed by the Appellant on 26th June, 2018 which was declined to be registered by the Registry on 26th June, 2018 and 18th July, 2018 on the ground of barred by time as well as non-payment of sufficient Court fee. An Appeal is filed against the order stating that the limitation is being sought from the date of passing of the order by Learned Civil Judge Alipore in Money Suit No. 07 of 2016 for refund of the money.

4. It is stated that Appellant is an auction bidder who participated in the auction sale held on 12th December, 2013 and offered bid of Rs.33 lacs. He paid Rs. 20,81,500/- to the Bank. Subsequently in pending T.S.A. No. 100 of 2015, a stay was granted by the Learned DRT restraining the Bank from effecting the delivery of possession. TSA No. 100 of 2015 was also allowed by the Learned DRT. Respondent Bank was directed to handover the possession of the secured assets but Bank did not take any initiative for conclusion of the same by way of deposit of the balance sale amount by the highest bidder. Accordingly, legal notice was sent by the Appellant on 09.09.2015 demanding refund of Rs.20,81,500/- with interest. Instead of replying the notice, fresh sale notice was published by the Bank on 08.02.2016. Being aggrieved, Civil Suit No. 07 of 2016 was filed by the Appellant before the Learned Civil Judge Senior Division, Alipore. Civil Suit was dismissed by the Civil Court on the issue of jurisdiction on 04.05.2018. Appellant received the certified copy of order on 31.05.2018. He filed the Application under Section 17 of the SARFAESI Act on 26th June, 2018. It is submitted that cause of action arose on 31.05.2018 i.e. the date of receipt of the copy of the order. Limitation will also start from that date.

5. Learned DRT held that the cause of action, if any, arose to the Appellant on 12^th December, 2013. He had not approached the DRT within the stipulated period, challenge to the measures under Section 13(4) of the Act were not made within 45 days for invoking the provisions of Section 17 of the SARFAESI Act. Appellant is also required to pay proper Court fees as per Rule 13(2) of the Security Interest (Enforcement) Rules, 2002. Accordingly, Application being Diary No. 23 of 2018 was dismissed by the Learned DRT. 6. Feeling aggrieved, Appellant preferred the Appeal.

7. As far as facts of the matter are concerned as narrated above, Application under Section 17 of the Act was filed by the Appellant before the learned DRT claiming the limitation with effect from 31.05.2018 on the ground of receipt of certified copy of the Order of the Learned Civil Court dated 04.05.2018. At the very outset, Learned Registrar allowed 15 days time to remove the deficiency but the same was not done. Accordingly, vide order dated 18.07.2018 Learned Registrar declined to register the Application under Section 17 of the Act.

8. It is undoubtedly admitted fact that the Appellant is an auction bidder in an auction conducted by the Bank on 20th December, 2013, Appellant also paid an amount of Rs.20,81,500/-. It is also not in dispute that the sale proceedings were stayed by the Learned DRT in another proceedings and the Application under Section 17 of the Act being TSA No. 100 of 2015 was allowed by the DRT. The Appellant filed a Civil Suit No. 07 of 2016 before the Learned Civil Court which ultimately was dismissed exparte by Learned Civil Judge Senior Division Second Court Alipore on 04.05.2018 holding that the Civil Court has no jurisdiction to pass any