An application to amend an appeal must be filed within a reasonable time, and the court may refuse to allow an amendment if it would prejudice the rights of third parties who have acquired an interest in the subject matter of the appeal.

Headnote:
AMENDMENT OF APPEAL - DELAY - THIRD PARTY RIGHTS - [KEYWORD] - [SUBJECT] - The court dismissed the petitioner's application to amend an appeal filed in 2013, as the amendment was sought after a significant delay and after third-party rights had accrued.
Fact of the Case:

The petitioner filed an appeal in 2013 challenging an auction sale conducted by the Debt Recovery Tribunal (DRT) in 2013. In 2023, the petitioner filed an application to amend the appeal to include new grounds, including the delay in holding the sale and the existence of a caucus to illegally snatch property put up for bank auction. The DRT rejected the application, and the petitioner filed an OP(DRT) challenging the order.
Finding of the Court:

The court found that the petitioner had knowledge of the issuance of the Sale Certificate and the confirmation of sale in 2013, but did not move the Tribunal for amendment for a long period thereafter. The court also found that third party rights had accrued consequent to the sale effected by the Tribunal.
Issues: 1. Whether the petitioner's application to amend the appeal was filed with an inordinate delay? 2. Whether third party rights had accrued consequent to the sale effected by the Tribunal?
Ratio Decidendi: The court held that the petitioner's application for amendment was not sustainable in law due to the delay in filing and the accrual of third party rights. The court noted that the petitioner could have filed the amendment application at the time of filing the appeal or soon thereafter, but waited nearly a decade to do so.
Final Decision: The court dismissed the OP(DRT) filed by the petitioner.

J U D G M E N T

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This OP(DRT) is filed by the petitioner to set aside Ext.P6 order of the Debt Recovery Tribunal-I, Ernakulam in IA No.3029/2023. By Ext.P6 order, the petitioner's application to amend the petition stands rejected.

2. The petitioner states that his liability to the Bank was incurred in the year 1997. When the petitioner failed to maintain the cash credit and when the debt accrual exceeded ₹10 lakhs, the 1st respondent-Bank approached the Debt Recovery Tribunal filing OA No.165/2008. The OA was finally disposed of on 07.07.2008. Consequently, a Recovery Certificate was issued on 07.07.2008. By

26.11.2012, the liability stood at ₹49,61,610/-.

3. According to the petitioner, in spite of his repeated requests, the Bank refused to settle the accounts through One Time Settlement. The Bank sold the secured assets in auction to the 2nd respondent. Coming to know of the same, the petitioner filed IA No.1953/2013 in OA No.165/2008 seeking to set aside the auction sale conducted on 04.02.2013. The Tribunal dismissed the IA as not maintainable.

4. The petitioner thereafter filed appeal No.12/2013 in the Debt Recovery Tribunal, Ernakulam invoking Section 30(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The petitioner also filed an interlocutory application seeking to direct the Recovery Officer to maintain status quo.

5. In the appeal, the petitioner urged that no notice of sale of the mortgaged property was issued on the petitioner. It is a material irregularity. The sale was conducted on 04.02.2013 when there was no Recovery Officer in the office of the Recovery Wing of the Tribunal. The sale effected by the Recovery Inspector is illegal. The petitioner further contended that the sale was conducted almost five years after the issuance of Recovery Certificate by the Tribunal and the sale is illegal on that ground also.

6. Ext.P2 appeal filed by the petitioner was dismissed for default on 05.12.2016. The petitioner filed IA No.9/2017 before the Debt Recovery Tribunal, Ernakulam seeking to restore the appeal. The said application for restoration was dismissed on 18.02.2019. The petitioner immediately filed OP(DRT) No.40/2019 in this Court challenging the order dated 18.02.2019. This Court directed the petitioner to approach the Debt Recovery Appellate Tribunal to challenge the order dated 18.02.2019. Hence, the petitioner filed AIR.126/2019 before the DRAT. The petitioner states that the Appellate Tribunal, without appreciating the facts, dismissed the appeal as per order dated 01.06.2022.

7. The petitioner filed W.P.(C) No.24107/2022 praying to set aside the order dated 01.06.2022 of the Appellate Tribunal. This Court granted an interim order against eviction of the petitioner. The petitioner challenged the said interim order dated 26.08.2022, filing W.A. No.1436/2022. The said Writ Appeal was disposed of as per Ext.P3 judgment directing reconsideration of W.P.(C)

No.24107/2022.

8. The petitioner states that this Court in W.P.(C)

No.24107/2022 set aside the order dated 01.06.2022 and directed to restore appeal No.12/2013 on the files of the Debt Recovery Tribunal. This Court further stayed the delivery of secured assets till the disposal of Appeal No.12/2013.

9. Thereafter, the petitioner filed IA No.3029/2023 in appeal No.12/2013 seeking to amend the appeal. The said IA was dismissed by the Debt Recovery Tribunal as per Ext.P6 order dated 27.10.2023. The petitioner challenges Ext.P6 order in this OP(DRT).

10. The petitioner states that the amendments sought in Ext.P5 are crucial and essential for deciding the appeal. Those grounds were urged in W.P.(C) No.24107/2022 and in W.A. No.1436/2022. The amendments were to bring in the ground that the appeal is not barred by limitation. The petitioner wanted to project that the sale was conducted by a person without authority. The petitioner wanted amendment to contend that the sale proclamation was never communicated to the petitioner. The p

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