Timely challenges against auction sales must comply with procedural timelines; the court emphasizes bona fide intent in litigation.

1. The Appellant - Borrower of Respondent No.1 - Bank has filed this Appeal under S.5 of the Kerala High Court Act, 1958 challenging the judgment of the learned Single Judge dated 29 November 2024 in W.P.(C). No. 6349 of 2023. Respondent No.3 is the Auction Purchaser of the property. In the writ petition, the Appellant challenged the order passed by the Debts Recovery Appellate Tribunal (DRAT) dismissing R.A. (S.A.)No. 75 of 2019.

2. The Appellant had obtained a loan from the Respondent - Bank on 29 June 2022 to the tune of Rs.52 lakhs. An equitable mortgage was created in respect of the property to the extent of 12.795 cents in Kowdiar Village, Thiruvananthapuram. Since the Appellant failed to repay the loan, the Respondent - Bank classified the loan account of the Appellant as a Non - Performing Asset. Notice under S.13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) was issued on 24 August 2015 calling upon the Appellant to pay an amount of Rs.45,54,375/-. Since the Appellant did not pay this amount, notice under S.13(4) of the SARFAESI Act was issued on 27 October 2015. Thereafter, the Respondent - Bank moved an application under S.14 of the SARFAESI Act before the Chief Judicial Magistrate. Pursuant to the order passed, the physical possession of the secured asset was taken on 23 May 2016. The auction sale notice was issued on 24 June 2016. Respondent No.3 has purchased the property in the auction. Sale was confirmed on 29 August 2016. Thereafter, Appellant instituted a series of proceedings before the DRAT as well as this Court. Ultimately, the DRAT dismissed the appeal on 13 July 2018, holding that the appeal was barred by limitation and the benefit of S.14 of the Limitation Act, 1963 (Act of 1963) could not be extended. This order is confirmed by the learned Single Judge. Thereafter, the present Appeal is filed.

3. We have heard Mr. Shyam Padman, learned Senior Advocate appearing for the Appellant and Mr. K.K. Chandran Pillai, learned Senior Advocate appearing for Respondent Nos.1 and 2.

4. The Appellant had filed a securitisation application, S.A. No. 150 of 2016, before the Debts Recovery Tribunal (DRT) challenging the sale conducted on 25 July 2016 and confirmed on 29 August 2016. Before the DRT, the contention of the Appellant was twofold. Firstly, there is a fundamental error in holding the auction which could vitiate the auction and secondly, there is no delay in challenging the auction sale. The main contention of the Respondent - Bank is that the securitisation application is barred by limitation.

5. The learned counsel for the Respondent - Bank contends that not only there is no fundamental error in conducting the auction sale and its confirmation, but the securitisation application is time - barred and even assuming that the Appellant has a case on merits that the securitisation application is time - barred, no arguments on merits can be advanced. Therefore, the central issue is whether the application is filed within time.

6. The sale was conducted on 25 July 2016 and the securitisation application was filed on 7 December 2016. There was no separate application before the DRT seeking condonation of delay. All that is stated in the application is that there were earlier proceedings filed in this Court and there is no delay in filing the application as per S.14 of the Act of 1963. S.14 of the Act of 1963 reads thus:

“14. Exclusion of time of proceeding bona fide in court without jurisdiction. -

(1) In computing the period of limitation for any suit the time during whi