Case Note & Summary
The petitioner, M/s. Zen Lifecare Ltd., challenged the orders of the Debt Recovery Tribunal-I, Ahmedabad, dated 20th November 2020 and 6th February 2024, which dismissed its Securitisation Application No. 141 of 2016 as time-barred and rejected the review application. The petitioner's loan account was classified as NPA on 31st May 2015, and a demand notice under Section 13(2) of the SARFAESI Act was issued on 14th July 2015. The petitioner submitted objections on 1st September 2015, but the Bank took possession on 9th October 2015. A sale notice was issued on 20th June 2016, and the petitioner's objections were rejected on 8th August 2016. The petitioner filed the Securitisation Application on 12th August 2016. The DRT held that the application was filed beyond the 45-day limitation period under Section 17(1) of the SARFAESI Act, which is mandatory and cannot be condoned. The High Court upheld this view, noting that the limitation period is absolute and the DRT has no power to extend it. The court also observed that the petitioner had an alternative remedy of appeal under Section 18 of the SARFAESI Act, and the writ petition was an attempt to circumvent the limitation bar. Consequently, the petition was dismissed.
Headnote
A) Limitation - Securitisation Application - Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - The period of limitation for filing a Securitisation Application under Section 17(1) is 45 days from the date of cause of action, and the DRT has no power to condone delay beyond this period. The court held that the limitation is mandatory and cannot be extended by the Tribunal. (Paras 5-8) B) Writ Jurisdiction - Alternative Remedy - Articles 226 and 227 of the Constitution of India - The High Court declined to entertain the petition as the petitioner had an alternative remedy of appeal under Section 18 of the SARFAESI Act, and the petition was filed to circumvent the limitation bar. The court held that writ jurisdiction cannot be used to bypass statutory limitation. (Paras 9-10)
Issue of Consideration
Whether the Debt Recovery Tribunal has the power to condone delay in filing a Securitisation Application under Section 17(1) of the SARFAESI Act beyond the prescribed period of 45 days?
Final Decision
The High Court dismissed the writ petition, upholding the DRT orders that the Securitisation Application was time-barred and the DRT had no power to condone delay beyond 45 days.
Law Points
- Limitation period under Section 17(1) of SARFAESI Act is mandatory
- DRT has no power to condone delay beyond 45 days
- writ jurisdiction under Article 226/227 cannot be used to circumvent limitation
