LI Network
Published on: January 17, 2024 at 13:06 IST
The Madhya Pradesh High Court has clarified that applications filed under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) beyond the 45-day limit are not barred from seeking condonation of delay under Section 5 of the Limitation Act.
The SARFAESI Act’s Section 17 provides a remedy for borrowers to appeal against actions taken by banks, setting a 45-day timeframe for such appeals.
However, the MP High Court, comprising Justice Sheel Nagu and Justice Vivek Jain, held that Section 5 of the Limitation Act, allowing for the condonation of delay, is applicable to applications filed beyond the stipulated 45 days.
The Court referred to Section 29(2) of the Limitation Act, stating that if a special law does not expressly exclude the application of Sections 4 to 24 of the Limitation Act, these provisions would apply to all causes raised under the special law.
The Court emphasized that the SARFAESI Act does not expressly exclude these provisions, including Section 5, and hence, the benefit of Section 5 of the Limitation Act is available to applications under Section 17 of the SARFAESI Act.
The petitioner in this case had filed an application under Section 17, challenging various notices related to secured assets. Additionally, the petitioner sought condonation of a 46-day delay through an application under Section 5 of the Limitation Act.
The Debt Recovery Tribunal (DRT) had dismissed the application, relying on a Supreme Court decision, Bank of Baroda & Anr. v. M/s Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors. (2022), stating that Section 5 of the Limitation Act is not applicable to applications under Section 17.
However, the High Court clarified that the Supreme Court had not addressed the applicability of the Limitation Act provisions to Section 17 applications in the mentioned case. It further highlighted that while Section 17 of the SARFAESI Act sets a 45-day limit, it does not expressly exclude the operation of Section 5 of the Limitation Act.
Consequently, the High Court allowed the plea, directing the DRT to consider and decide the petitioner’s application for condonation of delay.
Case Title: Aniruddh Singh v. Authorized Officer, ICICI