M/S. Deecon India Pvt. Ltd. & Ors vs Canara Bank & Ors
2022 Latest Caselaw 7810 Cal

                       In the High Court at Calcutta

                      Constitutional Writ Jurisdiction

                                 Appellate Side

Present :-
The Hon'ble Justice Moushumi Bhattacharya.


                            W.P.A 18157 of 2022

                       M/s. Deecon India Pvt. Ltd. & Ors.

                                         vs.
                             Canara Bank & Ors.


For the petitioners                      :     Mr. Sakya Sen, Adv.
                                               Mr. Arindam Banerjee, Adv.
                                               Mr. Lalratan Mandal, Adv.


For the respondent no. 1             :         Mr. Nimish Mishra, Adv.

                                               Ms. Sangeetha Ghosh, Adv.
                                               Ms. Aditi Roy, Adv.


For the respondent nos. 2 to 4       :         Mr. Debjeet Mukherjee, Adv.

                                               Mr. Shashwat Nayak, Adv.


Last Heard on                        :         23.11.2022.



Delivered on                         :         24.11.2022.

Moushumi Bhattacharya, J.

1. The petitioners seek quashing of a certificate of sale dated 2nd August,

2021 and a restraint on the respondent Bank from acting in terms of the said

sale certificate. The petitioner no. 1 is the borrower and the respondent Bank

is the secured creditor.

2 The respondent Canara Bank, represented through learned counsel,

takes a 2-point objection to the relief sought for. Counsel submits that under

section 13(8) of the SARFAESI Act, 2002, a borrower can take action against

sale of a secured asset only till the date of publication of notice for the auction

or tender inviting quotations from the public. Counsel relies on the

amendment brought to section 13(8) in 2016. The second objection is with

regard to the statutory time period mentioned under section 17(1) of the Act

wherein the person making the application must file the same before the

Debts Recovery Tribunal (DRT) having jurisdiction in the matter within 45

days from the date on which the measures under section 13(4) are taken by

the secured creditor. Counsel refers to Akshat Commercial Pvt. Ltd. v. Kalpana

Chakraborty, AIR 2010 Calcutta 138 in support of the second objection to

submit that section 5 of the Limitation Act will have no application filed under

section 17(1) of the SARFAESI Act.

3. Learned counsel appearing for the petitioners relies on paragraph 18 of

the writ petition which states that the petitioner received a copy of the

impugned certificate of sale for the first time on or about 1st August, 2022.

Counsel relies on a Supreme Court decision in Authorized Officer, Indian

Overseas Bank v. M/s. Ashok Saw Mill; (2009) 8 SCC 366 in answer to the

section 13(8) argument of the respondent Bank.

4. The Supreme Court in Ashok Saw Mill construed the legislative

intention behind the SARFAESI Act to hold that safeguards have been

provided in the Act for rectifying any wrongful use of powers by the Banks

and financial institutions by vesting the DRT with authority for declaring any

such action to be invalid. The Supreme Court opined that the DRT was

authorised to even restore possession to the borrower even after possession is

made over to the transferee and that the DRT is entitled to even set aside the

transaction including sale and to restore possession to the borrower in

appropriate cases. The Supreme Court decision answers the objection taken

by the Bank on the limited power of a borrower to challenge a sale after

publication of the auction notice.

5. Although, a Division Bench of this Court in Akshat Commercial was of

the view that section 5 of the Limitation Act will not apply to original

proceedings in the nature of the jurisdiction of the DRT under section 17 of

the SARFAESI Act, the facts in the present case, as stated on record, show

that the petitioners became aware of the certificate of sale only on 1st August,

2022. The writ petition was filed on 5th August, 2022. By the order dated 9th

November, 2022, the Bank was given an opportunity to rebut the statement

made in the writ petition by way of documents in the form of an affidavit. The

Bank has not brought anything on record to dislodge the factual contentions

of the petitioners with regard to knowledge. Hence, the statement made in

paragraph 18 of the writ petition with regard to the petitioners' knowledge on

and from 1st August, 2022 remains uncontroverted.

6. Moreover, the time period mentioned in section 17(1) of the SARFAESI

Act, must be given a purposive construction. Although, the starting point is

the date of the impugned measure taken by the secured creditor, the

provision would be rendered arbitrary and ineffective if the date of knowledge

of the 'person' [under section 17(1)] is not taken into account. If the date of

knowledge is discounted, then most applications under section 17(1) would

be rendered infructuous particularly where the 'person' receives the

communication of the impugned action beyond the 45-day time limit. It is

completely believable that the petitioners did not approach the DRT on the

apprehension that the petitioners' application would be kept out and not even

be given a file number on the ground of being belated.

7. The other contentions of the Bank with regard to the latches on the

part of the petitioners become irrelevant since the Bank has not been able to

factually dispute the date of knowledge stated in the writ petition.

8. In view of the above reasons, this Court deems it fit to send the parties

to the statutory forum under the SARFAESI Act, 2002 and seek appropriate

redress. The petitioners shall be at liberty of approaching the DRT not later

than seven days from 28th November, 2022. WPA 18157 of 2022 is disposed

of in terms of the above.

Urgent photostat certified copies of this judgment, if applied for, be

supplied to the respective parties upon fulfillment of requisite formalities.

(Moushumi Bhattacharya, J.)