Case Law Details
M. Padma Sree Vs State Bank of India (DRAT Chennai)
The application before the Debts Recovery Appellate Tribunal (DRAT), Chennai, sought condonation of a 2417-day delay in filing an appeal against the order dated 18.09.2017 passed by the Presiding Officer, DRT-II, Chennai in OA No. 333/2015.
The original application had been filed by the respondent banks for recovery of ₹1,15,39,31,669.57 from Defendants 1 to 6. While Defendants 7 to 12 contested the proceedings, the remaining defendants did not. The DRT allowed the original application against Defendants 1 to 6 and dismissed it against Defendants 7 to 18. Aggrieved by that order, the appellant, who was the fifth defendant, filed the appeal along with an application seeking condonation of the delay.
The appellant contended that she had not been served with notice in the original application and was therefore unaware of the proceedings. She submitted that the DRT had passed the order ex parte without hearing her and that she had not received a free copy of the order. According to her, she first became aware of the DRT order only through the company petition CP/IB/256/2022 pending before the NCLT, Chennai Bench, after which she obtained a certified copy and filed the appeal. She further asserted that the address mentioned in OA No. 333/2015 was incorrect, that she was neither a borrower nor a guarantor, that she had been wrongly impleaded with a fictitious address, and that the property involved was agricultural land.
The respondent bank opposed the application. It submitted that the appellant had knowledge of the DRT order from Form B dated 19.08.2021 filed in the NCLT proceedings but filed the appeal only on 31.05.2024. The bank contended that the address mentioned in the original application was the same as that appearing in the mortgage document and the NCLT proceedings. It also referred to the appellant’s letter dated 09.06.2021, in which she admitted having offered the property as collateral security for the loan obtained by M/s. JKS Constructions Private Limited by deposit of title deeds and requested release of the property on payment of ₹10 crore under a one-time settlement. The bank further relied on an email dated 03.12.2021, in which the appellant offered ₹30 crore as a one-time settlement. It also pointed out that the appellant had filed WP No. 35660/2020 and WP No. 22370/2021 before the High Court of Telangana after disposal of the original application, demonstrating her continued participation in related proceedings. The bank therefore submitted that the unexplained delay could not be condoned.
After considering the submissions and examining the records, the Tribunal found that the mortgage document contained the same Hyderabad address that was mentioned in the original application and in the NCLT proceedings. It also noted that the appellant had appeared through counsel and contested the company petition before the NCLT. Consequently, the Tribunal rejected the contention that the address in the original application was incorrect or that notice had not been served. On examining the original records received from the DRT, the Tribunal found that the notice issued to the appellant in OA No. 333/2015 had been returned as “unclaimed”, which it treated as deemed service.
The Tribunal also observed that the appellant had admitted creating the mortgage by deposit of title deeds for the loan availed by M/s. JKS Constructions Private Limited and had subsequently made one-time settlement offers of ₹10 crore and ₹30 crore. It therefore did not accept the contention that the property had not been mortgaged as security. The Tribunal further held that there was no material establishing that the property was agricultural land or that agricultural operations were being carried on at the time of creation of the mortgage or thereafter.
The Tribunal observed that even on the appellant’s own case, she had acquired knowledge of the DRT proceedings on 23.01.2022, yet the appeal was filed only on 31.05.2024. It held that the appellant had not acted vigilantly, promptly or diligently after acquiring knowledge of the order. The Tribunal concluded that the delay of 2417 days had not been properly explained and declined to condone the delay. Accordingly, IA No. 499/2024 was dismissed, the appeal in AIR 839/2024 was rejected, all pending interlocutory applications were closed, and no order as to costs was passed.
FULL TEXT OF THE ORDER OF DRAT CHENNAI
1. This Application is filed by the Petitioner/Appellant seeking to condone the delay of 2417 days in filing the Appeal.
1.1 Aggrieved by the order passed on 18.09.2017, in OA No. 333/2015, by the Learned Presiding Officer, DRT-II, Chennai, the Petitioner/Appellant filed this Appeal.
2. The Petitioner/Appellant is the 5th Defendant in OA No. 333/2015. The said OA was filed by Respondents 1 and 2 Banks for recovery of Rs.1,15,39,31,669.57p from Defendants 1 to 6. The OA was contested by Defendants 7 to 9, & 11 and 10 & 12, and the other Defendants have not contested the OA. The Learned Presiding Officer, on going through the pleadings, records, and submissions of Learned Counsel appearing for the parties, allowed the OA against Defendants 1 to 6 and dismissed the OA against Defendants 7 to 18. Aggrieved by the said order, this Appeal has been filed along with an Application in IA 499/2024 seeking condonation of delay of 2417 days in filing the Appeal.
3. Learned Counsel for the Petitioner/Appellant submitted that the Petitioner/Appellant was not served with notice in the OA, and therefore, she was not aware of the order passed in OA. The order came to be passed without hearing the Petitioner/Appellant as ex parte. A free copy of the order was also not served on her. The Petitioner/Appellant came to know about the order passed in the OA only through the Company Petition in CP/IB/256/2022 filed before NCLT, Chennai Bench. Therefore, there occurred a delay in filing the Appeal, and prayed for condonation of delay for contesting the Appeal on merits.
4. In reply, Learned Counsel for the Respondent Bank strongly opposed the Application. It is submitted that the Petitioner/Appellant was aware of the order passed in OA No.333/2015 from Form-B dated 19.08.2021 filed in the proceedings before NCLT. Though she was aware of the order passed on 19.08.2021, the Appeal came to be filed only on 31.05.2024. The notice was taken to the address given in the OA, which is the same address given in the proceedings before NCLT initiated by Bank. Therefore, the submission that the Petitioner/Appellant was not served with notice in the OA is not correct. The Petitioner/Appellant knew of the passing of the order long back. She sent a letter dated 09.06.2021 admitting that she had offered the property as collateral security for the loan availed by M/s. JKS Constructions Private Limited, in the year 2009, by way of deposit of title deeds. She also requested release of the property on accepting Rs.10 Crores as One Time Settlement. In fact, the Petitioner/Appellant sent an E-mail on 03.12.2021 offering to pay Rs.30 Crores as One Time Settlement, to buy peace of mind. The MODT document also shows the same address as given in the OA, i.e., Flat No.24, Seetha Ramaiah Towers, Moti Nagar, Hyderabad, Andhra Pradesh. The Petitioner/Appellant filed Writ proceedings in WP No. 35660/2020 on the file of Hon’ble High Court of Telangana, Hyderabad, after the disposal of the OA. The Petitioner/Appellant also filed Writ Petition in WP No.22370/2021. She has been continuously initiating writ proceedings. Hence, he claimed that, against the order passed in OA on 18.09.2017, the Appeal should have been filed immediately thereafter, within a period of 30 days. However, the Appeal is not filed in time. Thus, he submitted that the huge unexplained delay cannot be condoned.
5. Considered the rival submissions and perused the records.
6. From the Application filed in support of the Petition for condonation of delay, the Petitioner/Appellant contended that the Petitioner/Appellant had not received the notices dated 28.10.2013 and 01.12.2013. It is further submitted that the address of the Petitioner/Appellant given in the OA No. 333/2015 as Flat No.24, Seetha Ramaiah Towers, Moti Nagar, Hyderabad, is not the correct address. She is neither a borrower nor a guarantor and she was wrongly added as Defendant in the OA 333/2015 with a fictitious address. The Petitioner/Appellant’s property was an agricultural land. She came to know about the proceedings in OA No.333/2015 only on 23.01.2022, when she received a copy of the Company Petition in CP/IB/256/2022. Thereafter, she applied for a certified copy and filed the Appeal.
7. However, from the materials produced and the submissions of the Learned Counsel appearing for the parties, it is clear that the mortgage document contains the same address as Flat No.24, Seetha Ramaiah Towers, Moti Nagar, Hyderabad, Andhra Pradesh. This address is also given in the Company Petition in CP/IB/256/2022 on the file of NCLT, Division Bench-II, Chennai. In the said case, the Petitioner/Appellant appeared through Counsel and contested the matter. Therefore, the submission of the Learned Counsel for Petitioner/Appellant that the Petitioner/Appellant’s address was wrongly given in OA 333/2015 and notice was not served cannot be accepted. The perusal of the original records received from the Tribunal shows that the notice sent to the Petitioner/Appellant in OA No. 333/2015 was returned as ‘unclaimed’. It amounts to deemed service of notice. As submitted by the Learned Counsel for Respondent Bank, the Petitioner/Appellant had admitted the creation of mortgage by deposit of title deeds for the loan availed by M/s. JKS Constructions Private Limited. She had offered to pay Rs.10 Crores and then Rs.30 Crores and sought for an One Time Settlement. Therefore, the submission of Learned Counsel for the Petitioner/Appellant that the property was not mortgaged as a security asset cannot be accepted. The property is also not specifically shown as agricultural property. There is no material produced to show that agricultural operations were being carried out at the time of creation of mortgage and continued till date. Thus, the claim that the land is an agricultural land cannot be accepted.
8. The delay in filing the Appeal is so huge, i.e. 2417 days. When the Petitioner/Appellant admitted having knowledge about the OA proceedings on 23.01.2022, the Appeal should have been filed immediately within the period of limitation from the date of knowledge. That was also not done in this case. This Appeal was filed only on 31.05.2024 long after coming to know about the OA proceedings. This shows that the Petitioner/Appellant was not vigilant, prompt and diligent in filing the Appeal.
9. The huge delay of 2417 days is not properly explained. Therefore, this Tribunal is not inclined to condone the delay. Therefore, this Application in IA 499/2024 is dismissed. Consequently, the Appeal in AIR 839/2024 is rejected. All pending IAs, if any, stand closed. No order as to costs.
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