Madhya Pradesh High Court Rules: Applications U/s 17 of the SARFAESI Act, Filed Beyond 45 Days, Eligible for Seeking Condonation of Delay under the Limitation Act


The Madhya Pradesh High Court, in a recent judgment titled ‘Aniruddh Singh Vs. Authorized Officer, ICICI Bank,‘ delved into the intricate interplay between the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) and the Limitation Act. The court, comprising Justice Sheel Nagu and Justice Vivek Jain, rendered a significant decision regarding the applicability of Section 5 of the Limitation Act to applications filed under Section 17 of the SARFAESI Act beyond the prescribed 45-day period.


Factual Background:

The petitioner, in this case, invoked Section 17 of the SARFAESI Act to challenge the actions taken by the bank, including demand notice, possession notice, and auction notice, related to the secured assets. The petitioner also filed an application under Section 5 of the Limitation Act, seeking condonation of a delay of 46 days in filing the Section 17 application.


The DRT’s Perspective:

The Debt Recovery Tribunal (DRT), while dismissing the petitioner’s application, relied on the Apex Court decision in ‘Bank of Baroda & Anr. Vs. M/s Parasaadilal Tursiram Sheetgrah Pvt. Ltd. & Ors.’ (2022). The DRT concluded that the application under Section 17 of the SARFAESI Act resembled a suit, and hence, the provisions of Section 5 of the Limitation Act were inapplicable.


High Court’s Analysis:

The High Court critically examined the DRT’s reliance on the Bank of Baroda case and highlighted that the Apex Court had not specifically addressed the question of the applicability of the Limitation Act to Section 17 applications under the SARFAESI Act. Consequently, the court found the DRT’s reliance on the said decision misplaced.

The court emphasized that the SARFAESI Act did not expressly exclude the application of Sections 4 to 24 of the Limitation Act, including Section 5. Citing Section 29(2) of the Limitation Act, the court reiterated that unless expressly excluded, the provisions of the Limitation Act would apply to all causes raised under the SARFAESI Act.


Court’s Rationale:

The court reasoned that the SARFAESI Act while specifying a 45-day period for filing Section 17 applications, did not expressly bar the application of Section 5 of the Limitation Act. The court observed, “it is obvious from plain reading of SARFAESI Act that while prescribing the period of 45 days for filing an application u/S.17(1) this special Act does not expressly bar the application of Section 5 of Limitation Act.”


Consequently, the court held that Section 5 of the Limitation Act would apply with full force, allowing the petitioner to seek condonation of delay before the DRT in applications filed after the expiry of the 45-day period under Section 17 of the SARFAESI Act.


Conclusion:In a landmark decision, the Madhya Pradesh High Court clarified the application of Section 5 of the Limitation Act to Section 17 applications under the SARFAESI Act. The court’s meticulous analysis, grounded in statutory interpretation, reinforces the principle that the beneficial provisions of the Limitation Act are available unless expressly excluded by the special statute. This judgment provides clarity on the procedural aspects of filing appeals under the SARFAESI Act and underscores the importance of a nuanced approach to the interplay between special laws and general statutes.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. The content may not reflect the most current legal developments and is not guaranteed to be accurate, complete, or up-to-date. Readers should consult a qualified legal professional before taking any action based on the information provided. The authors and publishers disclaim any liability for any loss or damage incurred as a result of reliance on this article. This article does not create an attorney-client relationship.

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