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TMI Blog2017 (7) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 19 of the Act of 1993 continues the period of limitation, or in other words, stops the running of the period of limitation on and from the date of lodging of such proceedings has arisen for consideration in the present case. Section 4 of the Limitation Act, 1963, is based on the principle that, the law does not compel a man to do that which he cannot possibly perform and an Act of Court shall prejudice no man. This section has no manner of application in the facts of the present case. The initiation of a proceeding under Section 13(2) of the Act of 2002 is an original proceeding and Section 5 of the Limitation Act, 1963 would have no manner of application at the point of initiation of the proceedings. It applies to an appeal under Section 17 of the Act of 2002. Section 14 of the Limitation Act, 1963, permits exclusion of time for proceeding bona fide in a Court without jurisdiction - Section 14 of the Limitation Act, 1963 saves the period of limitation in the event of a new proceeding being filed when the Court in which the former proceeding was being prosecuted suffers from defect of jurisdiction or defect of like nature. It does not contemplate two proceedings on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that at the time of invocation, the same was barred by the laws of limitation. The petitioner appearing in person has submitted that, the petitioner had enjoyed credit facilities from the bank. The bank not having acted in terms of its obligations, the petitioner was obliged to file a suit for damages being Money Suit No. 120 of 2000 before the learned City Civil Court at Calcutta against the bank. The bank had filed a proceeding under Section 19 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 against the petitioner being O.A. No. 137 of 2001 before the Debts Recovery Tribunal-1, Kolkata. The Civil Suit was also transferred to the Debts Recovery Tribunal-1. Both the proceedings are pending adjudication. The bank has, thereafter, issued the impugned notice dated March 3, 2016 purportedly under the Act of 2002. The petitioner had replied thereto by a writing dated March 21, 2016. The bank is now proceeding wrongfully under the Act of 2002 as on the date of issuance of the notice under Section 13(2) of the Act of 2002, the claim of the bank was barred by the laws of limitation. He has referred to Section 36 of the Act of 2002 and submitted that, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Institutions Act, 1993 in 2001. The proceeding before the Debts Recovery Tribunal-1, Kolkata is within the period of limitation. Such proceedings are yet to be disposed of. Consequently, the bank is entitled to invoke the provisions of the Act of 2002 since the limitation had stopped in 2001. Referring to 2012 Volume 129 DRJ page 654 (Somnath Manocha v. Punjab and Sindh Bank Anr.), learned Advocate for the bank has submitted that, the period of limitation had stopped on the date of filing of the proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The Authorized Officer of the bank, therefore, did not act irregularly or without jurisdiction in invoking the provisions of the Act of 2002. He has referred to the word claim as used in Section 36 of the Act of 2002 and has submitted that, such word is not defined under the Act of 2002. He refers to the word financial asset used in Section 36 of the Act of 2002. He has submitted that, the word 'financial asset is defined in Section 2(l) of the Act of 2002. He has referred to the definition of the word debt as defined in Section 2(ha) of the Act of 2002 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same claims as in the Section 19 proceedings? (ii) To what reliefs if any, are the parties entitled to? The petitioner as a medical professional had started a medical diagnostic center and had obtained a loan from Canara bank. The petitioner has claimed to have repaid such loan. The petitioner had, thereafter, approached Punjab National Bank for credit facility. According to the petitioner, the bank had sanctioned a credit facility. Subsequent to the sanction, the bank did not discharge its obligations. Rather, the bank had caused loss and damages to the petitioner due to the various unlawful activities. The petitioner had filed a civil suit being Money Suit No. 120 of 2000 against the bank before the learned City Civil Court for recovery of the loss and damages suffered by him. The bank had filed a proceeding under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 being O.A. No. 137 of 2001 before the Debts Recovery Tribunal, Kolkata. The Civil Suit was transferred to the Debts Recovery Tribunal for adjudication. Both the proceedings are pending. The parties had taken various steps against each other in several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether secured or unsecured; or (ii) any debt or receivables secured by, mortgage of, or charge on, immovable property; or (iii) a mortgage, charge, hypothecation or pledge of movable property; or (iv) any right or interest in the security, whether full or part underlying such debt or receivables; or (v) any beneficial interest in property, whether movable or immovable, or in such debt, receivables, whether such interest is existing, future, accruing, conditional or contingent; or (va) any beneficial right, title or interest in any tangible asset given on hire or financial lease or conditional sale or under any other contract which secures the obligation to pay any unpaid portion of the purchase price of such asset or an obligation incurred or credit otherwise provided to enable the borrower to acquire such tangible asset; or (vb) any right, title or interest in any intangible asset or licence or assignment of such intangible asset, which secures the obligation to pay any unpaid portion of the purchase price of such intangible asset or an obligation incurred or credit otherwise extended to enable the borrower to acquire s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same relief shall be excluded, where such proceeding is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908, the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the Court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the Court or other cause of a like nature. Explanation.- For the purposes of this section,- (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction. 15. Exclusion of time in certain other cases.- (1) In computing the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of taking a measure under Section 13(4), the Limitation Act, 1963 would come into operation, that is to say that, the secured creditor is permitted by the Act of 2002 to take a measure under Section 13(4) only and only if, the measure sought to be taken is within the period of limitation as prescribed under the Limitation Act, 1963. The secured creditor is required to make his claim in respect of the financial asset within the period of limitation prescribed under the Limitation Act, 1963. Would lodging a proceeding under Section 19 of the Act of 1993 be construed to be making by a claim in respect of the financial asset within the period of limitation prescribed under Limitation Act, 1963 is another question which arises for consideration. In the facts of the present case, the petitioner has not contended that, the claim made by the secured creditor before the Debts Recovery Tribunal under Section 19 of the Act of 1993 is barred by the laws of limitation. In any event, the issue of limitation of the proceedings under Act of 1993 is an issue which is to be decided by the Debts Recovery Tribunal before which such proceedings are pending. A Writ Court in a coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid security by way of mortgage as limitation of 12 years as provided in Article 62 of the Schedule to the Limitation Act, 1963 has expired. The bank chose to file only a suit for recovery of money and in spite of averment made in Para 17 of the plaint, it did not file any suit under Order XXXIV of the CPC. No doubt, in terms of order XXXIV Rule 14, the bank was entitled to bring the mortgaged property to sale by instituting a suit for sale in enforcement of the mortgage whereafter obtaining a decree for payment of money, in satisfaction of the claim under mortgage. However, such a suit could be filed within the period of limitation prescribed under Article 62 in the Schedule to the Limitation Act. Thus, under the ordinary law, the bank is precluded from filing a mortgage suit in respect of the aforesaid property. 18. Thus, on the date of notice issued under Section 13(2) of SARFAESI Act, there was no such existing or subsisting right qua mortgage. We agree with the contention of the appellant that the remedy provided under SARFAESI Act is simply a new means of enforcing a preexisting right, i.e., one that existed before the SARFAESI Act came into existence. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the second appeal. The ratio has no manner of application in the facts of the present case. Brijesh Kumar (supra) has considered a condonation of delay of ten years under Section 54 of the Land Acquisition Act. Popat and Kotecha Property (supra) has considered an application under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 claiming that, the suit was barred by limitation. It has held that, a plaint must be read as a whole. It is not permissible to cull out a sentence or passage of a judgment and to read it out of the context in isolation. The real object of Order VII Rule 11 of the Code of Civil Procedure, 1908 is to keep out of Courts irresponsible law suits. In the facts of that case, upon consideration of the statements made in the plaint, their Lordships had found that, the claim made therein was not barred by the laws of limitation. The ratio laid down therein is not attracted to the facts of the present case. Section 4 of the Limitation Act, 1963, is based on the principle that, the law does not compel a man to do that which he cannot possibly perform and an Act of Court shall prejudice no man. This section has no manner of application in the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14 of the Limitation Act, 1963 permits exclusion of the time taken to proceed bona fide in a Court without jurisdiction. Such section permits a plaintiff to present the same suit, if the Court of the first instance, returns a plaint from defect of jurisdiction or other causes of like nature, being unable to entertain it. In the present case, a secured creditor is not withdrawing a proceeding pending before the Debts Recovery Tribunal under Section 19 of the Act of 1993 to invoke the provisions of the Act of 2002. Rather the secured creditor is proceeding, independent of its right to proceed under the Act of 1993, while invoking the provisions of the Act of 2002. This choice of the secured creditor to invoke the Act of 2002 is independent of and despite the pendency of the proceedings under the Act of 1993, has to be looked at from the perspective of whether or not such an action meets the requirement of Section 36 of the Act of 2002, when the secured creditor is proposing to take a measure under Section 13(4) of the Act of 2002. Although, a secured creditor, as held in Transcore (supra), is entitled to take a remedy or a measure as available in the Act of 2002, despite the pendenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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