R. S. KULHARI, CHAIRPERSON

1. This appeal has been preferred under section 20 of the Recovery of Debts and Bankruptcy Act, 1993 (for short “the RDB Act”) challenging the order dated 28.10.2017 passed by the Tribunal below, whereby the application filed by the appellant for amendment in the written Statement was rejected.

2. Briefly stated the facts of the matter are, that the appellantBank filed a civil suit for recovery of Rs. 1,31,22,420/-, which was later-on transferred to the DRT and registered as T.A. No. 131 of 2000. The defendants of the T.A. appeared and filed objections in the year of 2006. After exchange of the pleadings, the matter was at the stage of the final arguments. At one point of time, the arguments were heard and the judgment was reserved on 07.03.2014. However, it came to know that some applications were pending, therefore, the judgment was not delivered and order on the application was passed.

3. It appears that in the meantime, the Bank has proceeded under the SARFAESI Act after declaring the account as NPA. The demand notice and the possession notice were issued and the mortgaged property was also auctioned. The borrowers challenged the proceedings of the Bank by filing the S.A. No. 103 of 2009, which was dismissed by the Tribunal below on 23.08.2010. The M.A. filed with regard to the said S.A. was also dismissed on 23.02.2011. The appeal filed against the order of the Tribunal below is stated to have been pending before this Tribunal.

4. The present impugned application was filed on 24.07.2015 at the stage of final arguments in the T.A. praying that the Bank had produced some documents on the application of the defendants and the property has been sold in the SARFAESI proceedings, therefore, the amendment as additional written statement be taken on record and the T.A. may be dismissed because the Bank should have exhausted the remedy under section 13(10) of the SARFAESI Act.

5. The Tribunal below vide impugned order dismissed the application on the ground that it was filed at the belated stage and the validity of the SARFAESI proceedings cannot be looked into the application filed under section 19 of the RDB Act. However, the liberty was given to the defendants to argue the case on merits about the validity of the mortgage and its effects on the merits of sale conducted under the SARFAESI Act. Being aggrieved by the said order, the present appeal has been preferred by the appellant.

6. Learned counsel for the appellant submitted that the amendment sought was with regard to the subsequent steps taken by the Bank under the SARFAESI Act, therefore, the same was liable to be allowed as laid down by the Hon’ble Supreme Court in Shikharchandra Jain Vs. Digambar Jain Praband Karini Sabha and others, 1974 AIR 1174.

7. The next contention was that the bank has auctioned the property under the SARFAESI proceedings and has realized a substantial amount. The sale certificate has also been issued. Thus, the remaining amount, if any, was required to be recovered under section 13(10) of the SARFAESI Act and the T.A. pending before the DRT ought to have been withdrawn by the Bank or the Tribunal should have dismissed the same on this ground.

8. On the contrary, the learned counsel for the respondentBank submitted that the appellant/Borrowers filed written statement in the year 2006. The property was auctioned in the SARFAESI proceedings in the year 2009, which was challenged by the borrowers, therefore, all the proceedings were within the knowledge of the appellant. Yet, they have not sought any amendment, which was filed after a delay of five years at the time of final argument.

9. It was further contended that the validity of the proceedings conducted under the SARFAESI Act cannot be considered in the proceedings filed for recovery under the RDB Act. Both the proceedings may go-on simultaneously in view of the judgment passed by the Hon’ble Supreme Court in Appeal (Civil) No. 3228 of 2006-M/s Transcore Vs. Union of India and another, decided on 29.11.2006. Further, it was not categorically stated that what type of amendment was sought and what were the reasons for not filing the application in time. Only the prayer in the application is for dismissal of the O.A. Thus, such type of the application is otherwise not maintainable.

10. Having heard the learned counsels for the parties and considering the material available on record, it is undisputed that the written statement was filed in the year 2006 and the SARFAESI proceedings were conducted in the year 2009, which were well within the knowledge of the borrowers/appellant because they are contesting the matter upto the appellate stage of the S.A.

11. It is also a matter of record that some writ petitions were also filed at various stages. The amendment application was filed on 24.07.2015. Thus, it is apparently filed after five years from auction of the property and 9 years after filing the written statement. Since the delay in filing this application has not satisfactorily been explained, therefore, this application was liable to be dismissed on this ground alone.

12. Secondly, though it was argued that the S.A. proceedings are the subsequent proceedings, therefore, according to them such amendment be allowed, but only being a subsequent event cannot be a ground for waiting of more than five years. Moreover, the applicant himself has mentioned in para-D at page 42 of the memo that the Bank has produced some documents with regard to sale, therefore, the appellant is free to advance the argument in the O.A. with regard to such documents. This is not the case of the appellant that he intends to rebut such documents. Any legal issue can be raised even without pleading. All the issues raised in the so-called amendment or the additional written statement appear to be on law points, which may otherwise be argued. The Tribunal below has also given liberty to the appellant in this regard.

13. The judgment of Shikharchandra Jain Vs. Digambar Jain Praband Karini Sabha (Supra) referred by the counsel for the appellant does not render any assistance in the matter, because in that case Smt. Raj Rani died during the pendency of the litigation. The gift was valid during her life time, hence it was observed that her death gave a fresh cause of action to the appellant, who claimed to be her next reversioner. But the facts of the present matter are quite different. No specific ground for amendment has been stated and legal grounds can be raised at any stage without amendment. The proceedings of the SARFAESI Act were well within the knowledge of the borrowers since 2009.

14. With regard to the argument that the Bank should have withdrawn the O.A. after sale of the property under the SARFAESI Act, this issue also involves the legal aspect, so there is no necessity for making amendment in the pleadings. The appellant is free to raise this issue while arguing the case on merits before the DRT.

15. In view of the above, there is no infirmity in the impugned order and the appeal is liable to be dismissed. Accordingly, the same is dismissed with no order as to costs.

16. A copy of this judgment be sent to the parties as well as the DRT concerned and be also uploaded on the e-DRT portal.