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M/s. Neel Enterprises & Anr. v. State Bank of India & Anr.

Civil Appeal · 2018 INSC 471Decided 10 May 2018
Civil Appeal No. 4989 of 2018
Justice Kurian Joseph · Justice Mohan M. Shantanagoudar

Background

The State Bank of India issued a notice under Section 13(2) of the SARFAESI Act, 2002 against the appellant in August 2014. When the appellant challenged this notice before the Debt Recovery Tribunal (DRT) with a 14-day delay, the DRT refused to condone the delay, and the High Court, instead of condoning it, relegated the appellant to the Debt Recovery Appellate Tribunal while also directing a 25% deposit of the notice amount. The appellant then approached the Supreme Court, by which time the matter had already been pending for roughly four years since the original notice.

Decision Breakdown

The Supreme Court held that, given the long delay already caused by the litigation and the overall facts, justice required allowing the appellant to actually argue its objections to the Section 13(2) notice on merits before the DRT. It set aside both the High Court's order and the DRT's order refusing to condone the 14-day delay, and condoned that delay itself. The Court then directed the DRT to dispose of the underlying matter within two months, directed the parties to appear before the DRT on a fixed date, instructed the DRT not to grant unnecessary adjournments, and ordered that its own earlier interim order would continue to operate until the DRT decided the matter. With these directions, the Supreme Court appeal itself was disposed of, with no order as to costs.

Lesson Learnt

A minor procedural delay (here, just 14 days) in challenging a bank's SARFAESI notice should not by itself shut out a borrower from having their substantive objections heard, especially where the overall case has already dragged on for years: courts will often condone such delays and set strict timelines to ensure the underlying dispute is finally examined on its merits.

Official source (sci.gov.in)View Judgment (PDF)

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