RAYAN PHARMA LIMITED Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) With the consent of learned senior counsels appearing for the respective parties viz., Sri N. Subba Rao and Sri Damalapati Srinivas, both the writ petitions were taken up for hearing.

(2.) Sri N. Subba Rao, learned senior counsel argued the matter in detail in the lead case W.P.No.1373 of 2018. Learned counsel submits that the writ petitioners are questioning the orders passed by the Debt Recovery Appellate Tribunal, Kolkata, in Appeal No.77/2017/862, dtd. 15/12/2017. The said appeal was dismissed confirming the order passed by the Debt Recovery Tribunal, Visakhapatnam in S.A.No.84 of 2012, dtd. 8/4/2015. The 1stpetitioner, according to the learned senior counsel is a company involved in pharmaceutical business. The issue involved in this Writ Petition is about the procedure followed by the 1strespondent Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short "SARFAESI Act"). It is argued that the procedure stipulated in the Rules for effecting the sale of the property was not followed. The plant and the machinery in the factory were not properly auctioned. In the first instance property was also sold contrary to the rules. It is also submitted that the machinery was not properly maintained before it was sold. It is also argued that once the auction was fixed on 17/8/2011, W.P.No.24977 of 2011 was filed for directing the respondents to accept the request to pay the loan amount. This was dismissed by an order dtd. 20/1/2012 while giving liberty to the writ petitioner to question the auction.The copy of the order was received on 25/1/2012 and the S.A.No.84 of 2012 was filed on 12/3/2012 since 10/3/2012 is a 2ndSaturday and 11/3/2012 is a Sunday. It is argued that S.A. filed on 12/3/2012 is within time. The order copy of the High Court in the Writ Petition was received on 25/1/2012 and if 45 days is reckoned from this date, learned senior counsel submits that the S.A. was filed within time. It is his contention that the DRT, Visakhapatnam, overlooked the legal and factual issues raised about the procedure to be followed in a sale, the procedures under the Rules and also failed to appreciate the issue of limitation that has been raised and has wrongly decided the issue of limitation. It is argued that the limitation should only be counted from the date on which the certified copy is received. Learned senior counsel also relies upon the case law to argue that the sale was not properly conducted; there was collusion and the reserve price was not properly fixed and that even if there was a delay the same can be condoned. Sec. 14 of the Limitation Act is also relied upon for arguing that the time spent in pursuing of a case in a Court which does not have jurisdiction, should also be excluded from the computation of time.

(3.) For the respondents 1 and 2 the counter affidavit is filed and an argument in line with the counter affidavit is advanced by the learned standing counsel Sri K.M.Krishna Reddy. The allegation that the provisions of the SARFAESI Act and the Rules were not followed is denied. It is also denied that there was any collusion in the sale of the property. The allegations about the machinery being sold with meagre price after they were not cared for / maintained caring etc., is also vehemently denied. It is also pointed out that the High Court in W.P.No.24977 of 2011 passed a clear order holding that the petitioners have wrongly invoked jurisdiction of the writ court. The date of auction was fixed as 17/8/2011 and the writ petition was filed on 5/9/2011, thereafter these 17 days are already lost. It is submitted that the application is barred by time and that the Court did not commit any error.