DRT Cannot Condone Delay Beyond 45 Days In Pleas Challenging SARFAESI Recovery Measures: Karnataka High Court

The single-judge bench of Justice Lalitha Kanneganti observed that the statutory timelines under the SARFAESI Act mandatory and non-extendable 45-day timelines. Accordingly, the court dismissed the writ filed by borrowers challenging DRT's dismissal order of their delayed application.

Section 17 of the SARFAESI Act denotes applications made against measures taken by parties to recover secured debts, usually filed by borrowers against their respective lenders.

“The words employed in Section 17(1) of the Act are that the aggrieved party can make an application within 45 days from the date on which such measures had been taken. The words used "within forty five days" shows that the statute is silent on extension of time. In those circumstances, it has to be presumed as mandatory….”, the court observed in the order.

The petitioners had earlier filed an application under Section 17(1) of the SARFAESI Act before the DRT to quash the sale notice issued by Canara Bank. The DRT dismissed their interim application without condoning the delay of 49 days. Consequently, the application for the quashment of the sale notice was also dismissed as time-barred against the Bank's recovery action.

In the writ, the question posed before the court was 'whether the Debt Recovery Tribunal has the power to condone the delay beyond 45 days by resorting to Section 5 of the Limitation Act in filing an application under Section 17 of the SARFAESI Act". The legal question was read in conjunction with the pendency of the same matter before the apex court. 

The judge noted that though the apex court is seized of the review petition, it has only issued notice in the matter. No interim order of stay has been granted by the Supreme Court, contrary to the current legal position, said the single-judge bench.

The petitioners had put forth an argument that since the contentious legal question is the subject matter of the SLP in the Supreme Court, the High Court won't be justified in making an authoritative pronouncement during its pendency. The petitioners pushed for a more liberal interpretation of the delay condonation aspects under SARFAESI until the apex court lays down the law of the land.

“….The Hon'ble Apex Court has issued notice and no interim order is granted. In these circumstances, there is no bar for this Court to entertain this writ petition and particularly in the light of the order passed by the Division Bench of this Court”, Justice Kanneganti was referring to the binding division bench judgment in Kailasam P v. Karnataka Bank Limited [2025 SCC OnLine Kar 16631]”, the court emphasised.

In Kailasam, the Karnataka High Court held that DRT does not have the power to condone the delay, and the period of 45 days under Section 17 is mandatory and rigid.

Arguments & Court's Further Observations

Relying on various precedents, the petitioner had argued that excluding the applicability of the Limitation Act to the proceedings before the DRT under Section 17 would not be proper, especially in the absence of any statutory provision in the SARFAESI Act to that effect.

The court examined whether Section 29(2) of the Limitation Act can be interpreted so as to apply Section 5 to the proceedings under the SARFAESI Act, as the petitioners argued.

“…Section 29(2) of the Limitation Act says that if a special law prescribes its own limitation, the Limitation Act applies only if not expressly or impliedly excluded. In the light of the language employed in Section 18 of the SARFAESI Act which is conspicuously absent in Section 17 of the Act, it is clear case of implied exclusion of Section 5 of the Limitation Act and satisfies the test of necessary implication”, Justice Kanneganti clarified that 'purposive construction' of statutes ought to be deployed.

The respondent bank had submitted that the discretion in delay condonation is only available in Section 18 at the stage of appeal before the Debts Recovery Appellate Tribunal (DRAT).

The court agreed with the bank's arguments on the issue and noted that Section 17 of the SARFAESI Act prescribes 'implied exclusion' when read with Section 18, and the omission is deliberately aimed at speedy recovery of debts.

“The legal maxim "expressio unius est exclusio alterius" i.e., express mention of one implies exclusion of another applies in this case. It clearly demonstrates what is the intention of the legislature, legislature consciously granted the power to condone the delay under Section 18 of the Act, but not under Section 17 of the Act…”, the court further opined.

The court dismissed the writ petition, underscoring that the timelines prescribed in financial statutes for delay condonation are not up to the court's discretion per se.

“The Debt Recovery Tribunal is a creature of statute, the Tribunal cannot assume powers which are not expressly conferred upon it by the legislation. By fixing the time limit of 45 days, there is an implied exclusion of the provisions of the Limitation Act.…the whole purport of the act is for speedy recovery of the amounts to the banking and financial Institutions”, the court observed about the SARFAESI Act before parting.

For Petitioners: Senior Advocate Sri D.R. Ravishankar for Advocate Smt. Siri Rajashekar.

For Respondents: Advocate Sri Vignesh Shetty for Respondent No. 1; Advocate Smt. Aparna N. for Advocate Smt. Bhavana G.K. for Respondent No. 2.