UCO BANK(FORMERLY KNOWN UNITED COMMERCIAL BANK) vs MADHURI GUPTA A.K.A. JAISWAL & ANR

IN THE HIGH COURT AT CALCUTTA
CIVIL REVISIONAL JURISDICTION
APPELLATE SIDE

PRESENT:
THE HON’BLE DR. JUSTICE AJOY KUMAR MUKHERJEE
C.O. 1594 of 2017
UCO Bank (formerly known United Commercial bank)
Vs.
Madhuri Gupta also known as Jaiswal (since deceased) represented by
her legal heirs, Ashish Gupta @ Bunty & Ors.



For the Petitioner : Mr. Sourya Roy



For the opposite party No. 1(a) : Mr. Supratic Roy
Mr. Shuvajit Roy



Heard on : 28.01.2026



Judgment on : 15.05.2026

Dr. Ajoy Kumar Mukherjee , J.:
1. In this Application, UCO Bank has assailed an order dated March 30,
2017 passed by the Debts Recovery Appellate Tribunal at Calcutta(in short
DRAT) in Appeal No. 442 of 2013 arising out of SA No. 722 of 2011. By the
said order, DRAT dismissed the bank’s appeal and affirmed the order of the
Debts Recovery Tribunal, Kolkata(in short DRT) dated November 7, 2013,
by which he allowed opposite party no. 1’s application filed under section

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17 of the Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002(in short SARFAESI Act of 2002).
Said application under section 17 was filed challenging a notice under
section 13(2) dated April 26, 2010 and a possession cum sale notice dated
July 29, 2010 issued by the Bank.
2. While answering the question as to whether notice under section
13(2) was issued in accordance with SARFAESI Act of 2002 or not, DRT
held that the bank failed to establish that its mortgage right/security
interest was not time barred under Article 62 of the Limitation Act 1963(in
short Act of 1963) either before the mortgage suit was filed or before the
notice under section 13(2) was issued and it was held that the notice was
not in accordance with the provision of the SARFAESI Act of 2002 and the
bank is not entitled to initiate action under the SARFAESI Act of 2002 for
enforcement of mortgage, since the claim of the bank is time barred, within
the meaning of Section 36 of the Act of 2002 read with Article 62 of the Act
of 1963.
3. The DRT further set aside the possession cum sale notice dated July
29, 2011 including the sale conducted by the authorized officer of the bank
in furtherance to such notice. The bank was directed to refund the sale
price along with interest applicable to term deposits to the purchaser
within a period of 45 days of the order, subject to the purchaser joining
with the defendant/bank in cancelling the conveyance deed.
4. Aforesaid order of the DRT was challenged before DRAT in an appeal
th
filed by the bank, which was dismissed by the impugned order dated 30
March, 2017.

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5. Being aggrieved by the aforesaid orders learned counsel for the
petitioner Mr. Roy submits that the bank instituted a suit in the Barasat
Court on February 29, 1992. The suit was for enforcement of mortgage
under the provision of Order XXXIV of CPC. The petitioner herein as
plaintiff claimed for a declaration that the suit properties being the
immovable properties described in scheduled II of the plaint remain
mortgaged to the plaintiff as security for payment of the plaintiff’s claim.
The petitioner herein also claimed decree under Order XXXIV, Rule 4 of
CPC in respect of the mortgaged/scheduled mentioned properties. The
averments in the plaint clearly demonstrates that the petitioner relied upon
the balance sheet as on June 30, 1988, signed by the first defendant and in
the said balance sheet, the claims of the petitioners have been
acknowledged and admitted within the period of limitation and such suit
was for enforcement of mortgage but both the DRT and DRAT failed to
appreciate the factum of institution of suit under order XXXIV of CPC
within the period of limitation, which has a direct bearing on the secured
creditor’s right to take all or any of the measures under Section 13 and
more particularly under Section 13(4), of the Act of 2002.Therefore the
embargo in Section 36 of the Act of 2002 that a secured creditor shall not
be entitled to take all or any of the measures under section 13(4) unless
such secured creditor has lodged a claim in respect of the financial assets
within the period of limitation, did not apply to the petitioner/bank. In
support of such contention petitioner relied upon a judgement passed by
the Division Bench of the High Court of Delhi reported in 2012(129) DRJ
654 (Somnath Manocha Vs Punjab and Sind Bank and another).

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6. He further argued that here the petitioner bank lodged its claim in
respect of the financial assets being the mortgaged assets within the period
of limitation which is evident from the suit and therefore the measures
taken by the petitioner bank under section 13(2) and 13(4) of the Act of
2002 are well within the period of limitation and the same ought not to
have been set aside by the DRT or DRAT.

7. Therefore the finding that measures taken by the bank under Section
13 of the Act of 2002 was barred by law cannot be applied to the facts of
the present case. The mortgaged property stands sold in public auction in
favour of Smt. Nivedita Ghosh. Therefore the petitioner/bank has prayed
for setting aside the aforesaid orders passed by DRT and DRAT.
8. Learned counsel appearing on behalf of opposite party no 1(A)argued
that the concurrent findings of DRT and DRAT that the proceeding under
the Act of 2002 are time barred, are well reasoned and disclose no
jurisdictional error or perversity or illegality warranting interference of
supervisory jurisdiction, to be invoked under Article 227 of the
Constitution of India. Section 36 of the Act of 2002 expressly provides that
no secured creditor shall take any measure under Section 13(4) unless the
claim in respect of the financial asset is made within the period of
limitation prescribed under the Act of 1963. For enforcement of payment of
money secured by a mortgage or charge upon immovable property, Article
62 of the Act of 1963 prescribes a period of 12 years from the date when
the money becomes due. In the present case, the dues crystallized and the
accounts become NPA by 31.12.1991. The 12 year limitation expired on
31.12.2003. Even if the acknowledgement in the balance sheet signed on

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25.01.1990 is taken into account, limitation got expired by 25.01.2002.
The Section 13(2) notice issued on 26.04.2010 is therefore hopelessly time
barred.

9. He further argued that the petitioner tried to demonstrate that his
claim is in respect to the secured asset but as soon as the suit got
transferred under section 31 of the Recovery of debts due to Banks
Financial Institution Act, 1993 (in short Act of 1993), the suit lost its
nature and is now pending as a simple money claim, under section 19 of
the Act and as such no suit and/or claim is pending as against the secured
asset before any court of law from the date, the suit got transferred to DRT
in 1996.
10. Referring the decision passed by this High Court in Dr. Dipankar
Chakraborty Vs. Allahabad Bank and Ors., WP No. 16511(W) of 2016,
(supra), he further contended that the issue of limitation under section 36
of the Act of 2002 is independent of any proceeding pending under the Act
of 1993 and pendency of a recovery application under section 19 of the Act
of 1993 does not stop or extend the running of limitation for measures to
be taken under the SARFAESI Act 2002. Said Act provides a new means of
enforcing a pre-existing right i.e. the right to sell mortgaged property and
recover the secured sum. If that pre-existing mortgage enforcement right
stands extinguished by efflux of time, under Article 62 of the Act of 1963, it
cannot be revived by invoking provision under the Act of 2002. Since the
Bank had not enforced the mortgage within the 12 year limitation period,
the right got extinguished.

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11. Relying upon the judgment of this Court in Din Dayal Kayan Vs.
th
Canara Bank and another , WPO 580/2024 (9 July, 2024) , he argued
that the 12 year limitation for mortgage enforcement begins from the date,
the money becomes due (i.e. the debt when it became NPA) and a notice
under section 13(2), being a precursor to measures under section 13(4),
cannot be issued beyond 12 years. Any proceeding under the Act of 2002 is
essentially for enforcement of mortgage right and are therefore governed by
the same limitation as a mortgage suit under Article 62. Therefore once the
mortgage enforcement right stands extinguished, provision under the Act of
2002 cannot be invoked. Upon transfer of the original mortgage suit under
section 31 of the Act of 1993, the suit lost its character as a mortgage suit
and become a recovery proceeding under section 19 of the Act of 1993,
being TA no. 738 of 2001. Therefore no subsisting claim as a mortgage suit
remained for the purpose of preserving or extending limitation for the
proceeding under the Act of 2002. In fact, the transfer under section 31
merely shifts the forum for recovery but does not preserve the mortgage
enforcement right beyond the expiry of limitation period under Article 62.
The pendency of TA no. 25 of 1996 is therefore wholly irrelevant and does
not save the action under the SARFAESI Act of 2002 from the bar of
limitation. Furthermore, the Revisional Court is not supposed to re-
appreciate evidence or substitute findings of fact and therefore the instant
proceeding is liable to be dismissed.
Decision
Abovementioned background of the case principally raised two issues for
consideration

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(i) Whether institutions of a suit for enforcement of mortgage under
Order XXXIV of the Code of Civil Procedure (CPC) stops the clock
of the limitation.
(ii) If the institutions of the suit for enforcement of mortgage within
the period of limitation prescribed under the Limitation Act of
1963 is a proceeding for lodging a claim in respect of financial
asset, can the secured creditor then be entitled to take all or any
of the measures under section 13(4) of the Act of 2002.
12. In the present case the bank instituted a suit in the Barasat Court
on February, 29,1992. As would appear from the plaint and also from the
relief claimed, the suit is one of the enforcement of the mortgage under the
provisions of order XXXIV of CPC. The petitioner has claimed declaration
that the suit property, being the movable properties, described in schedule
II of the plaint remained mortgage to the plaintiff as security for payment of
the plaintiffs claim. The plaintiff/petitioner herein/Bank also claimed
decree under order XXXIV rule 4 of CPC in respect of the mortgage of
immovable property mentioned in scheduled II of the Plaint.
13. From the averments made in the plaint, it is also clear that the
plaintiff/petitioner has relied upon the balance sheet as on June 30, 1988
that was signed by the defendant no.1 on January, 25, 1990. In the said
balance sheet the claims of the petitioner have been acknowledged and
admitted by the defendant. These claims are also secured by mortgaged
immovable property as averred in the plaint. It is on the basis of the
admission in the balance sheet that the petitioner’s cause of action in such
suit arose on January 25, 1990. The suit being Title (mortgage) Suit No.

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th
116 of 1992 having been instituted in Barasat Court on 29 February,
1992, said Suit is well within the period of limitation prescribed under
Article 62 of the Limitation Act 1963. After the promulgation of the Act, of
st
1993, the suit then pending in the court of Assistant District Judge, 1
Court Barasat was transferred under section 31 of the Act of 1993 to the
DRT, Kolkata and renumbered as T.A no. 25 of 1996. Under section 31(2)
of the Act of 1993 where a suit transferred from any court to the DRT
under section 31(1), the court was under an obligation to forward the
record of such suit to the DRT, who on receipt of such record proceed to
deal with such suit as far as may be in the same manner as in the case of
an Application made under section 19, from the stage which was reached
before such transfer or from any earlier stage as the Tribunal may deem fit.
In this Context it would be appropriate to reproduce section 31(2) of the
1993 Act which states as follows:-
Where any suit or other proceeding stands transferred from any Court to
a Tribunal under sub-section (1),
(a) the Court shall, as soon as may be after such transfer, forward the
records of such suit or other proceeding to the Tribunal; and
(b) the Tribunal may, on receipt of such records, proceed to deal with such
suit or other proceeding, so far as may be, in the same manner as in the
case of an application made under section 19 from the stage which was
reached before such transfer or from any earlier stage as the Tribunal
may deem fit.

14. Neither section 31 nor section 19 of the Act of 1993 require an
original application to be filed by a bank upon transfer of a pending suit.
Subsection (2) of section 31 of the Act of 1993 clearly prescribes the
procedure which is required to be followed by the DRT upon transfer of a
suit. It is the record of the suit which gets transferred to the DRT and the
DRT may on receipt of the record proceed to deal with such suit in the
same manner as in the case of an application made under section 19 of the

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Act of 1993 from the stage which was reached before such transfer or from
an earlier stage as DRT may deem fit.
15. Learned Counsel for the opposite party argued strenuously that as
soon as the suit got transferred under section 31, the suit lost its nature
and is now pending as a simple money claim under section 19 of the Act of
1993 and as such there is no suit and or claim pending as against the
secured assets before any court of law from the date, the suit got
transferred to DRT. In this context, his main contention is that the issue of
limitation under section 36 of the SARFAESI Act of 2002 is independent of
any proceeding pending under the Act of 1993 and the pendency of a
recovery application under section 19 of the Act of 1993 does not stop or
extend the running of limitation for SARFAESI Act measures because
SARFAESI Act provides a new means of enforcing a pre-existing right and if
such pre-existing mortgage enforcement right stands extinguished by efflux
of time under Article 62 of the Limitation Act, it cannot be revived by
invoking SARFAESI Act. Accordingly his argument rests on the issue that
the bank had not enforced the mortgage within 12 year period and
therefore the right stood barred and notices under section 13(2) and 13(4)
of the SARFAESI Act are liable to be quashed.
16. In my view when a mortgage suit is transferred from a civil court to a
Debt Recovery Tribunal under section 31 of the Act of 1993, it does not loss
its character as a mortgage suit or becomes a simple money recovery suit.
The DRT in such case acts as a specialized tribunal to adjudicate the debt,
but the nature of the claim, which involves security interest, remains that
of mortgage suit allowing for the sale of mortgaged property to recover the

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debt. The transfer merely changes the forum i.e. from the Civil Court to the
Tribunal but not the substantive right of the parties or the nature of the
debt secured by the mortgage. The lender still hold the security interest
and the borrower still has equity of redemption. The DRT is empowered to
determine the debt and authorized the sale of the mortgaged property
which is a key characteristic of a mortgage suit, not merely a money suit. A
simple money suit does not involve specialized recovery against a specific,
pledge, or mortgaged property. Here in the instant case the transferred suit
specifically involves a mortgage, it remains a mortgage claim. Therefore, the
suit retains its character as a mortgage suit throughout the proceeding
before the DRT.
17. Now, the question is whether in the facts and circumstances of the
present case the embargo in section 36 of the Act of 2002, that a secured
creditor shall not be entitled to take all or any of the measures under
section 13 (4), unless such secured creditor has lodged a claim in respect of
the financial asset within the period of limitation, would apply to the
petitioner/bank or not. In this context it would be necessary to read
section 36 of the SARFAESI Act of 2002 which runs as follows:-
“36. Limitation.
- No secured creditor shall be entitled to take all or any of the measures under
sub-section (4) of section 13, unless his claim in respect of the financial asset
is made within the period of limitation prescribed under the Limitation Act,
1963.”

18. In Somnath Manocha Vs. Punjub and Sindh Bank and anr .
reported in 2012 (129) DRJ 654 , the question that arose for consideration
before a Division Bench was with regard to the interpretation to be

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accorded to section 36 of the Act of 2002. Needless to say that prior to the
coming into force of the Act of 2002, the machinery for enforcing the
remedy existed under the provisions of order XXXIV rule 4 to 6 of CPC. The
procedure was to file a suit for sale of mortgaged property which has been
done in the present case. The said procedure does not require the
mortgagee to file a prior suit for recovery of money. However in Somnath
Manocha Case (Supra) the relief was not granted in favour of Bank as the
Bank never filed any suit under order XXXIV of CPC. In paragraph 11 of
the said judgment the Division Bench held that the expression ‘claim in
respect of financial asset’ in section 36 must relate to the claim made under
the SARFAESI Act, however the same would depend upon the bank filing a
suit for enforcement of the mortgage under the provision of order XXXIV
CPC and not merely a suit for recovery of money. In paragraph 14, said
Division Bench after considering a Gujrat High Court judgment observed
that section 36 only provides that the claim in respect of the financial
assets is to be made within the period of Limitation Act.
19. The petitioner bank did lodge its claim in respect of the financial
asset being the mortgaged asset within the period of limitation as
appearing from the schedule and prayer portion of the plaint. It was further
held in para 13 of the Somanth Manocha judgment that this remedy is in
addition to the ordinary remedy of civil suit therefore, merely because bank
had earlier filed a suit for recovery of an amount would not mean that it is
precluded from enforcing the security under SARFAESI Act.

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20. Gujarat High Court in the case of Ivee Injecta Ltd. and anr. Vs.
Junagarh Vibhagiya Nagarik Sahakari reported in (2006) 129
complaint Case 529 (Gujrat) held as follows:-
The submission of the learned counsel for the appellant also overlooks the
scheme of the Securitisation Act which is different from the proceedings
under the Code of Civil Procedure . While the Civil Procedure Code provides for
two separate and distinct stages- (i) adjudication by the Court of the
mortgagee's claims resulting into a decree and (ii) the subsequent stage of
execution of the decree with judicial intervention; the Securitisation
Act confers power on the mortgagees, which are financial institutions, to
enforce security without the intervention of any Court or Tribunal and
notwithstanding anything contained in Sections 69 and 69A of the Transfer
of Property Act, 1882. Of course, the measures for enforcement of security are
to be taken after giving the borrower a notice in writing to discharge in full his
liabilities of the secured creditors within 60 days from the date of notice and if
the borrower gives a reply raising any dispute about the amount due
including dispute about interest, the financial institution will have to
meaningfully consider the reply and take the decision and thereafter proceed
under sub-section (4) of Section 13 . Section 17 of the Securitisation Act
confers a right of appeal before the Debts Recovery Tribunal to any person
(including the borrower) aggrieved by any of the measures taken by the
secured creditor under Section 13(4) of the Act. Hence, when the secured
creditor has already obtained a decree of a Civil Court/Debts Recovery
Tribunal, issuance of notice under Section 13(2) of the Securitisation Act is
not to be construed as institution of a suit in a Civil Court for enforcement of
the mortgage, but the proceeding would be in the nature of execution of the
decree.

21. Though in Somanth Manocha Vs. Punjab and Sindh Bank and
Another (Supra) the impugned proceeding vitiated on the ground that bank
did not file suit for recovery under order XXXIV of the CPC but the court
specifically held in para 19 that position would have been different if the
Bank had filed mortgage suit and such a suit was pending. In Ivee
Injectaa Ltd. Case (Supra) mortgage suit was filed and therefore it was
held that claim for enforcing mortgage right was subsisting as it was
pending for adjudication. The court even held, if the period of 12 years had
not been expired under Article 62 of the schedule to the Limitation Act and
there was still time to file the proceedings of mortgage suit, even that would

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have shaped the right of the bank to enforce the provision of SARFAESI
Act.
22. Section 36 of SARFAESI Act provides that no secured creditor shall
be entitled to take all or any of the measures under sub section (4) of
section 13 unless his claim in respect of the financial assets is made within
the period of limitation. What is meant by financial asset has been defined
in section 2 (1) (I) of the Act of 2002, which states as follows:-
“financial asset means debt or receivables and includes
(i)a claim to any debt or receivables or part thereof, 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 [Inserted by Act No. 44 of
2016.]
(vb) any right, title or interest on 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 such intangible asset or obtain licence of the intangible asset; or;
(vi) any financial assistance.”

23. The SARFAESI Act confers power upon the mortgagee, which are
financial institutions to enforce security creditor without the intervention of
any Court or Tribunal. Moreover section 13 (1) of the Act starts with a non-
obstanti clause stating “not withstanding anything contained in section 69
or 69 A of the Transfer of Property Act 1882”. Of course the measure for an
enforcement of security are to be taken after giving the borrower a notice in
writing to discharge in full his liabilities of secured creditor within 60 days
from the date of notice and if the borrower gives a reply raising any dispute

14

about the amount due including dispute about interest, the financial
institutions will have to meaningfully consider the reply and take the
decision and thereafter shall proceed under sub section (4) of section 13.
24. By the notice under section 13 (2) in the instant case, the petitioner
bank does not invoke the jurisdiction of the Tribunal to grant any fresh
relief based on a new cause of action. In fact every application which seeks
to enforce right or seeks a remedy or relief, on the basis of any cause of
action in civil suit, unless otherwise provided, will be subject to the law of
limitation. But when an application does not invoke the jurisdiction of the
court to grant any fresh relief based on any new cause of action but merely
made a prayer before the tribunal to pass order for sale and realization of
the suit properties mentioned in schedule by public auction to satisfy his
claim, such relief is not based on any cause of action and therefore there is
no question of any limitation. Such an application in a suit which is
already pending, which contains no fresh or new prayer for relief, is not one
to which Limitation Act 1963 would apply.
25. The cases cited by the opposite party is clearly distinguishable in the
facts and circumstances of the case. In the case of Din Dayal Kayan Vs.
Canara Bank (supra ) there was no suit for mortgage under order XXXIV
of the CPC pending, therefore there was no existing or subsisting right qua
mortgage on the date when the claim in respect of financial asset was
made. In Dr. Dipankar Chakraborty Vs. Allahabad Bank (supra) the
bank has issued the notice under section 13 (2) of the SARFAESI Act 2002,
19 years after the account has become NPA, without there being any
pending suit for enforcement of mortgage. In Somanth Manocha Vs.

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Punjab and Sindh Bank (Supra) also there was no suit for enforcement of
mortgage.
26. In view of aforesaid discussion the instant criminal revisional
application is liable to be allowed and the impugned order of DRT as well as
order of DRAT which confirms the order of the DRT are required to be set
aside.

27. C.O. 1594 of 2017 is allowed.

28. The impugned judgment passed by Kolkata Debt Recovery Tribunal II
in SA No. 722 of 2011 and the judgement of the Debt Recovery Appellate
th
Tribunal dated 30 March, 2017 passed in appeal no. 442 of 2013 are
hereby set aside. The conveyance deed executed by defendant no.2 in
favour of Smt. Nivedita Ghosh is declared as valid and therefore the
question of refunding the sale price by the defendant bank does not arise.
Urgent Xerox certified photocopies of this Judgment, if applied for, be given
to the parties upon compliance of the requisite formalities.

(Dr. AJOY KUMAR MUKHERJEE, J.)