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Arce Polymers Pvt. Ltd. v. Alphine Pharmaceuticals Pvt. Ltd.

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002Section 13 (3A)Security Interest (Enforcement) Rules, 2002Principle applied is that of waiver and estoppel.

Waiver is an intentional relinquishment of a known right. Waiver applies when a party knows the material facts and is cognizant of the legal rights in that matter, and yet for some consideration consciously abandons the existing legal right, advantage, benefit, claim or privilege. Waiver can be contractual or by express conduct in consideration of some compromise. However, a statutory right may also be waived by implied conduct, like, by wanting to take a chance of a favourable decision. The fact that the other side has acted on it, is sufficient consideration. It is correct that waiver being an intentional relinquishment is not to be inferred by mere failure to take action, but the present case is of repeated positive acts post the notices under Sections 13(2) and (4) of the SARFAESI Act. Not only did the Borrower not question or object to the action of the Bank, but it by express and deliberate conduct had asked the Bank to compromise its position and alter the contractual terms. The Borrower wrote repeated request letters for restructuring of loans, which prayers were considered by the Bank by giving indulgence, time and opportunities. The Borrower, aware and conscious of its rights, chose to abandon the statutory claim and took its chance and even procured favourable decisions. Even if we are to assume that the Borrower did not waive the remedy, its conduct had put the Bank in a position where they have lost time, and suffered on account of delay and laches, which aspects are material. Action on the Subject Property was delayed by more than a year as at the behest of the Borrower, the Bank gave them a long rope to regularise the account. To ignore the conduct of the Borrower would not be reasonable to the Bank once third party rights have been created. In this background, the principle of equitable estoppel as a rule of evidence bars the Borrower from complaining of violation. [Para 14]

Power of the Courts / Judicial Authorities to mould relief.

A complainant who succeeds in establishing unlawfulness of an action is entitled to a remedial order, but the court has discretion in the sense of determining what is fair and just to do in a particular case. [Para 17]

Case Law Reference

  1. ITC Limited v. Blue Coast Hotels Limited, (2018) 15 SCC 99
  2. Pravesh Kumar Sachdeva v. State of Uttar Pradesh, (2018) 10 SCC 628
  3. Blue Coast Hotels Limited v. IFCI Limited, 2016 SCC OnLine Bom 2663
  4. Indian Overseas Bank v. Ashok Saw Mill, (2009) 8 SCC 366
  5. Bank of India v. O.P. Swarnakar, (2003) 2 SCC 721
  6. Beg Raj Singh v. State of U.P., (2003) 1 SCC 726
  7. Commissioner of Customs, Mumbai v. Virgo Steels, (2002) 4 SCC 316
  8. Martin & Harris Ltd. v. VIth Additional Distt. Judge, (1998) 1 SCC 732
  9. Krishan Lal v. State of J&K, (1994) 4 SCC 422
  10. S. Raghbir Singh Gill v. S. Gurcharan Singh Tohra, (1980) Supp SCC 53
  11. Rameshwar v. Jot Ram, (1976) 1 SCC 194
  12. Shri Lachoo Mal v. Shri Radhey Shyam, (1971) 1 SCC 619
  13. AL.AR. Vellayan Chettiar v. Government of the Province of Madras, AIR 1947 PC 197