The Madras High Court on Monday held that the lockdown arising out of the Covid-19 pandemic cannot be used as a ‘magic wand’ to make defaults in repayments on all occasions.
The First Bench of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy made the observation while disposing of a PIL petition from Kayalvizhi, a bidder for a flat at Sholinganallur in an auction conducted by the Kodambakkam branch of the Axis Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
She made the initial payment, but could not pay the balance due to the pandemic, she said and prayed the court for a direction to the bank to grant more time. The Bench said there are times that courts presume they have the extraordinary authority to enlarge the time.
A kind of mercy jurisdiction is also resorted to at times without the court being mindful of the fact that the exercise of such authority may prejudice another, who may not be before the court or may amount to granting undue favour to a person merely because he has approached the court. If the law requires the auction purchaser to pay the entire consideration within 90 days of the date of the auction, unless there are exceptional circumstances, the court should be slow in enlarging the time for making payment since that would amount to conferring an undue benefit on a party in breach, it said.
It is true that the pandemic and the lockdown imposed in its wake may be an extraordinary situation; but it is not as extraordinary now as it may have been perceived to be some 12 or 14 months prior to now. Further, the lockdown cannot be used as a magic wand by every defaulter to wish away the default on its part, the Bench held.
Despite the recent lockdown during the second surge, financial transactions continued on the internet and even otherwise. The petitioner in either case should have been aware of the obligation to make the payment within the time it was due and merely because the second surge hit after February 18 or the lockdown was imposed sometime thereafter is not, by itself, enough ground to ignore the default committed by the petitioner, the Bench said.