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Judgment
This order shall dispose of a bunch of 23 petitions bearing CWP Nos.21519, 7790, 9017, 18798, 19341, 2134, 2338, 23122, 23057, 26055, 26487,
17893, 18246, 27310, 3689, 4335, 4710, 6118, 13848 and 16889 of 2018, 27382, 26380 and 28230 of 2017, as according to the learned counsel for the
parties, the issue involved in all these petitions is identical. However, the facts are being extracted from CWP No. 21519 of 2018.
CWP No. 21519 of 2018 has been filed by the petitioners for quashing the impugned order dated 15.01.2018, Annexure P.6, passed by respondent
No.2-Debt Recovery Tribunal-III (in short, “the DRTâ€) in SA No. 466 of 2017 vide which the Securitisation application (SA) filed by them under
Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (in short, “the 2002 Actâ€)
has been dismissed on the ground that the Tribunal does not have the power to condone the delay. Direction has also been sought to respondent No.2
to consider the application for condonation of delay and thereafter decide the above mentioned application. Further prayer has been made for
restraining the Bank from taking physical possession of the mortgaged property.
A few facts relevant for the decision of the controversy involved as narrated in CWP No. 21519 of 2018 may be noticed. Petitioner No.1 is a
company incorporated under the provisions of the Companies Act, 1956. Similarly, petitioner No.5 is also a Public Limited Company. The petitioners
are aggrieved by the order dated 15.01.2018 passed by the respondent No.1 vide which SA No. 466 of 2017 (Oswal Spinning and Weaving Mills
Limited Vs. UCO Bank) has been dismissed on the ground that it does not have the power to condone the delay. The SA was filed along with the
application, seeking condonation of 30 days of delay in filing the same along with an application seeking condonation of 15 days of delay in re-filing.
The Tribunal relied upon the judgment of the Apex Court in International Assets and Reconstruction Company of India Limited Vs. Official
Liquidator, Aldrich, CA No. 16962 of 2017 reported in AIR 2017 SC 5013.
Petitioner No.1 pleaded before the Tribunal that it was a company which was set up in 1992, having 100% export oriented cotton spinning unit with
an installed capacity of 26208 spindles for manufacturing of cotton yarns at its unit located at Village Doraha, District Ludhiana. It had availed certain
credit facilities from respondent No.1-Bank. Petitioner No.1 company was also engaged in the Vanaspati Ghee and Vegetable Oil. It was diversified
in Steel Industries. On account of deep recession in the aforesaid two fields, the company ran into financial problems. It was also registered with
Board for Industrial and Financial Reconstruction in March 2002 for rehabilitation under Sick Industries (Special Provisions) Act, 1985 (in short,
“the 1985 Actâ€). As far as spinning unit was considered, it was doing exceedingly well. In 2007-08 till 2009-10, it had an extensive turnover. Since
it was an export oriented unit credit facility in the nature of packing credit was made available to the Company for preparation of export consignment
and the recovery used to be effected through bill discounting facility which included the process of discounting of bills by the respondent Bank and
consequent recoveries, which used to clear off the packing credit outstanding. In the first week of April 2010, respondent No.1 Bank suddenly refused
to allow FBN facility and without any default from any of the reputed overseas customers of the petitioners. The said FBN facility was being allowed
by the Bank for the last 15 years as per petitioners’ requirement. Thus, the only source of recovery, was intentionally and willfully stalled by the
Bank, forcing the account to turn into NPA. The petitioners made various efforts to convince the officers of the Bank but of no avail. Finally on
16.05.2016, respondent No.1 issued a demand notice under Section 13(2) of the 2002 Act claiming ` 16,82,99,955/49 as on 30.09.2015 vide Annexure
P.1. The detailed objections were submitted on 14.07.2016 by the petitioners. The respondent-Bank issued a notice on 22.08.2016 under Section 13(4)
of the 2002 Act vide which it took symbolic property i.e. property measuring 500 square yards at 92, Industrial Area A, Ludhiana. In the SA, it was
pleaded by the petitioners that the possession notice dated 22.08.2016 was not served upon them, inspite of mandatory requirement under Rule 8(2) of
the Security Interest (Enforcement) Rules, 2002 (in short, “the Rulesâ€) i.e. pasting on the conspicuous part of the property, publication in the
newspaper etc. Therefore, there was certain delay in filing the SA. As against the requirement of 45 days, SA was filed 30 days beyond the limitation.
Delay of 15 days also took place on account of removal of objections and a bulky paper book which had to be scrutinized to finalise the petition and
remove objections. Notice was issued in the SA on 18.04.2017. The reply of the Bank was yet to be received. On 15.01.2018, respondent No.2-the
DRT passed the impugned order stating that the SA had been filed along with the application seeking condonation of 30 days delay under Section 5 of
the Limitation Act, 1963. The petitioners relied upon the judgment in Surinder Mahajan vs. Debts Recovery Appellate Tribunal and others, (2013) 16
RCR (Civil) 204 that the DRT shall have the power to condone the delay while dealing with SA filed under Section 17 of the 2002 Act. Hence the
instant petitions by the petitioners.
The issue that arises for consideration in these petitions is whether the Debt Recovery Tribunal has the power to condone the delay in filing the
Securitisation application (SA) under Section 17 of the 2002 Act.
Before adjudicating the controversy involved, it would be expedient to reproduce the relevant statutory provisions. Section 17 of 2002 Act deals
with filing of application assailing any of the measures adopted by the secured creditor under Section 13(4) of the 2002 Act. It reads thus:-
“17. Application against measures to recover secured debts.â€"(1) Any person (including borrower), aggrieved by any of the measures referred to
in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such
fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such
measure had been taken:
Provided that different fees may be prescribed for making the application by the borrower and the person other than the borrower.
Explanation.â€"For the removal of doubts, it is hereby declared that the communication of the reasons to the borrower by the secured creditor for not
having accepted his representation or objection or the likely action of the secured creditor at the stage of communication of reasons to the borrower
shall not entitle the person (including borrower) to make an application to the Debts Recovery Tribunal under this sub-section.
(1A) An application under sub-section (1) shall be filed before the Debts Recovery Tribunal within the local limits of whose jurisdictionâ€
(a) the cause of action, wholly or in part, arises;
(b) where the secured asset is located; or
(c) the branch or any other office of a bank or financial institution is maintaining an account in which debt claimed is outstanding for the time being.]
(2) The Debts Recovery Tribunal shall consider whether any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor
for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder.
(3) If, the Debts Recovery Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the
conclusion that any of the measures referred to in sub-section (4) of section 13, taken by the secured creditor are not in accordance with the
provisions of this Act and the rules made thereunder, and require restoration of the management or restoration of possession, of the secured assets to
the borrower or other aggrieved person, it may, by order,â€
(a) declare the recourse to any one or more measures referred to in sub-section (4) of section 13 taken by the secured creditor as invalid; and
(b) restore the possession of secured assets or management of secured assets to the borrower or such other aggrieved person, who has made an
application under sub-section (1), as the case may be; and
(c) pass such other direction as it may consider appropriate and necessary in relation to any of the recourse taken by the secured creditor under sub-
section (4) of section 13.
(4) If, the Debts Recovery Tribunal declares the recourse taken by a secured creditor under sub-section (4) of section 13, is in accordance with the
provisions of this Act and the rules made thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured
creditor shall be entitled to take recourse to one or more of the measures specified under sub-section (4) of section 13 to recover his secured debt.
(4A) Whereâ€
(i) any person, in an application under sub-section (1), claims any tenancy or leasehold rights upon the secured asset, the Debt Recovery Tribunal,
after examining the facts of the case and evidence produced by the parties in relation to such claims shall, for the purposes of enforcement of security
interest, have the jurisdiction to examine whether lease or tenancy,â€" (a) has expired or stood determined; or
(b) is contrary to section 65A of the Transfer of Property Act, 1882 (4 of 1882); or
(c) is contrary to terms of mortgage; or
(d) is created after the issuance of notice of default and demand by the Bank under sub-section (2) of section 13 of the Act; and (ii) the Debt
Recovery Tribunal is satisfied that tenancy right or leasehold rights claimed in secured asset falls under the sub-clause (a) or sub-clause (b) or sub-
clause (c) or sub-clause (d) of clause (i), then notwithstanding anything to the contrary contained in any other law for the time being in force, the Debt
Recovery Tribunal may pass such order as it deems fit in accordance with the provisions of this Act.]
(5) Any application made under sub-section (1) shall be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within
sixty days from the date of such application:
Provided that the Debts Recovery Tribunal may, from time to time, extend the said period for reasons to be recorded in writing, so, however, that the
total period of pendency of the application with the Debts Recovery Tribunal, shall not exceed four months from the date of making of such
application made under sub-section (1).
(6) If the application is not disposed of by the Debts Recovery Tribunal within the period of four months as specified in sub-section (5), any part to the
application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts Recovery Tribunal for
expeditious disposal of the application pending before the Debts Recovery Tribunal and the Appellate Tribunal may, on such application, make an
order for expeditious disposal of the pending application by the Debts Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be, dispose of the application in accordance with the
provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder.
Appeal to Appellate Tribunal.-- (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an
appeal along with such fee, as may be prescribed to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery
Tribunal. Provided that different fees may be prescribed for filing an appeal by the borrower or by the person other than the borrower.
Provided further that no appeal shall be entertained unless the borrower has deposited with the Appellate Tribunal fifty per cent of the amount of debt
due from him, as claimed by the secured creditors or determined by the Debts Recovery Tribunal, whichever is less:
Provided also that the Appellate Tribunal may, for the reasons to be recorded in writing, reduce the amount to not less than twenty-five per cent of
debt referred to in the second proviso.
(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as tar as may be, dispose of the appeal in accordance with the provisions of
the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and rules made thereunder.
The provisions of this Act to override other laws.-- The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith
contained in any other law for the time being in force or any instrument having effect by virtue of any such law.
36.Limitation.-- No secured creditor shall be entitled to take all or any of the measures under subsection (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.
37.Application of other laws not barred.-- The provisions of this Act or the rules made thereunder shall be in addition to and not in derogation of, the
Companies Act, 1956, the Securities Contracts (Regulation ; Act, 1956, the Securities and Exchange Board of India Act, 1992, the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 or any other law for the time being in force.
Recovery of Debts due to Banks and Financial Institutions Act, 1993.
Jurisdiction, powers and authority of Tribunals.â€"(1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and
authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.
(2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order
made, or deemed to have been made, by a Tribunal under this Act.
Procedure and Powers of the Tribunal and the Appellate Tribunalâ€" (1) The Tribunal and the Appellate Tribunal shall not be bound the procedure
laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions
of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which
they shall have their sittings. Xxxxxxxxxxxxxxxxx
Limitation.â€"The provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an application made to a Tribunal.
The Limitation Act, 1963
Definitions.â€"In this Act, unless the context otherwise requires,â€" (a) “applicant†includesâ€" (i) a petitioner; (ii) any person from or through
whom an applicant derives his right to apply; (iii) any person whose estate is represented by the applicant as executor, administrator or other
representative; (b) “application†includes a petition;
Savings.â€"(1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872). (2) Where any special or local law
prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall
apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit,
appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent
to which, they are not expressly excluded by such special or local law. (3) Save as otherwise provided in any law for the time being in force with
respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law. (4) Sections
25 and 26 and the definition of “easement†in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882
(5 of 1882), may for the time being extend.â€
The 2002 Act was enacted to regulate securitization and reconstruction of financial assets and enforcement of security interest and to provide for a
central database of security interests created on property rights and for matters connected therewith or incidental thereto. Section 17 of the 2002 Act
has been amended w.e.f 1.9.2016, whereby the words “Application against measures to recover secured debts†are substituted in place of
“Right to appealâ€. A perusal of the above provisions shows that sub-section (1) of Section 17 of the 2002 Act entitles a person to file an
application within 45 days to the Tribunal against any of the measures referred to in Section 13(4) thereof. By the use of the expression “aggrieved
by any of the measuresâ€, Section 17(1) makes it clear that the measures contemplated under Section 13(4) provide continuity to the cause of action.
An Explanation has been added to Section 17(1) clarifying that the communication of reasons to the borrower in terms of Section 13(3-A) shall not
constitute a ground for filing application under Section 17(1). Sub-section (2) of Section 17 casts a duty on the Tribunal to consider whether the
measures taken by the secured creditor for enforcement of security interest are in accordance with the provisions of the 2002 Act and the Rules
made thereunder. If the Tribunal, after examining the facts and circumstances of the case and evidence produced by the parties, comes to the
conclusion that the measures taken by the secured creditor are not in consonance with sub-section (4) of Section 13, then it can direct the secured
creditor to restore management of the business or possession of the secured assets to the borrower. On the other hand, if the Tribunal finds that the
recourse taken by the secured creditor under sub-section (4) of Section 13 is in accordance with the provisions of the 2002 Act and the Rules made
thereunder, then, notwithstanding anything contained in any other law for the time being in force, the secured creditor can take recourse to one or
more of the measures specified in Section 13(4) for recovery of its secured debt. Sub-section (5) of Section 17 prescribes the time-limit of sixty days
within which an application made under Section 17 is required to be disposed of. The proviso to this sub-section envisages extension of time, but the
outer limit for adjudication of an application is four months. If the Tribunal fails to decide the application within a maximum period of four months, then
either party can move the Appellate Tribunal for issue of a direction to the Tribunal to dispose of the application expeditiously. Sub section (7) makes
the provisions of the 1993 Act applicable to the DRT while dealing with an application under Section 17 of the 2002 Act.
There is a specific provision under Section 17(7) of the 2002 Act stating that the Debts Recovery Tribunal, as far as may be, dispose of the
application in accordance with the provisions of the 1993 Act and the rules made thereunder. Further, Section 24 of the 1993 Act states that the
provisions of the Limitation Act, 1963 would apply to an application made to the Tribunal. Hence the intention of the legislature clearly shows that the
provisions of the Limitation Act, 1963 are specifically applicable to the 2002 Act. The legislature has not specifically excluded the provisions of the
Limitation Act, 1963.
Having analysed the relevant statutory provisions, we now proceed to examine the case law on the subject. It is well settled that the Limitation Act,
1963 is procedural law. In Hitendra Vishnu Thakur vs. State of Maharashtra, (1994) 4 SCC 602, it has been held by the Supreme Court that law
relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in
nature.
A Full Bench of this Court in Jaswant Singh Bambha vs. Central Board of Direct Taxes and others, ILR (2005) 1 P&H 302 examined the
provisions of Section 239 of the Income Tax Act, 1961 and held that Section 5 of the Limitation Act, 1963 shall apply to the claims of refund under
Section 239 read with Section 119(2) of the said Act. The Bench observed as under:-
(13.1) The above provision clearly shows that Section 5 of the Limitation Act shall apply in cases of special or local laws to the extent to which they
are not expressly excluded by such special or local laws. In other words, Section 5 of the Limitation Act cannot be resorted to only when it is
expressly excluded by a special or local law.
(13.2) Section 239 of the Act has not expressly excluded the application of Section 5 of the Limitation Act. In fact, a conjoint reading of Sections 239
and 119(2) of the Act clearly shows that the application of Section 5 of the Limitation Act to the claims of refund has been specifically included in the
Act.
(13.3) Thus, in our view the power given to the Board under Section 119 (2) of the Act to entertain a belated claim is nothing but incorporation of the
provisions of Section 5 of the Limitation Act, 1963.
(14) In view of the above, we are satisfied that by virtue of power conferred on the Board under Section 119(2) of the Act, it is fully competent to
admit an application for refund even after the expiry of period prescribed under Section 239 of the Act for avoiding genuine hardship in any case or
class of cases.
In State of Haryana vs. Hindustan Machine Tools Limited and others, AIR 2015 Punjab 45, it was held by the Full bench of this Court that when
any special statute prescribes certain period of limitation shown, then the period of limitation prescribed under the special law shall prevail and to that
extent the provisions of the Limitation Act, 1963 shall stand excluded. If none of them are excluded, then in that situation all of them would be
applicable. Examining Sections 5 and 29(2) of the Limitation Act, 1963, it was recorded as under:-
“5. Examining the first issue, Sections 5 and 29(2) of 1963 Act would be germane for the purpose of deciding the controversy which provide as
follows:-
Extension of prescribed period in certain cases.- Any appeal or any application, other than an application under any of the provisions of Order XXI
of the Code of Civil Procedure, 1908 (5 of 1908) , may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that
he had sufficient cause for not preferring the appeal or making the application within such period.
Explanation.-- The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or
computing the prescribed period may be sufficient cause within the meaning of this section.
Savings.- (1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872).
(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the
Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any
period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall
apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.
Section 5 of 1963 Act enables the Court to admit an appeal or an application after the expiry of prescribed period of limitation on sufficient cause
being shown for the delay. It is meant to condone the 2014.10.01 15:40 I attest to the accuracy and integrity of this document High Court Chandigarh
default of the party wherever it is able to satisfy that sufficient cause exists.
Thus, sufficient cause is sine qua non for exercise of discretion for condoning delay under this provision. The discretion, however, is to be judicial and
not arbitrary. ""Sufficient cause"" has not been defined by the legislature in the 1963 Act but is to be ascertained on the individual facts of each case.
Section 29(2) of the 1963 Act, inter alia provides that where any special or local law prescribes for any suit, appeal or application a period of
limitation different from the period of limitation prescribed by the schedule, the provisions of section 3 shall apply as if such period was the period
prescribed by the schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or
local law, the provisions contained in Sections 4 to 24 shall apply only in so far as, and to the extent, they are not expressly excluded by such special or
local law. When any special statute prescribes certain period of limitation shown, then the period of limitation prescribed under the special law shall
prevail and to that extent the provisions of the 1963 Act shall stand excluded. If none of them are excluded, then in that situation all of them would be
applicable. In our opinion, the language mentioned in Section 29(2) of the 1963 Act does not require that the special statute should expressly provide
for exclusion of specific provision but it is to be gathered from the substance of the language mentioned in the statute whether the effect thereof is
nothing but exclusionary. The Supreme Court in Union of India v. Popular Construction Company, AIR 2001 SC 4010 while analyzing Section 29(2) of
the 1963 Act in view of its earlier decision in Hukumdev Narain Yadav v. Lalit Narain Mishra, AIR 1974 SC 480 had observed as under:-
Apart from the language, 'express exclusion' may follow from the scheme and object of the special or local law. ""Even in a case where the special
law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to
examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law excluded their
operation.
The Bombay High Court in UCO Bank, Mumbai s. M/s Kanji Manji Kothari and Co., Mumbai, 2008(4) Mhlj 424 has held that Section 5 of the
Limitation Act, 1963 applies to proceedings under Section 17 of the 2002 Act. Similar view has been expressed by the Madras High Court in Pannu
Swami vs. The Debts Recovery Tribunal, 2009(3) BJ 401 wherein it was held that Section 5 of the Limitation Act, 1963 applies to the proceedings
under Section 17 of the 2002 Act. A Single Bench of Allahabad High Court in a judgment reported as State Bank of Patiala Vs. Chairperson, Debt
Recovery Appellate Tribunal, Allahabad & others AIR 2012 Allahabad 1 following the judgment of Bombay High Court in UCO Bank's case (supra)
has held that Sections 5 and 14 of the Limitation Act, 1963 would apply to the proceedings under Section 17 of the 2002 Act.
Gujarat High Court in Union of India vs. Chairperson, Debts Recovery Appellate Tribunal and others, 2010(2) Bankers’ Journal 976 had also
expressed identical opinion that Section 5 of the Limitation Act, 1963 is applicable to proceedings under Section 17 of the 2002 Act in the following
terms:-
As observed earlier, even if the contention of the learned counsel is considered and accepted that it is a Tribunal and not the Court as per the
view taken by the Apex Court in the case of Nahar Industrial Enterprises Ltd. Vs. Hong Kong and Sanghai Banking Corporation 2009 (8) SCC 646,
then also in view of the observations made hereinabove, it cannot be accepted that Section 5 of the Limitation Act would not apply to the proceedings
under Section 17 of the Securitisation Act before the Debt Recovery Tribunal. The reliance upon the decision of the Apex Court in the case of
Consolidated Engineering Enterprises Vs. principal Secretary, Irrigation Department 2008 (7) SCC 169 is ill-founded inasmuch the observations off the
Apex Court are to be considered and applied to the facts of that case. If such observation are considered, what is being held by the Apex Court that if
there is express period prescribed in the special law, such would apply and not the prescription as provided under the Limitation Act, but the same
cannot be read in absolute so as to excluded the applicability of other provisions of the Limitation Act which may apply, more particularly in view of
the no express bar provided under the special law. Therefore, such a decision is of no help to the learned counsel for the petitioner.
The applicability of provisions of Section 5 of the Limitation Act, 1963 to the proceedings under Section 17 of the 2002 Act was held to be available to
an aggrieved person by the Madhya Pradesh High Court in M/s Seth Banshidhar Media Rice Mills Pvt. Limited s. State Bank of India, AIR 2011 MP
205.
The issue has also been examined by this Court in detail in Surinder Mahajan’s case (supra) where the question was whether the period of
limitation for filing an application under Section 17 or filing of an appeal under Section 18 of the 2002 Act expressly or impliedly excludes the
applicability of the provisions contained in Section 4 to 24 of the Limitation Act to such proceedings. After perusing the decisions rendered by various
High Courts and the Supreme Court, it had been concluded that applicability of Limitation Act, 1963 to the proceedings before the DRT under Section
17 of the 2002 Act or under Section 18 of 2002 Act before the Debts Recovery
Appellate Tribunal seeking condonation of delay would be maintainable in the following terms:-
“Section 2 (l) of the Limitation Act defines a 'suit' for the purposes of Limitation Act. Such suit does not include an appeal and application for the
purposes of the said Act. The 'application' in Section 2(b) of the said Act includes a petition for the purposes of the aforesaid Act. The Tribunal is not
a Court to which the Limitation Act is applicable. Therefore, the action of the borrower in approaching the Debt Recovery Tribunal under Section 17
of the Act is not a suit as defined in Section 2 (l) of the Limitation Act nor such application is before the Court. It is like original proceedings against an
action taken by the secured creditor as observed by Supreme Court in Mardia Chemicals Case (Supra). The right to approach the Debt Recovery
Tribunal under Section 17 of the Act arises to the borrower only if the secured creditor takes an action or any of the measures under the Act. The
entire process of recovery is vested with a secured creditor under the Act. The only right available with an aggrieved person is to seek recourse to his
remedies contemplated under Section 17 of the Act. Thus it is not an original proceeding to be initiated by an aggrieved person to establish one's right.
It is more akin to the objections filed to the action taken by the secured creditor, who is not only the beneficiary and also adjudicator to the large extent
except to the rights of an aggrieved person under Section 17 of the Act. The right to approach the Tribunal arises on the initiation of proceedings by
the secured creditor against the borrower or any aggrieved person. Therefore, though an application is to be filed by an aggrieved person including a
borrower, but such application is an objection petition to the action taken by the secured creditor.
Though sub-sections (5) & (6) of Section 17 of the Act, prescribes the period for a decision on an application filed in terms of Section 17 of the Act,
but sub-section (7) contemplates  that the Debt Recovery Tribunal shall dispose of the application filed in accordance with the provisions of the 1993
Act and the Rules made there under, save as otherwise provided under the Act. Similar provision is in respect of appellate proceedings contained in
sub-section (2) of Section 18 of the Act. The right has been given to any person including borrower to invoke the jurisdiction of the Debt Recovery
Tribunal in the matter within 45 days from the date on which such measures had been taken under sub-section (1) of Section 17. Section 37 of the Act
contemplates that provisions of the Act or the Rules made there under are in addition to, and not in derogation of 1993 Act including some other
Statutes.
There is no express exclusion of Sections 4 to 24 of the Limitation Act to the proceedings before the Debt Recovery Tribunal analogous to the
provisions of the Arbitration and Conciliation Act, 1996, subject matter of consideration in Popular Construction Co. Case (Supra). Even though the
proceedings before the Debt Recovery Tribunal are time bound, a directory provision, but such provisions will come into play only if the petition is filed
before the Debt Recovery Tribunal. Sub-section (7) of Section 17and/or sub-section (2) of Section 18 of the Act contemplate that the application shall
be disposed of in terms of 1993 Act.
In the present set of cases, the right given to the secured creditor under the Act is not a complete code. The right given to the secured creditor under
the Act is in addition to the rights conferred on the secured creditor in terms of Section 37 of the Act. Such right is in addition to many statutes
including the 1993 Act. In fact, Sections 17(7) and 18(2) of the Act, prescribes the procedure before the Tribunal as that under the 1993 Act. The
Limitation Act is extended to the proceedings under the said Act, while treating an application to be filed under Section 19 of the said Act as a suit.
Therefore, the inference that the limitation Act stands excluded in respect of the proceedings under the Act is not permissible to be drawn.
Therefore, in the absence of any provision under the Act excluding the applicability of the Limitation Act to the proceedings before the Debt Recovery
Tribunal under Section 17 or before the Debt Recovery Appellate Tribunal under Section 18 of the Act, an application for condonation of delay would
be maintainable before the Tribunal and the Appellate Tribunal. Therefore, we respectfully agree with the view of the Andhra Pradesh and Bombay
High Court and unable to agree with the view expressed by Calcutta High Court.
In view of the above, we hold that:
(i) The remedy provided to any person including a borrower under Section 17 of the Act is in response to the actions and measures taken by the
secured creditor through an application which is in the nature of objections to the action taken by the secured creditor.
(ii) The provisions of Sections 4 to 24 of the Limitation Act are applicable to the proceedings to be initiated by any person aggrieved including a
borrower before the Debt Recovery Tribunal under Section 17 of the Act.
(iii) The provisions of Sections 4 to 24 of the Limitation Act are applicable to an appeal to be preferred against an order passed by the Debt Recovery
Tribunal before the Debt Recovery Appellate Tribunal under Section 18 of the Act.
(iv) Whether sufficient cause is disclosed to seek condonation of delay, is a question of fact to be determined by the Debt Recovery Tribunal and/or
the Debt Recovery Appellate Tribunal in the facts of each case.â€
In all fairness to learned counsels for the Bank, we refer to the judgments relied upon by them. Support was drawn by them from the decisions in
Om Parkash vs. Ashwani Kumar Bassi, AIR 2010 SC 379;1 Ashwani Kumar Gupta vs. Siripal Jain, 1998(2) RCR 222;P rakash H.Jain vs. Marie
Fernandes, (2003) 8 SCC 431; AIR 2003 SC 45 9and Officer on Special Duty vs. Shah Mari Lal, 1996 AIR SCW 94.1 Suffice it to notice that the
principal of law enunciated therein is unquestionable but none of them relates to the provisions of 2002 Act or 1993 Act. Thus, no benefit can be
derived by them from these pronouncements.
Further, it may be noticed that the Calcutta High Court in Akshat Commercial Pvt. Ltd. and another vs. Kalpana Chakraborty and others, AIR
2010 Calcutta 138, differed with the judgment of Bombay High Court in UCO Bank's case (supra) and held that Section 5 of the Limitation Act, 1963
does not apply to proceedings although the other relevant provisions of the Limitation Act, 1963 may apply. It was observed as under:
On the same analogy, the proceedings under Section 17(1) should also be treated as a suit and thus, Section 5 of the Limitation Act at least does
not apply to such proceedings although other relevant provisions of the said Act may apply.
The Calcutta High Court is the sole High Court taking different view in Akshat Commercial Pvt. Ltd. case (supra) that the Limitation Act is not
applicable in respect of proceedings under Section 17 of the 2002 Act. With due respect, we are unable to subscribe to the aforesaid opinion of the
Calcutta High Court.
The DRT relying upon the decision of the Apex Court in International Assets and Reconstruction of India Limited’s case (supra), dismissed
the SA on the ground that it does not have the jurisdiction to condone the delay. The judgment in Industrial Assets and Reconstruction of India
Limited’s case (supra) is not applicable to the facts of the present case. Therein, the Apex Court was dealing with the issue of the competence of
Tribunal in condoning the delay while adjudicating the appeal filed against an order passed by the recovery officer before the presiding officer under
Section 30 of the 1993 Act. The Apex Court held that since there was no provision for condonation of delay under Section 30 of the 1993 Act, the
presiding officer/Tribunal would not be competent to condone the delay in an appeal preferred against the order of the recovery officer. The said
decision has been wrongly applied by the DRT to an application filed under Section 17 of the 2002 Act. The provisions of Section 30 of the 1993 Act
do not contain any power to condone delay in filing the appeal against the order of the Recovery Officer whereas by virtue of Section 17(7) of the
2002 Act read with Section 24 of the 1993 Act, the DRT would have jurisdiction to condone the delay in filing an application under Section 17 of the
2002 Act.
From the discussion and reading of the judicial pronouncements as quoted above, the inevitable conclusion is that Section 17(1) of the 2002 Act is
virtually a remedy in respect of a right of redemption. Hence the application of Section 5 of the Limitation Act, 1963 to proceedings under Section
17(1) of the 2002 Act would neither defeat the rights nor cause irreparable hardship to the secured creditor. The provisions of the Limitation Act, 1963
are applicable to the proceedings under Section 17 of 2002 Act before the DRT in view of Section 24 of the 1993 Act and therefore, the provisions of
section 5 of the Limitation Act, 1963 are applicable to the provisions of the said Act. Further, 2002 Act does not expressly exclude the application of
the provisions of the Limitation Act, 1963.
Accordingly, all the petitions are allowed. The impugned orders passed by the DRT dismissing the application under section 17 of the 2002 Act on
the ground that the Debt Recovery Tribunal does not have the power to condone the delay, are quashed. The matter is remitted back to the DRT to
decide the application for condonation of delay afresh on merits in accordance with the observations made hereinbefore.