TMI Blog2011 (10) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of learned Advocates appearing. Heard submissions. This Writ Petition is preferred in respect of an order dated 5th January 2011 passed by Debts Recovery appellate Tribunal, Mumbai and an order dated 17th March 2009 passed by Debts Recovery Tribunal, Nagpur whereby it is held that the provisions of Limitation Act are applicable to an appeal under Section 30 of the Recovery of Debts Due to Banks and financial Institutions Act (Briefly referred as RDDBFI Act). The question raised is as to whether the provisions of section 5 of the Limitation Act or its principles are applicable to appeal filed under section 30 of the RDDBFI Act. 2. The facts which gave rise to filing of the writ petition may be summed as under:- The Petitioners are owners of Apartments in the building known as 'Jupiter Complex' Situated at Vaishali Nagar, Binaki, Nagpur. The Petitioners claim that they were handed over possession of their respective apartments in the building pursuant to an agreement for sale of undivided share in the land and building construction executed in the year 1987. The respondent Central Bank of India, on the ground that the borrower had executed the mortgage of the plot along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal as also the period of limitation within which the Appeal has to be filed. The provisions of the Limitation Act, 1963 shall apply, as far as may be, to the application made to the Tribunal .According to the Petitioners the "application" defined in Section 2(b) of the RDDBFI Act means an application made to Tribunal under Section 19 of the RDDFBI Act. Thus it is implied that the Limitation Act is applicable only for filing the original application under section 19 of the RDDFBI Act. In view of section 29 (2) of the Limitation Act, section 5 of the Limitation Act can not be made applicable to the appeal filed under section 30 of the RDDBFI Act in as much as there is no proviso mentioned in Section 30 similar to the proviso of section 20 for to entertain an appeal from the order of the Tribunal to the Appellate Tribunal even after expiry of the period of Limitation upon satisfaction as to sufficient cause for not filing an appeal within period of limitation prescribed in Section 20 of the RDDBFI Act. The learned advocate for the Petitioners therefore making reference to section 19, 20 and 30 of the RDDBFI Act submitted that the provision of section 5 of the Limitation Act is exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly excluded in the case of reference to High Court. It was contended before us that the words "expressly excluded" would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. In this regard, we have to see the scheme of the special law here in this case is Central Excise Act. The nature of the remedy provided therein are such that the legislature intended it to be a complete Code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that 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 exclude their operation. In other words, the applicabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there has been exclusion of application of Section 5 of the Limitation Act to an application under Section 8 of the Act. In view of what is stated above, the non-applicability of Section 5 of the Limitation Act to the proceedings under Section 8 of the Act is certain and sufficiently clear. Section 29(2) of the Limitation Act as to the express exclusion of Section 5 of the Limitation Act and the specific period of limitation prescribed under Section 8 of the Act without providing for either extension of time or application of Section 5 of the Limitation Act or its principles can be read together harmoniously. Such reading does not lead to any absurdity or unworkability or frustrating the object of the Act. At any rate in the light of the Three-Judge Bench decision of this Court in Hukumdev Narain Yadav case ( supra ) and subsequently followed in Anwari Basavaraj Patil case ( supra ), even though special or local law does not state in so many words expressly that Section 5 of the Limitation Act is not applicable to the proceedings under those Acts, from the scheme of the Act and having regard to various provisions such express exclusion could be gathered. Thus, a conscious an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the payment. Had there been no minimum penalty prescribed under sub-section (3) of Section 38 of the Act, it would have been open for the adjudicating authority to consider the conduct of the defaulter and the extent of delay taking into account the extenuating circumstances while imposing penalty. But once the statute prescribes the minimum penalty without giving any discretion in favour of the adjudicating authority, then one has to go by the provisions of the Act. It was observed that while exercising writ jurisdiction the Court has only to consider whether or not power to impose penalty has been exercised in accordance with the provisions of the Act and whether the decision making process is in accordance with law. Once the Court comes to the conclusion that there is no fault on the part of the adjudicating authority either in complying with the provisions of the Act or in the decision making process, then this Court would be justified in refusing to interfere with the impugned order. The ruling is cited to emphatically submit that the power has to be used strictly in accordance with the provisions of the Act and not otherwise. 6. The object of the RDDBFI Act is to provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er bank or financial institution may join the applicant bank or financial institution at any stage of the proceedings, before the final order is passed, by making an application to that Tribunal. (3) Every application under sub-section (1) or sub-section (2) shall be in such form and accompanied by such documents or other evidence and by such fee as may be prescribed: Provided that the fee may be prescribed having regard to the amount of debt to be recovered: Provided further that nothing contained in this sub-section relating to fee shall apply to cases transferred to the Tribunal under sub-section (1) of section 31. (4) On receipt of the application under sub-section (1) or sub-section (2), the Tribunal shall issue summons requiring the defendant to show cause within thirty days of the service of summons as to why the relief prayed for should not be granted. (5) The defendant shall, at or before the first hearing or within such time as the Tribunal may permit, present a written statement of his defence. (6) Where the defendant claims to set-off against the applicant's demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of his property from the local limits of the jurisdiction of the Tribunal; or ( iii ) is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest, the Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of the debt, or to appear and show cause why he should not furnish security. (B) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt. (14) The applicant shall, unless the Tribunal otherwise directs, specify the property required to be attached and the estimated valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al shall send a copy of every order passed by it to the applicant and the defendant. (22) The Presiding Officer shall issue a certificate under his signature on the basis of the order of the Tribunal to the Recovery Officer for recovery of the amount of debt specified in the certificate. (23) Where the Tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more Tribunals, it may send the copies of the certificate of recovery for execution to such other Tribunals where the property is situated: Provided that in a case where the Tribunal to which the certificate of recovery is sent for execution finds that it has no jurisdiction to comply with the certificate of recovery, it shall return the same to the Tribunal which has issued it. (24) The application made to the Tribunal under sub section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the application finally within one hundred and eighty days from the date of receipt of the application. (25) The Tribunal may made such orders and give such directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to be heard, and after making such inquiry as it deems fit, confirm, modify or set aside the order made by the Recovery Officer in exercise of his powers under sections 25 to 28 (both inclusive)." 11. Learned Advocate for the petitioners submitted that the RDDBFI Act is a self contained Code providing a self contained machinery for the provisions of appeal and the limitation within which such appeal is required to be filed. The RDDBFI Act provides that the provisions of Limitation Act, 1963 shall, as far as may be, apply to the "application" made to the Tribunal . The term "application "is defined in section 2(b) as an application made to Tribunal under Section 19 of the RDDBFI Act. We find that the Principle of Section 5 of the Limitation Act is consciously excluded by the legislature in section 30 of the Act. It is emphatically contended that since the legislature has consciously excluded the principle of section 5 of the Limitation Act, 1963, while it has made such provision in section 20 (3) of the Act. The legislature by necessary implication therefore did not intend to include the principle of Section 5 of the Limitation Act while enacting Section 30 of the Act. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebts Recovery Appellate Tribunal applying the principle of section 5 of the Limitation Act to Appeal proceedings under Section 30 of the RDDBFI Act mainly on the ground that the provision of section 30 is part of the scheme of the statutory recovery proceedings which may follow soon after the order is passed by the Recovery Officer. The Recovery officer pursuant to the issuance of the recovery certificate may pass orders for early and effective recovery of debt as determined by the Tribunal. Recovery officer is expected to act promptly in accordance with the procedure as provided for in chapter V of the RDDBFI Act. Regarding condonation of delay to file appeal beyond the statutorily prescribed period of 30 days for challenging the order passed by the Recovery officer in an Appeal under Section 30 of the RDDBFI Act when the Legislature has willfully or consciously omitted to incorporate the enabling provision of condoning the delay to prefer appeal within prescribed period (unlike in proviso to section 20(3) of the Act of the discretion enabling the DRAT to entertain appeal beyond prescribed period of statutorily prescribed limitation of 45 days) by not making provision analogous to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this reason that Section 22(1) stipulates that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure. Therefore even though the Tribunal can regulate its own procedure, the Act requires that any procedure laid down by it must be guided by the principles of natural justice while, at the same time, it should not regard itself as being bound by the provisions of the Code of Civil Procedure." 16. Hon'ble Apex Court further holds that Section 25 provides for modes of recovery of debts either by attachment and sale or arrest or appointment of a receiver, Section 28 provides for modes of recovery in addition to the ones specified in Section 25. It is held that the same are not arbitrary, unreasonable or without any guidelines. Hon'ble Court observes :- "30. By virtue of Section 29 of the Act, the provisions of the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, has become applicable for the realization of the dues by the Recovery Officer. Detailed procedure for recovery is contained in these schedules to the Income-tax Act, including provisions relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation Act by the special statutory provision thus:- " --- In that case there was no law declared by this Court that even though the Statute prescribed a particular period of limitation, this Court can direct condonation. That would render a specific provision providing for limitation rather otiose." 19. In CIT v. Grasim Industries Ltd. [2009] 319 ITR 154 (Bom.) law explained by Hon'ble Apex Court in Hongo India (P.) Ltd.'s ( supra ) has been appreciated by the Division Bench of this Court in the light of Section 260-A of Income Tax Act, 1961 and Section 5 of the Limitation Act, 1963. It is concluded that as Section 260-A of I.T. Act is pari materia with Section 35-G of Excise Act, High Court has no power to condone delay u/s 260-A of I.T. Act. Notice of motion seeking condonation of delay was therefore dismissed. Above mentioned Full bench view in Velingkar Bros. ( supra ) was pressed into service but has not been accepted as binding precedent in view of later judgment of Hon'ble Apex Court on Section 35G of Excise Act. Thus absence of a power or provision for condonation of delay in Income Tax matters is well recognized position. The Income-tax (Certificate Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f "application" in present facts. The Division Bench has only found that the provisions of Limitation Act, 1963 are applicable to both the secured creditors and borrowers. 21. The judgment of Madras High Court considers a prayer for condonation of delay in filing application under Section 31A[1] of the RDDBFI Act and deals with miscellaneous proceedings. Section 31A permits execution of decrees passed by any Court before commencement of 2000 Amendment Act, thus the issue gone into there is not under Chapter V of the RDDBFI Act. The Full Bench judgment of this Court in Velingkar Bros. case ( supra ) relied upon by Shri Fuladi, learned counsel is, no longer a good law. The judgment of Hon'ble Allahabad High Court reported at Satish Sharma v. Syndicate Bank 2007 (6) ALJ 711 does not refer to any legal provision or any binding precedent and hence, in the light of discussion undertaken by us, it cannot be said that it lays down any binding law in this respect. The judgment of D.R.A.T. Calcutta Bank of India v. Chotanagpur Graphic Industries 2007 (1) Bankers Law Journal ---156 also does not call for any discussion. Naseem Banoo v. Presiding Officer DRT AIR 2007 All. 116 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. The insertion of Section 30 in the RDDBFI Act and absence of such provisions in Income Tax Act 1961 coupled with the fact that even Section 29 also contains rider that provisions of Second Schedule and Third Schedule to Income Tax 1961 are applicable only as far as possible, go to show that under Section 30 there is no bar to maintain appeal unless the attachment/ seizure is actually effected .The Recovery of Debts Due to Banks and Financial Institutions Act,1993 is a special statute. It overrides the provisions of general law. The Tribunal is competent to pass interim orders as per Section 19(12) of the Act. The Tribunal and the Appellate Tribunal are not tied down by the procedure prescribed under the Civil Procedure Code. The provision of Code of Civil Procedure is not required to be followed either by the Debts Recovery Tribunal or the Appellate Tribunal. However, it is expected they shall be guided by the principles of Natural Justice. The Debt Recovery Tribunal and the Appellate Tribunal are empowered to regulate their own procedure of course subject to the provisions of the Act and the Rules. 25. While we Ponder over the present case, it must be noted that Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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