TMI Blog2015 (1) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Limitation Act to an appeal under Section 18 of the Act. The Legislature was aware of the factual position that in spite of constituting Special Tribunals to recover the public money, the Banks and financial institutions were not in a position to achieve the results on account of the time taken to complete the original and appellate proceedings and the ultimate execution proceedings. The Legislature therefore wanted a fast track method and machinery to recover the dues within a reasonable time. The failure to make a provision to extend the provisions of the Limitation Act cannot therefore be treated as an omission. Since the Supreme Court [1985 (7) TMI 347 - SUPREME COURT OF INDIA] has already made the position very clear that the Tribunal under RDDBFI Act is not a Court, the question of automatic extension of the provisions of the Limitation Act to an appeal under Section 18 of the SARFAESI Act would not arise. The proviso to sub-section (3) of Section 20 of RDDBFI Act indicates the legislative intent to extend the time limit for filing appeal. Similarly Section 24 of the said Act indicates the exclusion of the provisions of the Limitation Act 1963 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loan outstanding, the Bank initiated proceedings under the SARFAESI Act. Notice under Section 13(2) of the SARFAESI Act was issued on 23 December 2008, followed by a possession notice issued on 28 February, 2009. The Bank thereafter issued a sale notice on 18 January 2010 proposing to sell the secured assets on 20 February 2010. 4. The sale notice dated 18 January 2010 was challenged by the petitioners before the Debts Recovery Tribunal (hereinafter referred to as Tribunal ), Bangalore in S.A.No.131 of 2010. The appeal was dismissed on 13 May 2010. 5. The order dated 13 May 2010 was challenged by the petitioners before the Debts Recovery Appellate Tribunal (hereinafter referred to as Appellate Tribunal ), Chennai belatedly. There was a delay of six days in preferring the appeal and this made the petitioners to file an application before the Appellate Tribunal to condone the delay. 6. The Appellate Tribunal was of the view that it has no jurisdiction to condone the delay. According to the Appellate Tribunal, the High Court of Madhya Pradesh has already made the position clear that SARFAESI Act does not contain a provision conferring power on the Appellate Tribunal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be made within the period of limitation prescribed under the Limitation Act. However no such provision is found in the SARFAESI Act excluding the period of limitation in respect of an appeal under Section 18 of the Act. (vii) Section 37 of the SARFAESI Act provides that the application of other laws are not barred. The other law would also include the Limitation Act. (viii) The right of appeal is a statutory right. Such a right cannot be curtailed by giving a narrow interpretation. (ix) The issue raised by the petitioner is covered by the decision of the Supreme Court in Mukri Gopalan v. Cheppilat Puthanpuraiyil Aboobacker (1995 (5) SCC 5). (x) The provisions contained under the Limitation Act would apply automatically to determine the periods under the special law, in case there is no express exclusion of the application of Limitation Act. 9. Mr.P.Raghunathan, learned counsel for the petitioner in W.P.No.12970 of 2012 would contend: (i) Though the Legislature had prescribed a particular period of limitation, no outer time limit was fixed restricting the discretion. The legislative intention is very clear that it was not in favour of excluding the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Limitation Act to a proceeding before the Appellate Tribunal under Section 18 of the Act. The Court cannot extend the period by importing the provisions of the Limitation Act. (ii) The Supreme Court upheld the validity of the SARFAESI Act in Mardia Chemicals Ltd. v. Union of India, (2004) 4 SCC 311, which includes Section 18 of the Act. Therefore the issue cannot be re-agitated later on a different point. (iii) The Act was enacted to achieve a specific purpose. The proceeding initiated under the SARFAESI Act should attain early finality. In case Section 5 of the Limitation Act is extended to an appeal under Section 18 of the Act, there would be no logical end to the proceeding. The Bank would not be in a position to sell the property on account of the pendency of belated appeals. Discussion: 14. SARFAESI Act is a special law enacted to enable the Banks and Financial Institutions to recover the dues without the intervention of Court. The Act contains various provisions enabling the Banks and Financial Institutions to declare the debt as a non-performing asset , to call upon the borrower to pay the amount within a prescribed period and in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless the application thereof has been excluded either specifically or by necessary implication. 19. We are now mainly concerned with the following two provisions of the Limitation Act viz., Section 5 and Section 29(2). 5.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. 29. Savings: - (1) ...... (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the special law exclude their operation. 23. The Supreme Court in Union of India v. Popular Construction Co. (2001) 8 SCC 470 held that the words exclusion also includes exclusion by necessary implication . 24. In Nasiruddin v. Sita Ram Agarwal, (2003) 2 SCC 577, the Supreme Court held that the Court can condone the delay only when the statute confers such a power on the Court and not otherwise. 25. The Supreme Court in Hukumdev Narain Yadav case (1974 (2) SCC 133) and Popular Construction Company case (2001 (8) SCC 470) indicated the test to determine the applicability of Section 29(2) of the Limitation Act. The Court was of the view that the applicability of the provisions of the Limitation Act has to be considered taking into account the provisions of the Special law and not by placing reliance on the provisions of the Limitation Act. 26. The decisions referred to above clearly shows that in case the provisions of the Special Act taken as a whole excludes the applicability of the Limitation Act either expressly or impliedly, the Courts cannot supplement the provisions of the Limitation Act to extend the period of limitation. In short, the provisions of the sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount due to banks and financial institutions by following a summary procedure. The Government on examination of the data provided by the Banks with respect to the pending litigations found that huge amount of public money was locked up in litigation. This made the parliament to enact the RDDBFI Act, 1993. 30. Section 19 of RDDBFI Act permits the Banks to file applications before the Tribunal for the purpose of issuing recovery certificates. The Tribunal was expected to decide the matter within a period of 180 days from the date of receipt of application. Section 20 of the RDDBFI Act provides for an appeal to the Appellate Tribunal within a period of forty-five days from the date on which the copy of the order is received by the appellant. The proviso to Section 20(3) permits the Appellate Tribunal to entertain an appeal in case the Tribunal is of the opinion that the appellant has made out sufficient cause for not filing the appeal within the statutory period. Though RDDBFI Act was enacted with a view to constitute a machinery to achieve speedy recovery, still, it failed to give the desired results. 31. The problem of accruing non-performing assets attracted the attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to achieve the results on account of the time taken to complete the original and appellate proceedings and the ultimate execution proceedings. The Legislature therefore wanted a fast track method and machinery to recover the dues within a reasonable time. The failure to make a provision to extend the provisions of the Limitation Act cannot therefore be treated as an omission. 35. The intention of the legislature to complete the entire legal proceeding within a specified period is evident from sub-section (5) of Section 17. This provision gives a mandate to the Tribunal to dispose of the application as expeditiously as possible and in any case within sixty days from the date of initiation of such appeal. The proviso to sub-section (5) of Section 17 is an ultimatum to the Tribunal to complete the proceedings within the outer time limit of four months from the date of registration of the appeal under sub-section (1) of Section 17 of the Act. 36. The right of appeal is nothing but a statutory right. The said right can be regulated by imposing appropriate conditions. When the right of appeal is circumscribed by a condition that it should be filed within thirty days, it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RDDBFI Act. According to the learned counsel, RDDBFI Act contains a specific provision for condoning the delay and as such, the Appellate Tribunal is empowered to condone the delay in filing an appeal under Section 18 of the SARFAESI Act. It is true that Section 18(2) provides that the Appellate Tribunal shall dispose of the appeal in accordance with the provisions of the RDDBFI Act. This is only for the purpose of regulating the proceedings. That does not mean that the provisions of the RDDBFI Act are automatically made applicable to an appeal under Section 18 of the SARFAESI Act. 40. Sub-section (2) of Section 18 is very specific that it is only for the purpose of disposal of the appeals under SARFAESI Act, the provisions of RDDBFI Act are made applicable. The question of disposal of the appeal would arise only after entertaining the appeal. We have not reached that stage now. We are now considering the question as to whether a belated appeal could be entertained by the Appellate Tribunal. In case there is no power to condone the delay, there is no question of entertaining the appeal. The question of disposal of the appeal in accordance with the provisions of the RDDBFI Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its counterclaim is entirely dependent on the continuance of the applications filed by the bank. Before it no declaratory relief can be sought for by the debtor. It is true that claim for damages would be maintainable but the same have been provided by way of extending the right of counterclaim. 86. The Debts Recovery Tribunal cannot pass a decree. It can issue only recovery certificates. [See Sections 19(2) and 19(22) of the Act.] The power of the Tribunal to grant interim order is attenuated with circumspection. [See Dataware Design Labs (P) Ltd. v. SBI, Comp Cas. at p. 184.] Concededly in the proceeding before the Debts Recovery Tribunal detailed examination, cross-examinations, provisions of the Evidence Act as also application of other provisions of the Code of Civil Procedure like interrogatories, discoveries of documents and admission need not be gone into. Taking recourse to such proceedings would be an exception. Entire focus of the proceedings before the Debts Recovery Tribunal centres round the legally recoverable dues of the bank. 89. The Tribunal could have been treated to be a civil court provided it could pass a decree and it had all the attributes of a civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 22 raises a legal fiction that the proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 and for all the purposes of Section 196 of the Penal Code, 1860. The very fact that a legal fiction has been created and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973, itself suggests that Parliament did not intend to take away the jurisdiction of the civil court. In any event, the said legal fiction has a limited application. Its scope and ambit cannot be extended. In Bharat Bank Ltd.16 it has clearly been held that although the Labour Court may have all the trappings of a court, but it is still not a court. 48. The Supreme Court in Nahar Industrial Enterprises Limited on the basis of the statement of objects, preable and the scheme observed that the Tribunal has only a limited jurisdiction and therefore it would not be a civil court. 49. The Supreme Court in Mardia Chemicals Ltd. v. Union of India (2004(4) SCC 311) while analysing the provisions of the SARFAESI Act observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the appellant herein under Section 90 of the Act not being a court, the Limitation Act, as such, had no applicability to the proceedings before him. But even in such a situation the relevant special statute may contain an express provision conferring on the Appellate Authority, such as the Collector, the power to extend the prescribed period of limitation on sufficient cause being shown by laying down that the provisions of Section 5 of the Limitation Act shall be applicable to such proceedings. 54. Since the Court has already made the position very clear that the Tribunal under RDDBFI Act is not a Court, the question of automatic extension of the provisions of the Limitation Act to an appeal under Section 18 of the SARFAESI Act would not arise. We have only to see whether there is an express provision under the SARFAESI Act indicating the applicability of the provisions of the Limitation Act. 55. The proviso to sub-section (3) of Section 20 of RDDBFI Act indicates the legislative intent to extend the time limit for filing appeal. Similarly Section 24 of the said Act indicates the exclusion of the provisions of the Limitation Act 1963 to an application before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of the Limitation Act and consequently Section 5 of the Limitation Act would also be applicable to such proceedings. Appellate authority will have ample jurisdiction to consider the question whether delay in filing such appeals could be condoned on sufficient cause being made out by the applicant concerned for the delay in filing such appeals. 57. Once it is held that Tribunal is not a Court, Section 5 of the Limitation Act would not be available to the appeal under Section 18 of the SARFAESI Act. Mukri Gopalan is not an authority for the proposition that Section 5 would apply even to a proceeding before the specified Tribunal unless it is expressly excluded. 58. While considering the applicability of Section 5 of the Limitation Act to a reference under Section 35-H(1) of the Central Excise Act, 1944 the Supreme Court in Commissioner of Customs v. Hongo India Private Limited, (2009) 5 SCC 791, observed: 35. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the special laws is sometimes given to the ordinary courts, and sometimes given to separate tribunals constituted under the special law. When the special law provides that the provision contained in Section 5 shall apply to the proceedings under it, it is really a conferment of the power of the court under Section 5 to the tribunals under the special law whether these tribunals are courts or not. 60. The learned counsel appearing for the petitioners in the respective writ petitions highlighted the point regarding the short time provided for filing an appeal under Section 18 of the Act. 61. The SARFAESI Act gives only thirty days time to file an appeal. The parliament wanted the Banks to recover the debts early without the intervention of Courts. The remedy of appeal under Section 17 and the second appeal under Section 18 are the adjudicatory mechanisms available to the parties to test the legality and correctness of the steps taken by the secured creditor under sub-section (4) of Section 13 of the SARFAESI Act. The parties must be diligent in prosecuting the appeals. Law will not come not the rescue of those who are negligent and careless. 62. Even while providing these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cere and not jus dare. 64. The Supreme Court in Mardia Chemicals Ltd. (2004(4) SCC 311) observed that the effect of some of the provisions may be a bit harsh for some of the borrowers but on that ground the impugned provisions of the Act cannot be said to be unconstitutional in view of the fact that the object of the Act is to achieve speedier recovery of dues. 65. We may now advert to the judgment of the Madhya Pradesh High Court relied upon by the Appellate Tribunal to dismiss the appeal. In Seth Banshidhar Kedia Rice Mills Pvt.Ltd. v. State Bank of India (AIR 2011 Madhya Pradesh 205) the Madhya Pradesh High Court compared the provisions of the RDDBFI Act and the SARFAESI Act, more particularly Section 18 of the SARFAESI Act with Section 20 of the RDDBFI Act. The Division Bench found that the period of limitation for filing an appeal under Section 18 of the Act has been reduced from 45 days to 30 days with no discretion to condone the delay. However, power to condone the delay was given to the Appellate Tribunal under the proviso to Section 20(3) of the RDDBFI Act. This made the Division Bench to conclude that the Legislature has consciously decided not to confer the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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