TMI Blog2018 (11) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... itendra Vishnu Thakur vs. State of Maharashtra, [1994 (7) TMI 343 - SUPREME COURT OF INDIA], 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. 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. 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 - petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent 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. 3. 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. 4. Petitioner No.1 pleade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2002 (in short, the Rules ) 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. 5. 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 applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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,- ( 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) Where- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks and Financial Institutions Act, 1993 (51 of 1993) and the rules made thereunder. 18. 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 Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quires,- (a) applicant includes- (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; 29. 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. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation 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. 8. 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. 9. Having analysed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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:- 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) 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 differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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. 12. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: 22. 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. 17. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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