Bhuwalka Steel Industries Limited, Bangalore v. Indian Overseas Bank, Bangalore
2015-12-18
ANAND BYRAREDDY
body2015
DigiLaw.ai
JUDGMENT : Anand Byrareddy, J. 1. Heard the learned counsel for the petitioner and the learned counsel for the respondents. 2. The present petition is filed in the wake of the Debts Recovery Tribunal having dismissed an application filed under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as 'the SARFAESI Act', for brevity), after a delay. The order impugned was passed on 22.09.2015 and the application was filed after a delay of 113 days. Therefore, the main application was accompanied by another, seeking condonation of delay. The Tribunal, by its order dated 22.09.2015 had framed the following issues: "(i) Whether Section 5 of the Limitation Act can be invoked by the petitioner (s)/applicant (s) who opts to file petition/application under Section 17 of the SARFAESI Act, 2002, seeking to condone the delay in filing the petition/application under Section 17 of the SARFAESI Act and whether DRT (Debts Recovery Tribunal) can invoke Section 5 of the Limitation Act to condone the delay in filing the petition/application under Section 17 of the SARFAESI Act, 2002. (ii) Even assuming that Section 5 of the Limitation Act applies to the petition/application filed under Section 17 of the SARFAESI Act, 2002, whether the present applicant establish that there are sufficient, bona fide and reasonable causes and reasons withholding them in filing the present main petition within the prescribed time of limitation. (iii)What order." The Tribunal considered the first of the issues and having held the same in the negative, had rejected both the applications. It is that which is under challenge in the present petitions. 3. The Tribunal while rejecting the applications seeking condonation of delay, has proceeded to rely upon a decision of the Madras High Court in Zubida Begaum v. Indian Bank & others, 2013 (1) DRTC 226, which was a Division Bench judgment holding that Section 5 of the Limitation Act, 1963 could not be invoked in proceedings before the DRT and that any appeal filed after the prescribed period, could not be entertained. 4. This was directly in issue before the Supreme Court in the case of Baleshwar Dayal Jaiswal v. Bank of India & Ors. in Civil Appeal No.5924/2015 & connected cases decided on 5.8.2015.
4. This was directly in issue before the Supreme Court in the case of Baleshwar Dayal Jaiswal v. Bank of India & Ors. in Civil Appeal No.5924/2015 & connected cases decided on 5.8.2015. The Supreme Court was addressing a batch of appeals wherein an identical question arose as to whether the Appellate Authority under the SARFAESI Act has the power to condone the delay in filing an appeal under Section 18(1) of the SARFAESI Act, and has answered the same in the affirmative while giving reasons as follows: That a bare perusal of Section 18(2) of the SARFAESI Act would make it clear that the Appellate Authority under the SARFAESI Act had to dispose of an appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the RDB Act', for brevity). And that the provisions of the RDB Act stand incorporated in the SARFAESI Act for disposal of an appeal. Once that is so, it would not be possible to discern any reason as to why the SARFAESI Appellate Tribunal cannot entertain an appeal beyond the prescribed period even on being satisfied that there is sufficient cause for not filing such appeal within that period. Even if the power of condonation of delay by virtue of Section 29(2) of the Limitation Act, 1963 were held not to be applicable, the proviso to Section 20(3) of the RDB Act is applicable by virtue of Section 18(2) of the SARFAESI Act. This interpretation is clearly borne out from the provisions of the two statutes and also advances the cause of justice. And the scheme of the statute expressly excludes the power of condonation of delay and there is no reason to deny such power to the Appellate Authority when the statutory scheme so warrants. Principle of legislation by incorporation is well known and has been well applied and has been referred to the judgment in Ram Kirpal Bhagat v. The State of Bihar (1969) 3 SCC 471 , and other cases. Accordingly, the Apex Court has held that the Appellate Tribunal under the SARFAESI Act has the power to condone the delay in filing an appeal before it by virtue of Section 18(2) of the S ARFAESI Act and proviso to Section 20(3) of the RDB Act.
Accordingly, the Apex Court has held that the Appellate Tribunal under the SARFAESI Act has the power to condone the delay in filing an appeal before it by virtue of Section 18(2) of the S ARFAESI Act and proviso to Section 20(3) of the RDB Act. Therefore, in view of the above law laid down by the Supreme Court with reference to Section 20(3) of the RDB Act, which reads as follows: "20(3). Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period." And Section 18(2) which reads as follows: (2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far 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 (51 of 1993) and rules made thereunder.", there is no hesitation in holding that the Tribunal was in error and reliance placed on the Division Bench judgment of the Madras High Court notwithstanding the Apex Court having now laid down the law, the delay would have to be condoned if there was sufficient reason and the matter would have to be considered on merits. Accordingly, the petitions are allowed. The matters are remanded for a fresh consideration, by the Tribunal. The respondent-Bank shall not take any precipitative measures till such time the Tribunal passes appropriate orders on the pending applications which are now remanded for reconsideration. The parties shall appear before the Tribunal without further notice on 28.12.2015. Petitions allowed.