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2007 (12) TMI 296 - HC - Companies LawFrom which point does the period of limitation of 45 days prescribed in section 17 of the NPA Act start running; from the date on which symbolic possession is taken or from the date on which actual possession is taken. Whether and to what extent the Limitation Act 1963 is applicable to the proceedings under section 17(1) of the NPA Act? Held that - An appeal under section 17 (1) of the NPA Act can be filed within 45 days from the date on which actual possession is taken as there is no dichotomy between symbolic possession and actual possession. However we make it clear that there is no further accrual of cause of action. The borrower s right in the secured assets having been extinguished he has no right to object to the procedure of sale. Thus Forty-five days period of limitation prescribed under section 17(1) of the NPA Act starts running from the date which symbolic possession is taken or from the date when actual possession is taken as there is no dichotomy between the two. The provision of section 5 of the Limitation Act is applicable to no proceedings under section 17(1) of the NPA Act.
Issues Involved:
1. Starting point of the 45-day limitation period under Section 17 of the NPA Act. 2. Applicability of the Limitation Act, 1963 to proceedings under Section 17(1) of the NPA Act. Issue-wise Detailed Analysis: 1. Starting Point of the 45-day Limitation Period under Section 17 of the NPA Act: The court examined whether the 45-day limitation period for filing an appeal under Section 17 of the NPA Act starts from the date of symbolic possession or the date of actual possession. The petitioner argued that the limitation period should start from the date of symbolic possession, while the respondents contended it should start from the date of actual possession. The court referred to the Supreme Court judgments in Mardia Chemicals and Transcore cases. It noted that the NPA Act deals with crystallized liability and the enforcement of security interest, which includes taking possession of the secured assets. The court emphasized that the borrower's right to appeal under Section 17 matures when any measures under Section 13(4) are taken, and such measures include taking symbolic or actual possession. The court concluded that the limitation period starts from the date on which actual possession is taken. It reasoned that if symbolic possession is taken but actual possession is delayed, the borrower should not be left without a remedy. Therefore, the borrower can file an appeal within 45 days from the date of actual possession. 2. Applicability of the Limitation Act, 1963 to Proceedings under Section 17(1) of the NPA Act: The court examined whether the provisions of the Limitation Act, 1963, particularly Section 5, which allows for the condonation of delay, are applicable to proceedings under Section 17(1) of the NPA Act. The petitioner argued that the NPA Act expressly excludes the application of the Limitation Act, while the respondents contended otherwise. The court referred to Section 29(2) of the Limitation Act, which states that the provisions of the Limitation Act shall apply to any special or local law unless expressly excluded. It also considered Section 37 of the NPA Act, which states that the provisions of the NPA Act are in addition to and not in derogation of other laws. The court concluded that the provisions of the Limitation Act, including Section 5, are applicable to proceedings under Section 17(1) of the NPA Act. It reasoned that there is no express exclusion of the Limitation Act in the NPA Act and that the application of Section 5 would be in the interest of justice. The court emphasized that while expeditious disposal of proceedings is essential, the DRT should not allow frivolous applications for condonation of delay. Conclusion: The court held that the 45-day limitation period for filing an appeal under Section 17 of the NPA Act starts from the date of actual possession. It also held that the provisions of the Limitation Act, including Section 5, are applicable to proceedings under Section 17(1) of the NPA Act. The petition was disposed of accordingly.
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