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2015 (1) TMI 319 - HC - Companies LawPower of Debts Recovery Appellate Tribunal to condone delay - whether the Debts Recovery Appellate Tribunal constituted under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has power to condone the delay in filing second appeal under Section 18 of the SARFAESI Act - Held that - In case the provisions of the Limitation Act are not expressly excluded and the period of limitation prescribed under the Special Act is different from the period that prescribed under the Schedule to the Limitation Act, then Section 29(2) would apply. In short, it is the contention of the petitioners that Sections 4 to 24 of the Limitation Act would apply automatically to determine the periods under Special Law in case the provisions of the Limitation Act are not expressly excluded. Proviso to sub-section (3) of Section 20 of the RDDBFI Act gives a discretion to the appellate authority to extend the time for filing statutory appeal. On the other hand, while enacting the SARFAESI Act, the parliament very consciously excluded the application of 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 an application before the Tribunal. There are no such express provisions in the SARFAESI Act so as to enable the appellants to invoke Section 5 of the Limitation Act. - Section 37 of the SARFAESI Act is in the nature of a clarification that the operation of some of the other laws are not barred. This shows that SARFAESI Act is in aid and not in derogation of other laws. In view of Section 36 of the SARFAESI Act it is not correct to say that the Limitation Act would come as an aid to the SARFAESI Act to recover the amount due to the Banks and Financial Institutions. The statement of objects and reasons, the preamble and the scheme of the SARFAESI Act would make the position clear that the Legislature consciously and intentionally excluded the applicability of Section 29(2) of the Limitation Act and consequently Section 5 to an appeal before the Appellate Tribunal under Section 18 of the Act. - Section 29(2) of the Limitation Act does not apply to an appeal under Section 18 of the SARFAESI Act and therefore Section 5 of the Limitation Act cannot be pressed into service to condone the delay in filing such appeal. - Decided against Appellant.
Issues Involved:
1. Whether the Debts Recovery Appellate Tribunal under the SARFAESI Act has the power to condone the delay in filing a second appeal under Section 18 of the SARFAESI Act. Issue-wise Detailed Analysis: 1. Power to Condon the Delay: - Core Issue: The primary question is whether the Debts Recovery Appellate Tribunal (Appellate Tribunal) constituted under the SARFAESI Act has the authority to condone delays in filing second appeals under Section 18. - Petitioners' Arguments: - The SARFAESI Act does not expressly exclude the provisions of the Limitation Act. - Section 29(2) of the Limitation Act applies if two conditions are met: a period of limitation is prescribed under a special or local law, and this period differs from that in the Limitation Act's Schedule. - If these conditions are satisfied, Sections 4 to 24 of the Limitation Act, including Section 5, apply unless expressly excluded. - The SARFAESI Act is a special statute, and since it does not explicitly exclude the Limitation Act, the Appellate Tribunal should have the power to extend the time for filing appeals. - Section 36 of the SARFAESI Act mandates that claims must be made within the Limitation Act's period, but no such provision exists for appeals under Section 18. - Section 37 of the SARFAESI Act states that the application of other laws, including the Limitation Act, is not barred. - The right of appeal is statutory and should not be narrowly interpreted to curtail it. - The Supreme Court's decision in Mukri Gopalan v. Cheppilat Puthanpuraiyil Aboobacker supports the argument that the Limitation Act applies unless expressly excluded. - Respondents' Arguments: - The time limit for filing appeals under both the Limitation Act and SARFAESI Act is thirty days, indicating no different period is prescribed to invoke Section 29(2). - The Legislature intentionally avoided including the Limitation Act in proceedings before the Appellate Tribunal under Section 18. - The SARFAESI Act aims for speedy recovery of dues, and extending Section 5 of the Limitation Act would hinder this objective. - Court's Analysis: - The SARFAESI Act is a special law designed to enable Banks and Financial Institutions to recover dues without court intervention. - Section 17 allows aggrieved parties to approach the Tribunal within forty-five days, and Section 18 allows appeals to the Appellate Tribunal within thirty days. - The Limitation Act applies to all civil proceedings unless excluded specifically or by necessary implication. - The Supreme Court has held that if the provisions of a special law exclude the Limitation Act by necessary implication, the Limitation Act cannot be applied. - The SARFAESI Act's scheme and legislative intent indicate an exclusion of the Limitation Act to ensure speedy recovery. - The Appellate Tribunal is not a Civil Court, and the provisions of the Limitation Act do not automatically apply to it. - The SARFAESI Act does not contain an express provision for extending the Limitation Act to appeals under Section 18. - The Supreme Court's decision in Mukri Gopalan is distinguishable as it involved a court, whereas the Appellate Tribunal under the SARFAESI Act is not a court. - The SARFAESI Act's objective is to provide a fast-track mechanism for debt recovery, and extending the Limitation Act would defeat this purpose. - Conclusion: The Debts Recovery Appellate Tribunal under the SARFAESI Act does not have the power to condone delays in filing appeals under Section 18. 2. Applicability of Limitation Act to Special Tribunals: - Core Issue: Whether the Limitation Act applies to tribunals constituted under special laws. - Court's Analysis: - The Limitation Act applies to courts unless expressly excluded. - The Appellate Tribunal under the SARFAESI Act is not a court but a tribunal with limited jurisdiction. - The Supreme Court has held that the Limitation Act does not apply to tribunals unless expressly provided. - The SARFAESI Act does not contain a provision extending the Limitation Act to appeals under Section 18. - Conclusion: The Limitation Act does not apply to the Appellate Tribunal under the SARFAESI Act. 3. Legislative Intent and Scheme of SARFAESI Act: - Core Issue: The legislative intent behind the SARFAESI Act and its scheme concerning the applicability of the Limitation Act. - Court's Analysis: - The SARFAESI Act was enacted to provide a fast-track mechanism for the recovery of dues by Banks and Financial Institutions. - The Act's scheme and legislative intent indicate an exclusion of the Limitation Act to ensure speedy recovery. - The failure to include a provision for extending the Limitation Act was a conscious decision by the Legislature. - Conclusion: The legislative intent and scheme of the SARFAESI Act exclude the applicability of the Limitation Act to appeals under Section 18. Judgment: - The Debts Recovery Appellate Tribunal has no power to condone the delay in filing appeals under Section 18 of the SARFAESI Act. - The writ petitions are dismissed, and the Appellate Tribunal is directed to consider the plea of whether the appeal was filed within the period of limitation. If the appeal is found to be within the prescribed period, it should be entertained.
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