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2018 (11) TMI 532 - HC - Indian LawsDelay in filing Securitisation application - power of Debt Recovery Tribunal to condone delay - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - whether the Debt Recovery Tribunal has the power to condone the delay in filing the Securitisation application (SA) under Section 17 of the 2002 Act? Held that - 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. It is well settled that the Limitation Act, 1963 is procedural law. In Hitendra 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 - petition allowed.
Issues Involved:
1. Whether the Debt Recovery Tribunal (DRT) has the power to condone the delay in filing the Securitisation Application (SA) under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (the 2002 Act). Issue-wise Detailed Analysis: 1. Power to Condonation of Delay by DRT: The primary issue in these petitions is whether the DRT has the jurisdiction to condone the delay in filing an SA under Section 17 of the 2002 Act. The petitioners challenged the DRT's order dated 15.01.2018, which dismissed their SA on the grounds that the Tribunal does not have the power to condone the delay. The DRT relied on the Supreme Court judgment in International Assets and Reconstruction Company of India Limited Vs. Official Liquidator, Aldrich, CA No. 16962 of 2017. Statutory Provisions: Section 17 of the 2002 Act allows any person aggrieved by the measures taken by the secured creditor under Section 13(4) to file an application to the DRT within 45 days. Section 17(7) states that the DRT shall dispose of the application in accordance with the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the 1993 Act). Section 24 of the 1993 Act applies the provisions of the Limitation Act, 1963 to applications made to the Tribunal. Case Law Analysis: The Supreme Court in Hitendra Vishnu Thakur vs. State of Maharashtra held that procedural laws like the Limitation Act, 1963 are applicable unless expressly excluded. The Full Bench of the Punjab and Haryana High Court in Jaswant Singh Bambha vs. Central Board of Direct Taxes held that Section 5 of the Limitation Act applies unless expressly excluded by a special or local law. Similarly, in State of Haryana vs. Hindustan Machine Tools Limited, it was held that the Limitation Act applies unless expressly excluded. Judgments from Other High Courts: The Bombay High Court in UCO Bank, Mumbai vs. M/s Kanji Manji Kothari and Co., Mumbai, the Madras High Court in Pannu Swami vs. The Debts Recovery Tribunal, and the Gujarat High Court in Union of India vs. Chairperson, Debts Recovery Appellate Tribunal held that Section 5 of the Limitation Act applies to proceedings under Section 17 of the 2002 Act. The Madhya Pradesh High Court in M/s Seth Banshidhar Media Rice Mills Pvt. Limited vs. State Bank of India also supported this view. Contrary View: The Calcutta High Court in Akshat Commercial Pvt. Ltd. vs. Kalpana Chakraborty held that Section 5 of the Limitation Act does not apply to proceedings under Section 17 of the 2002 Act. However, this view is not widely accepted. Conclusion: The High Court concluded that Section 17(1) of the 2002 Act is akin to a remedy for the 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 not defeat the rights of the secured creditor. The provisions of the Limitation Act, 1963 are applicable to the proceedings under Section 17 of the 2002 Act before the DRT, and the 2002 Act does not expressly exclude the application of the Limitation Act, 1963. Order: All the petitions are allowed. The impugned orders passed by the DRT dismissing the application under Section 17 of the 2002 Act on the ground that the DRT does not have the power to condone the delay are quashed. The matter is remitted back to the DRT to decide the application for condonation of delay afresh on merits in accordance with the observations made hereinbefore.
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