Gauhati High Court
WP(C)/7135/2023 on 20 November, 2024
GAHC010278352023
2024:GAU-AS:11262-DB
IN THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)
WP(C) NO.7135 OF 2023
1. M/s Baruah C.C. Block Industry,
represented by its Proprietor Smti. Anju
Barua, resident of Bengpukhuri, Manik
Hazarika Road, District: Tinsukia, Assam,
PIN - 786125.
2. Smti. Anju Barua,
Wife of Late Rajen Barua,
Resident of Bengpukhuri, Manik Hazarika
Road, District: Tinsukia, Assam, PIN -
786125.
.....Petitioners
-Versus-
1. State Bank of India, Head Office, Madam
Cama Road, Mumbai, PIN - 400021.
2. The Authorised Officer, State Bank of
India, Stressed Assets Recovery Branch, Na-
Ali, M.G. Road, Jorhat, Opposite ASEB
Building, Assam.
3. The Chief Manager, State Bank of India,
RMSE HUB, Tinsukia Branch, 3rd Floor, Near
ASTC Bus Stand, PO: Tinsukia, District:
Tinsukia, Assam, PIN - 786125.
.....Respondents
WP(C) No.7135/2023 1|Page
- BEFORE -
HON'BLE THE CHIEF JUSTICE MR. VIJAY BISHNOI
HON'BLE MR. JUSTICE N. UNNI KRISHNAN NAIR
For the Petitioners : Mr. S. Mitra, Advocate.
For the Respondents : Mr. K.K. Nandi, Advocate.
Date of Hearing : 05.11.2024.
Date of judgment : 20.11.2024.
JUDGMENT & ORDER (CAV)
(Vijay Bishnoi, CJ)
Heard Mr. S. Mitra, learned counsel for the petitioners.
Also heard Mr. K.K. Nandi, learned counsel appearing for all the
respondents.
2. The petitioner No.1 herein is a proprietorship firm,
which is represented by its sole Proprietor Smti. Anju Barua, i.e.
the petitioner No.2. They have preferred this writ petition
challenging the notice dated 19.05.2023 issued by the
respondent Bank under Section 13(2) of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (hereinafter to be referred as "SARFAESI
Act") and the subsequent notices dated 25.07.2023 and
05.08.2023 issued by the respondent Bank under Rule 8(1) of
the Security Interest (Enforcement) Rules, 2002 (hereinafter to
be referred as "Rules of 2002"). The petitioner's loan account
was declared as a Non-Performing Asset (NPA) on 28.02.2023.
3. Initially the petitioners have challenged the action of
the respondent Bank by way of filing an application under
Section 17(1) of the SARFAESI Act before the Debts Recovery
WP(C) No.7135/2023 2|Page
Tribunal, Guwahati Bench, Guwahati (hereinafter to be referred
as "DRT"). However, the said application came to be dismissed
vide order dated 20.11.2023 primarily on the ground that the
same was barred by limitation as per the provisions of Section
17 of the SARFAESI Act. The request made on behalf of the
petitioners to condone the delay of 19 days, though DRT had
calculated it as 23 days, was turned down by the DRT mainly
by relying on the decision rendered by a Division Bench of the
High Court of Calcutta in Akshat Commercial Private
Limited & Anr. -Vs- Kalpana Chakraborty & Ors., reported
in AIR 2010 Cal 138 as well as the order dated 11.08.2022
passed by the Hon'ble Supreme Court in Civil Appeal
No.5240/2022 (Bank of Baroda & Anr. -Vs- M/s
Parasaadilal Tursiram Sheetgrah Private Limited &
Ors.), while holding that the statutory time period of 45 days
provided under Section 17(1) of the SARFAESI Act is mandatory
and no discretion has been conferred upon the DRT to extend
such period. The order dated 20.11.2023 as such is not under
challenge in this writ petition and the petitioner No.2 has
claimed that she has not challenged the order passed by the
DRT before the Debts Recovery Appellate Tribunal, Kolkata by
filing an appeal under Section 18 of the SARFAESI Act as it may
not yield favourable result due to the judgment passed by the
High Court of Calcutta in Akshat Commercial Private
Limited (supra).
4. Be that as it may, though the order passed by the DRT
is not under challenge in this writ petition but the question that
arises in this writ petition is whether the DRT can condone the
WP(C) No.7135/2023 3|Page
delay in filing an application under Section 17(1) of the
SARFAESI Act preferred on behalf of a borrower by giving the
benefit of the provisions of the Limitation Act, 1963. Therefore,
we proceed to answer this question after taking into
consideration the arguments advanced on behalf of the parties.
5. Mr. S. Mitra, learned counsel for the petitioners has
argued that the DRT can extend the benefit of the provisions of
the Limitation Act while entertaining an application under
Section 17 of the SARFAESI Act. It is argued that an
application under Section 17 can be preferred by any person
including the borrower aggrieved by any measure referred to in
sub-section (4) of Section 13 of the SARFAESI Act, within 45
days from the date on which such measures is taken by the
secured creditor. Referring to sub-section (7) of Section 17 of
the SARFAESI Act, learned counsel for the petitioners has
argued that as per sub-section (7) of Section 17, the DRT is
obliged to dispose of the application preferred under Section 17
of the SARFAESI Act in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial Institutions Act,
1993 (now Recovery of Debts and Bankruptcy Act, 1993)
(hereinafter to be referred as "RDB Act"). It is contended that
under Section 19 of the RDB Act, a Bank or financial institution
can move an application to the DRT to recover any debt, and
Section 24 of the RDB Act provides that the provisions of the
Limitation Act shall, as far as may be, apply to an application
made to the Tribunal. It is contended that as per sub-section
(7) of Section 17 of the SARFAESI Act when the DRT is obliged
to dispose of an application in accordance with the provisions of
WP(C) No.7135/2023 4|Page
the RDB Act, the provisions of Limitation Act can also be taken
into consideration for the purpose of condoning the delay in
filing Section 17 application under the SARFAESI Act.
6. Mr. Mitra, learned counsel for the petitioners has
submitted that the Hon'ble Supreme Court in Baleswar Dayal
Jaiswal -Vs- Bank of India & Ors., reported in (2016) 1
SCC 444, while taking into consideration the provisions of the
SARFAESI Act as well as the RDB Act has, in unequivocal terms,
held that the DRT as well as the Debts Recovery Appellate
Tribunal have the power to condone the delay by applying the
provisions of the Limitation Act while adjudicating the
application moved under Section 17 of the SARFAESI Act, or an
appeal under Section 18 of the SARFAESI Act. The learned
counsel has also placed reliance on the decision rendered by
the Division Bench of the Andhra Pradesh High Court in Porus
Laboratory Private Limited -Vs- Indian Bank, Asset
Recovery Management Branch, Hyderabad & Anr. ,
reported in 2018 SCC OnLine Hyd 161; the decision of a
Division Bench of the High Court of Judicature at Madras dated
13.01.2020 passed in W.P. Nos.34860/2019 (P.K.
Radhakrishnan -Vs- Central Bank of India & Ors.); the
decision of the High Court of Judicature at Patna dated
26.08.2019 rendered in Civil Writ Jurisdiction Case
No.17999/2017 (Rahmatullah -Vs- Authorized Officer -cum-
Chief Manager, Central Bank of India & Ors.); the decision
of the Division Bench of the Madhya Pradesh High Court
rendered in Aniruddh Singh -Vs- Authorized Officer, ICICI
Bank Limited, Jabalpur, reported in 2024 0 Supreme (MP)
WP(C) No.7135/2023 5|Page
4 and has argued that all the above High Courts have
expressed the same view that the DRT in appropriate case can
condone the delay in filing an application under Section 17 of
the SARFAESI Act. It is submitted that the view expressed by
the Calcutta High Court in Akshat Commercial Private
Limited (supra) has not been followed in the aforesaid
judgments.
7. The learned counsel for the petitioners has, therefore,
argued that the DRT has erred in not condoning the delay in
filing the application under Section 17 of the SARFAESI Act. It
is, therefore, contended that this Court should interfere with
the action of the DRT and the DRT be directed to consider the
prayer of the petitioners for condoning the delay in filing the
application under Section 17 of the SARFAESI Act and if a case
is made out for condoning the delay, the same be condoned
and the application filed on behalf of the petitioners be decided
on merits.
8. Per contra, Mr. K.K. Nandi, learned counsel appearing
for the respondents has vehemently opposed the submissions
made on behalf of the petitioners and has argued that the DRT
has no power to extend the benefit of the provisions of the
Limitation Act to any person, including the borrower, while
adjudicating an application filed with a delay, under Section 17
of the SARFAESI Act. The learned counsel has submitted that
the Hon'ble Supreme Court in Mardia Chemicals Limited -Vs-
Union of India & Ors., reported in (2004) 4 SCC 311 and in
M/s Transcore -Vs- Union of India & Anr., reported in
WP(C) No.7135/2023 6|Page
(2008) 1 SCC 125 has categorically held that proceedings
under Section 17 of the SARFAESI Act is a state of initial
proceedings, such as filing of suit in the Civil Court and,
therefore, there is no application of the Limitation Act in the
proceedings under Section 17 of the SARFAESI Act.
9. Mr. Nandi has further placed reliance on the order
passed by the Hon'ble Supreme Court in Bank of Baroda &
Anr. -Vs- M/s Parasaadilal Tursiram Sheetgrah Private
Limited & Ors. (supra) and has argued that the Hon'ble
Supreme Court in the above referred order has clearly held that
the reason for providing time limit for filing an application under
Section 17 of the SARFAESI Act can easily be inferred from the
purpose and object of the enactment, as SARFAESI Act is
enacted for quick enforcement of the security. It is contended
that since the object of the SARFAESI Act is for quick
enforcement of the security, the concept of condonation of
delay is alien to it and cannot be applied in such proceedings.
The learned counsel has further placed reliance on the decision
of the Hon'ble Supreme Court rendered in International Asset
Reconstruction Company of India Limited -Vs- Official
Liquidator of Aldrich Pharmaceuticals Limited & Ors. ,
reported in AIR 2017 SC 5013 and the decision of the
Calcutta High Court in Akshat Commercial Private Limited
(supra) as well the judgment dated 12.05.2021 rendered by a
Division Bench of the High Court of Orissa in WP(C)
No.8100/2019 (BM, Urban Co-operative Limited, Cuttack -
Vs- Registrar, DRT & Anr.). The learned counsel appearing
for the respondents has, therefore, submitted that the DRT has
WP(C) No.7135/2023 7|Page
rightly refused to condone the delay in filing the application by
the petitioners under Section 17 of the SARFAESI Act. Hence,
the learned counsel for the respondents has contended that no
case for interference is made out and the writ petition filed on
behalf of the petitioners may be dismissed.
10. Heard the learned counsel appearing for the parties.
11. For proper adjudication of the matter, it is gainful to
reproduce the relevant provisions of the SARFAESI Act; RDB Act
as well as the provisions of the Limitation Act, 1963.
SECURITISATION AND RECONSTRUCTION OF FINANCIAL
ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT,
2002
"2. Definitions. - (1) In this Act, unless the context otherwise
requires, -
(i) 'Debts Recovery Tribunal' means the Tribunal established
under sub-section (1) of section 3 of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993 (51 of
1993);
17. [Application against measures to recover secured
debts].-- (1) Any person (including borrower), aggrieved by
any of the measures referred to in sub-section (4) of section
13 taken by the secured creditor or his authorised officer
under this Chapter, [may make an application along with
such fee, as may be prescribed] to the Debts Recovery
Tribunal having jurisdiction in the matter within forty-five
days from the date on which such measures had been taken:
(2) .......
(3) .......
(4) .......
(5) Any application made under sub-section (1) shall be dealt
with by the Debts Recovery Tribunal as expeditiously as
possible and disposed of within sixty days from the date of
such application:
Provided that the Debts Recovery Tribunal may, from time to
time, extend the said period for reasons to be recorded in
WP(C) No.7135/2023 8|Page
writing, so, however, that the total period of pendency of the
application with the Debts Recovery Tribunal, shall not
exceed four months from the date of making of such
application made under sub-section (1).
(6) If the application is not disposed of by the Debts Recovery
Tribunal within the period of four months as specified in sub-
section (5), any party to the application may make an
application, in such form as may be prescribed, to the
Appellate Tribunal for directing the Debts Recovery Tribunal
for expeditious disposal of the application pending before the
Debts Recovery Tribunal and the Appellate Tribunal may, on
such application, make an order for expeditious disposal of
the pending application by the Debts Recovery Tribunal.
(7) Save as otherwise provided in this Act, the Debts
Recovery Tribunal shall, as far as may be, dispose of
application in accordance with the provisions of the
Recovery of Debts Due to Banks and Financial Institutions
Act, 1993 (51 of 1993) and the rules made thereunder."
RECOVERY OF DEBTS AND BANKRUPTCY ACT, 1993
"3. Establishment of Tribunal.-- (1) The Central Government
shall, by notification, establish one or more Tribunals, to be
known as the Debts Recovery Tribunal, to exercise the
jurisdiction, powers and authority conferred on such Tribunal
by or under this Act.
[(1A) The Central Government shall by notification establish
such number of Debts Recovery Tribunals and its benches as
it may consider necessary, to exercise the jurisdiction,
powers and authority of the Adjudicating Authority conferred
on such Tribunal by or under the Insolvency and Bankruptcy
Code, 2016.]
(2) The Central Government shall also specify, in the
notification referred to in sub-section (1), the areas within
which the Tribunal may exercise jurisdiction for entertaining
and deciding the applications filed before it.
24. Limitation.-- The provisions of the Limitation Act, 1963
(36 of 1963), shall, as far as may be, apply to an application
made to a Tribunal."
LIMITATION ACT, 1963
"29. Savings.-- (1) Nothing in this Act shall affect section 25
of the Indian Contract Act, 1872 (9 of 1872).
WP(C) No.7135/2023 9|Page
(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 definition of 'easement' in
section 2 shall not apply to cases arising in the territories to
which the Indian Easements Act, 1882 (5 of 1882), may for
the time being extend."
12. Before proceeding further, survey of the divergent
views of the High Courts and the judgments of the Hon'ble
Supreme Court (touching the issue), is required.
(i) Judgments of the various High Courts, wherein it is
held that the provisions of the Limitation Act, 1963 are
applicable in the proceedings filed under Section 17 of
the SARFAESI Act.
13. The Andhra Pradesh High Court in Porus Laboratory
Private Limited (supra), while taking into consideration the
judgments passed by the Hon'ble Supreme Court in Baleswar
Dayal Jaiswal (supra) and International Asset
Reconstruction Company of India Limited (supra), has held
as under:-
"13. It is therefore manifest that an application filed under
Section 17(1) of the SARFAESI Act, though unlike an
application under Section 19 of the RDDB Act, has to be dealt
with in accordance with the provisions of the RDDB Act, as per
WP(C) No.7135/2023 10 | P a g e
Sections 17(7) and 37 of the SARFAESI Act. Therefore, Section
24 of the RDDB Act which makes the Act of 1963 applicable to
an application would come into play as it cannot be denied
that what is presented to the Tribunal under Section 17 of the
SARFAESI Act is also an application. It is therefore amply
clear that the provisions of Section 5 of the Act of 1963 would
be applicable to a belated application made under Section 17
of the SARFAESI Act.
14. ......
15. ......
18. Though the aforestated judgment dealt only with the
provisions of the RDDB Act, the Supreme Court categorically
held therein that by virtue of Section 24 thereof, the Act of
1963 would have application to original proceedings before
the Tribunal. In consequence, there can be no doubt that a
belated application under Section 17(1) of the SARFAESI Act,
being one such original proceeding before the Tribunal, would
attract the provisions of Section 5 of the Act of 1963, by virtue
of Section 17(7) and Section 37 of the SARFAESI Act read with
Section 24 of the RDDB Act.
19. ......
20. More importantly, it may be noted that if an
aggrieved person, including a borrower, is prevented from
availing the statutory remedy provided under Section 17(1) of
the SARFAESI Act merely because the application thereunder
was not presented within the stipulated 45 days, the
hierarchy of remedies provided under the SARFAESI Act
would be denied to him and rendered nugatory on that short
ground. Such an aggrieved person would then be left with no
remedy but to invoke the extraordinary jurisdiction of the High
Court under Article 226 of the Constitution of India. As the
very purpose of creating statutory Tribunals and Appellate
Tribunals is to provide efficacious alternative means of
resolution of disputes so as to lessen the burden that would
otherwise be visited upon the High Court in exercise of its
extraordinary jurisdiction under Article 226, the statutory
remedy provided under Section 17(1) of the SARFAESI Act
cannot be interpreted in such a narrow and pedantic compass.
Be it noted, by virtue of the proviso to Section 20(3) of the
RDDB Act, the Appellate Tribunal has been held to have the
power to condone the delay in the presentation of an appeal
under Section 18 of the SARFAESI Act beyond the 30 day
period stipulated therein. There is no logic or rationale in not
extending the same power to the Tribunal while entertaining a
belated application under Section 17 of the SARFAESI Act, by
taking recourse to Sections 17(7) and 37 of the SARFAESI Act
read with Section 24 of the RDDB Act."
WP(C) No.7135/2023 11 | P a g e
14. The Division Bench of the Madras High Court in P.K.
Radhakrishnan (supra) has held as under:-
"(20) In the considered opinion of the Court, the Division
Bench of the Andhra Pradesh High Court in the decision
reported in 2018 [5] ALT 108 : 2018 SCC OnLine Hyd 161
[cited supra], had taken into consideration, the judgments in
Baleshwar's case and International Asset's case [cited supra]
reported in 2016 [1] SCC 444 and 2017 [12] SCALE 748. On
an exhaustive analysis of the legal submissions, this Court is
of the considered view that in the absence of any specific
exclusion as to the applicability of the Limitation Act to the
application filed before DRT, it is inclined to follow the said
judgments.
(21) ........
(22) ........
(23) As already observed, in the light of any express bar
as to the applicability of the limitation and that apart, there is
no self contained period of limitation provided under the
relevant provisions of the SARFAESI Act, as observed by the
Andhra Pradesh High Court in the above cited Division Bench
Judgment, this Court is of the considered view that the DRT
was right in entertaining the application. As rightly pointed out
by the learned counsel for the petitioner in WP
No.34860/2019 / 1st respondent in WP No.251/2020, DRAT
had increased the cost from Rs.10,000/- to Rs.5 Crores."
15. In Rahmatullah (supra), while relying on the
decision of the Division Bench of the Punjab & Haryana High
Court in Surinder Mahajan -Vs- Debts recovery Appellate
Tribunal & Ors. [CWP No.22567/2011 (O&M)], the learned
Single Judge of the High Court of Patna has held as under:-
"It is well settled rule of interpretation of Statute that a
provision of law should be given it's literal meaning unless the
same gives rise to an absurdity. This Court finds no absurdity
in giving effect to sub-section (7) of Section 17 of the Act of
2002 by taking a view that it adopts the procedure prescribed
under the Act of 1993 for disposal of an application
under Section 17(1) in the same way as those provisions of
the Act of 1993 apply to the application under Section 19 of
the said Act. Even a purposive interpretation would lead this
Court to the same conclusion. Section 35 of the Act of 2002
WP(C) No.7135/2023 12 | P a g e
makes it clear that provisions of this Act shall have effect
notwithstanding anything inconsistent therewith contained in
any other law for the time being in force. This Court takes a
view that a reading of Section 17 with various sub-sections
and scheme of the Act of 2002 and that of Sections 19 to 24 of
the Act of 1993 would lead to a conclusion that there is no
inconsistency in the provisions of the Act of 2002 and the Act
of 1993 rather inconsistency would arise if a view is taken
otherwise saying that the provision of Section 24 of the Act of
1993 would not apply in respect of an application
under Section 17(1) of the Act of 2002. This Court say so
because while providing for a specific period of limitation for
filing an application under Section 17(1) of the Act of 2002 the
legislatures did not expressly exclude the applicability of
the Limitation Act rather knowing fully well that Section 24 of
the Act of 1993 provides for applicability of the Limitation
Act in relation to an application under the said Act went on to
legislate that the Debts Recovery Tribunal shall as far as may
be dispose off application in accordance with the provisions of
the Act of 1993. The real import of sub-section (7) of Section
17 of the Act of 2002 is thus in favour of the applicability of
the Limitation Act being a procedural law by virtue of Section
24 of the Act of 1993 falling under Chapter IV of the said Act."
16. A Division Bench of the Punjab & Haryana High Court
in Surinder Mahajan (supra), while taking into consideration
the conflicting judgments of the various High Courts on the
point in issue and the various decisions of the Hon'ble Supreme
Court disagreeing with the judgment passed by the Calcutta
High Court in Akshat Commercial Private Limited (supra),
has held as under:-
"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 is not a suit as defined
in Section 2(l) of the Limitation Act nor such application is
before the Court. It is like original proceedings against an
action taken by the secured creditor as observed by Supreme
Court in Mardia Chemicals Case (supra). The right to approach
the Debt Recovery Tribunal under Section 17 of the Act arises
to the borrower only if the secured creditor takes an action or
WP(C) No.7135/2023 13 | P a g e
any of the measures under the Act. The entire process of
recovery is vested with a secured creditor under the Act. The
only right available with an aggrieved person is to seek
recourse to his remedies contemplated under Section 17 of the
Act. Thus it is not an original proceeding to be initiated by an
aggrieved person to establish one's right. It is more akin to the
objections filed to the action taken by the secured creditor,
who is not only the beneficiary and also adjudicator to the
large extent except to the rights of an aggrieved person
under Section 17 of the Act. The right to approach the Tribunal
arises on the initiation of proceedings by the secured creditor
against the borrower or any aggrieved person. Therefore,
though an application is to be filed by an aggrieved person
including a borrower, but such application is an objection
petition to the action taken by the secured creditor.
Though sub-sections (5) & (6) of Section 17 of the Act,
prescribes the period for a decision on an application filed in
terms of Section 17 of the Act, but sub-section (7) contemplates
that the Debt Recovery Tribunal shall dispose of the
application filed in accordance with the provisions of the 1993
Act and the Rules made there under, save as otherwise
provided under the Act. Similar provision is in respect of
appellate proceedings contained in sub-section (2) of Section
18 of the Act. The right has been given to any person including
borrower to invoke the jurisdiction of the Debt Recovery
Tribunal in the matter within 45 days from the date on which
such measures had been taken under sub-section (1)
of Section 17. Section 37 of the Act contemplates that
provisions of the Act or the Rules made there under are in
addition to, and not in derogation of 1993 Act including some
other Statutes.
There is no express exclusion of Sections 4 to 24 of
the Limitation Act to the proceedings before the Debt Recovery
Tribunal analogous to the provisions of the Arbitration and
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 17 and/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, Section
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
WP(C) No.7135/2023 14 | P a g e
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 drawn.
Therefore, in the absence of any provision under the
Act excluding the applicability of the Limitation Act to the
proceedings before the Debt Recovery Tribunal under Section
17 or before the Debt Recovery Appellate Tribunal
under Section 18 of the Act, an application for condonation of
delay would be maintainable before the Tribunal and the
Appellate Tribunal. Therefore, we respectfully agree with the
view of the Andhra Pradesh and Bombay High Court and
unable to agree with the view expressed by Calcutta High
Court."
17. Recently a Division Bench of the Madhya Pradesh High
Court in Aniruddh Singh (supra) has held as under:-
"6.2 The SARFAESI Act is also a complete Code to regulate
securitization and reconstruction of financial assets and
enforcement of security interest and to provide for central data
base of security interest created on property rights and for
matters connected therewith or incidental thereto.
6.3 Section 17 of SARFAESI Act is a remedy available to
any person aggrieved by the recourse taken by creditor to any
means u/S. 13(4). This remedy is available before DRT by
filing an application which is ordinarily termed as
securitisation application (SA) to be filed within 45 days from
the date on which any of the measures u/S. 13(4) are taken.
6.4 Section 17 of SARFAESI Act does not confer DRT with
discretion to extend the period of limitation of 45 days.
6.5 Noticeably, Section 17 or any other provision of
SARFAESI Act does not expressly exclude the operation of
beneficial provisions under the Limitation Act.
7. This Court need not go into the prolixity of considering
various judicial pronouncements of different Courts to resolve
the controversy herein because the answer to the question
framed above lies in the bare reading of Section 29(2) of the
Limitation Act. (Reproduced above).
7.1 Section 29 containing saving clause lays down
various contingencies in which different nature of causes of
action arising under different enactments can be prevented
from becoming time barred.
WP(C) No.7135/2023 15 | P a g e
7.2 Section 29(2) inter alia stipulates that if the special
law does not expressly exclude the application of Sections 4 to
24 of Limitation Act, then these provisions of Limitation Act
shall apply qua all causes raised under the Special Law.
7.3 The special law i.e. SARFAESI Act does not expressly
exclude the application of the provisions from Sections 4 to 24
of the Limitation Act (including Section 5) and therefore the
benefit u/S. 5 of Limitation Act shall be available to the cause
of action raised in an application u/S 17 of SARFAESI Act.
8. Now applying the aforesaid principle of law to the fact
situation attending the present case, it is obvious from plain
reading of SARFAESI Act that while prescribing the period of
45 days for filing an application u/S. 17(1) this special Act
does not expressly bar the application of Section 5 of
Limitation Act.
8.1 Consequent upon the above discussion, it is obvious
that provisions of Section 5 of the Limitation Act would apply
with full force and are available for making a prayer for
condonation of delay before the DRT in applications u/S. 17(1)
which are filed after expiry of 45 days.
9. This Court is bolstered in its aforesaid view by the
decision of Apex Court in Baleshwar Dayal Jaiswal vs. Bank
of India and Others [(2016) 1 SCC 444], relevant extract of
which is reproduced below:-
'14. We have already held that the power of condonation of
delay was expressly applicable by virtue of Section 18(2) of the
SARFAESI Act read with proviso to Section 20(3) of the RDDB Act
and to that extent, the provisions of the Limitation Act having been
expressly incorporated under the special statutes in question,
Section 29(2) stands impliedly excluded. To this extent, we differ
with the view taken by the Andhra Pradesh High Court as well as the
Madras and Bombay High Courts. We are also in agreement with
the principle that even though Section 5 of the Limitation Act may
be impliedly inapplicable, principle of Section 14 of the Limitation
Act can be held to be applicable even if Section 29(2) of the
Limitation Act does not apply, as laid down by this Court in
Consolidated Engg. Enterprises v. Irrigation Deptt. [(2008) 7 SCC
169] and M.P. Steel Corpn. v. CCE [(2015) 7 SCC 58].
15. As a result of the above discussion, the question is answered
in the affirmative by holding that delay in filing an appeal under
Section 18(1) of the SARFAESI Act can be condoned by the Appellate
Tribunal under proviso to Section 20(3) of the RDDB Act read with
Section 18(2) of the SARFAESI Act. The contrary view taken by the
Madhya Pradesh High Court in Seth Banshidhar Kedia Rice Mills (P)
Ltd. Case [AIR 2011 MP 205] is overruled.'
WP(C) No.7135/2023 16 | P a g e
10. In conspectus of above discussion, it is held that
benefit of the provisions from Section 4 to Section 24 (both
inclusive) of Limitation Act is available to the causes raised
u/S. 17(1) before DRT."
(ii) Judgments of High Courts wherein it is held that the
Limitation Act will not apply into the proceedings
initiated under Section 17 of the SARFAESI Act.
18. The High Court of Calcutta in Akshat Commercial
Private Limited (supra), while taking into consideration the
decisions rendered by the Hon'ble Supreme Court in Mardia
Chemicals Limited (supra) and M/s Transcore -Vs- Union of
India & (supra) and other decisions of the Hon'ble Supreme
Court, has held as under:-
"Therefore, the only question that arises for
determination in this appeal is whether the provision
of Section 5 of the Limitation Act for condonation of delay
applies to a proceeding under Section 17 of the SARFAESI Act.
In view of sub-section (7) of Section 17 of the
SARFAESI Act, the Debts Recovery Tribunal shall, as far as
may be, dispose of the application in accordance with the
provisions of the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 and the rules made
thereunder.
It further appears that according to Section 24 of the
Recovery of Debts Due to Banks and Financial Institutions Act,
1993, the provisions of the Limitation Act, 1963 shall, as far
as may be, apply to an application made to a Tribunal.
The conjoint effect of Section 17(7) of the SARFAESI
Act and Section 24 of the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 is that in a proceeding
under Section 17(1) of the SARFAESI Act which is entertained
by a Debts Recovery Tribunal, the provisions of the Limitation
Act, 1963 shall, as far as may be, apply.
Although Section 17 of the SARFAESI Act has been
described in the said Act as the one conferring right of appeal,
as held by the Supreme Court in the case of Mardia Chemicals
Ltd. & Anr. vs. Union of India & Ors. reported in 2004 (4) SCC
311 and also in the case of M/s. Transcore vs. Union of India
& Anr. reported in AIR 2007 SC 712, the proceedings
under Section 17 of the SARFAESI Act in fact are not appellate
proceedings and it seems to be a misnomer. According to the
WP(C) No.7135/2023 17 | P a g e
Supreme Court, in fact, it is the initial action which is brought
before a forum as prescribed under the Act, raising grievance
against the action or measures taken by one of the parties to
the contract. Therefore, according to the Supreme Court, it is
the stage of initial proceeding like filing a suit in Civil Court. It
has further been pointed out by Supreme Court that as a
matter of fact the proceedings under Section 17 of the Act are
in lieu of a civil suit which remedy is ordinarily available but
for the bar created under Section 34 of the Act.
...............
In view of the decision of the Supreme Court in the aforesaid two matters there is no controversy that a proceeding under Section 17(1) is in the nature of original proceeding and in such a case, even though the other relevant provisions of the Limitation Act applies, Section 5 thereof at least has no application in view of the fact that the said section is not applicable to the original proceeding like suit. We have already pointed out that the Limitation Act in general will be applied in the proceedings under Section 17(1) of the SARFAESI Act "as far as may be".
We, therefore, hold that although in a proceeding under Section 17(1) of the SARFAESI Act, the provisions of the Limitation Act applies in general "as far as my be", yet, Section 5 of the Limitation Act in particular, however, has no application in view of the fact that the proceeding is original in nature like suit and Section 5 of the Limitation Act has no application to a suit.
...............
We have already pointed out that the by virtue of the provisions contained in Sections 17(7) of the SARFAESI Act and Section 24 of the Recovery of the Debts Due to Banks and Financial Institutions Act, the provisions of the Limitation Act would "as far as may be" applicable but not all the provisions of the said Act. The legislature having consciously applied the provisions of the Limitation Act "as far as may be"
by conjoint effect of Sections 17(7) and 24 of the two Special Acts, there is no scope of further application of Section 29(2) of the Limitation Act to the proceedings before the Tribunal so as to apply Sections 4 to 29 thereof over again.
Our aforesaid interpretation of Section 17(1) gets support from the intention of the legislature as reflected in the said Section itself where in sub- section (5) thereof, a time-limit of 60 days has been given for the disposal of such application and according to sub-section (6), if the application is not disposed of by the Tribunal within 4 months, any party to the application may make an application, in such form as may be prescribed, to the Appellate Tribunal for directing the Debts WP(C) No.7135/2023 18 | P a g e Recovery Tribunal for expeditious disposal of the application pending before the Debts Recovery Tribunal.
Therefore, there being specific time-limit of 45 days for invoking the original jurisdiction of Section 17 of the SARFAESI Act, which has been found to be, in essence, a suit and a further tentative time-limit of 60 days for disposal of the proceedings, and giving a right to the party to complain before the appellate forum for compliance of such provisions alleging violation thereof if not completed within four months, it was never the intention of the legislature to apply Section 5 of the Limitation Act to such original proceeding by giving power to entertain the application under Section 17(1) of the SARFAESI Act by merely showing sufficient cause for the delay without putting any restriction upon the Tribunal and we, therefore, hold that the time period of 45 days provided in Section 17 of the SARFAESI Act which is original in nature cannot be extended by taking aid of Section 5 of the Limitation Act."
19. A Division Bench of the High Court of Orissa in BM, Urban Co-operative Limited, Cuttack (supra) has held as under:-
"30. As can be seen Section 17(7) of the SARFAESI Act expressly states that the DRT shall dispose of an application under Section 17(1) thereof in accordance with the provisions of the RDB Act. Neither Section 17(1) SARFAESI Act nor Section 30(1) of the RDB Act permits the DRT to condone the delay in filing an appeal beyond the prescribed period. In that view of the matter, in the present case the DRT was in error in condoning the delay and allowing Opposite Party No.2 to proceed with the appeal filed by her before it."
(iii) Judgments of the Hon'ble Supreme Court
20. The Hon'ble Supreme Court in Baleswar Dayal Jaiswal (supra), while examining the question of applicability of the provisions of the Limitation Act in the proceedings before the DRT, has observed as under:-
"7. The first point for consideration is the applicability of proviso to Section 20(3) of the RDDB Act to the disposal of an appeal by the Appellate Tribunal under Section 18(2) of the SARFAESI Act. A bare perusal of the said Section 18(2) makes it clear that the Appellate Tribunal under the SARFAESI Act WP(C) No.7135/2023 19 | P a g e has to dispose of an appeal in accordance with the provisions of the RDDB Act. In this respect, the provisions of the RDDB Act stand incorporated in the SARFAESI Act for disposal of an appeal. Once it is so, we are unable 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 power of condonation of delay by virtue of Section 29(2) of the Limitation Act were held not to be applicable, the proviso to Section 20(3) of the RDDB 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. Unless the scheme of the statute expressly excludes the power of condonation, there is no reason to deny such power to an Appellate Tribunal when the statutory scheme so warrants. Principle of legislation by incorporation is well known and has been applied, inter alia, in Ram Kirpal Bhagat v. The State of Bihar, (1969) 3 SCC 471, Bolani Ores Ltd. v. State of Orissa, (1974) 2 SCC 777, Mahindra and Mahindra Ltd. v. Union of India, (1979) 2 SCC 529 and Onkarlal Nandlal v. State of Rajasthan, (1985) 4 SCC 404 relied upon on behalf of the appellants. We have thus no hesitation in holding 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) SARFAESI Act and proviso to Section 20(3) of the RDDB Act."
21. The Hon'ble Supreme Court in International Asset Reconstruction Company of India Limited (supra) has observed as under:-
"12. An 'application' is defined under Section 2(b) of the RDB Act as one made under Section 19 of the Act. The latter provision in Chapter IV, deals with institution of original recovery proceedings before a Tribunal. An appeal lies against the order of the Tribunal under Section 20, before the Appellate Tribunal within 45 days, which may be condoned for sufficient cause under the proviso to Section 20(3) of the Act. The Tribunal issues a recovery certificate under Section 19(22) to the Recovery officer who then proceeds under Chapter V for recovery of the certificate amount in the manner prescribed. A person aggrieved by an order of the Recovery officer can prefer an appeal before the Tribunal under Rule 4, by an application in the prescribed Form III. Rule 2(c) defines an 'application' to include a memo of appeal under Section 30(1). The appeal is to be preferred before the Tribunal, as distinct from the appellate tribunal, within 30 days. Section 24 of the RDB Act, therefore, manifestly makes the provisions of WP(C) No.7135/2023 20 | P a g e the Limitation Act applicable only to such an original 'application' made under Section 19 only. The definition of an 'application' under Rule 2(c) cannot be extended to read it in conjunction with Section 2(b) of the Act extending the meaning thereof beyond what the Act provides for and then make Section 24 of the RDB Act applicable to an appeal under Section 30(1) of the Act. Any such interpretation shall be completely contrary to the legislative intent, extending the Rules beyond what the Act provides for and limits. Had the intention been otherwise, nothing prevented the Legislature from providing so specifically."
22. Having surveyed the above referred judgments, we respectfully disagree with the view expressed by the Calcutta High Court and the Orissa High Court. The Calcutta High Court as well as the Orissa High Court have failed to take note the difference between the application under Section 19 of the RDB Act and the application under Section 17 of the SARFAESI Act. Application under Section 19 of the RDB Act is like a recovery suit, wherein ordinary law of limitation as per the Limitation Act applies. However, in case of application under Section 17(1) of the SARFAESI Act, the situation is not the same. As a matter of fact, a borrower has an opportunity to file an application before the DRT under Section 17 only when the secured creditor takes an action or any measure under Section 13(4) or 14 of the SARFAESI Act, meaning thereby filing an application under Section 17 are not original proceedings but actually it is like filing of objection against the action taken by the secured creditor.
23. In Hitendra Vishnu Thakur & Ors. -Vs- State of Maharashtra & Ors., reported in (1994) 4 SCC 602, the Hon'ble Supreme Court has held that right to forum and WP(C) No.7135/2023 21 | P a g e limitation is procedural in nature. Relevant portion of the said judgment is reproduced hereunder:-
"26. ........
(ii) 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."
24. In Section 2(1)(i) of the SARFAESI Act, "Debts Recovery Tribunal" is defined, which means the Tribunal established under sub-section (1) of Section 3 of the RDB Act. Section 17(1) of the SARFAESI Act provides that any person, including the borrower, can file an application under Section 17 against the measures taken by the secured creditor under sub- section (4) of Section 13 of the SARFAESI Act before the DRT established under the RDB Act. Sub-section (7) of Section 17 provides that the DRT is required to dispose of the application in accordance with the provisions of the RDB Act. Section 24 of the RDB Act provides that the provisions of the Limitation Act, as far as may be applied, to an application made to a Tribunal. A conjoint reading of the above provisions make it clear that the DRT is required to dispose of an application filed under Section 17 of the SARFAESI Act as per the provisions of the RDB Act, wherein by virtue of Section 24 of the RDB Act, the provisions of Limitation Act are applicable.
25. The principle of legislation by incorporation is well recognized in India. As the provisions of the RDB Act are incorporated in the SARFAESI Act for disposal of an application filed under Section 17 and in such circumstances, in our view, there is no reason to hold that the DRT cannot entertain an WP(C) No.7135/2023 22 | P a g e application filed under Section 17 of the SARFAESI Act beyond the period of limitation even on being satisfied that there is sufficient cause for not filing such application within the time limit prescribed.
26. The Hon'ble Supreme Court in International Asset Reconstruction Company of India Limited (supra), considering the provisions of the RDB Act, has held that Section 24 of the RDB Act provides that the provisions of the Limitation Act are applicable only to the original applications and the same could not be extended to an appeal filed against the order of the Recovery Officer under Section 30 of the RDB Act. The Hon'ble Supreme Court has concluded that legislature provided for application of the provisions of the Limitation Act to original proceedings before the Tribunal under Section 19 only and not to the appeals filed under Section 30 of the RDB Act. Since the Hon'ble Supreme Court has categorically held that by virtue of Section 24 of the RDB Act the Limitation Act would have application to the original proceedings before the Tribunal, it is clear that an application under Section 17 of the SARFAESI Act, being one such original proceedings before the DRT filed after the period of limitation, as prescribed, can be entertained while applying the provisions of the Limitation Act by virtue of Section 24 of the RDB Act.
27. In view of the above discussion, we hold that the DRT can condone the delay in filing the application under Section 17 of the SARFAESI Act while applying the provisions of Sections 4 to 24 of the Limitation Act, 1963, of course, only if it is satisfied WP(C) No.7135/2023 23 | P a g e that the delay in filing the application under Section 17 is sufficiently explained.
28. Hence, we are of the view that the learned DRT has erred in dismissing the application filed by the petitioners under Section 17 of the SARFAESI Act without considering the application for condonation of delay. Therefore, the order dated 20.11.2023 passed by the learned DRT, Guwahati Bench, Guwahati is set aside.
The matter is remitted back to the learned DRT to consider the application filed by the petitioners for condonation of delay in filing the application under Section 17 of the SARFAESI Act and if the delay is satisfactorily explained, the same may be condoned and the application filed by the petitioners under Section 17 of the SARFAESI Act be decided on merits.
29. With the above observations and directions, the writ petition stands disposed of.
JUDGE CHIEF JUSTICE
Mukut
Comparing Assistant
WP(C) No.7135/2023 24 | P a g e