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Saturday, August 8, 2015

whether the Appellate Tribunal under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act”) has the power to condone delay in filing an appeal under Section 18(1) of the said Act. 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 RDB Act read with Section 18 (2) of the SARFAESI Act. The contrary view taken by the Madhya Pradesh High Court in Seth Banshidhar Media Rice Mills Pvt. Ltd. case is overruled. 16. Accordingly, the appeal filed by the Bank against the judgment of the Andhra Pradesh High Court is dismissed and the appeals filed by the borrowers are allowed. The impugned orders passed by the High Court of Madhya Pradesh (in appeals arising out of SLP (C) No.27674 of 2011 and SLP (C) No.36316 of 2011) are set aside and the matters are remanded to the High Court for being dealt with afresh in accordance with law. The appeal arising out of SLP (C) No.38436 of 2012 has been preferred directly from the order of the Debt Recovery Appellate Tribunal, Delhi passed by the said tribunal relying upon the judgment of the Madhya Pradesh High Court in Seth Banshidhar Media Rice Mills Pvt. Ltd. case. The said impugned order is also set aside and the matter is remanded to the Debt Recovery Appellate Tribunal, Delhi for being dealt with afresh in accordance with law. 17. All the appeals are disposed of accordingly.

REPORTABLE




                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO.5924 OF 2015
                  (ARISING OUT OF SLP (C) NO.27674 OF 2011)



BALESHWAR DAYAL JAISWAL                            …APPELLANT

VERSUS

BANK OF INDIA & ORS.                             ...RESPONDENTS


                                    WITH

                        CIVIL APPEAL NO.5925 OF 2015
                  (ARISING OUT OF SLP (C) NO.36316 OF 2011)

                                    WITH

                        CIVIL APPEAL NO.5926 OF 2015
                  (ARISING OUT OF SLP (C) NO.38436 OF 2012)

                                    WITH

                        CIVIL APPEAL NO.5927 OF 2015
                  (ARISING OUT OF SLP (C) NO.5789 OF 2013)




                               J U D G M E N T


ADARSH KUMAR GOEL, J.

1.    Leave granted.
2.    The  question in this  batch  of  appeals  is  whether  the  Appellate
Tribunal under the Securitisation and  Reconstruction  of  Financial  Assets
and Enforcement of Security Interest Act, 2002 (“the SARFAESI Act”) has  the
power to condone delay in filing an appeal under Section 18(1) of  the  said
Act.

3.    We have heard learned counsel appearing  for  the  parties,  including
S/Shri Amol Chitale and Akshat  Shrivastava,  counsel  for  the  appellants-
borrowers and Shri Rana Mukherjee, senior  counsel  and  S/Shri  Anil  Kumar
Sangal and Pranab Kumar Mullick, counsel appearing for the Banks.

4.    The appellants submit that the Appellate Tribunal  has  the  power  to
condone delay in filing the  appeal  beyond  by  the  prescribed  period  of
limitation because of the following reasons:

(i)   Section  18(2)  of  the  SARFAESI  Act  provides  that  the  Appellate
Tribunal shall follow the provisions of the Recovery of Debts Due  to  Banks
and Financial Institutions Act, 1993 (“the RDB Act”)  in  disposing  of  the
appeal unless otherwise provided under the SARFAESI Act or  the  rules  made
thereunder.  The proviso to Section  20(3)  of  the  RDB  Act  empowers  the
Appellate Tribunal  to  entertain  an  appeal  after  expiry  of  period  of
limitation, if sufficient cause for not filing the appeal within the  period
of limitation was shown.  Thus, the proviso to Section 20(3) of the RDB  Act
is incorporated in Section 18(2) of the SARFAESI Act;

(ii)  Section 29(2) of  the  Limitation  Act,  1963  makes  the  said  Act’s
Sections 4 to 24  applicable  to  a  special  or  local  law  prescribing  a
different period of limitation for a  suit,  appeal  or  application  unless
expressly excluded. There being no provision in the SARFAESI  Act  excluding
the applicability of Sections 4 to 24 of the Limitation Act,  delay  can  be
condoned under Section 5 of the Limitation Act, and  time  can  be  excluded
under Section 14 of the Limitation Act wherever applicable; and

(iii) Section 24 of the RDB Act makes the Limitation Act  applicable  to  an
application made to a Tribunal.   Section  36  of  the  SARFAESI  Act  makes
period of limitation prescribed  under  the  Limitation  Act  applicable  to
measures taken under Section 13(4).  Thus, there is be no exclusion  of  the
Limitation Act.

5.    On the other hand, the Banks would contend that:

(i)   Section 18(2)  of  the  SARFAESI  Act  cannot  be  read  as  extending
provisions of proviso to Section 20(3) of the RDB Act  to  an  appeal  filed
under Section 18(1) of the SARFAESI Act;

 (ii)  Section 29(2) of the Limitation Act is not attracted  to  proceedings
before  a  Tribunal  as  the  period  of  limitation  prescribed  under  the
Limitation Act is applicable only to proceedings  before  a  Court  and  not
before a Tribunal; and

(iii) Provisions of Limitation  Act  can  stand  excluded  not  only  by  an
express  provision  of  a  local  or  special  law  but  also  by  necessary
implication from the scheme of such local or special  law.   The  scheme  of
the SARFAESI Act  by making  the  Limitation  Act  expressly  applicable  to
measures under section 13(4) of the Act  impliedly  excludes  the  said  Act
from appeals or other proceedings.

6.    Learned counsel for the parties have brought to our  notice  that  the
issue in question has been examined by the High Courts  of  Madhya  Pradesh,
Andhra Pradesh, Bombay and Madras.  While Madhya Pradesh High Court in  M/s.
Seth Banshidhar Media Rice Mills Pvt. Ltd. vs. State Bank of India[1]   held
that delay in filing an appeal cannot  be  condoned  by  the  Tribunal,  the
Andhra Pradesh High Court in Sajida Begum vs. State Bank  of  India[2],  the
Bombay High Court in UCO Bank, Mumbai vs. M/s. Kanji Manji Kothari and  Co.,
Mumbai[3]  and the Madras High Court in Punnu Swami vs. The  Debts  Recovery
Tribunal[4]  have taken contrary view.

7.    At this stage it will be appropriate to reproduce  the  provisions  of
Sections 18 and 36 of the SARFAESI Act, Section 20 and  Section  24  of  the
RDB Act and Section 29 of the Limitation Act :

      “Sections 18 and 36 of the SARFAESI Act :

18.   Appeal to Appellate Tribunal

(1)   Any person  aggrieved,  by  any  order  made  by  the  Debts  Recovery
Tribunal under section 17, may prefer an appeal alongwith such fee,  as  may
be prescribed to an Appellate Tribunal within thirty days from the  date  of
receipt of the order of Debts Recovery Tribunal:

PROVIDED that different fees may be prescribed for filing an appeal  by  the
borrower or by the person other than the borrower:

PROVIDED FURTHER that no appeal shall be  entertained  unless  the  borrower
has deposited with the Appellate Tribunal fifty per cent. of the  amount  of
debt due from him, as claimed by the secured creditors or determined by  the
Debts Recovery Tribunal, whichever is less:

 PROVIDED ALSO that the Appellate  Tribunal  may,  for  the  reasons  to  be
recorded in writing, reduce the amount to  not  less  than  twenty-five  per
cent. of debt referred to in the second proviso.

(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.

36.   Limitation No secured creditor shall be entitled to take  all  or  any
of the measures under sub-section (4) of section 13,  unless  his  claim  in
respect  of  financial  asset  is  made  within  the  period  of  limitation
prescribed under the Limitation Act, 1963 (36 of 1963).

Sections 20 and 24 of the RDB Act :

Section 20 Appeal to the Appellate Tribunal
(1)    Save as provided in subsection (2), any person aggrieved by an  order
made, or deemed to have been made, by a Tribunal under this Act, may  prefer
an appeal to an Appellate Tribunal having jurisdiction in the matter.
(2)   No appeal shall lie to the Appellate Tribunal from an order made by  a
Tribunal with the consent of the parties.
(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.

(4)   On receipt of an appeal under sub-section (1), the Appellate  Tribunal
may, after giving the parties to the appeal, an opportunity of being  heard,
pass such orders thereon as it thinks fit, confirming, modifying or  setting
aside the order appealed against.

(5)   The Appellate Tribunal shall send a copy of every order made by it  to
the parties to the appeal and to the concerned Tribunal.

(6)   The appeal filed before the Appellate Tribunal under  sub-section  (1)
shall be dealt with by it as expeditiously as possible and  endeavour  shall
be made by it to dispose of the appeal finally within six  months  from  the
date of receipt of the appeal.

Section 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.

Section 29 of the Limitation Act

29. Savings-
(1)   Nothing in this Act shall affect section 25  of  the  Indian  Contract
Act, 1872 (9 of 1872).

(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.”


8.    The first point for consideration is the applicability of  proviso  to
Section 20(3) of the RDB 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 has to dispose of an appeal in accordance with  the  provisions
of the RDB Act.  In this respect,  the  provisions  of  the  RDB  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 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.
Unless  the  scheme  of  the  statute  expressly  excludes  the   power   of
condonation, there is no reason to deny such power to a  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 vs. The State of Bihar[5], Bolani Ores Ltd. vs.  State of  Orissa[6],
Mahindra and Mahindra Ltd. vs. Union of India[7] and  Onkarlal  Nandlal  vs.
State of Rajasthan[8]  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 RDB Act.
9.    The fact that RDB Act and the SARFAESI Act are complimentary  to  each
other, as held by this Court in  Transcore  vs.  Union  of  India[9],   also
supports this view.
10.   We may now deal with the conflicting views of the High Courts  on  the
subject.   The Madhya  Pradesh  High  Court  has  held  that  the  power  of
condonation of delay stood excluded by principle of interpretation  that  if
a later statute has  provided  for  shorter  period  of  limitation  without
express provision for condonation, it could be implied  that  there  was  no
power of condonation.  Reliance has been placed on principles  of  statutory
interpretation by Justice G.P. Singh, 12th Edition, 2010, page 310.  It  was
further observed that the Limitation Act was made applicable to  a  Tribunal
under Section 24 of the RDB Act, but there was  no  similar  provision  with
respect to the Appellate Tribunal.  To justify such an  inference,  reliance
has also been placed on Gopal Sardar case and  Fairgrowth  Investments  Ltd.
vs. The Custodian[10].  It was further observed that the object of  SARFAESI
Act was to ensure speedy recovery of the  dues  and  quicker  resolution  of
disputes arising out of action taken for recovery of  such  dues.   We  find
the approach to be erroneous and incorrect understanding  of  the  principle
of interpretation which has been relied upon.  The  principle  discussed  in
the celebrated Treatise in question is as follows:
 “When an amending Act alters the language  of  the  principal  statue,  the
alteration must be taken to have been made deliberately.”

11.   It is difficult to appreciate how the above  principle  justifies  the
view of the High Court.  The change intended in SARFAESI Act has to be  seen
from the statute and not from beyond it.  No doubt the period of  limitation
for filing appeal under Section 18  of  the  SARFAESI  Act  is  30  days  as
against  45  days  under  Section  20  of  the  RDB  Act.  To  this  extent,
legislative intent may be deliberate.   The absence of an express  provision
for condonation, when Section 18(2) expressly adopts  and  incorporates  the
provisions of the RDB Act which contains provision for condonation of  delay
in  filing  of  an  appeal,  cannot  be  read  as  excluding  the  power  of
condonation.  As already  observed,  the  proviso  to  Section  20(3)  which
provides for condonation of delay (45 days under RDB  Act)  stands  extended
to  disposal  of  appeal  under  the  SARFAESI  Act  (to  the  extent   that
condonation is of delay beyond 30 days).  There is no reason to exclude  the
proviso to Section 20(3) in dealing with an appeal under the  SARFAESI  Act.
Taking such a view will be nullifying Section 18(2)  of  the  SARFAESI  Act.
We are thus, unable to uphold the view taken  by  the  Madhya  Pradesh  High
Court.
12.   We approve the view taken by the Madras,  Andhra  Pradesh  and  Bombay
High Courts, but for different reasons.  The view taken  by  Andhra  Pradesh
High Court in  Sajida  Begum  vs.  State  Bank  of  India[11]  is  based  on
applicability of Section 29(2) of the Limitation Act.  In our view,  Section
29(2) of the Limitation Act has no absolute application, as the  statute  in
question impliedly excludes applicability of provisions  of  Limitation  Act
to the extent a different scheme is adopted. If no provision  of  Limitation
Act was expressly adopted, it may have been possible to hold that by  virtue
of Section 29(2) power of condonation of delay was available.   It  is  well
settled that exclusion of power of condonation of delay can be  implied   as
laid down in Union of India vs. Popular Construction  Co.[12],  Chhattisgarh
State Electricity Board vs. Central Electricity  Regulatory  Commission[13],
Commissioner  of  Customs  and  Central  Excise  vs.  Hongo  India   Private
Limited[14] and Gopal Sardar vs. Karuna Sardar[15] relied upon on behalf  of
the Banks.
13.   We may now advert to the last question as  to  whether  the  Appellate
Tribunal under the SARFAESI Act was  not  a  Court  and  therefore,  Section
29(2) of the Limitation Act was not attracted.
Tribunal to be Court, has relied on Sections 22  and  24  of  the  RDB  Act.
Section 22 vests powers of Civil Court on the  Tribunal  only  for  purposes
14.   The Andhra Pradesh High Court in Sajida  Begum  case  in  holding  the
mentioned therein, such as summoning witnesses, discovery and production  of
documents, receiving evidence, issuing commission  for  examining  witnesses
etc. and deems Tribunals to be courts for specified purposes,  such  as  for
Sections 193, 196 and 228 of the Indian Penal Code and Section  195  of  the
Criminal Procedure Code.  These provisions may  not  be  conclusive  of  the
question of the Tribunal being Court for Section  29(2)  of  the  Limitation
Act without further examining the scheme of the statutes in  question.    In
Nahar Industrial  Enterprises  Ltd.  vs.  Hong  Kong  and  Shanghai  Banking
Corpn.[16],  this Court examined the scheme of the two Acts in question  and
held that the Tribunal was a court  but not a civil court  for  purposes  of
Section 24 of the CPC.  We are of the view that for purposes of decision  of
these appeals, it is not  necessary  to  decide  the  question  whether  the
Tribunal under the Banking statutes in question was court  for  purposes  of
Section 29(2) of the Limitation Act.  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  RDB  Act  and
to that extent, the provisions  of  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 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 Engineering Enterprises  vs.  Principal  Secretary,  Irrigation
Department[17]  and M.P.  Steel  Corporation  vs.  Commissioner  of  Central
Excise[18] .
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 RDB Act read with Section 18 (2)  of  the  SARFAESI
Act.  The contrary view taken by the  Madhya  Pradesh  High  Court  in  Seth
Banshidhar Media Rice Mills Pvt. Ltd. case is overruled.
16.   Accordingly, the appeal filed by the Bank against the judgment of  the
Andhra Pradesh High  Court  is  dismissed  and  the  appeals  filed  by  the
borrowers are allowed.  The impugned orders passed  by  the  High  Court  of
Madhya Pradesh (in appeals arising out of SLP (C) No.27674 of 2011  and  SLP
(C) No.36316 of 2011) are set aside and the  matters  are  remanded  to  the
High Court for being dealt with afresh in accordance with law.   The  appeal
arising out of SLP (C) No.38436 of 2012 has  been  preferred  directly  from
the order of the Debt Recovery Appellate Tribunal, Delhi passed by the  said
tribunal relying upon the judgment of the Madhya Pradesh High Court in  Seth
Banshidhar Media Rice Mills Pvt. Ltd. case.   The  said  impugned  order  is
also set aside and the matter is remanded to  the  Debt  Recovery  Appellate
Tribunal, Delhi for being dealt with afresh in accordance with law.
17.   All the appeals are disposed of accordingly.

                                                    …………..……..…………………………….J.
 [ JAGDISH SINGH KHEHAR]

                                                    …………..….………………………………..J.
                                                       [ ADARSH KUMAR GOEL ]
NEW DELHI
AUGUST 05, 2015




-----------------------
[1]    AIR 2011 MP 205
[2]    AIR 2013 AP 24
[3]    2008 (4) MhLj424
[4]    2009 (3) BJ 401
[5]    (1969) 3 SCC 471
[6]    (1974) 2 SCC 777
[7]    (1979) 2 SCC 529
[8]    (1985) 4 SCC 404
[9]    (2008) 1 SCC 125
[10]   (2004) 11 SCC 472
[11]   AIR 2013 AP 24
[12]   (1995) 5 SCC 5
[13]   (2010) 5 SCC 23
[14]   (2009) 5 SCC 791
[15]   (2004) 4 SCC 252
[16]   (2009) 8 SCC 646
[17]   (2008) 7 SCC 169
[18]   (2015) 5 SCALE 505

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