W .P. No. 1488 Of 20 vs Vaishali Nagar, Nagpur on 13 October, 2011
Bench: B. P. Dharmadhikari, A.P. Bhangale
1IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH : NAGPUR
W .P. no. 1488 of 2011
Petitioners : 1) Madhukar Govindrao Thaware, aged about 60 years, resident of D-1, Jupiter Complex, Plot No. 1468, Vaishali Nagar, Nagpur
2) Nishikant Marotrao Shende, aged about 56
years, resident of C-3, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
3) Suresh Uddhavrao Fulzele, aged about 59
years, occ: service, resident of C-1, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
4) Shyam Tulshiram Gulgulwar, aged about 56
years, occ: service, r/o D-3, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
5) Vinayak Somaji Meshram, aged about 63 yrs
r/o M-C, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
6) Subhash Sukhdeo Shamkuwar, aged about 54
years, occ: service, r/o D-2, Jupiter Complex, 2
1468, Vaishali Nagar, Nagpur
7) Purushottam M. Likhar, aged about 57 years, occ: service, r/o A/2, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
8) Smt Jyoti Purushamdas Mandavkar, aged
about 48 years, occ: House-wife, resident of B-2, Jupiter Complex, 1468,Vaishali Nagar, Nagpur
9) Pradip Shivdas Ramteke, aged about 54 years, occ: service, r/o B-1, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
10) Dhaniram Atmaram Meshram, aged about 70
years, r/o DM, Jupiter Complex, 1468,
Vaishali Nagar, Nagpur
11) Harendra T. Ramteke, aged about 58 years, occ: service, A-3, Jupiter Complex, 1468,
Vaishali Nagar, Nagpur
12) Anita wd/o Dilip Bansod, aged about 56 yrs occ: service, r/o A-1, Jupiter Complex, 1468, Vaishali Nagar, Nagpur
13) Nandlal Narayan Meshram, aged 57 years
occ: service, B-3, Jupiter Complex, 1468,
Vaishali Nagar, Nagpur
3
versus
Respondent : Central Bank of India, through its Branch Manager, Butibori Branch, Nagpur
Mr S. N. Kumar, Advocate and Ms Y. Ramani Patro, Mr Swapnil Lavatawar and Ms Seema Shrinath, Advocates with himfor petitioners
Mr N.K. Fuladi, Advocate Mr U.K. Fuladi, Advocate with him for respondent
Coram: B. P. Dharmadhikari & A. P. Bhangale, JJ Dated : 13th October 2011
Judgment (Per A. P. Bhangale, J)
1. Taken up for hearing by consent of learned Advocates appearing . Heard submissions. This Writ Petition is preferred in respect of an order dated 5th January 2011 passed by Debts Recovery appellate Tribunal , Mumbai and an order dated 17th March 2009 passed by Debts Recovery Tribunal, Nagpur whereby it is held that the provisions of Limitation Act are applicable to an appeal under Section 30 of the Recovery of Debts Due to Banks and financial Institutions Act ( Briefly referred as RDDBFI Act ). The question raised is as to whether the provisions of section 5 of the Limitation Act or its principles are applicable to appeal filed under section 30 of the RDDBFI Act.
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2. The facts which gave rise to filing of the writ petition may be summed as under:-
The Petitioners are owners of Apartments in the building known as 'Jupiter Complex' Situated at Vaishali Nagar, Binaki, Nagpur. The Petitioners claim that they were handed over possession of their respective apartments in the building pursuant to an agreement for sale of undivided share in the land and building construction executed in the year 1987.The respondent Central Bank of India , on the ground that the borrower had executed the mortgage of the plot along with the structure of the open foundation in its favour on 14/05/1997 to enforce recovery certificate had put the property for sale through DRT , Nagpur The Petitioners on or about 3/3/2004 filed an application/objection under Rule 11 and 15 of the second schedule of the Income Tax Act, 1961 and other enabling provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act) for release of attachment and cancellation of proposed Sale. On 29/03/2005 the Recovery officer, DRT Nagpur passed a common order whereby the objection of the Petitioners was accepted on the 5
ground that the Petitioners legally possessed the Apartments much prior to the Mortgage and the so called Mortgaged property did not exist in the form of description given in the Mortgage deed .Thus it was held that the said property was not liable to be sold .The respondent bank challenged the order passed by the recovery Officer in the DRT , Nagpur by filing an Appeal under Section 30 of the RDDBFI Act along with an application for condonation of delay of 74 days in filing the Appeal with reference to section 5 of the Limitation Act. DRT, Nagpur had allowed the application for amendment of Appeal and for condonation of delay, impleading the Petitioners as respondents in the appeal as well as in the application for condonation delay in filing the Appeal. The Petitioners contested the application filed under section 5 of the Limitation Act for condonation of Delay on the ground that section 5 of the Limitation Act is not applicable to the appeal filed under Section 30 of the RDDBFI Act and therefore no period of delay can be condoned .On 17/03/2009 the DRT , Nagpur passed an order holding that provision of section 5 of the Limitation Act is applicable to an appeal file under section 30 of the RDDBFI Act. Upon challenge the DRAT , Mumbai upheld the order passed by the 6
DRT , Nagpur, on the ground that the definition of the term "application" provided in the Rules , which includes an Appeal under Section 30, can be considered even though the "application" defined by the Act defines it as an Application under Section 19 i.e. original proceedings (and not an appeal under Section 30 of the RDDBFI Act).
3. It is contended on behalf of the Petitioners that the impugned Judgment is contrary to the provisions of the RDDBFI Act as it is self contained Code providing for the remedy of Appeal as also the period of limitation within which the Appeal has to be filed. The provisions of the Limitation Act ,1963 shall apply, as far as may be, to the application made to the Tribunal .According to the Petitioners the "application" defined in Section 2(b) of the RDDBFI Act means an application made to Tribunal under Section 19 of the RDDFBI Act. Thus it is implied that the Limitation Act is applicable only for filing the original application under section 19 of the RDDFBI Act. In view of section 29 (2) of the Limitation Act , section 5 of the Limitation Act can not be made applicable to the appeal filed under section 30 of the RDDBFI Act in as much as 7
there is no proviso mentioned in Section 30 similar to the proviso of section 20 for to entertain an appeal from the order of the Tribunal to the Appellate Tribunal even after expiry of the period of Limitation upon satisfaction as to sufficient cause for not filing an appeal within period of limitation prescribed in Section 20 of the RDDBFI Act. The learned advocate for the Petitioners therefore making reference to section 19, 20 and 30 of the RDDBFI Act submitted that the provision of section 5 of the Limitation Act is excluded by the said Act to the appeal filed under Section 30 of the RDDBFI Act in terms of Section 29 (2) of the Limitation Act, 1963.The contradictory definition of the "application" appearing in Rule (under the Rules framed under the RDDBFI Act) can not override the definition of the term "application" in Section 2(b) of the RDDBFI Act. It is thus submitted that the DRT and DRAT committed error of law which is apparent and manifest. It is submitted that the legislature having regard to expeditious disposal of Appeals under Section 30 of the RDDBFI Act, did not intend to give benefit of section 5 of the Limitation Act to the filing of Appeal under section 30 of the RDDBFI Act, consciously by not making a specific provision as made for the applicability of section 5 of the 8
Limitation Act in cases of Application under Section 19 and 20 of the RDDBFI Act.
Reliance was placed to Section 5 and Section 29(2) of the Limitation Act which read as under:
"5. Extension of prescribed period in certain cases. - Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period."
"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 9
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."
Three Judges Bench of Hon'ble Supreme Court in the ruling in Commissioner of Customs & Central excise vs. M/s. Hongo India (Pvt) Ltd reported in 2009(4) SCALE 374 observed thus- "20) Though, an argument was raised based on Section 29 of the Limitation Act, even assuming that Section 29(2) would be attracted what we have to determine is whether the provisions of this section are expressly excluded in the case of reference to High Court. It was contended before us that the words "expressly excluded" would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which 10
the operation is to be excluded. In this regard, we have to see the scheme of the special law here in this case is Central Excise Act. The nature of the remedy provided therein are such that the legislature intended it to be a complete Code by itself which alone should govern the several matters provided by it. If, on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our considered view, that even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent, the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. In other words, the applicability of the provisions of the Limitation Act, therefore, to be judged not from the terms of the Limitation Act but by the provisions of the Central 11
Excise Act relating to filing of reference application to the High Court. The scheme of the Central Excise Act, 1944 support the conclusion that the time limit prescribed under Section 35H(1) to make a reference to High Court is absolute and unextendable by court under Section 5 of the Limitation Act. It is well settled law that it is the duty of the court to respect the legislative intent and by giving liberal interpretation; limitation cannot be extended by invoking the provisions of Section 5 of the Act.
21. In the light of the above discussion, we hold that the High Court has no power to condone the delay in filing the "reference application" filed by the Commissioner under unamended Section 35H(1) of the Central Excise Act, 1944 beyond the prescribed period of 180 days and rightly dismissed the reference on the ground of limitation."
4. In the ruling of Gopal Sardar vs. Karuna Sardar reported in (2004) 4 SCC 252 short question that arose before the 12
Apex Court for consideration was whether Section 5 of the Limitation Act is applicable to an application made under Section 8 of the West Bengal Land Reforms Act, 1955 Act having regard to Section 29(2) of the Limitation Act. The Apex Court observed thus-
"13. Section 8 of the Act prescribes definite period of limitation of three months or four months, as the case may be, for initiating proceedings for enforcement of right of pre-emption by different categories of people with no provision made for extension or application of Section 5 of the Limitation Act. When in the same statute in respect of various other provisions relating to filing of appeals and revisions, specific provisions are made so as to give benefit of Section 5 of the Limitation Act and such provision is not made to an application to be made under Section 8 of the Act, it obviously and necessarily follows that the legislature consciously excluded the application of Section 5 of the Limitation Act. Considering the scheme of the Act 13
being self-contained code in dealing with the matters arising under Section 8 of the Act and in the light of the aforementioned decisions of this Court in the case of Hukumdev Narain Yadav, Anwari Basavaraj Patil and M/s. Parson Tools (supra), it should be construed that there has been exclusion of application of Section 5 of the Limitation Act to an application under Section 8 of the Act. In view of what is stated above, the non- applicability of Section 5 of the Limitation Act to the proceedings under Section 8 of the Act is certain and sufficiently clear. Section 29(2) of the Limitation Act as to the express exclusion of Section 5 of the Limitation Act and the specific period of limitation prescribed under Section 8 of the Act without providing for either extension of time or application of Section 5 of the Limitation Act or its principles can be read together harmoniously. Such reading does not lead to any absurdity or unworkability or frustrating the object of the Act. At any rate in the light of the Three-Judge Bench decision of this Court in 14
Hukumdev Narain Yadav case (supra) and subsequently followed in Anwari Basavaraj Patil case (supra), even though special or local law does not state in so many words expressly that Section 5 of the Limitation Act is not applicable to the proceedings under those Acts, from the scheme of the Act and having regard to various provisions such express exclusion could be gathered. Thus, a conscious and intentional omission by the Legislature to exclude application of Section 5 of the Limitation Act to the proceedings under Section 8 of the Act, looking to the scheme of the Act, nature of right of pre-emption and express application of Section 5 of the Limitation Act to the other provisions under the Act, itself means and amounts to "express exclusion" of it satisfying the requirement of Section 29(2) of the Limitation Act" After making reference to various rulings it was concluded in Para 19 that Section 5 of the Limitation Act cannot be pressed into service in aid of a belated application made under 15
Section 8 of the of the West Bengal Land Reforms Act, 1955 Act seeking condonation of delay. The right of pre-emption conferred under Section 8 thereof was held as a statutory right besides being weak, it has to be exercised strictly in terms of the said Section and consideration of equity has no place. The Apex Court found on the facts found in those appeals, that applications under Section 8 were not made within four months from the date of transfer but they were made four years and six months after the date of transfer respectively which were hopelessly barred by time. Benefit of Section 5 of the Limitation Act not being available to the applications made under Section 8, Section 3 of the Limitation Act essentially entails their dismissal.
5. Learned Advocate for the Petitioners also made reference to the ruling in Hukumdev Narain vs. Lalit Narain Misra reported in (1974) 2 SCC 133 and Anwari Basavraj vs. Siddaramiah & others reported in (1993) 1 SCC 636 as also M/s Malaysian Airlines vs. Union of India & others (W. P. No. 17 of 2004, decided on 9th August 2010 by the Bombay High Court (DB). This Court held in the ruling in Malaysian Airlines (supra) 16
that the concept of failure to pay can be equated with non- payment. Non-payment is nothing but failure to pay when due. As per the provisions of the Finance Act, 1979 amount of FTT collected becomes due within fifteen days from the date of collection thereof. Failure to pay within this prescribed time frame would mean non-payment or failure to pay. If any person fails to pay within the statutory period of fifteen days, then such person is well within the sweep of the words "failure to pay". Once the period of fifteen days is over and breach in payment of tax is committed, then it is immaterial when the defaulter in future is making the payment. Had there been no minimum penalty prescribed under sub-section (3) of Section 38 of the Act, it would have been open for the adjudicating authority to consider the conduct of the defaulter and the extent of delay taking into account the extenuating circumstances while imposing penalty. But once the statute prescribes the minimum penalty without giving any discretion in favour of the adjudicating authority, then one has to go by the provisions of the Act. It was observed that while exercising writ jurisdiction the Court has only to consider whether or not power to impose penalty has been exercised in accordance 17
with the provisions of the Act and whether the decision making process is in accordance with law. Once the Court comes to the conclusion that there is no fault on the part of the adjudicating authority either in complying with the provisions of the Act or in the decision making process, then this Court would be justified in refusing to interfere with the impugned order. The ruling is cited to emphatically submit that the power has to be used strictly in accordance with the provisions of the Act and not otherwise.
6. The object of the RDDBFI Act is to provide speedy mechanism of Tribunals and Recovery officer under the Act to ensure expeditious disposal of applications/matters for adjudication and recovery of debts due to banks and financial institutions. It aims at overcoming the procedural hurdles faced by the Banks and Financial institutions in time-consuming normal litigation process when their funds have been blocked in the unproductive assets. Speedy recovery of such assets is critical for the successful implementation of financial reforms. The Act by Setting up of the Special Tribunals with special powers for adjudication of such matters and speedy recovery aimed at the successful 18
implementation of the financial sector reforms. An urgent need was felt to work out a suitable and speedy mechanism through which the dues to the banks and financial institutions could be realized without delay.
7. Let us now consider the relevant provisions in the RDDBFI Act which reads as under :
S.2(b) "application" means an application made to a Tribunal under Section 19;
Chapter IV of the act deals with the procedure of the Tribunals. Section 19 is about the exclusive detailed procedure for application to the Debts recovery Tribunal. The Tribunal which is created under the Act in substitution of a civil Court has necessary powers to pass interim and final orders without being bound by hurdles of procedural ramifications, but guided by the principles of natural justice. Section 19 reads as under:
19. Application to the Tribunal.--(1) Where a bank or a financial institution has to recover any debt from any 19
person, it may make an application to the Tribunal within the local limits of whose jurisdiction
(a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or
(b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain; or
(c) the cause of action, wholly or in party, arises. (2) Where a bank or a financial institution, which has to recover its debt from any person, has filed an application to the Tribunal under subsection (1) and against the same person another bank or financial institution also has claim to recover its debt, then, the later bank or financial institution may join the applicant bank or financial institution at any stage of the proceedings, before the 20
final order is passed, by making an application to that Tribunal.
(3) Every application under sub-section (1) or sub- section (2) shall be in such form and accompanied by such documents or other evidence and by such fee as may be prescribed:
Provided that the fee may be prescribed having regard to the amount of debt to be recovered:
Provided further that nothing contained in this sub-section relating to fee shall apply to cases transferred to the Tribunal under sub-section (1) of section 31. (4) On receipt of the application under sub-section (1) or sub-section (2), the Tribunal shall issue summons requiring the defendant to show cause within thirty days of the service of summons as to why the relief prayed for should not be granted.
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(5) The defendant shall, at or before the first hearing or within such time as the Tribunal may permit, present a written statement of his defence.
(6) Where the defendant claims to set-off against the applicant's demand any ascertained sum of money legally recoverable by him from such applicant, the defendant may, at the first hearing of the application, but not afterwards unless permitted by the Tribunal, present a written statement containing the particulars of the debt sought to be set-off.
(7) The written statement shall have the same effect as a plaint in a cross-suit so as to enable the Tribunal to pass a final order in respect both of the original claim and of the set-off.
(8) A defendant in an application may, in addition to his right of pleading a set-off under sub-section (6), set up, by way of counter-claim against the claim of the applicant, any right or claim in respect of a cause of action accruing to the defendant against the applicant 22
either before or after the filing of the application but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not.
(9) A counter-claim under sub-section (8) shall have the same effect as a cross-suit so as to enable the Tribunal to pass a final order on the same application, both on the original claim and on the counter-claim.
(10) The applicant shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the Tribunal.
(11) Where a defendant sets up a counter-claim and the applicant contends that the claim thereby raised ought not be disposed of by way of counter-claim but in an independent action, the applicant may, at any time before issues are settled in relation to the counter-claim, apply to the Tribunal for an order that such counter-claim may 23
be excluded, and the Tribunal may, on the hearing of such application, make such order as it thinks fit. (12) The Tribunal may make an interim order (whether by way of injunction or stay or attachment) against the defendant to debar him from transferring, alienating or otherwise dealing with, or disposing of, any property and assets belonging to him without the prior permission of the Tribunal.
(13) (A) Where, at any stage of the proceedings, the Tribunal is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay or frustrate the execution of any order for the recovery of debt that may be passed against him,--
(i) is about to dispose of the whole or any part of his property; or
(ii) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Tribunal; or
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(iii) is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest, the Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of the debt, or to appear and show cause why he should not furnish security. (B) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt.
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(14) The applicant shall, unless the Tribunal otherwise directs, specify the property required to be attached and the estimated value thereof.
(15) The Tribunal may also in the order direct the conditional attachment of the whole or any portion of the property specified under subsection.
(16) If an order of attachment is made without complying with the provisions of sub-section (13), such attachment shall be void.
(17) In the case of disobedience of an order made by the Tribunal under sub-sections (12), (13) and (18) or breach of any of the terms on which the order was made, the Tribunal may order the properties of the person guilty of such disobedience or breach to be attached an may also order such person to be detained in the civil prison for a term not exceeding three months, unless in the meantime the Tribunal directs his release.
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(18) Where it appears to the Tribunal to be just and convenient, the Tribunal may, by order--
(a) appoint a receiver of any property, whether before or after grant of certificate for recovery of debt; (b) remove any person from the possession or custody of the property;
(c) commit the same to he possession, custody or management of the receiver;
(d) confer upon the receiver all such powers, as to bringing and defending suits in the courts or filing and defending application before the Tribunal and for the realization, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Tribunal thinks fit; and
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(e) appoint a Commissioner for preparation of an inventory of the properties of the defendant or for the sale thereof.
(19) Where a certificate of recovery is issued against a company registered under the Companies Act, 1956 (1 of 1956) the Tribunal may order the sale proceeds of such company to be distributed among its secured creditors in accordance with the provisions of section 529A of the Companies Act, 1956 and to pay the surplus, if any, to the company.
(20) The Tribunal may, after giving the applicant and the defendant an opportunity of being heard, pass such interim or final order, including the order for payment of interest from the date on or before which payment of the amount is found due up to the date of realization or actual payment, on the application as it thinks fit to meet the ends of justice.
(21) The Tribunal shall send a copy of every order passed by it to the applicant and the defendant. 28
(22) The Presiding Officer shall issue a certificate under his signature on the basis of the order of the Tribunal to the Recovery Officer for recovery of the amount of debt specified in the certificate.
(23) Where the Tribunal, which has issued a certificate of recovery, is satisfied that the property is situated within the local limits of the jurisdiction of two or more Tribunals, it may send the copies of the certificate of recovery for execution to such other Tribunals where the property is situated:
Provided that in a case where the Tribunal to which the certificate of recovery is sent for execution finds that it has no jurisdiction to comply with the certificate of recovery, it shall return the same to the Tribunal which has issued it.
(24) The application made to the Tribunal under sub- section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the application finally within 29
one hundred and eighty days from the date of receipt of the application.
(25) The Tribunal may made such orders and give such directions as may be necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice.
Section 20 provides for Appeal to the Appellate Tribunal.-- 20(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 30
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.
Thus under sub-sender section 20 (3) of the Act an Appeal is required to be filed within 45 days from the date of receipt of the copy of the order passed by the Tribunal. The proviso to section also specifically provides that the Appellate Tribunal may entertain the appeal after expiry of 45 days provided that the Appellate Tribunal is satisfied that there was sufficient cause for not filing the appeal within specified period of 45 days. Chapter V of the Act relates to the exclusive procedure in sections 25 to 28 which enables the Recovery Officer for recovery of debt determined by the Tribunal and specified in the recovery certificate. The Recovery officer can pass requisite orders to execute the certificate of recovery issued by the Tribunal as 31
contemplated under section 25 to 28 of the Act. There is a remedy against the order passed by the Recovery officer under section 30 of the Act. Section 30 reads as under :
30. Appeal against the order of Recovery Officer.--(1) Notwithstanding anything contained in section 29, any person aggrieved by an order of the Recovery Officer made under this Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal.
(2) On receipt of an appeal under sub-section (1), the Tribunal may, after giving an opportunity to the appellant to be heard, and after making such inquiry as it deems fit, confirm, modify or set aside the order made by the Recovery Officer in exercise of his powers under sections 25 to 28 (both inclusive).
Learned Advocate for the petitioners submitted that the RDDBFI Act is a self contained Code providing a self contained machinery for the provisions of appeal and the limitation within which such appeal is required to be filed. The RDDBFI Act provides 32
that the provisions of Limitation Act, 1963 shall , as far as may be , apply to the "application" made to the Tribunal . The term "application "is defined in section 2(b) as an application made to Tribunal under Section 19 of the RDDBFI Act. We find that the Principle of Section 5 of the Limitation Act is consciously excluded by the legislature in section 30 of the Act. It is emphatically contended that since the legislature has consciously excluded the principle of section 5 of the Limitation Act, 1963, while it has made such provision in section 20 (3) of the Act. The legislature by necessary implication therefore did not intend to include the principle of Section 5 of the Limitation Act while enacting Section 30 of the Act. Therefore delay can not be condoned by the Debt Recovery appellate Tribunal as Section 5 of the Limitation Act can not be made applicable to the appeal filed under Section 30 of the RDDBFI Act in as much as there is no any proviso in Section 30 of the Act similar to the proviso incorporated in section 20 of the Act. thus considering the section 19 , 20, 24, 30 read in juxtaposition to definition of "application" in section 2(b) of the RDDBFI Act and Section 29(2) of the Limitation Act it is explicit that RDDBFI Act excludes the provision of Section 5 of the Limitation Act to the 33
Appeal under section 30 Of the RDDBFI Act as it aims at expeditious adjudication of such appeals .
9. On behalf of the respondents it is pointed out that the term "application" is described in Rule 2(c) of the Debts Recovery Rules , 1993 as under :-
"application" means an application filed under section 19 or under section 31-A and includes an "appeal" filed under section 30(1) of the Act."
The respondents relied upon ruling in UCO Bank vs. Kanji Manji Kothari & Co. reported in 2008 (3) Bom C.R. 290 (Para 68) wherein it is observed thus :
"Mere provision of a period of limitation in howsoever peremptory or imperative language is not sufficient to displace the applicability of section 5"
10. Learned Advocate for the writ-petitioners, submitted that Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, (54 of 2002) (SARFESI Act) does not contain any provision like section 24 in the RDDBFI Act. 34
In Union of India v. Popular Construction Company (2001) 8 SCC 470 the Apex court held that the expression exclusion also includes exclusion by necessary implication. Considering the power to condone the delay under proviso to Section 20(3) of the RDDBFI Act, the Parliament had consciously excluded power of the Court to condone delay in relation to Section 30 of the RDDBFI Act. It is submitted that the Division Bench of this Court was recording it's finding as to section 17(1) of the NPA Act. In that Act there is no provision like Section 24 of the RDDBFI Act to make the applicability of the Limitation Act conditional using the words "---- shall, as far as may be, apply to an application made to a tribunal" .
Learned Advocate for the Petitioners submitted that the Petitioners have challenged the impugned order passed by the Debts Recovery Appellate Tribunal applying the principle of section 5 of the Limitation Act to Appeal proceedings under Section 30 of the RDDBFI Act mainly on the ground that the provision of section 30 is part of the scheme of the statutory recovery proceedings 35
which may follow soon after the order is passed by the Recovery Officer. The Recovery officer pursuant to the issuance of the recovery certificate may pass orders for early and effective recovery of debt as determined by the Tribunal. Recovery officer is expected to act promptly in accordance with the procedure as provided for in chapter V of the RDDBFI Act. Regarding condonation of delay to file appeal beyond the statutorily prescribed period of 30 days for challenging the order passed by the Recovery officer in an Appeal under Section 30 of the RDDBFI Act when the Legislature has willfully or consciously omitted to incorporate the enabling provision of condoning the delay to prefer appeal within prescribed period (unlike in proviso to section 20(3) of the Act of the discretion enabling the DRAT to entertain appeal beyond prescribed period of statutorily prescribed limitation of 45 days) by not making provision analogous to section 5 of the Limitation Act, 1963 in a subsequent statutory provision, or if there appears a conscious omission in a subsequent provision, the language of which is otherwise plain and unambiguous, the question arises as to whether the court is competent to supply the omission by engrafting on it or introducing in it, under the guise of 36
interpretation, by a analogy or by an implication, something what it thinks to be a general principle of justice and equity to condone delay. Would it not be entrenching upon the precincts of the legislature? To our mind the primary function of a court of law is do justice according to law. Where the legislature clearly declares its intent to lay down the scheme and use or omit specific words in a statute, it becomes the duty of the court to give full effect to the same. Perusal of sub-section (2) of Section 30 of the RDDBFI Act, indicate that for the Debts Recovery Appellate Tribunal, entertaining appeal against the order of the Recovery Officer, the only precaution seems to observe the principle of natural justice, while Tribunal can expeditiously inquire and dispose of the appeal by passing an appropriate order after examining the validity of the order passed by the Recovery officer following the procedure contained in section 25 to 28 (both inclusive).
11. So far as Division Bench decision of the Bombay High Court in the case of UCO Bank vs. M/s. Kanji Manji Kothari & Co. & Ors. reported in 2008(3) Bom C R 290 is concerned, it appears that the Division Bench in the said case did not take note of the aforementioned decision of the Supreme Court in the case of Gopal 37
Sardar vs. Karuna Sardar (supra) . Therefore, in our opinion the said decision is not applicable particularly in the facts of the present case. Because the RDDBFI Act and the relevant provisions including rules framed thereunder must be construed bearing in mind the policy of the law and objects for which the legislature has passed the enactment. In Union of India vs. Delhi High Court Bar Association reported in AIR 2002 SC 1479 The Apex Court upholding constitutional validity of the RDDBFI Act observed thus : "The very purpose of establishing the Tribunal being to expedite the disposal of the applications filed by the banks and financial institutions for realisation of money, the Tribunal and the Appellate Tribunals are required to deal with the applications in an expeditious manner. It is precisely for this reason that Section 22(1) stipulates that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure. Therefore even though the Tribunal can regulate its own procedure, the Act requires that any procedure laid down by it must be guided by the principles of natural justice while, at the same time, it 38
should not regard itself as being bound by the provisions of the Code of Civil Procedure."
Hon'ble Apex Court further holds that Section 25 provides for modes of recovery of debts either by attachment and sale or arrest or appointment of a receiver, Section 28 provides for modes of recovery in addition to the ones specified in Section 25. It is held that the same are not arbitrary, unreasonable or without any guidelines. Hon'ble Court observes :-
"30. By virtue of Section 29 of the Act, the provisions of the Second and Third Schedules to the Income-tax Act, 1961 and the Income-tax (Certificate Proceedings) Rules, 1962, has become applicable for the realization of the dues by the Recovery Officer. Detailed procedure for recovery is contained in these schedules to the Income-tax Act, including provisions relating to arrest and detention of the defaulter. It cannot, therefore, be said that the Recovery Officer would act in an arbitrary manner. Furthermore, Section 39
30, after amendment by the Amendment Act, 2000, gives a right to any person aggrieved by an order of the Recovery Officer, to prefer an appeal to the Tribunal. Thus now an appellate forum has been provided against any orders of the Recovery Officer which may not be in accordance with law. There is, therefore, sufficient safeguard which has been provided in the event of the Recovery Officer acting in an arbitrary or an unreasonable manner. The provisions of Sections 25 and 28 are, therefore, not bad in law."
The Act was brought in to force to establish Tribunals for expeditious adjudication and disposal of the proceedings to ensure early recovery of Debts due to Banks and financial institutions and for matters connected therewith or incidental thereto. In Damodaran Pillai v. South Indian Bank Ltd.reported in (2005) 7 SCC 300, the Apex Court was considering whether the provisions of Section 5 of the Limitation Act would be applicable to the proceedings under Order 21 of the Code of Civil Procedure. The Court observed as under:
"It is also trite that the civil court in the absence of any express power cannot condone the delay. For the purpose 40
of condonation of delay in the absence of applicability of the provisions of Section 5 of the Limitation Act, the court cannot invoke its inherent power."
12. Learned advocate on behalf of the respondents, so as to support the impugned orders, made reference to Full Bench ruling of this Court in Commissioner of Income Tax vs. Velingkar Brothers reported in 2007 (3) Mh. L. J. 241 to argue that the provisions of Section 5 of the Limitation Act would apply. The question framed by the Full bench was :-
Q. Whether section 5 of the Limitation Act, 1963 shall apply in case of an appeal filed under section260A of the Income Tax Act, 1961?
The answer was concluded thus:-
Section 5 of the Limitation Act shall apply in case of the appeals filed under section 260A of the Income Tax Act, 1961. We must hasten to add that the full bench view has no longer remained a good law because of decision of Hon'ble supreme Court in Appeal (civil) 5949 of 2007 Decided on 14/12/2007 in the case of M/s Singh Enterprises Vs. Commissioner of Central 41
Excise,Jamshedpur and Ors. reported in (2008)3 SCC 70 Hon'ble Supreme Court summed up in connection with exclusion of section 5 of the Limitation Act by the special statutory provision thus:- " --- In that case there was no law declared by this Court that even though the Statute prescribed a particular period of limitation, this Court can direct condonation. That would render a specific provision providing for limitation rather otiose." In (2009) 225 CTR (Bom) 12 = (2009)319 ITR
154 (Bom)--2009 (9) LJSOFT (URC) 18 (Commissioner of Income Tax, City - VI Vs. Grasim Industries Limited), law explained by Hon'ble Apex Court in Commissioner of Customs and Central Excise Vs. Hongo India (P) Limited and anr (supra) has been appreciated by the Division Bench of this Court in the light of Section 260-A of Income Tax Act, 1961 and Section 5 of the Limitation Act, 1963. It is concluded that as Section 260-A of I.T. Act is pari materia with Section 35-G of Excise Act, High Court has no power to condone delay u/s 260-A of I.T. Act. Notice of motion seeking condonation of delay was therefore dismissed. Above mentioned Full bench view in Commissioner of Income Tax Vs. 42
Velingkar Brothers 2007 (1) LJSOFT 1 = 289 ITR 382 (Bom) was pressed into service but has not been accepted as binding precedent in view of later judgment of Hon'ble Apex Court on Section 35G of Excise Act. Thus absence of a power or provision for condonation of delay in Income Tax matters is well recognized position. The Income-tax (Certificate Proceedings) Rules, 1962, which need to be followed in present matter vide its Rule 55-A incorporate an appellate remedy under Rule 86 of Second Schedule of the Income Tax Act, 1961 and permit an appeal to the Chief Commissioner or Commissioner and that forum also does not contain a provision for condoning delay. Same safeguard as available due to Rule 55A of the Income-tax (Certificate Proceedings) Rules, 1962 has been similarly made available by amending S. 30 of RDDBFI Act. Neither said Rule 55A nor Rule 86 of the "principal rules" contemplate condonation of delay in filing that appeal. Parliament which is aware of this position can not be said to have either failed or erred in not prescribing mechanism for condonation of delay in S. 30 in this background. It can not be construed as casus omissus and inclusion of an appeal filed under Section 30(1) of RDDBFI Act within meaning of "application" in 43
definition clause Rule 2(c) of the Debts Recovery Rules,1993 thereby enabling recourse to Section 24 of RDDBFI Act and in turn to Section 5 of Limitation Act, therefore can not be sustained as valid exercise of its power by rule making authority. It therefore needs to be declared that merely because subordinate authority adds "appeal under section 30(1) also within the phrase "application", it does not mean that Section 24 of the RDDBFI Act can be invoked and delay in filing such an appeal can be condoned. Rule making authority can not be construed to have done something which is not permitted by the principal enactment or contrary to it. Though DRAT itself may not have overlooked the definition in said Rule 2(c), it is apparent that said definition to that extent is excessive in present facts. Impugned order passed by the DRAT by relying upon it is thus unsustainable. The judgment of Division Bench of this Court reported at 2008 (4) Mh.L.J. 424 (UCO Bank, Mumbai .vrs. M/s. Kanji Manji Kothari and Co. Mumbai), is now required to be considered. This controversy arises out of definition of "application" in Rule 2(c) of the Debt Recovery Tribunal (Procedure) Rules, the main provision 44
of DRT Act and Rule 2 itself show that the said definition of application stands good "unless the context otherwise requires". The context in present facts when viewed in the light of Section 2[b] of the RDDBFI Act & its Section 19, Section 20 and Section 24 clearly rules out inclusion of Appeal under Section 30 within the meaning of "application" in present facts. The Division Bench has only found that the provisions of Limitation Act, 1963 are applicable to both the secured creditors and borrowers. The judgment of Madras High Court considers a prayer for condonation of delay in filing application under Section 31A[1] of the RDDBFI Act and deals with miscellaneous proceedings. Section 31A permits execution of decrees passed by any Court before commencement of 2000 Amendment Act, thus the issue gone into there is not under Chapter V of the RDDBFI Act. The Full Bench judgment of this Court in 2007 [3] Mh.L.J. 241 (Commissioner of Income tax .vrs. Velingkar Brothers) relied upon by Shri Fuladi, learned counsel is, no longer a good law. The judgment of Hon'ble Allahabad High Court reported at 2007[6] ALJ 711 (Satish Sharma and another .vrs. Syndicate Bank and another) does not refer to 45
any legal provision or any binding precedent and hence, in the light of discussion undertaken by us, it cannot be said that it lays down any binding law in this respect. The judgment of D.R.A.T. Calcutta 2007[1] Bankers Law Journal ---156 (Bank of India .vrs. Chotanagpur Graphic Industries and others.) also does not call for any discussion. AIR 2007 Allahabad 116 (Naseem Banoo .vrs. Presiding Officer DRT) is the judgment of learned Single Judge in which though it is noticed that the appeal under Section 30 of the D.R.T. Act is not same as an appeal under Section 20 thereof, still the present issue has not been gone into there. 1983 [139] ITR 1013 ( Ghanshyamdas Gopaldas Mohta .vrs. Union of India and others) is the Division Bench judgment of this Court which in the light of the later Division Bench noted by us between Commissioner of Income Tax and Grassim Industries Ltd. (supra), cannot be said to be a laying laid down correct position in present facts. In view of this discussion, it is apparent that the delay in filing appeal under Section 30 cannot be condoned by D.R.A.T. 46
13. The provisions of Section 30 of the RDDBFI Act which are carved out as an exception to Section 29 of the Act need to be set out as under :
S. 30. Appeal against the order of Recovery Officer - (1) Notwithstanding anything contained in Section 29, any person aggrieved by an order of the Recovery Officer made under this Act may, within thirty days from the date on which a copy of the order is issued to him, prefer an appeal to the Tribunal.
(2) On receipt of an appeal under Sub-section (1), the Tribunal may, after giving an opportunity to the appellant to be heard, and after making such inquiry as it deems fit, confirm, modify or set aside the order made by the Recovery Officer in exercise of his powers under Sections 25 to 28 (both inclusive)]
Thus as it could be seen the Section 30 starts with non -obstante clause that Notwithstanding anything contained in Section 29 any person aggrieved by the order of Recovery Officer made under the Recovery Act may file an appeal to the Debt Recovery Tribunal. It 47
may be noted that so far as the provisions of Second Schedule are concerned no appeal is provided against the order of Tax Recovery Officer whereas in the recovery of Debt Due to Banks And Financial Institutions Act 1993 Section 30 clearly provides for appeal to the Debt Recovery Tribunal against an order made by Recovery officer in exercising of his powers under Section 25 to 28 (both inclusive). Thus by insertion of Section 30 it can be said that sufficient safeguard is provided against orders of the Recovery Officer passed against any person. Section 30 provides adequate safeguard to any aggrieved person against arbitrary and illegal orders of Recovery Officer. The insertion of Section 30 in the RDDBFI Act and absence of such provisions in Income Tax Act 1961 coupled with the fact that even Section 29 also contains rider that provisions of Second Schedule and Third Schedule to Income Tax 1961 are applicable only as far as possible, go to show that under Section 30 there is no bar to maintain appeal unless the attachment/ seizure is actually effected .The Recovery of Debts Due to Banks and Financial Institutions Act,1993 is a special statute. It overrides the provisions of general law. The Tribunal is competent to pass interim orders as per Section 19(12) of the Act. The Tribunal and the Appellate 48
Tribunal are not tied down by the procedure prescribed under the Civil Procedure Code. The provision of Code of Civil Procedure is not required to be followed either by the Debts Recovery Tribunal or the Appellate Tribunal. However, it is expected they shall be guided by the principles of Natural Justice. The Debt Recovery Tribunal and the Appellate Tribunal are empowered to regulate their own procedure of course subject to the provisions of the Act and the Rules.
14. While we Ponder over the present case, it must be noted that Section 30 (which is an exception to Section 29) of the RDDBFI Act provides for an appeal against the order of Recovery officer within 30 days from the date the copy of the order of the Recovery officer is issued to an aggrieved person who wants to prefer appeal to the Tribunal and when there is no provision made for condonation of delay the court/ Tribunal can not have power to condone delay in absence of such specific provision because the power of the court flows from provision of the relevant special statute. If the relevant special statute provides for the specific period of limitation to prefer appeal without any specific 49
provision for the court to condone delay, then inherent power of the court to condone delay under the general law i.e. Limitation Act , 1963 can not apply and delay can not be condoned on the ground of equity and hardship. Order of the Recovery officer under Chapter V of the RDDBFI Act would become absolute and binding if no appeal is preferred within specified limitation of 30 days as provided for under section 30 of the Act. Thus we find that a pure question of law which arose for determination in this petition is as to whether an application for condonation of delay in preferring an application under Section 30(1) of the RDDBFI Act beyond the period of 30 days prescribed under the said provision can be allowed by Debts Recovery Appellate Tribunal (DRAT) by exercising power to condone delay as understood under Section 5 of the Limitation Act ?
In our opinion, the question of law posed above must be answered in the negative for the reasons stated and discussed by us.
15. In the result, we must conclude that the Tribunal under RDDBFI Act had no power by the impugned orders to condone delay that occurred in filing Appeal under Section 30 of the 50
RDDBFI Act, 1993 as provision of Section 5 of the Limitation Act or principles thereof can not apply. Impugned orders are therefore set aside. Rule is made absolute accordingly. Parties are left to bear their own costs.
A. P. BHANGALE, J B. P. DHARMADHIKARI, J joshi
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