International Asset Reconstruction Co. of India Ltd. vs Official Liquidator

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.16962 OF 2017 (Arising out of SLP (C) No.25815 of 2013)

INTERNATIONAL ASSET RECONSTRUCTION COMPANY OF INDIA LTD. ..........APPELLANT(S) VERSUS

THE OFFICIAL LIQUIDATOR OF ALDRICH PHARMACEUTICALS LTD. AND OTHERS ....RESPONDENT(S)

With

CIVIL APPEAL NO. 16963 OF 2017 (Arising out of SLP (C) No.29534 of 2014)

IRIDIUM INDIA TELECOM LTD. ..........APPELLANT(S) VERSUS

DOHA BANK QSC AND ANOTHER ......RESPONDENT(S)

JUDGMENT

NAVIN SINHA, J.

Leave granted.

2. A common question of law arising for consideration in Signature Not Verified Digitally signed by NEETU KHAJURIA Date: 2017.10.24 17:23:00 IST Reason:

both appeals is whether Section 5 of the Limitation Act, 1963

1 (hereinafter referred to as “the Limitation Act”), can be invoked

to condone the prescribed period of 30 days, under Section

30(1) of the Recovery of Debts and Bankruptcy Act, 1993

(hereinafter referred as the “RDB Act”), for preferring an appeal

before the Tribunal, against an order of the Recovery officer.

3. In view of the pure question of law involved, the facts of

the case need not be elucidated. Suffice to observe that

pursuant to a recovery certificate issued by the Tribunal under

Section 19(22) of the RDB Act, the Recovery officer passed

necessary orders under Section 28 of the Act. An appeal was

preferred by the aggrieved against the same before the

Tribunal, beyond the prescribed period of 30 days. It was held

that Section 5 of the Limitation Act not being applicable to

proceedings under Section 30 of the Act, the delay beyond the

prescribed period could not be condoned.

4. Ms. Madhavi Divan, learned senior counsel on behalf of

the appellants, submitted that the RDB Act was not a

complete Code by itself. A mere expeditious procedure for

recovery was not conclusive to infer express or implied

2 exclusion of the Limitation Act. In the absence of an express

exclusion of the Limitation Act to Section 30, implied exclusion

cannot be readily inferred, considering the nature of the rights

and interests of the borrower involved, raising issues with

regard to fairness of procedure. By virtue of Section 29(2) of

the Limitation Act, any implied exclusion is ruled out and the

provisions of Section 5 of the Limitation Act will apply to

proceedings under Section 30(1) of the RDB Act.

5. Under Section 22(1) of the RDB Act, the Tribunal was not

bound by the procedures of the Code of Civil Procedure and

was guided by the principles of natural justice, which would

include the power to condone delay beyond the prescribed

period of 30 days under Section 30(1) of the Act. Section

19(25) provided for passing of necessary orders to secure the

ends of justice, which again would include the power for

extension of the prescribed period. The scheme of the RDB

Act does not exclude application of the Limitation Act to

proceedings under it. Referring to Section 2(b) of the Act and

reading the same in conjunction with Rule 2(c) of the Debt

3 Recovery Tribunal (Procedure) Rules, 1993, (hereinafter

referred to as “the Rules”) it was urged that an “application”

filed under Section 30(1) of the Act was also amenable to

condonation under Section 24 of the RDB Act. Section 20(3)

likewise provides for condoning delay beyond 45 days in

preferring an appeal before the appellate tribunal.

6. Sh. Arvind P. Datar, learned senior counsel for the

respondents, contended that the RDB Act was a complete

Code by itself with regard to recovery of dues to banks and

financial institutions. Section 24 of the RDB Act applied only

to an application made under Section 19 by a bank or

financial institution, to the Tribunal for recovery of a debt.

Section 20(3) expressly applied to proceedings before the

appellate tribunal only. The scheme of the Act manifests, that

the Legislature expressly intended to exclude any extension of

the prescribed period of 30 days under Section 30(1), which is

further manifest from the amendment to the same in the year

2000 denuding the deemed status of the Recovery officer as a

Tribunal, for purposes of the provision.

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7. The definition of “application” under Section 2(b) of the

Act was confined to Section 19 of the RDB Act only. Its

meaning could not be extended beyond that prescribed under

the Act, by invoking Rule 2(c) which had to be read with Rule

4 providing the procedure for making an application,

inter-alia, under Section 30 of the RDB Act in the

prescribed Form III.

8. Shri Datar with all fairness also invited our attention to a

two-Judge Bench decision dated 01.07.2015 in Civil Appeal

No. 4926 of 2015, A.R. Venugopal @ R.Venugopal vs.

Jotheeswaran & ors., holding that the delay in preferring an

appeal under Section 30(1) beyond the prescribed 30 days was

condonable by virtue of Section 20 read with Section 24 of the

RDB Act.

9. We have considered the submissions. The RDB Act was

enacted to facilitate and expedite recovery of debts due to

banks and financial institutions by summary proceedings

before a statutory Tribunal. Section 18 bars the jurisdiction of

any court or other authority in such matters (except the

5 Supreme Court/High Court under Articles 226 and 227 of the

Constitution). Section 31 provides for transfer of pending

cases from a Court to the Tribunal. The Act provides a

complete procedure for institution of recovery proceedings, the

method of its enforcement including the right to appeal. The

RDB Act is undoubtedly a special law and a complete code by

itself with regard to expeditious recovery of dues to banks and

financial institutions.

10. The fact that the Tribunal may be vested with some of the

powers as a Civil Court under the Code of Civil Procedure,

regarding summoning and enforcing attendance of witnesses,

discovery and production of the documents, receiving evidence

on affidavits, issuing commission for the examination of

witnesses or documents, reviewing its decisions etc. does not

vest in it the status of a Court. Section 22(1), in fact, provides

that the Tribunal shall not be bound by the procedures under

the C.P.C., and can regulate its own procedures in accordance

with natural justice.

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11. Section 5 of the Limitation Act provides that the appeal

or application, with the exception of Order XXI, CPC may be

admitted after the prescribed period, if the applicant satisfies

the court that he has sufficient cause for not preferring the

application within time. The pre-requisite, therefore, is the

pendency of a proceeding before a court. The proceedings

under the Act being before a statutory Tribunal, it cannot be

placed at par with proceedings before a court. The Tribunal

shall therefore have no powers to condone delay, unless

expressly conferred by the Statute creating it. In Sakuru vs.

Tanaji, (1985) 3 SCC 590, it was observed that:

“3…that the provisions of the Limitation Act, 1963 apply only to proceedings in ‘courts’ and not to appeals or applications before bodies other than courts such as quasi-judicial Tribunals or executive authorities, notwithstanding the fact the such bodies or authorities may be vested with certain specified powers conferred on courts under the Codes of Civil or Criminal Procedure. The Collector before whom the appeal was preferred by the appellant herein under Section 90 of the Act not being a court, the Limitation Act, as such, had no applicability to the proceedings before him. But even in such a situation the relevant special statute may contain an express provision conferring on the

7 appellate authority, such as the Collector, the power to extend the prescribed period of limitation on sufficient cause being shown by laying down that the provisions of Section 5 of the Limitation Act shall be applicable to such proceedings. Hence it becomes necessary to examine whether the Act contains any such provision entitling the Collector to invoke the provisions of Section 5 of the Limitation Act for condonation of the delay in the filing of the appeal…”

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”

8 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 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.

13. A comparative study of Section 30, pre and post

amendment in the year 2000, reveals that the deemed status

of proceedings before the Recovery officer, as a Tribunal,

stands denuded. Had the proceedings before the Recovery

9 officer deemed to be before a Tribunal, entirely different

considerations may have arisen.

Old Section 30 before 2000 Old Section 30 before 2000 amendment amendment “S. 30 Orders of Recovery “S. 30. Appeal against the Officer to be deemed as orders order of Recovery Officer. of Tribunal— (1) Notwithstanding anything Notwithstanding anything contained in Section 29, any contained in Section 29, an person aggrieved by an order of order made by the Recovery the Recovery Officer made under Officer in exercise of his powers this Act may, within thirty days under Sections 25 to 28 (both from the date on which a copy of inclusive), shall be deemed to the order is issued to him, prefer have been made by the Tribunal an appeal to the Tribunal. and an appeal against such (2) On receipt of an appeal orders shall lie to the Appellate under sub-section (1), the Tribunal.” Tribunal may, after giving an opportunity to the appellant to be heard, and after making such enquiry 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).”

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14. The RDB Act is a special law. The proceedings are before

a statutory Tribunal. The scheme of the Act manifestly

provides that the Legislature has provided for application of

the Limitation Act to original proceedings before the Tribunal

under Section 19 only. The appellate tribunal has been

conferred the power to condone delay beyond 45 days under

Section 20(3) of the Act. The proceedings before the Recovery

officer are not before a Tribunal. Section 24 is limited in its

application to proceedings before the Tribunal originating

under Section 19 only. The exclusion of any provision for

extension of time by the Tribunal in preferring an appeal

under Section 30 of the Act makes it manifest that the

legislative intent for exclusion was express. The application of

Section 5 of the Limitation Act by resort to Section 29(2) of the

Limitation Act, 1963 therefore does not arise. The prescribed

period of 30 days under Section 30(1) of the RDB Act for

preferring an appeal against the order of the Recovery officer

therefore cannot be condoned by application of Section 5 of

the Limitation Act.

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15. Insofar as A.R. Venugopal @ R.Venugopal (supra) is

concerned, all that would be required to be noticed and

observed is that the entire statutory scheme did not fall for

consideration of the court in that case.

16. The appeals lack merit and are dismissed.

………………………………….J. (Ranjan Gogoi)

……….………………………..J. (Abhay Manohar Sapre)

……….………………………..J. (Navin Sinha) New Delhi, October 24, 2017

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