IMPORTANT POINTS
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.
Section 29(2) of Limitation Act has no applicability to SARFAESI Act.

Headnote:(a) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) – Section 18(2) r/w Section 20(3), Proviso, RDB Act – Disposal of appeal by Appellate Tribunal under SARFAESI Act u/s 18(2) – Tribunal has to follow provisions of section 20(3) of RDB Act – To that effect provisions of RDB Act stand incorporated in SARFAESI Act – Both the Acts are complementary to each other – Thus SARFAESI Appellate Tribunal can entertain an appeal beyond prescribed period if sufficient cause for delay is shown – The Tribunal can condone delay in filing the appeal – Legislation by incorporation. (Para 8, 9)
        (1969) 3 SCC 471; (1974) 2 SCC 777; (1979) 2 SCC 529; (1985) 4 SCC 404; (2008) 1 SCC 125 – Relied upon
        (b) Interpretation of statute – Legislation by incorporation – Section 18(3) providing limitation of 30 days as against 45 days u/s 20 SARFAESI Act – However section 18(2) expressly adopting and incorporating provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act) – Proviso to section 20(3) of RDB Act providing for condonation of delay up to 45 days stands extended to section 18(3) of SARFAESI Act – Thus provision for condonation of delay beyond 30 days available under SARFAESI Act. (Para 11)
        (2004) 11 SCC 472; (1995) 5 SCC 5 – Referred
        AIR 2011 MP 205 – Not approved
        AIR 2013 AP 24; 2008 (4) MhLJ424; 2009 (3) BJ 401 – Approved
        (c) Limitation Act, 1963 – Section 29(2) – SARFAESI Act adopting a different scheme of limitation – Hence applicability of Limitation Act is impliedly excluded – Section 29(2) has no applicability to SARFAESI Act. (Para 12)
        (1995) 5 SCC 5; (2010) 5 SCC 23; (2009) 5 SCC 791; (2004) 4 SCC 252 – Relied upon
        (d) Limitation Act, 1963 – Section 29(2) – Whether SARFAESI Tribunal a court for section 29(2) – Not required to decide – Section 29(2) already held to be inapplicable to SARFESI Act – 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. (Para 14)
        (2009) 8 SCC 646; (2008) 7 SCC 169; (2015) 5 SCALE 505 – Relied upon
       Facts of the case:
        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 .
       Finding of the Court:
        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. The view taken by the Madras, Andhra Pradesh and Bombay High Courts approved.
       Result: Appeal filed by the Bank against the judgment of the Andhra Pradesh High Court dismissed.
       Appeals filed by the borrowers allowed.
       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 order of the Debt Recovery Appellate Tribunal, Delhi 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.

Judgement Key Points

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JUDGMENT

Adarsh Kumar Goel, J. —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, AIR 2011 MP 205 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, AIR 2013 AP 24 the Bombay High Court in UCO Bank, Mumbai vs. M/s. Kanji Manji Kothari and Co., Mumbai, 2008 (4) MhLJ 424 and the Madras High Court in Punnu Swami vs. The Debts Recovery Tribunal, 2009 (3) BJ 401 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 an

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IMPORTANT POINTSDelay 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.Section 29(2) of Limitation Act has no applicability to SARFAESI Act.

Cases Referred (15)

IMPORTANT POINTS
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.
Section 29(2) of Limitation Act has no applicability to SARFAESI Act.