BALESHWAR DAYAL JAISWAL Vs. BANK OF INDIA & ORS.
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 5924 of 2015, Judgment Date: Aug 05, 2015
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.
14. The Andhra Pradesh High Court in Sajida Begum case in holding the
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
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