[Case-Brief] The RDB Act is a special law and a complete code in itself.

A recovery certificate was issued by the tribunal under section 19(22) of the Recovery of Debt and Bankruptcy Act, 1993. Pursuant to which the Recovery officer passed an order. An appeal against this order can be filed within the period of 30 days but no appeal was preferred in the prescribed period. It is thus contended that section 5 of the Limitation Act should apply and the delay should be condoned. The court did not accept this argument. An appeal is preferred before the Supreme Court.

The question of law to be addressed is: Whether the scope of Limitation Act, 1963 can be extended to prefer an appeal before the tribunal?

Contentions on behalf of appellant:

  • The RDB act is not a complete code by itself and thus in order to ensure the fairness in procedure Limitation Act should be applied.
  • The tribunal under section 22(1) of the RDB act is guided by the principles of natural justice and thus it could condone the delay of 30 days period mentioned under the act.
  • Section 19(25) of the RDB act provides for passing of necessary orders to secure the ends of justice, which would again include the power for extension of the prescribed period.
  • The scheme of RDB act does not exclude the application of the limitation act to the proceedings under it.
  • In order to interpret the term “application”, section 2(b) of the act should be read with Rule 2(c) of the Debt Recovery Tribunal Rules, 1993

Contentions of the respondents:

  • RDB was a complete code by itself with regard to recovery of dues to banks and financial institutions.
  • The scheme of the act manifests that the legislature expressly intended to exclude an extension of the prescribed period of 30 days under section 30(1).
  • The definition of “application” under section 2(b) cannot be read with Rule 2(c).
  • Reference was made to the case of AR Venugopal v/s Jotheeswaran & Ors (2015), wherein it was held 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.

The ratio as given by the author of the judgment:

The RDB Act was enacted to facilitate and expedite recovery of debts due to banks and financial institutions by summary proceedings before the tribunal. Section 18 of the act bars the jurisdiction of any court or other authority in such matters (except the jurisdiction of Supreme Court/High Court under section 226 and 227 of the constitution). This act also provides a complete procedure for institution of recovery proceedings, the method of its enforcement including the rights to appeal. Thus the act undoubtedly is a special law and a complete code in itself with regards to expeditious recovery of dues to banks and financial institutions. The fact that the tribunal contains some of the powers of the civil court does not vest it in par with the status of court.

Section 5 of the Limitation Act says that an appeal or application 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 is therefore that the proceedings should be before a ‘court’. The tribunal shall, therefore, have no powers to condone the delay, unless expressly conferred by the statute creating it. The definition of an “application” under Rule 2(c) cannot be extended to read it with section 2(b) of the act because such interpretation would be contrary to the legislative intent.

Decision Held:

Keeping the above observations in mind, it was held that the prescribed period of 30 days under section 30(1) of the RDB act cannot be condoned by application under section 5 of the Limitation Act. The appeal thus lacked merits and was dismissed by the court.

Leave a Reply