|Case name||Baleshwar Dayal Jaiswal v/s Bank of India & Others|
|Case number||Civil Appeal Numbers 5924-5927 of 2015|
|Court||Supreme Court of India|
|Bench||Justice Jagdish Singh Khehar, Justice Adarsh Kumar Goel|
|Author of the judgment||Justice Adarsh Kumar Goel|
|Decided on||February 23, 2018|
|Relevant Act/Sections||SARFAESI Act, 2002 – Section 18
RDB Act, 1993 – Section 20(3)
Limitation Act, 1963 – Section 29(2)
|Author of the case brief||Bhavisha Sharma ([email protected])|
Brief Facts and Procedural History:
The present case is a result of clubbed petitions wherein a specific question of law has been answered by the Supreme Court.
The appellants have raised a contention that the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act) with respect to the period of limitation must be read into SARFAESI Act as Section 18(2) of the SARFAESI Act provides for that. Section 20(3) of the RDB Act empowers the Appellate Tribunal to entertain an appeal after the expiry of period of limitation if sufficient cause for the failure is shown. Thus, Appellant contends that this must be read into the SARFAESI Act and the Tribunal has the power to condone the delay. Also, as Section 24 of RDB Act makes the Limitation Act, 1963 applicable to applications made to a Tribunal, the Appellate tribunal could also refer to the provisions of the same while deciding the issue.
Additionally, it was also contended by the appellants that by virtue of Section 29(2) of the Limitation Act, Section 4 – Section 24 of the same are applicable to any special law which prescribes a different period for limitation, unless the same have been expressly excluded by the impugned statute. As SARFAESI Act is a special law that provides a different period of limitation but does not expressly exclude the applicability of Limitation Act, Section 4 – Section 24 of the same can be read into SARFAESI Act. Thus, according to Section 5 of the Act, delay can be condoned whenever it is deemed fit to do so.
The Respondents, on the other hand, are of the opinion that Section 18(2) of SARFAESI Act cannot be read as an extending provision to include Section 20(3) of the RDB Act under the provisions of Section 18(1) of the Act. Further, they contended that Section 29(2) is not applicable to proceedings before Tribunals and is only applicable to a proceeding before a Court. Additionally, Limitation Act can be applicable to a special law only by necessary implication by the scheme of that special law. Thus, Limitation Act is not applicable and the delay cannot be condoned.
The High Court of Andhra Pradesh in favour of the respondents held that such a delay cannot be condoned by the Appellate Tribunal. Relying on a similar order of Madhya Pradesh High Court, the Delhi DRT had also ruled implying the same. Appeals were filed against such orders and were addressed through this common judgment.
Issues before the Supreme Court:
- Is the proviso to Section 20(3) of the RDB Act applicable to the disposal of appeal by the Appellate Tribunal under Section 18(1) of the SARFAESI Act?
- Is Section 29(2) of the Limitation Act applicable to the Tribunals constituted under SARFAESI Act?
- Is Section 29(2) not applicable to Tribunals under SARFAESI Act because it is not a “court”?
Ratio of the Court:
- Yes. By the bare reading of Section 18(2) of the SARFAESI Act, it is clear that the Appellate Tribunal under SARFAESI has to dispose appeals in accordance with the provisions of RDB Act. The court observed that then, there is no reason to support the Respondent’s contention. A harmonious reading of RDB Act and SARFAESI Act in this manner will further the holistic schemes provided under both acts as well as the cause of justice. The court also relied on several cases of legislation by incorporation to support these findings. It further noted that in the case of Travancore v Union of India, this court had supported the view that RDB Act and SARFAESI Act are complementary to each other.
- No. The court was of the view that section 29(2) of the Limitation Act has no absolute application as SARFAESI impliedly excludes the application of Limitation Act as it provides a different scheme in that matter. If no provisions under Limitation Act is expressly adopted by the legislation, condonation of delay using Section 29(3) would have been possible. But as the legislature adopts some sections of the act, it can be implied that the intent did not support the application of Section 29(3) while disposing of appeals under Section 18(1) of SARFAESI Act.
- The court observed that for the purpose of this appeal, it was not necessary to decide this question as it had already answered Issue 1 in the affirmative.
The court allowed the appeals filed by the borrowers while dismissing the appeal filed by the bank against the judgement of Andhra Pradesh High Court. It held that the Appellate Tribunal under SARFAESI Act, 2002 has the authority to condone delay under Section 18(1) if sufficient cause is shown for the delay. This lies irrespective of the possibility of provisions of Limitation Act in that regard. It further remanded the cases back to the respective High Court and DRT to be determined in reference to the facts of the case.