Delay In Filing Appeal Before DRT Against Recovery Officer Order Cannot Be Condoned U/Sec 5 Limitation Act: Supreme Court

The Supreme Court observed that the delay in filing appeal before Debt Recovery Tribunal against the order passed by the Recovery Officer cannot be condoned by invoking Section 5 of the Limitation Act.

Section 5 of the Limitation Act shall not be applicable to the appeal against the order of Recovery Officer as provided under Section 30 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the court observed.

In this case, there was a delay of 31 days in the appeal preferred against the order of Recovery Officer. The Debts Recovery Tribunal condoned the delay by applying Section 5 of the Limitation Act, 1963. The DRAT set aside this order passed by the Debts Recovery Tribunal. The High Court restored the order passed by DRT relying on A.R. Venugopal Alias R. Venugopal Vs. Jotheeswaran and Ors., (2016) 16 SCC 588.

In appeal, the Apex court bench comprising Justices MR Shah and Sanjiv Khanna noted that the judgment in A.R. Venugopal Alias R. Venugopal (supra), which has been relied upon by the High Court has been expressly overruled by this Court in the decision in the case of International Asset Reconstruction Company of India Limited Vs. Official Liquidator of Aldrich Pharmaceuticals Limited (2017) 16 SCC 137. The court referred to following observations made therein:

13. 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 3 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."

Allowing the appeal, the court restored the DRAT order and observed:

9. Thus, as per the law laid down by this Court in the aforesaid case and even otherwise considering Section 30 of the Act, 1993, we are also of the view that Section 5 of the Limitation Act shall not be applicable to the appeal against the order of Recovery Officer as provided under Section 30 of the Act, 1993. Therefore, the High Court has committed a grave error in quashing and setting aside the order passed by the DRAT and in restoring the order passed by the Debts Recovery Tribunal condoning the delay in preferring the appeal under Section 30 by applying Section 5 of the Limitation Act.

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