2011 (9) TMI 1150 - HC - Indian Laws

DRAT lacks authority to condone appeal delays under SARFAESI Act Section 18.

Seth Banshidhar Kedia Rice Mills Pvt. Ltd. & Ors. Versus State Bank of India & Ors.

The court held that the Debts Recovery Appellate Tribunal (DRAT) does not have the authority to condone delays in filing appeals under Section 18 of the ... Whether the Debts Recovery Appellate Tribunal has power to condone the delay in filing of Appeal before it under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002? - Held that:- Appellate Tribunal has no power to condone the delay in filing of Appeal before it under Section 18 of the SARFAESI Act and answer the question in negative. Since, Appeal before the appellate Tribunal was filed admittedly after the expiry of the prescribed period of 30 days the same has rightly been dismissed. Issues Involved:1. Whether the Debts Recovery Appellate Tribunal has the power to condone the delay in filing an appeal under Section 18 of the SARFAESI Act, 2002.Detailed Analysis:1. Power to Condon the Delay in Filing an Appeal:The primary issue in this case was whether the Debts Recovery Appellate Tribunal (DRAT) has the authority to condone the delay in filing an appeal under Section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).Arguments and Background:- The petitioners, a company and its directors, had faced recovery proceedings initiated by the respondent bank under the SARFAESI Act. After the bank took possession of the mortgaged properties, the petitioners filed an appeal with the Debts Recovery Tribunal (DRT) and subsequently with the DRAT, seeking a stay on the auction of the properties.- The appeal to the DRAT was filed two days late, and the petitioners sought condonation of this delay under Section 5 of the Limitation Act, 1963.Legal Provisions and Precedents:- Section 18 of the SARFAESI Act mandates that an appeal to the DRAT must be filed within 30 days from the date of receipt of the DRT's order. The petitioners argued that the Limitation Act should apply, allowing for the condonation of delay.- The DRAT dismissed the appeal, citing that it had no power to condone the delay, relying on previous decisions and the Supreme Court's rulings in cases like Fairgrowth Investments Limited v. Custodian and Hukumdev Narain Yadav v. Lalit Narain Mishra.Court's Analysis:- The court examined the provisions of the SARFAESI Act, particularly Section 18, which clearly stipulates a 30-day period for filing an appeal without any provision for condoning delays.- Section 29(2) of the Limitation Act allows for the application of Sections 4 to 24 of the Limitation Act to special or local laws unless expressly excluded. The Supreme Court has held that 'expressly exclude' includes exclusion by necessary implication.- The court noted that while the RDDBFI Act, 1993, which also deals with debt recovery, provides for condonation of delay in filing appeals, the SARFAESI Act does not. The court inferred that the legislature intentionally excluded the power to condone delays under the SARFAESI Act to ensure speedy recovery of debts.Conclusion:- The court concluded that the DRAT does not have the power to condone delays in filing appeals under Section 18 of the SARFAESI Act. The legislature's intention was to expedite the recovery process, and allowing condonation of delays would contradict this objective.- The petition was dismissed, affirming that the appeal was rightly dismissed by the DRAT for being filed beyond the prescribed period.Order:- The petition was dismissed without any order as to costs, upholding the DRAT's decision that it lacks the authority to condone delays in appeals under Section 18 of the SARFAESI Act.