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Issues: (i) Whether the application seeking review/clarification/modification of the DRT order was barred by limitation under the DRT procedure rules. (ii) Whether the protection under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 extends to guarantors against recovery proceedings initiated by a bank before the DRT under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Issue (i): Whether the application seeking review/clarification/modification of the DRT order was barred by limitation under the DRT procedure rules.
Analysis: The review application was filed well beyond the period prescribed by Rule 5A of the Debts Recovery Tribunal (Procedure) Rules, 1993. The statutory scheme of the DRT Rules provided a fixed outer limit for review, and no sufficient explanation or application for condonation of delay was placed before the DRT. The challenge to the order was therefore hit by limitation, and there was no jurisdictional error in refusing to entertain the belated review.
Conclusion: The issue was decided against the petitioners and in favour of the respondent.
Issue (ii): Whether the protection under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 extends to guarantors against recovery proceedings initiated by a bank before the DRT under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
Analysis: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was construed in the setting of the statute's object of rehabilitation of sick industrial companies. The term "proceedings" had been given a wide meaning in earlier authority, but the term "suit" in the amended provision was held to retain a narrower meaning. On a contextual reading of the provision, and in light of the distinction drawn between civil court suits and tribunal recovery proceedings, the bar against "suit for recovery of money" or enforcement of a guarantee was held not to extend to original recovery applications filed by banks before the DRT. The protection under section 22(1) was thus unavailable to guarantors in such tribunal proceedings.
Conclusion: The issue was decided against the petitioners and in favour of the respondent.
Final Conclusion: The writ petition failed on both grounds, and the orders of the DRT and DRAT were sustained.
Ratio Decidendi: The word "suit" in section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 means a civil court suit and does not include recovery proceedings before the DRT, while a review application filed beyond the prescribed statutory period is not entertainable.
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