2020 (1) TMI 1173 - SC - Indian Laws

Supreme Court rules review petition time-barred, disallows condonation

Standard Chartered Bank Versus MSTC Limited

The Supreme Court set aside the High Court's judgment, ruling that the review petition was not maintainable due to the expiration of the 30-day limitation ... Condonation of delay - Recovery of debt - applicability of time limitation - HELD THAT:- The only application referred to in Section 24 is an application filed under Section 19 and to no other. The sentence that is extracted and relied upon by Mr. Dave only makes sense in the context of Section 30 unamended, when read juxtaposed with Section 30 as amended. Under the unamended section, when the recovery officer’s order was deemed as an order of the Tribunal, appeals would lie to the Appellate Tribunal. This would mean that Section 20 of the RDB Act would apply, as a result of which Section 20(3) would kick in and would permit condonation of delay. After the amendment, it is important to note that the recovery officer is no longer considered a Tribunal, as result of which an appeal from a recovery officer’s order is made not to the Appellate Tribunal, but to the Tribunal of first instance. The peremptory language of Rule 5A would also make it clear that beyond 30 days there is no power to condone delay. We may also note that Rule 5A was added in 1997 with a longer period within which to file a review petition, namely, 60 days. This period was cut down, by amendment, with effect from 04.11.2016, to 30 days. From this two things are clear: one, whether in the original or unamended provision, there is no separate power to condone delay, as is contained in Section 20(3) of the Act; and second, that the period of 60 days was considered too long and cut down to 30 days thereby evincing an intention that review petitions, if they are to be filed, should be within a shorter period of limitation – otherwise they would not be maintainable. Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code - The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and that therefore a writ petition would be maintainable, was clearly in error on this count also. Appeal allowed - decided in favor of appellant. Issues Involved:1. Jurisdiction of DRT Mumbai.2. Applicability of Section 5 of the Limitation Act, 1963 to review petitions under Rule 5A of the Debt Recovery Tribunal (Procedure) Rules, 1993.3. Maintainability of writ petitions against orders dismissing review petitions.4. Interpretation of 'application' under Section 24 of the RDB Act.5. Application of Order XLVII Rule 7 of the CPC to DRT proceedings.6. Conduct of the appellant in filing the I.A. for judgment on admission.Detailed Analysis:1. Jurisdiction of DRT Mumbai:The respondent challenged the jurisdiction of the DRT Mumbai, which was ultimately upheld by the DRT and affirmed on appeal. It was established that the DRT Mumbai had territorial jurisdiction to proceed with the case.2. Applicability of Section 5 of the Limitation Act, 1963:The review petition filed by the respondent was dismissed by the DRT on the grounds that Section 5 of the Limitation Act, 1963 does not apply to review petitions under Rule 5A of the Debt Recovery Tribunal (Procedure) Rules, 1993. The DRT followed the Supreme Court's judgment in *International Asset Reconstruction Company of India Limited vs. Official Liquidator of Aldrich Pharmaceuticals Limited and Others* which clarified that the Limitation Act applies only to applications under Section 19 of the RDB Act. The High Court's decision to condone the delay in filing the review petition was found to be erroneous.3. Maintainability of Writ Petitions:The High Court held that a writ petition was maintainable as an alternative remedy of filing an appeal was not available. However, the Supreme Court found this to be incorrect, emphasizing that Section 20 of the RDB Act makes it clear that appeals lie to the DRAT from all applications disposed of by the Tribunal, including review petitions.4. Interpretation of 'Application' under Section 24 of the RDB Act:The Supreme Court clarified that the term 'application' in Section 24 of the RDB Act refers exclusively to applications made under Section 19 for the recovery of debts. Review applications, which are governed by Section 22(2)(e) and Rule 5A, are not covered by Section 24. This interpretation was supported by the precedent set in *International Asset Reconstruction Company of India Limited*.5. Application of Order XLVII Rule 7 of the CPC:The High Court's reliance on Order XLVII Rule 7 of the CPC to hold that an appeal from an order dismissing a review petition is not maintainable was found to be misplaced. The Supreme Court noted that Section 22(1) of the RDB Act explicitly states that the Tribunal and the Appellate Tribunal are not bound by the CPC, and Section 20 of the RDB Act provides a comprehensive appeal mechanism. Consequently, Order XLVII Rule 7 does not apply to DRT proceedings.6. Conduct of the Appellant:The respondent's argument regarding the appellant's delayed filing of the I.A. for judgment on admission was rejected. The Supreme Court noted that the jurisdictional challenge by the respondent, which was resolved only in 2017, justified the timing of the appellant's I.A. filing.Conclusion:The Supreme Court set aside the High Court's judgment, emphasizing that the review petition was not maintainable due to the expiration of the 30-day limitation period stipulated in Rule 5A, without the possibility of condonation under Section 5 of the Limitation Act. The appeal was allowed, and the High Court's decision to condone the delay and restore the review application was overturned.