TaxTMI 
TaxTMI 
2020 (1) TMI 1173
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....neral Insurance Company under which the Insurance Company agreed to indemnify the respondent and the appellant in the event of default in payment of foreign buyers. (iii) The appellant had lodged a claim with the said Insurance Company which, however, was repudiated on 03.03.2011. In this background, on 13.03.2012, the appellant filed an application under Section 19 of the RDB Act being O.A. No. 43 of 2012 before the DRT, Mumbai for recovery of a sum of Rs. 191,03,54,070.96. (iv) An I.A was then filed by the respondent before the DRT Mumbai, challenging its jurisdiction, which was ultimately disposed of on 26.09.2013 and an appeal therefrom was dismissed on 03.02.2017, holding that the DRT Mumbai did have territorial jurisdiction to go ahead with the case. (v) At this point, an I.A was filed by the appellant stating that given the admissions contained in the balance sheet of the relevant years of the respondent-Company, a sum of Rs. 222,51,00,000/- was owed by the respondent to the appellant. This I.A. was allowed by the DRT Mumbai on 26.10.2017. (vi) An appeal was filed by the respondent-Company against the said order before the DRAT on 14.11.2017. While the appeal was pen....
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....B Act. This being the case, the High Court set aside the judgment of the DRT, condoned the delay in filing of the review application itself, and restored the review application to the file. 3) Mr. Neeraj Kishan Kaul, learned Senior Advocate appearing on behalf of the appellant, has contended that the High Court is wrong on all counts. First and foremost, the High Court could not have looked at Order XLVII Rule 7 of the CPC in order to hold that an appeal from an order dismissing a review petition would not be maintainable before the DRAT both for the reason that Order 47 Rule 7 itself is inapplicable under Section 22(1) of the RDB Act and for the reason that Section 20 of the RDB Act makes it clear that appeals lie to the DRAT from all applications that may have been disposed of by the Tribunal under the RDB Act. He further argued that the judgment in International Asset Reconstruction Company of India Limited (supra) ought to have been applied correctly in that the ratio decidendi of the judgment made it clear that it is only applications under Section 19 that are referred to in Section 24 of the RDB Act, and this being the case, a review application, being an independent proceed....
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.... viewed. It was his case, therefore, that this judgment is wholly distinguishable. He also supported the impugned judgment on maintainability of the Writ Petition. 5) Having heard learned counsel for both sides, it is necessary to set out some of the provisions of the RDB Act and the Rules made thereunder. Section 2(b) of the RDB Act states as follows: "2. Definitions.- (b) "application" means an application made to a Tribunal under section 19;" Section 19 of the RDB Act states as follows: "19. Application to the Tribunal. - (1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction- (a) the branch or any other office of the bank or financial institution is maintaining an account in which debt claimed is outstanding, for the time being; or (aa) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of making the application, actually and volun....
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....he Appellate Tribunal. - (1) Save as provided in sub-section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. xxx xxx xxx (3) Every appeal under sub-section (1) shall be filed within a period of thirty days the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. 21. Deposit of amount of debt due, on filing appeal. - Where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution or a consortium of banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty percent of the amount of debt so due from him as determined by the Tribunal under section 19: Provi....
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.... authorised legal practitioner to the Registrar of the Bench within whose jurisdiction his case falls or shall be sent by registered post addressed to the Registrar." Rule 5A of the Rules states as follows: "5A.Review.- (1)Any party considering itself aggrieved by an order made by the Tribunal on account of some mistake or error apparent on the face of the record desires to obtain a review of the order made against him, may apply for a review of the order to the Tribunal which had made the order. (2)No application for review shall be made after the expiry of a period of thirty days from the date of the order and no such application shall be entertained unless it is accompanied by an affidavit verifying the application. (3) Where it appears to the Tribunal that there is no sufficient ground for a review, it shall reject the application but where the Tribunal is of opinion that the application for review should be granted, shall grant the same: Provided that no such application shall be granted without previous notice to the opposite party to enable him to appear and to be heard in support of the order, a review of which is applied for." Rule 7 of the Rules states as f....
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....tion 2(b), apply only to applications that are made under Section 19, which are original applications to recover debts that are made by banks and financial institutions. What is clear is that an application for review cannot possibly be said to be an application filed under Section 19 even on a cursory reading of the provisions of the Act, as it traces its origin to Section 22(2)(e) read with Rule 5A of the Rules. 7) As a matter of fact, applications that are made to the Tribunal under Section 19 of the Act are only made in order to recover a debt from any person. Even Section 19(2), which is strongly relied upon by Shri Dave, makes it clear that another bank or financial institution may join an applicant bank or financial institution at any stage of the proceeding before the final order is passed by making an application against the same debtor for debts owed to such other bank or financial institution. Also, under Section 19(5) of the Act, a written statement may include a claim for set-off and/or a counter-claim and under Section 19(18) of the Act, interim orders may be passed in applications filed for recovery of debts under Section 19 of the Act. All this must be contrasted w....
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....e RDB Act as one made under Section 19 of the Act. The latter provision in Chapter IV deals with institution of original recovery proceedings before a Tribunal. An appeal lies against the order of the Tribunal under Section 20 before the Appellate Tribunal within 45 days, which may be condoned for sufficient cause under the proviso to Section 20(3) of the Act. The Tribunal issues a recovery certificate under Section 19(22) to the Recovery officer who then proceeds under Chapter V for recovery of the certificate amount in the manner prescribed. A person aggrieved by an order of the Recovery officer can prefer an appeal before the Tribunal under Rule 4, by an application in the prescribed Form III. Rule 2(c) defines an "application" to include a memo of appeal under Section 30(1). The appeal is to be preferred before the Tribunal, as distinct from the Appellate Tribunal, within 30 days. Section 24 of the RDB Act, therefore, manifestly makes the provisions of the Limitation Act applicable only to such an original "application" made under Section 19 only. The definition of an "application" under Rule 2(c) cannot be extended to read it in conjunction with Section 2(b) of the Act extendi....
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....e Tribunal in preferring an appeal under Section 30 of the Act makes it manifest that the legislative intent for exclu- sion was express. The application of Section 5 of the Limitation Act by resort to Section 29(2) of the Limita- tion 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." 10) The judgment of this Court makes it plain, though in a slightly different context, that the only application that is referred to by Section 24 of the RDB Act is an application filed under Section 19 and no other. This being the case, an application for review, not being an application under Section 19, but an application under Section 22(2)(e) read with Rule 5A of the Rules, this judgment would apply on all fours to exclude applications which are review applications from the purview of Section 24 of the RDB Act. 11) However, Mr. Dave laid great stress on paragraph 12 of the said judgment and, in particular, the sentence "had the proceedings before the Recovery Officer deemed to be before a Tribuna....
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.... 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. 15) We are also of the view that the High Court wrongly applied Order XLVII Rule 7 of the Code of Civil Procedure. Order XLVII Rule 7 states as follows: "7. Order of rejection not appealable - Objections to order granting application.- (1) An order of the Court rejecting the application shall not be appealable; but an order granting an application may be objected to at once by an appeal from the order granting the application or in an appeal from the decree or order finally passed or made in the suit. (2) Where the application has been rejected in consequence of the failure of the applicant to appear, he may apply for an order to have the rejected application restored to the file, a....