SC: Recovery Tribunal has no Power to Condone Delay

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January 28, 2018

In a recent case International Asset Reconstruction Co. of India Ltd. v. The Official Liquidator of Aldrich Pharmaceuticals Ltd. & Ors., the Supreme Court was confronted with the issue:

Whether condonation of delay under Section 5 of the Limitation Act can be invoked to condone the prescribed period of 30 days for preferring an Appeal against an order of Recovery Officer as provided under Section 30 of the Recovery of Debts and Bankruptcy Act, 1993?

Two provisions in question in the case were Section 30 of the Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) which provides for Appeal against the order of Recovery Officer and Section 5 of the Limitation Act, 1963 which provides for extension of prescribed periods in certain cases.

Background

In the case pursuant to a recovery certificate issued by the Recovery Tribunal, the Recovery officer passed necessary orders under Section 28 of the RDB Act. An appeal was preferred by the aggrieved against the same before the Tribunal, beyond the prescribed period of 30 days. However, it was held that Section 5 of the Limitation Act was not applicable to proceedings under Section 30 of the RDB Act. Thus, the delay beyond the prescribed period could not be condoned.

Relevant extract of the two provisions:

 

The Appellant in the case submitted that in the absence of an express exclusion of the Limitation Act to Section 30 of the RDB Act, implied exclusion could not be readily inferred. The Appellant also submitted that by virtue of Section 29(2) of the Limitation Act, any implied exclusion is ruled out and the provisions of Section 5 of the Limitation Act will apply to proceedings under Section 30(1) of the RDB Act.

On the other hand, the Respondents in the case submitted that the Scheme of the Act manifests, that the Legislature expressly intended to exclude any extension of the prescribed period of 30 days under Section 30(1) of the RDB Act.

Bench’s Verdict

The Two judge Bench of the Supreme Court made the following observations in the case:

  • That Section 5 of the Limitation Act provides that the appeal or application, with the exception of Order XXI, CPC (Order XXI provides for the execution of orders and decrees) may be admitted after the prescribed period, if the applicant satisfies the court that he has sufficient cause for not preferring the application within time. The pre-requisite, therefore, is the pendency of a proceeding before a court.
  • The proceedings under the Act being before a statutory Tribunal, it cannot be placed at par with proceedings before a Court. The Tribunal shall therefore have no powers to condone delay, unless expressly conferred by the Statute creating it. In this context the Supreme Court made reference to its judgment in the case of Sukuru v. Tanaji [(1985)3 SCC 590], wherein it was observed that the provisions of the Limitation Act, 1963 apply only to proceedings in ‘courts’ and not to appeals or applications before bodies other than courts such as quasi-judicial Tribunals or executive authorities.
  • That Section 24 of the RDB Act  (it provides that the Limitation Act shall an application made to a Tribunal) makes the provisions of the Limitation Act applicable only to an original “application” and the definition of an “application” under the Act cannot be extended to be applicable to an appeal under Section 30(1) of the RDB Act.
  • That 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.