Prayer: This Revision is preferred under Article 227 of the Constitution against the final order dated 17.1.2008 made in I.A No. 166 of 2008 in O.A(S) SR. No. 511 of 2008 on the file of the Debts Recovery Tribunal, Coimbatore.
JUDGMENT
1. This Civil Revision Petition arises out of an order passed by the Debts Recovery Tribunal, Coimbatore, dismissing an Application under Section 5 of the Limitation Act, as not maintainable.
2. I have heard Mr. T.S Sivagnanam, learned counsel for the petitioners and Mr. S. Sethuraman, learned counsel for the second respondent-Bank.
3. The second respondent-Bank issued a possession notice dated 16.10.2007, under Rule 8(1) of the Security Interest (Enforcement) Rules, 2002, in exercise of the powers conferred under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as the SARFAESI Act). It was followed by a notice of sale inviting tenders dated 26.12.2007
4. On 14.1.2008, the petitioners filed an Appeal under Section 17 (1) of the SARFAESI Act, on the file of the Debts Recovery Tribunal, Coimbatore, challenging the possession notice dated 16.10.2007 as well as the sale notice dated 26.12.2007 Since the challenge to the possession notice was not made within 45 days as prescribed by Section 17(1), the petitioners also filed an Application in I.A No. 166 of 2008, under Section 5 of the Limitation Act, seeking condonation of the delay of 47 days in filing the Appeal. Without even ordering notice to the second respondent-Bank, the Tribunal dismissed I.A No. 166 of 2008, by an order dated 17.1.2008, on the ground that such an application is not maintainable, in the absence of a specific provision in the SARFAESI Act, either empowering the Tribunal to condone the delay or extending the provisions of the Limitation Act to the proceedings. It is against the said order that the petitioners have come up with the present Civil Revision Petition.
5. Assailing the order of the Tribunal, Mr. T.S Sivagnanam, learned counsel for the petitioners contended that the provisions of the SARFAESI Act, did not exclude Section 5 of the Limitation Act, expressly and that since the Tribunal is held to have the trappings of a Civil Court, an application under Section 5 of the Limitation Act was maintainable. In support of his contention, the learned counsel relied upon a decision of the Full Bench of the Calcutta High Court in Union of India v. Central Administrative Tribunal, 2002 (5) CTC 436, wherein the Full Bench, following the decision of the Supreme Court in Manguram v. Ram Prasad Gondamal, AIR 1976 SC 105, held that the Administrative Tribunals Act and the Rules issued there under (particularly Section 22 and Rule 17) do not expressly exclude the applicability of Section 5 of the Limitation Act. Consequently, the Full Bench held that the provision was applicable to a Review Application before the Central Administrative Tribunal. The learned counsel also relied upon the decision of R. Balasubramanian, J., in N.M Palanimuthu v. The Commissioner, HR & CE (Admn.) Department, 1999 (1) CTC 534, wherein it was held that the Tamil Nadu Hindu Religious and Charitable Endowments Act, did not exclude Section 5 of the Limitation Act and that therefore a condone delay Petition was maintainable.
6. Mr. T.S Sivagnanam, learned counsel for the petitioners also submitted alternatively that in any event, the Application was filed within 45 days from the date of the sale notice and that therefore in so far as the prayer for setting aside the sale notice was concerned, the Appeal filed under Section 17 was within the period of limitation. The measures taken under Section 13(4) of the SARFAESI Act, constitute a chain of events, each of which provided a part of the cause of action for the Appeal and that therefore there was not even a necessity for the petitioners to seek condonation of delay in filing the Appeal under Section 17. In support of his contention that every step taken under Section 13(4) provided a continuous cause of action, the learned counsel relied upon a decision of a Division Bench of this Court in Indian Overseas Bank v. G.S Rajasekaran, CDJ 2008 MHC 736. In the case before the Division Bench, possession was taken on 13.11.2007 and a sale notice was issued on 26.12.2007 A writ Petition was filed on 8.1.2008 and a Single Judge of this Court, while dismissing the Writ Petition, gave two weeks time to the petitioners therein to approach the Tribunal under Section 17. Contending that the same amounted to enlargement of the time prescribed by the SARFAESI Act, the Bank went on Appeal to the Division Bench. The Division Bench held that there was no enlargement of time by the Single Judge, in view of the fact that though possession was taken on 13.11.2007, the cause of action continued till the sale notice dated 26.12.2007 was issued. Therefore the Division Bench held that there was continuous cause of action and that the limitation had to be counted from the date of the sale notice.
7. In response, Mr. S. Sethuraman, learned counsel for the second respondent-Bank contended that though Section 17 of the SARFAESI Act, termed the proceedings as “Appeal,” the Supreme Court held in more than one place in Mardia Chemicals Ltd v. Union of India, 2004 (2) CTC 759, that the proceedings under Section 17 are akin to original proceedings. Therefore the learned counsel contended that Section 5 of the Limitation Act, cannot be invoked to original proceedings, just as they cannot be invoked to Suits.
8. In support of his contention, Mr. S. Sethuraman, learned counsel for the Bank relied upon the decisions of the Supreme Court in Gopal Sardar v. Karuna Sardar., 2004 (4) SCC 252; Fairgrowth Investments Ltd. v. Custodian., 2004 (11) SCC 472. In Gopal Sardar v. Karuna Sardar., 2004 (4) SCC 252, the Supreme Court held that an Application for exercise of the right of pre-emption, filed under Section 8 of the West Bengal Land Reforms Act, 1955 is in the nature of a Suit and that since that Act was a self-contained Code in relation to the enforcement of rights of pre-emption, Section 5 of the Limitation Act had no application. In Fairgrowth Investments Ltd. v. Custodian., 2004 (11) SCC 472, the Supreme Court held that the Special Court constituted under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992, had no power to condone the delay in filing a Petition under Section 4(2) of the Act.
9. However Mr. S. Sethuraman, learned counsel for the Bank also fairly brought to my notice that a Division Bench of the Bombay High Court had taken the view in UCO Bank v. Kanji Manji Kothari, CDJ 2008 BHC 313, that Section 5 of the Limitation Act applies to the proceedings under Section 17 of the SARFAESI Act. But still the learned counsel contended that the view of the said decision of the Division Bench of the Bombay High Court was not followed by this Court, on a different issue and that therefore I am entitled to take a different view on the applicability of Section 5 of the Limitation Act.
10. The learned counsel for the Bank also fairly conceded that in so far as the challenge to the sale notice is concerned, the present case is within the period of limitation, on the principle of continuous cause of action. Therefore, the objection of the learned counsel for the Bank is confined only to the applicability of Section 5 of the Limitation Act, in relation to the prayer for setting aside the possession notice.
11. Before independently considering the question of applicability of Section 5 of the Limitation Act, to the proceedings under Section 17 of the SARFAESI Act, it is useful to refer to the decision of the Division Bench of the Bombay High Court, in UCO Bank v. Kanji Manji Kothari, CDJ 2008 BHC 313, to which my attention was drawn by the learned counsel for the Bank himself. In paragraph-31 of its decision, the Division Bench of the Bombay High Court, formulated two questions that arose for consideration. The first question was about the starting point for counting the period of limitation. The second question was as to whether and to what extent the Limitation Act, 1963 was applicable to the proceedings under Section 17 of the SARFAESI Act. After analysing, threadbare, the decisions of the Supreme Court in Mardia Chemicals Ltd v. Union of India, 2004 (2) CTC 759, and Transcore v. Union of India, 2006 (5) CTC 753 (SC), the Division Bench of the Bombay High Court enlisted the propositions that emerged out of them, in paragraph-68 as follows:
“68. The following propositions emerge from the above judgments:
(a) There is no inherent power in the Court to condone delay.
(b) The prescribed period for taking steps in legal proceedings is intended to be abided by subject to any power expressly conferred on the Court to condone delay.
(c) The fixation of period of limitation must always be to some extent arbitrary and may frequently result in hardship. But in construing such provisions equitable considerations are out of place, and the strict grammatical meaning of the words is the only safe guide.
(d) The provisions of Sections 4 to 29 of the Limitation Act, 1963 will apply when —
(i) there is a special law or local law which prescribes a different period of limitation for any Suit, Appeal or application, and
.. .. .. .. .. ..
(ii) the special or local law does not expressly exclude those Sections: Union Of India v. Popular Construction Co.. (supra).
(e) A mere provision of a period of limitation in howsoever preemptory or imperative language is not sufficient to displace the applicability of Section 5.
(f) If on an examination of the relevant provisions of the special law, it is clear that the provisions of the Limitation Act are necessarily excluded then the benefits conferred therein cannot be called in aid to supplement the provisions of the Special Act.
(g) Where the special law does not exclude the provisions of Section 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent the nature of the provisions or the nature of the subject matter and the scheme of the special law exclude their operation.
(h) If the Special Act and the Limitation Act can be read harmoniously without doing violence to the words used therein then there is no prohibition in doing so: State Of Goa v. Western Builders (supra).”
12. After deducing the propositions of law emerging out of the decisions of the Supreme Court, the Division Bench of the Bombay High Court referred to the different periods of limitation prescribed under Sections 17 and 36 of the SARFAESI Act, for the borrower and the creditor respectively. It also referred to Sections 35 and 37, which respectively gave overriding effect to the SARFAESI Act, and declared it to be in addition to and not in derogation of certain other laws. Thereafter, the Division Bench went on to hold that Section 5 of the Limitation Act is applicable to proceedings under Section 17(1) of the Act.
13. While holding so, the Division Bench of the Bombay High Court took specific note of the observations of the Supreme Court in Mardia Chemicals Ltd. v. Union of India, 2004 (2) CTC 759, that the proceedings under Section 17 are not appellate proceedings and that the word “Appeal” used in Section 17 appeared to be a misnomer. The observations of the Supreme Court that the proceedings under Section 17 are in lieu of a Civil Suit and that it is only an initial action taken by a borrower, were also taken note of by the Division Bench of the Bombay High Court. Apart from taking note of the observations of the Supreme Court in the decisions rendered under the SARFAESI Act, the Bombay High Court also considered the scope of Sections 5 and 29 (2) of the Limitation Act and the decisions of the Supreme Court in Hukumdev Narain Yadav v. Lalit Narain Mishra, AIR 1974 SC 480; Mangu Ram v. Delhi Municipality, AIR 1976 SC 105; Union Of India v. Popular Construction Co.., 2001 (4) CTC 213 (SC): AIR 2001 SC 4010; and State of Goa v. Western Builders, AIR 2006 SC 2525.
14. The decision of the Supreme Court in Fairgrowth Investments Ltd. v. Custodian., 2004 (11) SCC 472, relied upon by the learned counsel for the respondent-Bank, was also considered by the Bombay High Court in paragraph-67 of its decision, though the features distinguishing the said decision were not enumerated. As stated earlier, Fairgrowth case arose out of a special enactment, passed to deal with situations created by large scale irregularities and malpractices in transactions in securities indulged in by some brokers. The object of the Act was to ensure speedy recovery of funds diverted from Banks and Financial Institutions to the individual accounts of brokers and to punish the guilty and restore the confidence in and maintain the basic integrity and credibility of the institutions. In paragraph-17 of its decision, in Fairgrowth case, the Supreme Court, after referring to the decision in Union Of India v. Popular Construction Co.., 2001 (4) CTC 213 (SC): AIR 2001 SC 4010, reiterated the fundamental proposition that Sections 4 to 24 of the Limitation Act would apply to any special or local law which prescribed a different period of limitation subject to the condition that such special or local law did not expressly exclude the application of the Limitation Act. But the Supreme Court said that the word “exclusion” would include “exclusion by necessary implication.” Thus, the ratio decidendi in Fairgrowth case was that the exclusion of Section 5 of the Limitation Act could either be express or by necessary implication. Therefore, the question as to whether the provisions of the Limitation Act, 1963 would apply or not to the proceedings under Section 17 of the SARFAESI Act, has to be considered only with reference to the question as to whether the SARFAESI Act excludes them, expressly or by necessary implication.
15. SARFAESI Act does not expressly exclude the application of the provisions of the Limitation Act, 1963 and there is no controversy about the same. Whether there is exclusion by implication, can be seen from a reading of the relevant provisions.
16. Section 13(1) empowers the secured creditor to enforce the security interest, without the intervention of the Court or Tribunal, notwithstanding anything contained in Section 69 or 69-A of the Transfer of Property Act, 1882. Sub-section (2) enables the secured creditor to call upon the borrower by a notice in writing, to discharge his liabilities in full, within 60 days. Sub Section (3-A) obliges the secured creditor to consider any representation made by the borrower in response to the notice under sub-section (2) and to communicate the reasons for non-acceptance of the objections or representation of the borrower. But the Proviso makes it clear that the reasons are not justiciable. Sub-section (4) enlists several measures available to the secured creditor, if the borrower fails to discharge his liability in full, in response to the notice under sub-section (2). These measures include (i) taking possession of the secured asset (ii) the right to transfer by way of lease, assignment or sale of the secured asset (iii) taking over the management of the business subject to the restrictions contained in the Proviso (iv) the appointment of a Manager to manage the assets and (v) a direction to third parties, in the nature of garnishee orders. Sub-section (7) entitles the secured creditor to apply the sale proceeds, first towards payment of costs, charges and expenses and next towards discharge of the dues. Sub-section (8) mandates the secured creditor not to take any step towards transfer or sale of the secured asset, if the borrower tenders the dues together with all costs, charges and expenses, before the date fixed for the sale or transfer.
17. Section 14 enables the secured creditor to seek the assistance of the Chief Metropolitan Magistrate or the District Magistrate for the purpose of taking possession or control of any secured asset. Section 15 entitles the secured creditor to appoint Directors or Administrator, when the management of business of a borrower is taken over and such borrower happens to be a Company or other legal entity as the case may be. The provisions of Section 15 are to have effect notwithstanding anything to the contrary contained in the Companies Act, 1956 or the Memorandum and Articles of Association of the borrower Company.
18. Thus, Sections 13 to 15 deal with the various powers conferred upon the secured creditor and the various measures that could be taken by the secured creditor. These provisions expressly exclude the Transfer of Property Act and the Companies Act, to the extent that they are inconsistent with these provisions. These provisions (Sections 13 to 15) contain a stipulation with regard to time, only under sub-sections (2) and (3-A) of Section 13. While the time stipulated under Section 13(2) is for the borrower to respond to the notice, the time stipulated under Section 13(3-A) is for the creditor to reply to the representation. The time lost by a borrower under Section 13(2), can always be made up by him, in view of Section 13(8), by making payment of the dues with costs and expenses, before the actual date of sale. Therefore things may not go completely out of control for a borrower who failed to pay the dues within 60 days in response to the notice under Section 13(2), as he can still save himself under Section 13(8) and cover the lost ground. The time stipulated under Section 13(3-A) is of no consequence in view of the proviso thereunder. Therefore there is nothing in Sections 13 to 15 to suggest that the provisions of the Limitation Act, 1963 stand excluded by implication.
19. Since Section 13(1) excludes the application of Sections 69 and 69-A of the Transfer of Property Act and also since Sections 13 to 15 do not prescribe any time limit either for issuing a notice under Section 13(2) or for taking any of the measures including sale under Section 13(4) or for resorting to the management of the business of the borrower under Section 15, the gap is sought to be filled up by Section 36. Section 36 makes it clear that a secured creditor will not be entitled to take all or any of the measures under Section 13(4) unless his claim in respect of the financial asset was made within the period of limitation prescribed under the Limitation Act, 1963. Thus, the right of the secured creditor to enforce the security interest, in accordance with the procedure prescribed under the Act, is made subject to the normal law of limitation, as found in the Limitation Act, 1963. In other words, Section 36 is an indication that despite SARFAESI Act being a special enactment, conferring special powers upon the secured creditors, the normal period of limitation was neither given a go by nor enlarged by the Act. Sections 13 to 15, read with Section 36 makes it clear that the Limitation Act was not considered as an antidote.
20. Coming to Section 17, sub-section (1) entitles a person to Appeal to the Tribunal against any of the measures referred to in Section 13(4). By the use of the expression “aggrieved by any of the measures,” Section 17(1) makes it clear that the measures contemplated under Section 13(4) provide continuity to the cause of action, which is why, the Division Bench of this Court took the view as it did in IOB case, CDJ 2008 MHC 736, referred to earlier. Section 17 is silent about the precise moment at which the period of limitation would start running, though it is common knowledge that the closing point may be the date of sale. At the same time, there is also no outer time limit prescribed under Section 17 for the Tribunal to condone the delay. There are a few enactments where not only the period of limitation is prescribed, but also the power to condone the delay is restricted by a further time limit. For example, the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prescribes a period of limitation for filing a Revision under Section 25(2). The Proviso under Section 25(2) enables the High Court to allow a further period of time, if sufficient cause is shown. Such a prescription can be taken to be an indication of the intention of the legislature to exclude the application of Section 5 of the Limitation Act. But the SARFAESI Act contains no such indication. On the contrary, sub-section (7) of Section 17 makes the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, applicable to the Debts Recovery Tribunal while dealing with an Application under Section 17 of the SARFAESI Act. Section 24 of the 1993 Act, makes it clear that the provisions of the Limitation Act, 1963 shall apply to an Application made to a Tribunal. Therefore, far from indicating an “exclusion by necessary implication,” the SARFAESI Act actually provides an “inclusion by necessary implication.” Hence the decision in Fairgrowth Investments Ltd. v. Custodian., 2004 (11) SCC 472, is of no assistance to the learned counsel for the Bank.
21. The decision in Gopal Sardar v. Karuna Sardar., 2004 (4) SCC 252, is also of no assistance to the Bank for more than one reason. It is a case which arose out of West Bengal Land Reforms Act, 1955, Section 8 of which conferred the right of pre-emption upon certain persons. Section 8 prescribed different periods of limitation for different categories of persons to make an Application for enforcing the right of pre-emption. Considering the nature of the right in the context of the law of limitation, the Supreme Court held that Section 5 of the Limitation Act had no application. In paragraph-13 of its decision, the Supreme Court pointed out that in the very same statute (West Bengal Land Reforms Act), there were other provisions relating to filing of Appeals and revisions extending the benefit of Section 5 of the Limitation Act. Therefore when Section 8 of the West Bengal Land Reforms Act, did not make a reference to Section 5 of the Limitation Act, though the other provisions made a reference to the same, it was taken to be an indication of the legislative intent, not to extend the benefit of Section 5 of the Limitation Act, to an application under Section 8 of the West Bengal Land Reforms Act. In paragraph-19 of its decision, the Supreme Court again pointed out that the right of pre-emption is a statutory right, besides being a weak right. Therefore, the Supreme Court concluded that the exercise of such a right had to be strictly in accordance with the provisions of the very Act which conferred such a right.
22. But in contrast, the right of a person to challenge the measures taken under Section 13(4) of the SARFAESI Act, is neither a weak right (as a right of pre-emption dealt with by the Supreme Court in Gopal Sardar v. Karuna Sardar., 2004 (4) SCC 252, nor a statutory right newly created. The right of a person to challenge any of the measures taken under Section 13(4) of the SARFAESI Act, is akin to a right of redemption, which a mortgagor always had. As a matter of fact, SARFAESI Act created a new right only in favour of the Bank, to take possession of the mortgaged property and to bring it to sale, de hors the provisions of Sections 69 and 69-A of the Transfer of Property Act. Such a right to bring a mortgaged property to sale, without the intervention of the Court, or to have a Receiver appointed, was available to mortgagees, only if the conditions prescribed under Section 69 or Section 69-A of the Transfer of Property Act were satisfied. SARFAESI Act, made such rights and even more, available to Banks, even if those conditions were not fulfilled. While Section 13(4) of the SARFAESI Act, created new rights in favour of the Banks de hors Sections 69 and 69-A of the Transfer of Property Act, Section 13(8) recognised the right of redemption available to the borrower (Paragraph-54 of the decision in Mardia Chemicals Ltd v. Union of India, 2004 (2) CTC 759, confirms this). Therefore the rights conferred under Section 13(8) and Section 17(1) are not to be considered as “weak rights,” as the right of pre-emption with which the Supreme Court was dealing with in Gopal Sardar's case.
23. The contention of Mr. S. Sethuraman, the learned counsel for the Bank that the proceedings under Section 17(1) are in the nature of original proceedings and that therefore the benefit of Section 5 of the Limitation Act, cannot be extended, is essentially based upon the observations of the Supreme Court in Mardia Chemicals Ltd v. Union of India, 2004 (2) CTC 759. Therefore, let me now refer to the decision in Mardia Chemicals case.
24. In Mardia Chemicals Ltd v. Union of India, 2004 (2) CTC 759, the Supreme Court was concerned with the validity of the SARFAESI Act. One of the grounds of challenge related to the precondition prescribed under Section 17 of the Act for the deposit of 75% of the demanded amount, for invoking the remedy under Section 17. In support of the condition so prescribed (before amendment) it was argued that such a prescription was not unknown to law. It is only while dealing with such a contention that the Supreme Court observed in paragraph-59 that the proceedings under Section 17 are not appellate proceedings and that it would be a misnomer to call them so. After referring to its earlier decision in Ganga Bai's case, where the distinction between original and appellate proceedings was drawn, the Supreme Court observed in paragraph-60 that the requirement of pre-deposit is not to be found in any other statute, at the first stage of the proceedings, though it was permissible to have such a prescription at the appellate stage. But after having said so, the Supreme Court, in the operative portion of its order at paragraph-83 (penultimate paragraph) permitted the borrowers to file Appeals under Section 17 within the limitation prescribed therein, to be counted only with effect from the date of its decision. If the earlier observations of the Apex Court are to be strictly construed, so as to exclude Section 5 of the Limitation Act, it would not have been possible for the Apex Court to have granted this reprieve to the borrowers, as it virtually had the effect of enlarging the time. Therefore, I am of the considered view that though the proceedings under Section 17(1) of the SARFAESI Act, are original in nature, for the purpose of the procedure to be followed by the Tribunal and the reliefs that could be sought from the Tribunal, it does not follow as a corollary that as a consequence, Section 5 of the Limitation Act would have no application. To hold so, would defeat the right of redemption provided under Section 13(8) and the principle of continuous cause of action inbuilt in Section 13(4) and Section 17(1) of the Act.
25. It is a fallacy to think that every original proceeding before every Tribunal is like a Suit before a Civil Court. The proceedings before Tribunals are quasi judicial in nature, though the Tribunals may have the trappings of a Civil Court. A Tribunal is a creature of a Statute. Therefore the Statutes creating the Tribunals, call the proceedings by different names such as Suits, applications and Appeals. While the Administrative Tribunals Act, 1985 uses the word “Application,” the Wakf Act, 1995 uses all the three expressions viz., Suits, applications and Appeals, in respect of the proceedings initiated before the Wakf Tribunal. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, uses the expression “Application,” in relation to proceedings initiated before the Debts Recovery Tribunal, but uses the expression “Appeal,” in relation to proceedings initiated before the Appellate Tribunal. Thus, different nomenclature is used under different enactments for describing the proceedings before the Tribunals constituted there under. In most of those cases, the proceedings are original in nature, but it does not mean that all those proceedings are like Civil Suits to which Section 5 of the Limitation Act, may not apply. As a matter of fact, different periods of limitation are prescribed for initiating proceedings before the Tribunals under different enactments. Interestingly, different periods of limitation are prescribed even under the same enactment, for different types of proceedings before the very same Tribunal. Let us now see some of these examples to get into the bottom of the myth.
26. Section 19 of the Administrative Tribunals Act, 1985, enables a person to make an “Application” before the Tribunal and Section 21 of the Act not only prescribes a period of limitation under sub-sections (1) and (2), but also empowers the Tribunal to condone the delay under sub-section (3). Thus an Administrative Tribunal is specifically empowered to condone the delay in initiating the proceedings, despite the fact that the proceedings before the Tribunal are original in nature. This is why the Full Bench of the Calcutta High Court held in Union of India v. Central Administrative Tribunal, 2002 (5) CTC 436, that Section 5 of the Limitation Act, would apply to a Review Application before the Administrative Tribunal.
27. Even Section 24-A(1) of the Consumer Protection Act, 1986 prescribes a period of limitation of 2 years for filing a Complaint (an original proceeding) before the District Forum/State Commission/National Commission. However, sub-section (2) of Section 24-A empowers the District Forum/State Commission/National Commission to condone the delay in filing the Complaint.
28. Therefore it is clear from the Administrative Tribunals Act, 1985 and the Consumer Protection Act, 1986 that condonation of delay is not an anathema to all types of original proceedings, as in the case of Civil Suits.
29. The Wakf Act, 1995, provides for the Constitution of Wakf Tribunals under Section 83(1). There are some provisions in the Wakf Act, 1995 such as Section 6(1) and Section 32(3) where a remedy of a Suit before the Tribunal is provided. There are certain other provisions in the Wakf Act, 1995 under which the proceedings before the Wakf Tribunal are to be initiated by presenting “Applications.” There are certain other provisions under which the Wakf Tribunal is empowered to entertain Appeals. Though one may argue that in respect of Suits filed before the Wakf Tribunal, Section 5 of the Limitation Act, may not apply, one cannot certainly apply the same logic to Applications and Appeals before the Tribunal. This is why Section 83(2) of the Wakf Act, 1995 leaves the question of prescribing a period of limitation to the rule making power of the Government, wherever limitation is not prescribed by the Act itself.
30. Section 5 of the Limitation Act, 1963, applies to both Appeals as well as Applications, as seen from the very language employed in Section 5. It reads as follows:
“5. Extension of prescribed period in certain cases. — Any Appeal or any Application, other than an Application under any of the provisions of Order 21 of the Code of Civil Procedure, 1908, may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the Appeal or making the Application within such period.
Explanation. — The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this Section.”
31. Section 2(b) of the Limitation Act defines an “Application” to include a Petition. Section 2(1) defines a “Suit” not to include an Appeal or an Application. Thus the definition of the word “Suit” under Section 2(1) of the Limitation Act, makes it clear that in so far as the provisions of the Limitation Act are concerned, an Application or an Appeal is different from a Suit. Therefore the words “Appeal” and “Application” appearing in Section 5 have to be understood in the context of the definition of the word “Suit.”
32. In Karnataka Theatres Ltd. v. S. Venkatesan, AIR 1996 Kar. 18, a learned Judge of the Karnataka High Court held as follows:
“If an Application could be understood in a generic sense as a prayer made to an Authority for some relief to set aside an order of another Authority and such an Application is under the Statute, would amount to an Appeal. The Privy Council considered this very question as to whether an Application could be understood as an Appeal in Nagendra Nath Dey's case, AIR 1932 PC 165, and stated that in the absence of definition of an Appeal or an Application, there cannot be a doubt that an Application would include an Appeal asking the Appellate Court to set aside an order made by any Authority and therefore the ordinary connotation of the expression Application would include an Appeal.”
33. Again in Naveen Kumar v. Karnataka Theatres Ltd., AIR 1999 Kar. 71, a learned Judge of the Karnataka High Court, following a decision of the Supreme Court held that “the changed definition of the words “applicant” and “application” contained in Sections 2(a) and 2(b) of the Limitation Act, indicates the object of the Limitation Act, to include petitions, original or otherwise under Special Laws.”
34. In Shaik Saidulu v. Chukka Yesu Ratnam, 2002 (3) SCC 130, a question arose as to whether Section 5 of the Limitation Act was applicable to Election Petitions filed under the Hyderabad Municipal Corporations Act, 1955 or not. In one of the cases before the Supreme Court, the Election Tribunal itself was constituted after two months of the declaration of results and the Election Petition filed after its constitution, was held to be out of time by the High Court. In the other case which formed part of the very same decision, also a similar situation arose. In both cases, the High Court held that Section 5 of the Limitation Act, had no application to the Election Petitions. But while reversing the decision of the High Court, the Supreme Court held that the word “Application” would include an Election Petition. The relevant portions of the decision of the Supreme Court, are as follows:
“The dictionary meaning of the word “Application” is:
“(1) a formal request to an authority, (2) the action of putting something into operation, practical use or relevance, (3) the action of applying something to a surface, (4) sustained effort, (5) computing a program or piece of software designed to fulfil a particular purpose.”
The word “Application” could be understood in a generic sense as a prayer made to an authority for some relief to set aside an order of another authority.”
“11. We have no doubt in holding that the word “Application,” as used in Section 671 of the Act, would include within its ambit an Election Petition wherein a voter or the candidate makes the prayer to the Court and seeks the redressal of his grievances regarding the conduct of the elections. Holding Election Petition not to be covered within the term “Application” would amount to adopting a hyper technical approach which would defeat the very purpose of the Act and the provisions made therein for disputing the authenticity and the conduct of the election. To overcome the confusion regarding the distinction between the Application and the Petition, a new definition of an Application was inserted in the Limitation Act, 1963 which defined it to include a Petition. The object of the new definition is to provide a period of limitation for Original Applications, Interlocutory Applications and Petitions under special law, to which the Act has been made applicable.”
35. Therefore, the Supreme Court ultimately held in paragraph-13 that in the absence of the applicability of Section 5 of the Limitation Act, the rights of aggrieved persons could be defeated and hence Section 5 of the Limitation Act, was applicable.
36. Therefore it is clear that Section 5 would apply even to some types of Applications, though it may not apply to Suits. The proceedings before the Debts Recovery Tribunal under Section 17 of the SARFAESI Act, though original in nature, should be treated as Applications and not strictly like Suits. Therefore, the provisions of Section 5 of the Limitation Act, in my considered view would apply to Applications under Section 17 of the SARFAESI Act. But the same logic cannot be extended to applications filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, since Section 24 of the 1993 Act makes the provisions of the Limitation Act, 1963 applicable to an Application under the Act, meaning thereby that an Application under Section 19 of the 1993 Act is to be treated as a Suit.
37. Section 17(1) of the SARFAESI Act, prescribes a period of limitation of just 45 days for filing an Application, challenging any of the measures taken by the secured creditor under Section 13(4) of the Act. The remedy under Section 17(1) is virtually a remedy in respect of a right of redemption. Therefore, to hold that Section 5 of the Limitation Act, will not apply to an Application under Section 17(1) would virtually defeat the valuable right of redemption available to a mortgagor. This right of redemption normally gets extinguished after the sale of the property. Therefore, the apprehension expressed by the learned counsel for the Bank that the parties may come up with Applications after a huge delay and defeat the object of the Act for speedy recovery of dues, may not be well founded for the simple reason that after losing possession of the property under Section 13(4), a debtor cannot afford to wait for long. If he waits for long, the property may get sold and his rights may get extinguished. Hence, the application of Section 5 of the Limitation Act, to proceedings under Section 17(1) of the SARFAESI Act, would neither defeat the rights of the secured creditor nor cause irreparable hardship to the secured creditor.
38. In Karnataka State Financial Corporation v. N. Narasimahaiah, 2008 (5) SCC 176, the Supreme Court held as follows:
“40. Right to property, although no longer a fundamental right, is still a constitutional right. It is also human right. In the absence of any provision either expressly or by necessary implication, depriving a person there from, the Court shall not construe a provision leaning in favour of such deprivation.”
“In a case where a Court has to weigh between a right of recovery and protection of a right, it would also lean in favour of the person who is going to be deprived there from. It would not be the other way round.”
39. Viewed in the context of the ratio laid down by the Supreme Court extracted above, it could be seen that the right conferred upon the secured creditor under Section 13(4) of the SARFAESI Act, is a right of recovery. The right conferred upon the debtor or the surety under Section 17 is a right to save one's own property. To hold that the fate of a debtor or surety will be sealed in a period of 45 days from the date of initiation of the measures under Section 13(4) and that he would be left remediless after the said period on account of non-availability of Section 5 of the Limitation Act, would defeat the right to property. Therefore the Court has to choose an interpretation which would lean in favour of the right to property. If so done, the conclusion is irresistible that Section 5 of the Limitation Act, would apply to Applications filed under Section 17 of the SARFAESI Act.
40. In so far as the present case is concerned, the possession notice under Section 13(4) is dated 16.10.2007 and the notice of sale is dated 26.12.2007 The Application was filed on 14.1.2008 and hence it was within the period of limitation, from the date of the notice of sale. Therefore there was not even a necessity for the petitioners to have filed an Application to condone the delay, in so far as their prayer for setting aside the notice of sale was concerned.
41. In view of the above, this Civil Revision Petition is allowed, the order of the Debts Recovery Tribunal, Coimbatore in I.A No. 166 of 2008 in O.A(S)SR No. 511 of 2008 dated 17.1.2008 is set aside. Since the Tribunal dismissed the condone delay Petition only on the ground of maintainability and not on merits and also since the Application was dismissed without notice to the second respondent-Bank, I have no alternative except to remit the Application back to the Tribunal, for disposal on merits. Accordingly I.A No. 166 of 2008 in O.A(S)SR No. 511 of 2008 is remitted back to the first respondent-Tribunal for a fresh disposal on merits, after notice to the second respondent-Bank. The Tribunal shall dispose of the Application within 4 weeks from the date of receipt of a copy of this order. Till such disposal, the Bank shall not proceed further with the action already initiated. No costs. Consequently, connected Miscellaneous Petition is closed.