Seth Banshidhar Kedia Rice Mills Pvt. Ltd. & Ors. v. State Bank Of India & Ors.

Per Ajit Singh, J.

It can be held that the legislature has con­sciously excluded the applicability of the pro­visions of Section 4 to Section 24 of the Limi­tation Act insofar as they relate to section 18 of the sarfaesi act. The Appellate Tri­bunal has no power to condone the delay in filing of appeal before it under section 18 of the sarfaesi act. (Paras 18,19)

section 18 of the sarfaesi act when compared with section 20 of the rddbfi act, it is found that in Section 18 not only the period of limitation for filing an appeal has been reduced to 30 days from 45 days as provided in Section 20 but the power of the Appellate Tribunal to condone delay has also been excluded which is provided in section 20 of the rddbfi act. This itself leaves no iota of doubt that the legislature has con­sciously intended not to confer the power of condonation of delay with the Appellate Tri­bunal under section 18 of the sarfaesi act. Because, it is a well settled principle of law that just as use of same language in a later statute as was used in an earlier one in pari materia is suggestive of the intention of the Legislature that the language so used in the later statute is used in the same sense as in the earlier one, change of language in a later stat­ute in pari materia is suggestive that change of interpretation is intended. (Para 16)

Per Sanjay Yadav, J. (Concurring).

When the legislature has chosen not to confer the power to condone the delay in fil­ing an appeal under Section 18 of SARFAESI Act, 2002, by an inferential interpretation such power cannot be conferred upon the Ap­pellate Tribunal by a judicial pronouncement. (Para 39)

A combined reading of the provision con­tained in Sections 35, 36 and 37 of the Act of 2002 does not lend any support to the con­tention of the petitioners that the powers con­ferred in the Appellate Tribunal under Sec­tion 20 of the Act of 1993 to condone the delay in filing an Appeal against the order of the Debt Recovery Tribunal, could be read with the jurisdiction of Appellate Tribunal under Section 18 of the Act of 2002. As the provisions contained under Sections 35, 36 and 37 have their own field of operation and have no bearing upon the provisions con­tained under Section 18 of the Act of 2002. (Para 28)

Cases Referred : Chronological Paras

AIR 2010 SC 3413 : 2010 AIR SCW 5267 [Para 15]

(2009) 3 BJ 401 (Mad) [Paras 5 & 18]

(2008) 4 Mah LJ 424 [Paras 5 &18]

(2008) 2 BC 72 (DRAT) [Para 4]

(2008) 3 BC 51 (DRAT) [Paras 4 & 6]

AIR 2007 SC 712 : 2007 AIR SCW 389 [Paras 28 & 38]

2005 AIR SCW 3076 [Paras 5, 6, 11 & 17]

AIR 2004 SC 2371 : 2004 AIR SCW 2541 [Para 26 & 27]

AIR 2004 SC 3068 : 2004 AIR SCW 1438 [Para 17]

AIR 1979 SC 262 : 1979 Lab IC 129 [Para 38]

AIR 1974 SC 480 [Paras 6 & 12]

AIR 1973 SC 2729 [Para 37]

Ajit Singh, J.:-

In this petition an important question which calls for determi­nation is whether the Debts Recovery Ap­pellate Tribunal has power to condone the delay in filing of appeal before it under sec­tion 18 of the Securitization and Reconstruc­tion of Financial Assets and Enforcement of Security Interest Act, 2002 (in short "the SARFAESI Act").

2. Petitioner No. lisa Company registered under the provisions of the Companies Act. Petitioner Nos. 2, 3 and 5 have been the Di­rectors of the Company from time to time. Petitioner No. 5 is alleged to have signed per­sonal guarantee along with petitioner Nos. 2,3 and 4. Petitioner Nos. 2, 4 and 5 are said to have mortgaged their immovable proper­ties in favour of respondent State Bank of India which provided financial assistance to petitioner No. 1 for establishing an automatic rice milling plant. The respondent Bank ini­tiated recovery proceedings against the peti­tioner under the provisions of the SARFAESI Act vide demand notice dated 5.5.2009. On receiving the demand notice the petitioners submitted a detailed representation on 8.7.2009 to the Bank which was decided vide order dated 16.7.2009 and demand was modi­fied. On 17.7.2009, the petitioners submit­ted another representation which was decided by the Bank vide order dated 21.8.2009. The Bank then took the possession of the mort­gaged properties on 30.4.2010 by taking re­course to one of the measures enumerated in section 13(4) of the SARFAESI Act.

3. Aggrieved with the action taken, the petitioners filed SA No. 87/2010 under sec­tion 17 of the SARFAESI Act before the Debts Recovery Tribunal, Jabalpur (in short "the Tribunal"). They also separately filed an application for staying the auction of the mortgaged properties which was scheduled for 29.7.2010 but it was dismissed by the Tribunal vide order dated 28.7.2010.

4. Against the order dated 28.7.2010 the petitioners filed an appeal SR No.97/2010 on 1.9.2010 under section 18 of the sarfaesi act before the Debts Recovery Appellate Tribunal, Allahabad (in short "the Appellate Tribunal"). They filed an applica­tion under section 5 of the Limitation Act seeking condonation of delay of 2 days be­cause the appeal was not filed within the pre­scribed period of 30 days from the date of receipt of the copy of order of the Tribunal. It appears that the auction of the mortgaged properties could not materialize on 29.7.2010 and a fresh auction was scheduled for 22.9.2010. The Appellate Tribunal, after con­sidering the application for stay filed by the petitioners, passed an interim order dated 20.10.2010 to the effect that auction may go on but the sale shall not be confirmed. The Bank thereupon raised a preliminary objec­tion in the appeal that the Appellate Tribu­nal had no jurisdiction to extend the period of limitation by condoning the delay. The Appellate Tribunal, relying upon its two ear­lier decisions in Misuki Exports Pvt. Ltd. v. State Bank of India III (2008) BC 51 (DRAT) and State Bank of India v. Sudarshan Doors (P) Ltd. II (2008) BC 72 (DRAT), by order dated 21.1.2011 dismissed the appeal on the ground it had no power to condone the de­lay. It is against the order dated 21.1.2011 the petitioners have filed the present petition. 5. The learned counsel for petitioners ar­gued that the provisions of the SARFAESI Act do not exclude either expressly or impliedly the application of the provisions of the Limitation Act, 1963 and, therefore, the Appellate Tribunal had full powers under section 29(2) of the Limitation Act, to con­sider on merits the question of condonation of delay in filing appeal as per section 5 of the Limitation Act. In support of his argu­ment the learned counsel relied upon a deci­sion of the Bombay High Court in UCO Bank v. Kanji Manji Kothari 2008 (4) Mh LJ 424 and also a decision dated 9.2.2009 of the Madras High Court in Punnu Swami v. The Debts Recovery Tribunal 2009 (3) BJ 401. In these decisions both Bombay High Court and Madras High Court have taken a view that section 5 of the Limitation Act applies to the proceedings under section 17 of the sarfaesi act. The learned respective counsel for the Bank and auction purchaser on the other hand have supported the order passed by the Appellate Tribunal by relying upon the decision of Supreme Court in Fairgrowth Investments Ltd. v. Custodian.

(2004) 11 SCC 472 : (2005 AIR SCW 3076).

6. It is to be noted that the Appellate Tri­bunal in its decisions rendered in Misuki Exports Pvt. Ltd. v. State Bank of India (su­pra), while holding that it has no power to condone the delay, has relied upon the deci­sions of the Supreme Court in Hukumdev Narain Yadav v. Lalit Narain Mishra., AIR 1974 SC 480 and Fairgrowth Investments Limited (supra).

7. section 13 of the sarfaesi act con­tains detailed mechanism for enforcement of security interest. Sub-section (1) thereof empowers the secured creditors to enforce the security interest without the intervention of the Court or Tribunal notwithstanding any­thing contained in section 69 or section 69-A of the Transfer of Property Act. Sub-sec­tion (2) enables the secured creditor to call upon the borrower by notice in writing to discharge in full his liabilities within sixty days from the date of notice with an indica­tion that if he fails to do so, the secured credi­tor shall be entitled to exercise all or any of its rights under sub-section (4). Sub-section (3) lays down that the notice issued under section 13(2) shall contain details of the amount payable by the borrower as also the details of the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the bor­rower. Sub-section (3-A) provides that if the borrower makes any representation or raises any objection in response to the notice is­sued under section 13(2), the secured credi­tor has to consider such representation or objection and if he comes to the conclusion that such representation or objection is not acceptable, then reasons for non-acceptance are required to be communicated within one week to the borrower. Sub-section (4) of sec­tion 13 enumerates various modes which can be adopted by the secured creditor if the bor­rower fails to discharge in full his liabilities in response to the notice under sub-section (2).

8. Section 17 of the SARFAESI Act speaks of the remedies available to any person, in­cluding the borrower, who may have griev­ance against the action taken by the secured creditor by any of the measures provided under sub-section (4) of section 13. Such an aggrieved person can make an application to the Tribunal within 45 days from the date on which action is taken under that sub-section. Section 18 provides for an appeal to the Ap­pellate Tribunal against any order made by the Tribunal under section 17 within 30 days from the date of receipt of the order of Tri­bunal. Section 35 declares that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. Section 36, which deals with limi­tation, clearly provides that no secured credi­tor shall be entitled to take all or any of the measures under sub-section (4) of section 13 unless his claim in respect of the financial asset is made within the period of limitation prescribed in the Limitation Act. Section 37 states that the provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of the Companies Act, 1956 (1 of 1956), the Securities Con­tracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institu­tions Act, 1993, 1993 or any other law for the time being in force.

9. section 18 of the sarfaesi act, with which I am mainly concerned, reads as un­der:

18. Appeal to Appellate Tribunal.- (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal along with such fee, as may be prescribed to an Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal.

Provided that different fees may be pre­scribed for filing an appeal by the borrower or by the person other than the borrower:

Provided further that no appeal shall be entertained unless the borrower has depos­ited with the Appellate Tribunal fifty per cent, of the amount of debt due from him, as claimed by the secured creditors or deter­mined by the Debts Recovery Tribunal, whichever is less:

Provided also that the Appellate Tribunal may, for the reasons to be recorded in writ­ing, reduce the amount to not less than twenty-five per cent, of debt referred to in the second proviso.

(2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, 1993 and rules made thereunder."

10. There is no express provision in the SARFAESI Act empowering the Appellate Tribunal to condone the delay in filing the appeal. A reading of section 18 (1) shows that words used are clear and unambiguous that the appeal before the Appellate Tribu­nal is to be filed within 30 days from the date of receipt of the order of the Tribunal passed under section 17. No scope is left to infer that the Appellate Tribunal has power to ex­tend the period prescribed on the basis of any principle of interpretation of statutory pro­visions. Thus, the only source of power in this regard could be section 5 of the Limita­tion Act, 1963 provided it applies to the SARFAESI Act.

11. section 29(2) of the Limitation Act, 1963 reads as follows:

"(2) Where any special or local law pre­scribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (in­clusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law."

In Fairgrowth Investments Limited (su­pra) the Supreme Court has held that section 29(2) of the Limitation Act, 1963 provides for the application of the provisions of sec­tion 4 to section 24 of the Act, including sec­tion 5, to any special or local law which pre­scribes the period of limitation in respect of any suit, appeal or application different from the period prescribed under the Limitation Act. According to the Supreme Court the general rule, as far as special law and local Acts are concerned, is that the specified pro­visions, including section 5 of the Limita­tion Act, will apply provided the special or local Act provides a period of limitation dif­ferent from that prescribed under the Limi­tation Act and that the special/local Act does not expressly exclude the application of the Limitation Act.

12. The Supreme Court in Hukumdev (Su­pra) has held that the expression "expressly exclude" also includes "exclusion by neces­sary implication" and even in a case where the special law does not exclude the provi­sions of section 4 to section 24 of the Limi­tation Act by an express reference, it would nonetheless be open to the Court to examine whether and to what extent nature of those provisions are excluded or the nature of the subject-matter and scheme of the special law exclude their operation.

13. Section 18(2) of the SARFAESI Act provides that the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recov­ery of Debts Due to Banks and Financial In­stitutions Act, 1993 (in short, "the RDDBFI Act") and Rules made thereunder.

14. RDDBFI Act was enacted earlier in the year 1993 because banks and financial institutions were experiencing considerable difficulties in recovering loans and enforce­ment of securities charged with them. This Act provided for the establishment of Tribu­nals and Appellate Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions with provi­sions to ensure that defaulting borrowers were not able to invoke the jurisdiction of civil courts for frustrating the proceedings initiated by the banks and financial institu­tions. section 20 of the rddbfi act also provides for appeal. Its relevant extract is as under:

"20. Appeal to the 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.

(2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties.

(3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from 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 forty-five days if it is satisfied that there was sufficient cause for not filing it with in that period."

It is clear from the above quoted provi­sion that though a period of 45 days for fil­ing an appeal to the Appellate Tribunal is provided, the Appellate Tribunal has power to condone the delay if it is satisfied that there was sufficient cause for not filing it within that period.

15. For few years the new dispensation under the RDDBFI Act worked well and the officers appointed to man the tribunals worked with great zeal for ensuring that cases involving recovery of the dues of banks and financial institutions were decided expeditiously. But with the passage of time, the pro­ceedings before the tribunals became synony­mous with those of the regular civil courts. The Ministry of Finance, Government of In­dia, conducted a survey which revealed that as in the year 2001, a sum of more than Rs. 1,20,000/- crores was due to the banks and financial institutions and this was ad­versely affecting the economy of country. A committee was, therefore, constituted to sug­gest measures for expediting the recovery of debts due to banks and financial institutions. The committee in its report made various suggestions for bringing about radical changes in the existing adjudicatory mecha­nism for facilitating speedy recovery of the dues of banks and also for quick resolution of disputes arising out of the action taken for recovery of such dues. The Government of India accepted the suggestions and that led to enactment of the SARFAESI Act in the year 2002 by which for the first time the se­cured creditors have been empowered to take steps for recovery of their dues, without in­tervention of the Courts or Tribunals (See United Bank of India v. Satyawati Tondon, AIR 2010 SC 3413).

16. When I compare section 18 of the SARFAESI Act with section 20 of the RDDBFI Act, I find that in section 18 not only the period of limitation for filing an appeal has been reduced to 30 days from 45 days as provided in section 20 but the power of the Appellate Tribunal to condone delay has also been excluded which is provided in section 20 of the rddbfi act. This itself leaves no iota of doubt that the legislature has consciously intended not to confer the power of condonation of delay with the Ap­pellate Tribunal under section 18 of the sarfaesi act. Because, it is a well-settled principle of law that just as use of same lan­guage in a later statute as was used in an ear­lier one in pari materia is suggestive of the intention of the Legislature that the language so used in the later statute is used in the same sense as in the earlier one, change of lan­guage in a later statute in pari materia is sug­gestive that change of interpretation is in­tended (See Principles of Statutory Interpre­tation by Justice G. P. Singh 12th Edition, 2010 Page 310).

17. There is also an identical provision in sub-section (7) of section 17 of the SARFAESI Act which states that the Tribu­nal shall, as far as may be, dispose of the application in accordance with the provisions of RDDBFI Act. Under the RDDBFI Act the Tribunal and the Appellate Tribunal are sepa­rately established and its section 24, which deals with limitation, states that the provi­sions of Limitation Act, 1963 shall, as far as may be, apply to an application made to a Tribunal. As already mentioned above, ap­plication under section 17 can be made by any aggrieved person to the Tribunal within 45 days from the date on which he has suf­fered an action under any of the measures referred to in sub-section (4) of section 13 of the SARFAESI Act. Thereafter any person aggrieved by any order made by the Tribu­nal under section 17 can prefer an appeal to the Appellate Tribunal under section 18 within 30 days from the date of receipt of the order of the Tribunal. section 24 of the rddbfi act has not made the provisions of the limitation act applicable to an Appel­late Tribunal. This being the position, it is apparent that although the Tribunal can give the benefit of section 5 of the Limitation Act, while dealing with an application under sec­tion 17 of the SARFAESI Act, the Appellate Tribunal cannot do so while considering the appeal under section 18. This view also finds support from the decision of the Supreme Court in Gopal Sardar v. Karuna Sardar (2004) 4 SCC 252 : (AIR 2004 SC 3068) wherein it is held that when in the same stat­ute in respect of various other provisions re­lating to filing of appeals and revisions, spe­cific provisions are made so as to give ben­efit of section 5 of the Limitation Act and such provision is not made to an application to be made under a particular section of that statute, it obviously and necessarily follows that the legislature consciously excluded the application of section 5 of the Limitation Act. This view was also followed by the Su­preme Court in Fairgrowth Investments Lim­ited (2005 AIR SCW. 3076) (supra).

18. Having regard to the object of the SARFAESI Act that it intends to ensure speedy recovery of dues of Banks and also for quick resolution of dispute arising out of the action taken for recovery of such dues, I have no hesitation in holding that the legis­lature has consciously excluded the applica­bility of the provisions of section 4 to sec­tion 24 of the Limitation Act insofar as they relate to section 18 of the sarfaesi act. The decisions of UCO Bank v. Kanji Manji Kothari and Punnu Swami v. The Debts Re­covery Tribunal of Bombay and Madras High Courts relied upon by the learned counsel for petitioner are with regard to the applicabil­ity of section 5 of the Limitation Act only to section 17 of the SARFAESI Act and not section 18. In both these decisions, section 18 has not even been referred. The decisions are, therefore, not applicable in the present case.

19. For these reasons, I conclude that the Appellate Tribunal has no power to condone the delay in filing of appeal before it under section 18 of the sarfaes1 act and answer the question in negative.

20. Since, the appeal before the Appellate Tribunal was filed admittedly after the ex­piry of the prescribed period of 30 days, the same has rightly been dismissed.

21. The petition has no merit. It fails and is dismissed but without any order as to costs.

San Jay Yadav, J.:-

22. It is not said for nothing in respect of Judicial interven­tion regarding sententia legis, that: "A stat­ute is an edict of the legislature and the con­ventional way of interpreting or construing a statute is to seek the 'intention' of its maker. The duty of judicature is to act upon the true intention of the legislature. The function of the Courts is only to expound and not legis­late. (Principle of Statutory Interpretation : Justice G.P. Singh, 12th Edn. 2010 Ch. I Syn. 2 page 3).

23. While entirely agreeing with my learned Brother, I take liberty to express on the issue which crops up for consideration.

24. The question, an important one, as rightly posed by my learned Brother, is whether when the legislature has chosen not to confer the power to condone the delay in filing an appeal under Section 18 of the Securitization and Reconstruction of Finan­cial Assets and Enforcement of Security In­terest Act, 2002, whether by an inferential interpretation such power can be conferred upon the Appellate Tribunal by a judicial pro­nouncement.

25. Conscious of surmounting accumula­tion of the non-performing assets (NPA) af­fecting the national economy adversely and a counter productive in a way, and having experienced the failure of The Recovery of debts Due to Banks and Financial Institution Act, 1993 to achieve the object, the enact­ment was brought for, the., speedy recovery of the amount to the Banks in form of NPA, legislature enacted tha Securitization and Reconstruction of Financial Assets and Enforce­ment of Security Interest Act, 2002 with cer­tain stringent provisions.

26. These provisions were labelled as draconian and were questioned in Mardia Chemicals Ltd. and others v. Union of India and others (2004) 4 SCC 311 : (AIR 2004 SC 2371) wherein the validity of the provi­sions of the Act of 2002 was upheld except that of Sub-section (2) of Section 17 which was declared 'ultra vires', Article 14 of the Constitution. The said sub-section provided for deposit of seventy five percent of the amount before entertaining an appeal by the Debts Recovery Tribunal (DRT) under Sec­tion 17. It was further observed that in case where secured creditor has taken action un­der sub-section (4) of section 13 of the Act of 2002, it would be open to borrowers to file appeals under Section 17 of the Act within the limitation as prescribed therefor. It was further observed that the borrower af­ter service of notice under sub-section (2) of section 13 of the Act raised an objection or placed facts for consideration of the secured creditor, such reply to the notice must be considered with due application of mind and the reasons for non-accepting the objections, however, brief they may be, must be com­municated, to the borrowers. The reasons so communicated shall only be for the purpose of the information/knowledge of the bor­rower without giving rise to any right to ap­proach the Debts Recovery Tribunal under Section 17 of the Act, at that stage.

27. To ensure effective implementation of the judgment in Mardia Chemicals (supra), and also to discourage the borrowers to post­pone the repayment of their dues and also enable the secured creditor to speedily re­cover their debts, if required, by enforcement of security or other measures specified in sub­section (4) of Section 13 of the Act of 2002, the Central Government promulgated the en­forcement of Security Interest and Recovery of Debts Loans (Amendment) Ordinance, 2004 on 11.11.2004. The same was later on enacted on 29.12.2004, after it was passed by Lok Sabha on 7.12.2004 and Rajya Sabha on 16.12.2004; whereby besides amending Sections 2, 3, 4, 7, 13, 15, 17, 18, 25, 28, 31 and 38, inserted Sections 5A, 12A, 13 (3A), 17A, 18A and 18B and substituted new Sec­tion for Section 19. Besides, the amendment in the Act of 2002, corresponding amend­ments were effected in the Recovery of debts Due to Banks And Financial Institution Act, 1993, the Companies Act, 1956.

28. And though in a decision in Transcore v. Union of India and another [(2008) 1 SCC 125] the two Acts, i.e, Act of 2002 and 1993 were held to be complimentary.

(61. Keeping in mind the above circum­stances, the NPA Act is enacted for quick enforcement of the security. The said Act deals with enforcement of the rights vested in the bank/FI. The NPA Act proceeds on the basis that security interest vests in the bank/ fi. sections 5 and 9 of npa act are also im­portant for preservation of the value of the assets of the banks/ FIs. Quick recovery of debt is important. It is the object of DRT Act as well as the NPA Act. But under NPA Act, authority is given to the banks/ FIs, which is not there in the DRT Act, to assign the se­cured interest to securitization company/as­set reconstruction company. In cases where the borrower has bought an asset with the finance of the bank/ FI, the latter is treated as a lender and on assignment the securitisation company/ asset reconstruction company steps into the shoes of the lender bank/ FI and it can recover the lent amounts from the borrower.

62. According to Snell's Principles of Equity (Thirty-first edition) at page 777, a dual obligation could arise on the same trans­action, namely, A's obligation to repay a sum of money to B or some other obligation. In such a case, B can sue A for money or for breach of the obligation. However, B will often have some security which covers the obligation of A, say, in the form of an asset over which B can exercise his rights. B may be entitled to this security either by law or by operation of common law principles or under the transaction (contract). In addition, B may acquire a personal right of action against the third party. Security over the as­set (property) may be obtained by mortgage, charge, pledge, lien etc. Security in the form of right of action against a third party is known as guarantee. Broadly, there are three types of security over the asset. One is where the creditor obtains interest in the asset con­cerned (mortgage). Second is securities in which the rights of the creditor depends on possession of the asset (pledge/ lien). The third is charge where the creditor neither obtains ownership nor possession of the as­set but the asset is appropriated to the satis­faction of the debt or obligation in question (charge). The dichotomy, which is of impor­tance, is that more than one obligation could arise on the same transaction, namely, to re­pay the debt or to discharge some other obli­gation.

63. Therefore, when Section 13(4) talks about taking possession of the secured as­sets or management of the business of the borrower, it is because a right is created by the borrower in favour of the bank/ FI when he takes a loan secured by pledge, hypoth­ecation, mortgage or charge. For example, when a company takes a loan and pledges its financial asset, it is the duty of that company to see that the margin between what the com­pany borrows and the extent to which the loan is covered by the value of the financial asset hypothecated is retained. If the borrower company does not repay, becomes a defaulter and does not keep up the value of the finan­cial asset which depletes then the borrower fails in its obligation which results in a mis­match between the asset and the liability in the books of the bank/ FI. Therefore, Sec­tions 5 and 9 talks of acquisition of the se­cured interest so that the balance sheet of the bank/ FI remains clean. Same applies to im­movable property charged or mortgaged to the bank/ FI. These are some of the factors which the Authorised Officer of the bank/ FI has to keep in mind when he gives notice under Section 13(2) of the NPA Act. Hence, equity, exists in the bank/FI and not in the borrower. Therefore, apart from obligation to repay, the borrower undertakes to keep the margin and the value,-of the securities hy­pothecated so that there is no mis-match be­tween the asset-liability in the books of the bank/FI. This obligation is different and dis­tinct from the obligation to repay. It is the former obligation of the borrower which at­tracts the provisions of NPA Act which seeks to enforce it by measures mentioned in Sec­tion 13(4) of NPA Act, which measures are not contemplated by DRT Act and, therefore, it is wrong to say that the two Acts provide parallel remedies as held by the judgment of the High Court in M/s. Kalyani Sales Co. As stated, the remedy under DRT Act falls short as compared to NPA Act which refers to ac­quisition and assignment of the receivables to the asset reconstruction company and which authorizes banks/ FIs. to take posses­sion or to take over management which is not there in the DRT Act. It is for this reason that NPA Act is treated as an additional rem­edy (Section 37), which is not inconsistent with the DRT Act.)

A combined reading of the provision con­tained in Sections 35, 36 and 37 of the Act of 2002 does not lend any support to the con­tention of the petitioners that the powers con­ferred in the Appellate Tribunal under Sec­tion 20 of the Act of 1993 to condone the delay in filing an Appeal against the order of the Debt Recovery Tribunal, could be read with the jurisdiction of Appellate Tribunal under Section 18 of the Act of 2002. As the provisions contained under Sections 35, 36 and 37 have their own field of operation and have no bearing upon the provisions con­tained under Section 18 of the Act of 2002.

29. Act of 1993 was enacted with an ob­ject to provide for the establishment of Tri­bunals and Appellate Tribunals for expedi­tious adjudication and recovery of debts due to banks and financial institutions. The ad-judicatory aspect was because the Tribunal substituted the regular Civil Court (Courts of Original Jurisdiction). sub-section (1) of section 17 of the Act of 1993 stipulates that:

"(1) Any person (including borrower), aggrieved by any of the measures referred to in sub-section (4) of section 13 taken by the secured creditor or his authorised officer under this Chapter, may make an application along with such fee, as may be prescribed to the Debts Recovery Tribunal having jurisdiction in the matter within forty-five days from the date on which such measures had been taken.

Provided that different fees may be pre­scribed for making the application by the borrower and the person other than the bor­rower."

Sub-section (2) of Section 17 stipu­lates :-

"(2) The Debts Recovery Tribunal shall consider whether any of the measures re­ferred to in sub-section (4) of section 13 taken by the secured creditor for enforcement of security are in accordance with the provisions of this Act and the rules made thereunder."

30. Thus, the entire machinery to adjudi­cate matter pertaining to debts due to banks and financial institution and for matters con­nected therewith or incidental thereto got shifted to the Tribunal and Appellate Tribu­nal constituted under the Act of 1993, from that of regular Civil Courts and the regular appellate Courts. It appears that in order to maintain parity with the mechanism preva­lent before regular Courts/Appellate Court, the legislature retained the powers regard­ing condo nation of delay with the Appellate Court under Section 20 of the 1993 Act and by virtue of Section 24 made the provisions of the Limitation Act 1963, as for as may be, applicable in cases of application made to a Tribunal (in contradistinction to the Appel­late Tribunal). Presently since we are con­cerned with the issue as to whether appel­late Court wields the power to condone the delay under section 18 of the Act of 2002 we propose to confine to the same.

31. The object with which the Act of 2002 has been enacted is to

"regulate secularisation and reconstruction of financial assets and enforcement of security interest and for mat­ters connected therewith or incidental thereto."

It has been observed in Transcore (supra) "14. There is one more reason for enact­ing NPA Act, 2002. When the civil courts failed to expeditiously decide suits filed by the banks/ FIs., Parliament enacted the DRT Act, 1993. However, the DRT Act did not provide for assignment of debts to securitization companies. The secured assets also could not be liquidated in time. In order to empower banks or FIs to liquidate the as­sets and the secured interest, the NPA Act is enacted in 2002. The enactment of NPA Act is, therefore, not in derogation of the DRT Act. The NPA Act removes the fetters which were in existence on the rights of the secured creditors. The NPA Act is inspired by the pro­visions of the State Financial Corporations Act, 1951 ("SFC Act"), in particular Sections 29 and 31 thereof. The NPA Act proceeds on the basis that the liability of the borrower to repay has crystallized; that the debt has become due and that on account of delay the account of the borrower has become sub­standard and non-performing. The object of the DRT Act as well as the NPA Act is re­covery of debt by non-adjudicatory process. These two enactments provide for cumula­tive remedies to the secured creditors. By removing all fetters on the rights of the se­cured creditor, he is given a right to choose one or more of the cumulative remedies. The object behind Section 13 of the NPA Act and Section 17 r/w Section 19 of the DRT Act is the same, namely, recovery of debt. Concep­tually, there is no inherent or implied incon­sistency between the two remedies. There­fore, as stated above, the object behind the enactment of the NPA Act is to accelerate the process of recovery of debt and to re­move deficiencies/obstacles in the way of realisation of debt under the DRT Act by the enactment of the NPA Act, 2002.

66. We have already analysed the scheme of both the Acts. Basically, the NPA Act is enacted to enforce the interest in the finan­cial assets which belongs to the bank/ FI by virtue of the contract between the parties or by operation of common law principles or by law. The very object of section 13 of npa act is recovery by non-adjudicatory process. A secured asset under NPA Act is an asset in which interest is created by the borrower in favour of the bank/ FI and on that basis alone the NPA Act seeks to enforce the security interest by non-adjudicatory process. Essen­tially, the NPA Act deals with the rights of the secured creditor. The NPA Act proceeds on the basis that the debtor has failed not only to repay the debt, but he has also failed to maintain the level of margin and to maintain value of the security at a level is the other obligation of the debtor. It is this other obli­gation which invites applicability of NPA Act. It is for this reason, that sections 13(1) and 13(2) of the npa act proceeds on the basis that security interest in the bank/FI; needs to be enforced expeditiously without the intervention of the court/tribunal; that li­ability of the borrower has accrued and on account of default in repayment, the account of the borrower in the books of the bank has become non-performing. For the above rea­sons, NPA Act states that the enforcement could take place by non-adjudicatory process and that the said Act removes all fetters un­der the above circumstances on the rights of the secured creditor."

32. Securitisation finds its meaning in sec­tion 2 (1)(z), it means

"acquisition of finan­cial assets by any securitisation company or reconstruction company from any originatore, whether by raising of funds by such securitisation company or reconstruc­tion company from qualified institutional buyers by issue of security receipts repre­senting undivided interest in such financial assets or otherwise."

33. "Financial assets" is defined under section 2(1)(1) as "debt or receivables" and includes -

"(i) a claim to any debt or receivables or part thereof, whether secured or unsecured; or

(ii) any debt or receivables secured by, mortgage of, or charge on, immovable prop­erty; or

(iii) a mortgage, charge, hypothecation or pledge of movable property; or

(iv) any right or interest in the security, whether full or part underlying such debt or receivables; or

(v) any beneficial interest in property, whether movable or immovable, or in such debt, receivables, whether such interest is existing, future, accruing, conditional or contingent; or

(vi) any financial assistnce."

34. "Security interest' under section 2(1) (zf) means "security interest" means right, title and interests of any kind whatsoever upon property, created in favour of any se­cured creditor and includes any mortgage, charge, hypothecation, assignment other than those specified in section 31.

35. Chapter III deals with the provisions regarding the manner of enforcement of se­curity interest. sub-section (4) of section 13 empowers the Secured Creditor (Section 2 (1) (zd) " to take recourse to one or more of the measures to recover secured debt (sec­tion 2(1) (ze)", in case, borrower, which in­cludes the guarantor as per section 2(1)(f)], fails to discharge his liability in full within the period specified in sub-section (2) of sec­tion 13. It is against the measures provided under sub-section (4) of section 13 and ap­peal is provided under section 17. Under sec­tion 17 the Tribunal is required to decide the appeal within an outer time limit of four months as provided under sub-section (5) of section 17.

36. It is pertinent to note that sub-section (1) of section 17 lays down the period within which an application can be filed against the measures referred under sub-section (4) of section 13 taken by the secured creditor or his authorized officer, which is "within forty-five days from the date on which such mea­sures had been taken".

37. It is to be noted that the law makers have not wielded even the Tribunal with a power to condone the delay if any in case the application is not filed within forty five days. Though an inference has been drawn on the basis of sub-section (7) of section 17 (which stipulates that "same as otherwise provided in this Act the Debts Recovery Tri­bunal shall, as far as may be, dispose of ap­plication in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993(51 of 1993) and the Rules made thereunder), that section 24 of the Act of 1993 would be applicable. In my considered opinion the scheme of section 17 of the Act of 2002 does not support this proposition. sub-section (7) of section 17 starts with a phrase "save as otherwise provided in this Act", which finds its inter­pretation in following terms in State of Rajasthan v. Shri Noor Mohammed : AIR 1973 SC 2729 wherein it is observed:

"8. This power under clause (b), however, is subject to certain limitations. Sub-section (3) begins with the words "A State Trans­port Authority shall give effect to any direc­tions issued under section 43, and subject to such directions and save as otherwise pro­vided by or under this Act shall exercise and discharge throughout the State the follow­ing powers and functions, including those in sub-clause (b). It is clear, therefore, that the functions under sub-clause (b) could be dis­charged by the State Transport Authority subject to directions given to it under sec­tion 43 of the Act and save as otherwise pro­vided by or under the Act. In the present case it is urged that directions have been issued by the State Government under section 43. We shall deal with this point in another place. The other limitation is that the State Trans­port Authority could perform the duties of the Regional Transport Authority under sub-clause (b) save as otherwise provided by or under this Act. It was contended that the Regional Transport Authority is a separate authority on which the duties referred to in clause (b) have been imposed by other pro­visions in Chapter IV, and since the State Transport Authority is required to act save as otherwise provided by or under the Act" it would be disentitled to take over the func­tions under sub-clause (b). Such an interpre­tation would obviously lead to grave incon­gruity. Sub-clause (b), as we have already seen, provides for the exercise of the powers of the Regional Transport Authority by the State Transport Authority in certain contin­gencies. If the expression "save as otherwise provided by or under the Act" is construed in a manner to negative the functions per­mitted to be performed under sub-clause (b), the very object with which sub-clause (b) has been enacted will be frustrated. We, have, therefore, to construe the expression, "save as otherwise provided by or under the Act" in a harmonious manner so that sub-clause (b) is not reduced to a nullity. In our opinion the expression "save as otherwise provided by or under the Act" would in the context mean, "save as otherwise expressly barred by or under the Act". If there is a provision which expressly debars the exercise of the power under sub-clause (b) in any case then only the State Transport Authority will not be able to exercise the power and discharge the functions given in sub-clause (b). Other-wise there would be no such bar. It is not shown to us that there is any express provi­sion which bars the performance by the State Transport Authority of the duties referred to in sub-clause (b) and, therefore, we are of the view that the State Transport Authority in this particular case would not be barred from performing the duties under sub-clause (b)."

38. What the petitioner wants that the pro­visions of the Act of 1993 be read for the purpose of construing the limitation aspect. In Transcore (AIR 2007 SC 712) (supra) it is held (Paragraph 34) :

"Section 35 gives an overriding effect to the NPA Act with all other laws if such other laws are inconsistent with the NPA Act." For a provision being "inconsistent", as per Black's Legal Dictionary, it means "mutu­ally repugnant or contradictory; contrary, the one to the other so that both cannot stand, but the acceptance or establishment of the one implies the abrogation or abandonment of the other". In Basti Sugar Mills Co. Ltd. v. State of U.P. and another (AIR 1979 SC 262) regarding inconsistency of the provi­sions appearing in two different Act it is ob­served :

"23..... If they relate to the same subject-matter, to the same situation, and both substantially overlap and are co-extensive and at the same time so contrary and repug­nant in their terms and impact that one must perish wholly if the other were to prevail at all then, only then are they consistent."

39. Therefore, when the legislature has chosen not to confer powers on the Appel­late Tribunal under Section 18 of the Act of

2002 to condone the delay in filing Appeal against the orders passed by the Debts Re­covery Tribunal the same cannot be conferred by Judicial Pronouncement having inroad through inferential interpretation. The up­shot of above analysis is that the Appellate Tribunal is justified in dismissing the Appeal not filed within the time, stipulated under Section 18 of the 2002 Act.

40. In the result petition fails and is hereby dismissed.

Order of the Court

We, therefore, find no merit in the peti­tion. It is accordingly dismissed but without any order as to costs.

Petition dismissed.