,,
R.F. Nariman, J",,
1) Leave granted.,,
2) The present appeal raises interesting questions which arise under the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as",,
“the RDB Act†or “the Actâ€). The brief facts necessary to appreciate the questions raised are as follows:-,,
(i) On 29.08.2008, a Receivables Purchase Agreement was executed between Standard Chartered Bank, which is the appellant before us and MSTC",,
Limited, which is a Government Company-respondent herein, whereunder receivables from overseas buyers in respect of invoices raised by the",,
respondent against foreign buyers were purchased by the appellant. 95% of the amount raised by the invoices was remitted to the respondent.,,
(ii) An Export Insurance Policy was obtained by these parties from ICICI Lombard General 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 pending, Review",,
Application No. 1 of 2018 was filed on 18.12.2017 before the DRT by the respondent-Company after the appeal that was lodged earlier in point of,,
time was withdrawn by the respondent-Company on 02.01.2018.,,
(vii) In the meanwhile, an application dated 16.02.2018 was made to condone a 28 day delay in filing the review petition before the DRT, the period of",,
limitation under Rule 5A of the Debt Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as “the Rulesâ€) being 30 days. This",,
review petition was dismissed by the DRT on 21.04.2018, in which this Court’s judgment reported in International Asset Reconstruction Company",,
of India Limited vs. Official Liquidator of Aldrich Pharmaceuticals Limited and Others, (2017) 16 SCC 137 was followed, and Section 5 of the",,
Limitation Act, 1963 was held not to be applicable to review petitions that were filed under Rule 5A of the Rules. A further plea to exclude time taken",,
under Section 14 of the Limitation Act, 1963 was also dismissed by the DRT stating that a filing of the review petition after the appeal would show",,
that the appeal provision, which requires a minimum 25% deposit, was sought to be circumvented, and, therefore, this being the case, time taken under",,
Section 14 cannot be excluded as the respondent-Company did not move bona fide in the matter.,,
(viii) From the order dated 21.4.2018, a writ petition was filed before the Bombay High Court on 26.04.2018, which was then disposed of by the",,
impugned judgment on 03.05.2019, holding that the alternative remedy of filing an appeal not being available, the writ petition would be maintainable. In",,
any case, the judgment of this Court in International Asset Reconstruction Company of India Limited (supra) was confined to consideration of Section",,
30 of the RDB Act, and paragraph 14 of the said judgment would make it clear that it would apply to the facts of this case inasmuch as an original",,
application made under Section 19 of the RDB Act, (which by the definition clause under Section 2(b) applies only to applications made under Section",,
19 and to no others) would subsume an application for review as a review application would originate from an order passed under Section 19 of the,,
RDB Act, as per procedure prescribed under Section 22 of the RDB Act, and would therefore not be an application which could be said to be",,
independent of Section 19 of the RDB 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 proceeding, could not be subsumed",,
within the expression “application†contained in Section 24 of the RDB Act. He also cited the judgment reported in Kamlesh Verma vs.,,
Mayawati and Others, (2013) 8 SCC 320 to buttress the submission that a review petition cannot be equated with the original proceeding. Further,",,
contrasting Rule 5A of the Rules with Section 20 of the RDB Act, since peremptory language has been used in the said rule, making it clear that a",,
review petition filed beyond 30 days would have to be dismissed, coupled with the fact that no provision for condonation of delay, as in Section 20, is",,
contained in Rule 5A would also make it clear that the impugned judgment has to be faulted on this ground as well.,,
4) Mr. Amar Dave, learned Advocate appearing on behalf of the respondent, stoutly resisted each one of these contentions. First and foremost, he",,
asked us to consider the fact that the O.A. before the DRT was in 2012, and it is only after waiting for five years that a thoroughly frivolous",,
application was taken out in 2017 for a judgment on admission. He also adverted to Section 19, in particular, sub-section (2) thereof, to argue that",,
Section 19 is not exhaustive of the types of applications that can be made under the Act. He also strongly relied upon the reasoning of the High Court,,
judgment, and stated that Section 19 and 22 should be read together, as a review proceeding emanates from the original proceeding and is really part",,
and parcel of the proceeding, and this being the case, Section 24 of the RDB Act would apply Section 5 of the Limitation Act, 1963 to review",,
proceedings as well. He strongly relied upon paragraph 12, in particular, in International Asset Reconstruction Company of India Limited (supra) to",,
contend that there was a fundamental difference between the facts in that judgment and the facts of the present case. The difference is that in the,,
earlier judgment, Section 30 pre and post amendment was set out, and it was stated that an appeal that was filed against the orders of recovery",,
officers, which will be governed by Section 30 of the RDB Act, would be appeals filed against a persona designate who is not a tribunal, and this being",,
the case, the second sentence of paragraph 12 becomes very important, in which this Court then states that had the recovery officer been held to be a",,
tribunal, the matter would have to be completely differently 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;â€,,
Section 19 of the RDB Act states as follows:,,
“19. Application to the Tribunal. â€",,
(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 voluntarily resides or carries on business,",,
or personally works for gain; or,,
(c) the cause of action, wholly or in part, arises xxx xxx xxx",,
(2) Where a bank or a financial institution, which has to recover its debt from any person, has filed an application to the Tribunal under sub-section (1)",,
and against the same person another bank or financial institution also has claim to recover its debt, then, the later bank or financial institution may join",,
the applicant bank or financial institution at any stage of the proceedings, before the final order is passed, by making an application to that Tribunal.",,
xxx xxx xxx,,
(5) (i) the defendant shall within a period of thirty days from the date of service of summons, present a written statement of his defence including",,
claim for set-off under sub-section (6) or a counter-claim under sub-section (8), if any, and such written statement shall be accompanied with original",,
documents or true copies thereof with the leave of the Tribunal, relied on by the defendant in his defence:",,
Provided that where the defendant fails to file the written statement within the said period of thirty days, the Presiding Officer may, in exceptional",,
cases and in special circumstances to be recorded in writing, extend the said period by such further period not exceeding fifteen days to file the",,
written statement of his defence;,,
xxx xxx xxx,,
(18) Where it appears to the Tribunal to be just and convenient, the Tribunal may, by orderâ€"",,
(a) appoint a receiver of any property, whether before or after grant of certificate for recovery of debt;",,
(b) remove any person from the possession or custody of the property;,,
(c) commit the same to the possession, custody or management of the receiver;",,
(d) confer upon the receiver all such powers, as to bringing and defending suits in the courts or filing and defending applications before the Tribunal",,
and for the realisation, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the",,
application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Tribunal",,
thinks fit; and,,
(e) appoint a Commissioner for preparation of an inventory of the properties of the defendant or for the sale thereof.â€,,
Sections 20, 21 and 22 of the RDB Act state as follows:",,
“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. 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:,,
Provided that the Appellate Tribunal may, for reasons to be recorded in writing, reduce the amount to be deposited by such amount which shall not be",,
less than twenty- five per cent of the amount of such debt so due to be deposited under this section.,,
22. Procedure and powers of the Tribunal and the Appellate Tribunal. - (1) The Tribunal and the Appellate Tribunal shall not be bound by the,,
procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other",,
provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places",,
at which they shall have their sittings.,,
S.No.,Nature of Application,Amount of Fee Payable
1.,"Applica(cid:23)on for recovery of debts due
under section 19(1) or section 19(2) of
the Act
(a)Where amount of debt due is Rs. 10
lakhs
(b)Where the amount of debt due is
above Rs. 10 lakhs","Rs. 12,000
Rs. 12,000 plus Rs. 1,000 for every one
lakh rupees of debt due or part thereof
in excess of Rs. 10 lakhs, subject to a
maximum of Rs. 1,50,000
2.,"Applica(cid:23)on to counter claim under
section 19(8) of the Act â€
(a)Where the amount of claim made is
upto Rs. 10 lakhs.
(b)Where the amount of claim made is
above Rs. 10 lakhs.","Rs. 12,000
Rs. 12,000 plus Rs. 1,000 for every one
lakh rupees or part thereof in excess
of Rs. 10 lakhs, subject to a maximum
of Rs. 1,50,000
3.,"Applica(cid:23)on for Review including
review applica(cid:23)on in respect of
counter-claim
(a)against an interim order
(b)against a final order excluding
review for correc(cid:23)on of clerical or
arithmetical mistakes","Rs. 125 50% of fee payable at rates as
applicable on the applica(cid:23)ons under
sec(cid:23)on 19(1) or 19(8) of the Act,
subject to a maximum of Rs. 15,000
4.,Application for interlocutory order,Rs. 250
5.,"Appeals against orders of the
Recovery Officer If the amount
appealed against is (i) less than Rs.
10 lakhs (ii) Rs. 10 lakh or more but
less than Rs. 30 lakhs (iii) Rs. 30 lakhs
or more","Rs. 12,000
Rs. 20,000
Rs. 30,000
6.,Vakalatnama,Rs. 5â€
Old Section 30 before the 2000 Amendment,Section 30 after the 2000 Amendment,
30 Orders of Recovery Officer to be deemed as order of
Tribunal.- Notwithstanding anything contained in Sec(cid:23)on
29, an order made by the Recovery Officer in exercise of
his powers un-der Sec(cid:23)ons 25 to 28 (both inclusive),
shall be deemed to have been made by the Tribunal and
an appeal against such orders shall lie to the Appellate
Tribunal.""","""30. Appeal against the order of Recovery Officer.- (1)
Notwithstanding anything contained in Sec(cid:23)on 29, any
person aggrieved by an order of the Recovery Officer
made un-der this Act may, within thirty days from the
date on which a copy of the order is issued to him, prefer
an appeal to the Tribunal. (2) On receipt of an appeal
under sub-sec(cid:23)on (1), the Tribunal may, a(cid:58)er giving an
opportunity to the appellant to be heard, and after
making such enquiry as it deems fit, confirm, modify or
set aside the order made by the Recovery Officer in
exercise of his powers under Sec(cid:23)ons 25 to 28 (both
inclusive).""",
(3) No order shall be made under sub-rule (2) unless notice of the application has been served on the opposite party.â€,,
16) Section 22(1) of the Act makes it clear that the Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of,,
Civil Procedure, making it clear thereby that Order XLVII Rule 7 would not apply to the Tribunal. Also, in view of Section 20, which applies to all",,
applications that may be made, including applications for review, and orders being made therein being subject to appeal, it is a little difficult to",,
appreciate how Order XLVII Rule 7 could apply at all, given that Section 20 of the RDB Act is part of a complete and exhaustive code. Section 34 of",,
the Act makes it clear that the 1993 Act, (and, therefore, Section 20), will have overriding effect over any other law for the time being in force, which",,
includes the Code of Civil Procedure. The High Court, in holding that no appeal would be maintainable against the dismissal of the review petition, and",,
that therefore a writ petition would be maintainable, was clearly in error on this count also.",,
17) Shri Dave’s contention that as to the appellant’s conduct, as in an application filed in 2012 an I.A praying that a judgment should be given",,
on admission, was filed unconscionably late i.e. only in 2017, five years later, also has no legs to stand. In 2013, the respondent challenged the",,
jurisdiction of the DRT Mumbai which challenge was repelled finally in appeal only in 2017 after which the said I.A was filed. In any event, this is not",,
an argument which would, by itself, lead to a dismissal of the SLP filed by the appellant under Article 136 of the Constitution of India.",,
18) For all these reasons therefore, we are of the view that the High Court judgment cannot be sustained and is thus set aside. The appeal is allowed",,
accordingly.,,
