DRT can’t apply Sec 5 of the Limitation Act, 1963, and condone the delay in filing an appeal against the order of Recovery Officer

Case Details: Avneesh Chandan Gadgil v. Oriental Bank of Commerce - [2021] 132 taxmann.com 262 (SC)

Judiciary and Counsel Details

• • M.R. Shah and Sanjiv Khanna, JJ.

Facts of the Case

In the instant case, Bank committed a delay of 31 days in filing appeal u/s 30 of the RDB Act,1993 to DRT against the order of the Recovery Officer. DRT condoned the delay in filing an appeal by applying section 5 of the Limitation Act,1963. Thereafter, an appeal is filed with DRAT and DRAT quashed the order passed by DRT.

Appeal against the order by DRAT was filed and the High Court quashed and set aside the order passed by the DRAT which stated to set aside the order passed by the DRT condoning the delay in preferring the appeal under Section 30 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. Then appeal is filed against the impugned judgment passed by the High Court.

Supreme Court Held

The Supreme court held that the DRAT was right in quashing DRT’s order condoning the delay of 31 days by the Bank in filing an appeal against the order of the Recovery Officer. Given the above, the High Court has committed a grave error in quashing and setting aside the order passed by the DRAT and in restoring the order passed by the Debts Recovery Tribunal condoning the delay in preferring the appeal under Section 30 by applying Section 5 of the Limitation Act.

SC observed that the issue involved in the present appeal is not res Integra in view of the decision of this Court in International Asset Reconstruction Co. of India Ltd. vs. Official Liquidator of Aldrich Pharmaceuticals Ltd. & Ors., where it was held that Sec. 5 of the Limitation Act is specifically excluded so far as appeal u/s 30 of the BFI Act is concerned.

Further, highlighting that the case relied upon by HC has been overruled by the SC decision in International Asset Reconstruction Co. of India Ltd., SC states “…High Court has committed a grave error in…condoning the delay in preferring the appeal under Section 30 by applying Section 5 of the Limitation Act.”; In conclusion, retelling that Section 5 of the Limitation Act shall not apply to an appeal against the order of the Recovery Officer.

The order passed by the DRAT setting aside the order passed by the Debts Recovery Tribunal is restored.