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On this issue there are controversies among various High Courts. We may note the views of some of the High Courts are stated hereunder:

View of Bombay High Court: Provisions of Sec.5 of Limitation Act will apply to the proceedings under Sec.17 of SARFAESI Act. This view is taken because there is no specific provision in SARFAESI Act which says that Sec. 5 of Limitation Act does not apply to the proceedings u/s 17 of the said Act (UCo Bank Vs. Kanji Manji Kothari & Co. :2008(3) Bom. CR. 290). It has been further held that, 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 Sec. 3 shall apply as if such periods were the periods 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 in so far as, and to the extent to which, they are not expressly excluded by such special or local law.

View of Madras High Court: In Ponnusamy and Anr. Vs. DRT Coimbatore and Anr.: 2009(2) CTC 302 Madras High Court ruled that, Sec.5 of Limitation Act is applicable to the proceedings under Sec.17 of SARFAESI Act. Following are the basic points for the above ruling:

1) Provisions of Limitation Act apply to any statute if such statute does not expressly or impliedly exclude applicability;

2) SARFAESI Act does not expressly exclude application of the provisions of 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.;

3) Right of borrower or guarantor under Sec.17 is right of redemption embodied in Section 13(8) of the Act. It is constitutional right and also human right.;

4) Any contrary interpretation would defeat right to property ;

5) Sec.17 can not to be treated strictly like suit.

6) Sec. 13(4) is continuous cause of action. 

7) Sec.5 of Limitation Act applies to some type of applications even though it does not apply to suits.

8) The above logic cannot be applied to Sec.19 of RDDB & FI Act.

9) Sec.24 of RDDB & FI Act makes the provisions of Limitation Act as applicable.

10) Hence claim under Sec.19  RDDB & FI Act should be treated as suit.

11) Sec.17 of SARFAESI Act is right of redemption which extinguishes after sale of asset. To say that, Sec.5 does not apply it would mean that the right of redemption (right to property =Constitutional right=human right) is denied.

12) Interpretation leaning towards right to property should be chosen by the courts.

13) It is fallacy to think that every original proceeding pending before tribunal is like a suit.

14) Administrative Tribunal Act 1985 uses the word application. Wakf Act uses all the three expressions (‘suit’ ‘Applications’ ‘Appeals’). RDDB & FI Act uses the word ‘Application’ in relation to original proceedings before DRT ‘Appeal’ in relation to appeal before DRAT. Administrative Tribunal Act 1985 provides for filing of application u/s 21 and a provision for condonation of delay. Provisions of Limitation Act are provided in sub-Sec. (1),(2) and (3) for condonation of delay even though the proceedings before the Tribunal are original in nature.

15) Full Bench of Calcutta High Court in Union of India Vs. Central Administrative Tribunal : 2002 (5)CTC 436 held that, Sec.5 of Limitation Act would apply to Review Application before Administrative Tribunal. Consumer Protection Act 1986 provides 2 years limitation for filing complaint (an original proceeding) Sec. 24-A(1) Sec. 24-A(2) provide for condonation of delay in Dist. Forum, State Reddressal Commission and National Reddressal Commission. The High Court under the circumstances is of the firm opinion that, Sec.5 of Limitation Act is applicable to the proceedings under Sec.17 of the SARFAESI Act.

While arriving to the above opinion the High Court also referred to various judgments of Supreme Court and High Courts which have also been referred to by the other High Courts. Madras High Court concurred with the view taken by Bombay High Court in UCo Bank Vs. kanji Manji Kothari CDJ 2008 BHC 313 = 2008(3)Bom.CR.290 in this regard.

View of Kerala High Court: Disagreeing with the view taken by Bombay High Court in UCo Bank Vs. Kanji Manji Kothari & Co.: 2008(3) Bom. CR.290, Kerala High Court in Jayan Vs. HSBC : IV (2009) BC 365 held that, the Bombay High Court has not referred to or dealt with the decisions of Supreme Court while coming to such opinion and held that Sec.5 of Limitation Act has no application to the proceedings u/s 17 of SARFAESI Act. It is Supreme Court’s view that, the tribunal is creature of statute such as quasi judicial authority or executive authority to which provisions of Limitation Act do not apply and such statutory authority has no inherent power like a civil court.  The proceedings initiated to test the correctness of the action are initial proceedings before the tribunal like a suit in civil court. DRT is creature of statute i.e. statutory authority. In case of Prakash H. Jain Vs. Marie Fernandez (Ms): VI (2003) SLT 266 = (2003) 5 SCC 431 the Supreme Court elaborately considered the point as to whether a statutory authority has inherent power as court to condone the delay in filing statutory applications or not. It has been held that it depends not only upon the nature and character of the authority but also upon the nature of powers of such authority. The extent of power thereof and the limitations thereon with particular reference to the legislative intent and scheme of the enactment is required to be taken into consideration to come to conclusion if such statutory authority has inherent power or not. It has been further held by the High Court that it is settled legal position that provisions of Limitation Act are not applicable to proceedings before the bodies other than the Court, such as quasi judicial tribunal or an executive authority. DRT is creature of statute and it has no inherent power which exists in civil courts. Further there is no enabling provision in the SARFAESI Act or in RDDB & FI Act to condone the delay. In the absence of enabling provision, statutory authority created for a definite purpose and to exercise powers in a quasi judicial manner, circumscribed by the very statutory provisions which conferred upon it with limited powers to be exercised in the manner provided therein and subject to such conditions and limitations stipulated by the statute. Even Bombay High Court in UCo Bank Vs. Kanji Manji Kothari : 2008 (3) Bom.CR.290 held that, while exercising these powers DRT must bear in mind the scheme of the Act and not allow any person to procrastinate proceedings by making frivolous applications.

Views of Calcutta High Court: Calcutta High Court in Akshat Commercial Pvt. Ltd. Vs. KalpanaChakraborty : AIR 2010 Calcutta 138 held that the legislature having consciously applied the provisions of Limitation Act “as far as may be” by conjoint effect of Sec.17(7) of SARFAESI Act and Sec.24 of RDDB & FI Act, there is no scope for application of Sec.29(2) of Limitation Act to the proceedings before the tribunal so as to apply Sec. 4 to 24 of Limitation Act. The above referred provisions are reproduced hereunder for a glance:

Sec. 17(7) of SARFAESI Act 2002: “Save as otherwise provided in this Act, the Debts Recovery Tribunal shall, as far as may be,  dispose of the application in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the rules made thereunder.” 

Sec. 24 of RDDB & FI Act 1993: “The provisions of the Limitation Act, 1963 (36 of 1963), shall, as far as may be, apply to an application made to a Tribunal.”

Sec 29(2) of Limitation Act 1963: “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 s. 3 shall apply as if such periods were the periods 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 in so far as, and to the extent to which, they are not expressly excluded by such special or local law.”

According to Sec 17(7) of SARFAESI Act, application filed under Sec. 17(1) shall be decided by the tribunal in accordance with the provisions of RDDB & FI Act and the Rules framed there under. Sec. 24 of RDDB & FI Act lays down that the provisions of Limitation Act 1963 shall as far as may be, apply to an application made to a tribunal. The conjoint effect of Sec. 17(7) of SARFAESI Act and Sec 24 of RDDB & FI Act 1993 is that in a proceeding under Sec. 17(1) of the SARFAESI Act the provisions of Limitation Act 1963 as far as may be, apply. Proceedings under Sec.17 of SARFAESI ACT are original proceedings like suit. Calling such proceedings as appeal is misnomer as held by Supreme Court in Mardia Chemicals Ltd. &Anr. Vs. Union of India &Ors. : AIR 2004 (4) SCC 311 = AIR 2004 SC 2371 and also in M/s. TranscoreVs. Union of India &Anr. AIR 2007 SC 712.  It is the initial action in lieu of suit in civil court but for bar of jurisdiction under Sec 34 of the Act. After the judgment of Supreme Court in Mardia Chemical case the Act was amended (on 11.11.2004) correcting the word ‘appeal’ as ‘application’. But the marginal note (“Appeal”) is not corrected. Therefore there is no controversy  that the proceedings under Sec.17(1) is in the nature of original application. Supreme Court in Transcor’e case (supra) clarified that, marginal note cannot control the text as it is initial proceedings like suit. Provisions of Limitation Act will be applied in the proceedings under Sec.17(1) of the Act “as far as may be”. Thus Sec. 5 of Limitation Act has no application in particular even if it applies to the proceedings under Sec.17(1) of SARFAESI Act in general. In Gopal Sardar Vs. Karuna Sardar : 2004(4) S.C.C. 252 Supreme Court relying upon the judgment of Division Bench of Calcutta High Court in  SerishMaji Vs. Nitish Kumar Doloi : 1999 (1) C.H.N. 365 held that, the proceedings initiated by an application under Sec 8 of West Bengal Land Reforms Act is to be construed as suit for the purpose of Limitation Act. Specific period of limitation (of 45 days) is fixed in the SARFAESI Act and the same cannot be enlarged taking aid of Sec.5 of Limitation Act. According to Supreme Court (Nahar Industrial Enterprises Ltd. Vs. HSBC Ltd. : 2009(4) CTC  74) DRT is not a civil court. It has no inherent power. Therefore it cannot exercise discretion particularly condonation of delay taking aid of Sec.5 of Limitation Act.

Madras High Court and Bombay High Court are of the common view that, Section 5 of Limitation Act applies to the proceedings under sec. 17 of SARFAESI Act. But Calcutta High Court and Kerala High Court together are of different view on the point that, Section 5 of Limitation Act does not apply to the proceedings under Sec.17 of SARFAESI Act. Appeals against the judgment of Madras High Court and Calcutta High Court are preferred before Supreme Court and the same are pending.

Views of Allahabad High Court: Recently Allahabad High Court in State Bank of Patiala Vs. DRAT Allahabad:2012(1) D.R. T.C. 319 (All.) followed the views taken by Madras High Court (in PonnuSwamy's case) and Bombay High Court (in Kanji Manji Kothari's case). Allahabad High Court is also of the view that Limitation Act is matter of public policy that no one should sleep over his right  but the Limitation Actis not meant to destroy the rights of the parties and Sec 17(7)SARFAESI Act bring into RDDB & FI Act 1993 and Sec. 24 of RDDB & FI Act brings into the Limitation Act 1963 by necessary implication.

Views of A.P High Court: A.P. High Court in Sajida Begum Vs. State Bank of India in a judgment dated 04.09.2012 (allowing the WP No.22317 of 2012) held that, according to Sec.29(2) of Limitation Act, 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 in so far as, and to the extent to which, they are not expressly excluded by such special or local law. It is further held that as can be noticed from sub-clause (2) above that Sections 4 to 24 (inclusive) of the Limitation Act would apply to any special or local law, if such special or local law does not expressly exclude the applicability of Sections 4 to 24 of the Limitation Act and it is not in dispute that there is no express exclusion of the Limitation Act under the SARFAESI Act and so far as DRT Act is concerned, under which the DRT and DRAT function and entertain original and appellate proceedings under the SARFAESI Act, clearly exercise powers of a civil Court under CPC and in addition, the Limitation Act is expressly made applicable under Section 24 of the DRT Act and hold that the provisions of the Section 5 of the Limitation Act are applicable to the proceedings before DRAT under Section 18 of the SARFAESI Act. Consequently, the Debts Recovery Appellate Tribunal, Chennai is directed to consider the petitioner's application for condonation of delay. The views taken by Hon’ble A.P.High Court in this judgment is distinct from the views take by Madras High Court in Dr. Zubida Begum & Others Vs. Indian Bank (CDJ 2012 MHC 4285) wherein it has been held that, the statement of objects and reasons, the preamble and the scheme of the SARFAESI Act would make the position clear that the Legislature consciously and intentionally excluded the applicability of Section 29(2) of the Limitation Act and consequently Section 5 to an appeal before the Appellate Tribunal under Section 18 of the Act and Section 29(2) of the Limitation Act does not apply to an appeal under Section 18 of the SARFAESI Act and therefore Section 5 of the Limitation Act cannot be pressed into service to condone the delay in filing such appeal. These are the controversies on the subject because of divergent views of different High Courts

Unless the Supreme Court decides those appeals before it preferred from Calcutta High Court & Madras High Court the issue remains in ambiguous state. 

It may be noted that, while deciding Mardia Chemical's case Supreme Court allowed the borrowers to approach DRT to agitate their grievances before DRT. This judgment was delivered after 2 years of the borrowers approaching the Supreme Court challenging the constitutional validity of SARFAESI Act. So Supreme has in its mind while exhaustively dealing with the provisions of the Act that the aggrieved parties should not forego their human right to property and for this reason also struck down Section 17(2) of the Act (which contemplated conditional pre-deposit amount of 75% of the debt demanded) as unconstitutional. The Supreme Court in L. K. Trust  vs. EDC Ltd. : 2011(2) D.R.T.C. 305 (S.C.) held that, right of redemption subsists as long as mortgage subsists and any law to prevent, evade or hamper redemption is void. Hence there should not be any doubt on applicability of the provisions of Limitation Act 1963 to the proceedings u/s 17 and 18 of SARFAESI Act. Supreme Court knows the public policy of the Limitation Act that no one should sleep over his right and should enforce it within time prescribed does not mean that it is enacted to hamper the right of redemption borrower to redeem his mortgage. Let us hope that Supreme Court may take a similar view as taken by Bombay, Madras & Allahabad High Courts on this crucial issue at the earliest as some DRTs are declining to accept the condonation of delay as it is not specifically provided except the right of enforcing their claim under Sec.13(2) of SARFAESI Act and shut the doors leaving some aggrieved parties to peril.

This is author’s personal opinion and is open for comments.


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