# STANDARD CHARTERED BANK v. MSTC LIMITED

- **Citation:** [2020] 2 S.C.R. 444
- **Court:** Supreme Court of India
- **Decided:** 2020-01-21
- **Case number:** Civil Appeal No. 501 of 2020
- **Bench:** R.F. Nariman, V. Ramasubramanian
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/standard-chartered-bank-v-mstc-limited-34238
- **Pages:** 20

## Headnote

Recovery of Debts and Bankruptcy Act, 1993 - ss. 19, 20, 21
and 22 - Debts Recovery Tribunal (Procedure) Rules, 1993 - r.5A
- Application for review - Appellant-Bank filed an application u/s.
19 of the RDB Act for recovery of a sum of Rs.191,03,54,070.96/- -
An I.A. was filed by the appellant stating that given the admissions
contained in the balance of the relevant years of the respondentCompany, a sum of Rs. 222,51,00,000/- was owed by the respondent
- The said I.A. was allowed by DRT - The respondent filed an appeal
against the said order before the DRAT - While pending appeal, a
review application was filed by the respondent before the DRT -
Thereafter, the appeal filed earlier was withdrawn - Meanwhile,
an application was filed to condone a delay of 28 days in filing the
review petition before the DRT - Application was dismissed by the
DRT - Writ Petition - The High Court held that no appeal would be
maintainable against the dismissal of the review petition and that
therefore, a writ petition would be maintainable - The High Court
also held that application u/s. 19 of the RDB Act would subsume an
application for review as a review application would originate from
an order passed u/s.19 , as per procedure prescribed u/s. 22 of the
RDB Act, and would therefore not be an application which could
be said to be independent of s. 19 of the Act - This being the case,
the High Court condoned the delay and set aside the judgment of
the DRT - On appeal, held: The judgment of the Supreme Court in
International Asset Reconstruction Company of India Limited makes
it plain, though in a slightly different context, that only application
that is referred to by s. 24 of the RDB Act is an application filed u/
s. 19 and no other - This being the case, an application for review,
not being an application u/s. 19, but an application u/s. 22 (2) (e)
 [2020] 2 S.C.R. 444
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r/w. r. 5A of the Rules, this judgment would apply on all fours to
exclude applications which are review applications from the purview
of s. 24 of the RDB Act - The High Court also wrongly applied Or.
XLVII, r. 7 of the CPC - S. 22 (1) of the RDB 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
that Or. XLVII, r. 7 would not apply to the Tribunal - Further, s. 20
applies to all applications that may be made, including applications
for review and orders being made therein subject to appeal - Also,
s. 34 of the Act makes it clear that 1993 Act, will have overriding
effect over any other law for the time being in force, which includes
the Code of Civil Procedure - The High Court was clearly in error
in holding that no appeal would be maintainable against the
dismissal of the review petition and that a writ petition would be
maintainable - Therefore, the judgment of the High Court cannot
be sustained and is set aside.
Allowing the appeal, the Court
HELD : 1. Rules 2(b) and 2(c) of the Debt Recovery
Tribunal (Procedure) Rules, 1993 define "applicant" and
"application", respectively, as including applicants and
applications filed under Section 19, 31A of the Recovery of Debts
and Bankruptcy Act, 1993 as well as appeals filed under Section
30(1) of the Act. An application under Section 31A is an application
to enforce a decree or order passed by any court before the
commencement of the Amendment Act of 2000 and which has
not yet been executed. An appeal under Section 30(1) is an appeal
to the Tribunal against orders of the Recovery Officer made
under the Act. The reason why Rule 2(c) of the Rules defines
application as including an application under Section 31A and an
appeal filed under Section 31 of the Act, apart from applications
filed under Section 19, is because under Rule 4 of the Rules,
the procedure for filing such applications/appeal is under Forms
I to III appended to the Rules. What is important to note is that
even this

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STANDARD CHARTERED BANK
v.
MSTC LIMITED
(Civil Appeal No. 501 of 2020)
JANUARY 21, 2020
[R.F. NARIMAN AND V. RAMASUBRAMANIAN, JJ.]
Recovery of Debts and Bankruptcy Act, 1993 - ss. 19, 20, 21
and 22 - Debts Recovery Tribunal (Procedure) Rules, 1993 - r.5A
- Application for review - Appellant-Bank filed an application u/s.
19 of the RDB Act for recovery of a sum of Rs.191,03,54,070.96/- -
An I.A. was filed by the appellant stating that given the admissions
contained in the balance of the relevant years of the respondentCompany, a sum of Rs. 222,51,00,000/- was owed by the respondent
- The said I.A. was allowed by DRT - The respondent filed an appeal
against the said order before the DRAT - While pending appeal, a
review application was filed by the respondent before the DRT -
Thereafter, the appeal filed earlier was withdrawn - Meanwhile,
an application was filed to condone a delay of 28 days in filing the
review petition before the DRT - Application was dismissed by the
DRT - Writ Petition - The High Court held that no appeal would be
maintainable against the dismissal of the review petition and that
therefore, a writ petition would be maintainable - The High Court
also held that application u/s. 19 of the RDB Act would subsume an
application for review as a review application would originate from
an order passed u/s.19 , as per procedure prescribed u/s. 22 of the
RDB Act, and would therefore not be an application which could
be said to be independent of s. 19 of the Act - This being the case,
the High Court condoned the delay and set aside the judgment of
the DRT - On appeal, held: The judgment of the Supreme Court in
International Asset Reconstruction Company of India Limited makes
it plain, though in a slightly different context, that only application
that is referred to by s. 24 of the RDB Act is an application filed u/
s. 19 and no other - This being the case, an application for review,
not being an application u/s. 19, but an application u/s. 22 (2) (e)
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r/w. r. 5A of the Rules, this judgment would apply on all fours to
exclude applications which are review applications from the purview
of s. 24 of the RDB Act - The High Court also wrongly applied Or.
XLVII, r. 7 of the CPC - S. 22 (1) of the RDB 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
that Or. XLVII, r. 7 would not apply to the Tribunal - Further, s. 20
applies to all applications that may be made, including applications
for review and orders being made therein subject to appeal - Also,
s. 34 of the Act makes it clear that 1993 Act, will have overriding
effect over any other law for the time being in force, which includes
the Code of Civil Procedure - The High Court was clearly in error
in holding that no appeal would be maintainable against the
dismissal of the review petition and that a writ petition would be
maintainable - Therefore, the judgment of the High Court cannot
be sustained and is set aside.
Allowing the appeal, the Court
HELD : 1. Rules 2(b) and 2(c) of the Debt Recovery
Tribunal (Procedure) Rules, 1993 define "applicant" and
"application", respectively, as including applicants and
applications filed under Section 19, 31A of the Recovery of Debts
and Bankruptcy Act, 1993 as well as appeals filed under Section
30(1) of the Act. An application under Section 31A is an application
to enforce a decree or order passed by any court before the
commencement of the Amendment Act of 2000 and which has
not yet been executed. An appeal under Section 30(1) is an appeal
to the Tribunal against orders of the Recovery Officer made
under the Act. The reason why Rule 2(c) of the Rules defines
application as including an application under Section 31A and an
appeal filed under Section 31 of the Act, apart from applications
filed under Section 19, is because under Rule 4 of the Rules,
the procedure for filing such applications/appeal is under Forms
I to III appended to the Rules. What is important to note is that
even this extended definition,under the Rules, does not include
an application for review filed under Rule 5A of the Rules. In
point of fact, Rule 7 makes it abundantly clear that each such
application, including applications for review, are viewed
STANDARD CHARTERED BANK v. MSTC LIMITED
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separately and independently, as fees payable for filing such
applications are vastly different, as is clear from Rule 7(2) of the
Rules. [Para 8][458-D-F]
2. In fact, this Court in International Asset Reconstruction
Company of India Limited had to consider whether Section 5 of
the Limitation Act can be invoked to condone delay in the filing
of an appeal after the prescribed period of 30 days under Section
30(1) of the RDB Act. The Court first stated, in paragraph 8,
that the RDB Act is undoubtedly a special law and a complete
code by itself with regard to expeditious recovery of dues to
banks and financial institutions. After then noticing Section 22(1)
in paragraph 9 and stating that Section 5 of the Limitation Act
cannot proprio vigore apply to a tribunal as a tribunal is not a
Court. [Para 9][458G-H; 459A]
3. The judgment of this Court makes it plain, though in a
slightly different context, that the only application that is
referred to by Section 24 of the RDB Act is an application filed
under Section 19 and no other. This being the case, an application
for review, not being an application under Section 19, but an
application under Section 22(2)(e) read with Rule 5A of the Rules,
this judgment would apply on all fours to exclude applications
which are review applications from the purview of Section 24 of
the RDB Act. [Para 10][461A-B]
4. The peremptory language of Rule 5A would also make it
clear that beyond 30 days there is no power to condone delay. It
may also be noted that Rule 5A was added in 1997 with a
longer period within which to file a review petition, namely, 60
days. This period was cut down, by amendment, with effect
from 04.11.2016, to 30 days. From this two things are clear:
one, whether in the original or unamended provision, there is no
separate power to condone delay, as is contained in Section
20(3) of the Act; and second, that the period of 60 days was
considered too long and cut down to 30 days thereby evincing an
intention that review petitions, if they are to be filed, should be
within a shorter period of limitation - otherwise they would not
be maintainable. [Para 14][462C-D]
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5. This Court is also of the view that the High Court wrongly
applied Order XLVII Rule 7 of the Code of Civil Procedure.
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. [Paras 15 and 16][462E; 463B-D]
International Asset Reconstruction Company of India
Limited
v.
Official
Liquidator
of
Aldrich
Pharmaceuticals Limited and Others (2017) 16 SCC
137 : (2017) 10 SCR 199 - relied on.
Kamlesh Verma v. Mayawati and Others (2013) 8 SCC
320 : (2013) 11 SCR 25 - referred to.
Case Law Reference
(2017) 10 SCR 199
relied on
Para 2 (vii)
(2013) 11 SCR 25
referred to
Para 3
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 501 of
2020.
From the Judgment and Order dated 03.05.2019 of the High Court
of Judicature at Bombay in Writ Petition No. 2765 of 2018.
Neeraj Kishan Kaul, Sr. Adv., Tushad Cooper, Ms. Anushka Sharda,
Rohit Ghose, Ms. Smriti Nair, Varun Mathur, Akash Lamba, Divyanshu
Srivastava (for M/s. Khaitan & Co.), Advs. for the Appellant.
STANDARD CHARTERED BANK v. MSTC LIMITED
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Tushar Mehta, SG, Amar Dave, Hemant Sharma, Ms. Anamika,
Mrs. Indu Sharma, Advs. for the Respondent.
The Judgment of the Court was delivered by
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 Act"). 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 Companyrespondent 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.
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(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 Rules")
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 respondentCompany 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
STANDARD CHARTERED BANK v. MSTC LIMITED
[R. F. NARIMAN, J.]
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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
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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
designata 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;"
Section 19 of the RDB Act states as follows:
"19. Application to the Tribunal. -
(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
STANDARD CHARTERED BANK v. MSTC LIMITED
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(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 order-
(a) appoint a receiver of any property, whether before or after
grant of certificate for recovery of debt;
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(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."
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:
STANDARD CHARTERED BANK v. MSTC LIMITED
[R. F. NARIMAN, J.]
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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.
(2) The Tribunal and the Appellate Tribunal shall have, for the
purposes of discharging their functions under this Act, the
same powers as are vested in a Civil Court under the Code
of Civil Procedure, 1908 (5 of 1908), while trying a suit, in
respect of the following matters, namely:
(a) xxx xxx xxx
(e) reviewing its decisions;"
Section 24 of the RDB Act states as follows:
"24. Limitation. - The provisions of the Limitation Act, 1963
(36 of 1963), shall, as far as may be, apply to an application
made to a Tribunal."
Section 34 (1) of the RDB Act states as follows:
"34. Act to have overriding effect.-
(1) Save as provided under sub-section (2), the provisions
of this Act shall have effect notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or in any instrument having effect by virtue
of any law other than this Act."
Rule 2(b) and 2(c) of the Debt Recovery Tribunal (Procedure)
Rules, 1993 states as follows:
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"2. Definitions.-
(b) - "applicant" means a person making an application
under section 19 or under section 31A and includes an
"applicant" who files an appeal under section 30(1) of the
Act;
(c) "application" means an application filed under section
19 or under section 31A and includes an "appeal" filed
under section 30(1) of the Act"
Rule 4(1) of the Rules states as follows:
"4. Procedure for filing applications
(1) An application under section 19 or section 31A, or under
section 30(1) of the Act may be presented as nearly as
possible in Form I, Form II and Form III respectively
annexed to these rules by the applicant in person or by his
agent or by a duly authorised legal practitioner to the Registrar
of the Bench within whose jurisdiction his case falls or shall be
sent by registered post addressed to the Registrar."
Rule 5A of the Rules states as follows:
"5A.Review.-
(1) Any party considering itself aggrieved by an order made
by the Tribunal on account of some mistake or error apparent
on the face of the record desires to obtain a review of the
order made against him, may apply for a review of the order
to the Tribunal which had made the order.
(2) No application for review shall be made after the
expiry of a period of thirty days from the date of the order and
no such application shall be entertained unless it is
accompanied by an affidavit verifying the application.
(3) Where it appears to the Tribunal that there is no sufficient
ground for a review, it shall reject the application but
where the Tribunal is of opinion that the application for
review should be granted, shall grant the same:
Provided that no such application shall be granted without
previous notice to the opposite party to enable him to appear
and to be heard in support of the order, a review of which is
applied for."
STANDARD CHARTERED BANK v. MSTC LIMITED
[R. F. NARIMAN, J.]
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Rule 7 of the Rules states as follows:
"7. Application fee
(1) Every Application under section 19(1), or section 19(2), or
section 19(8), or section 30(1) of the Act, or interlocutory
application or application for review of decision of the Tribunal
shall be accompanied by a fee provided in the sub-rule (2) and
such fee may be remitted through a crossed Bank Demand
Draft drawn on a bank or Indian Postal Order in favour of the
Registrar of the Tribunal and payable at the place where
the Tribunal is situated.
(2) The amount of fee payable shall be as follows:-
Amount of Fee
Payable
S. No.
Nature of Application
Application 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
1.
Application to counter claim under
section 19(8) of the Act -
(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
2.
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6. A reading of the aforesaid provisions of the Act and Rules
would show that review petitions are dealt with in Section 22(2)(e) read
with Rule 5A of the Rules. Section 24, which applies the provisions
of the Limitation Act to applications made to a Tribunal, would, as per
the definition section contained in Section 2(b), apply only to
applications that are made under Section 19, which are original
applications to recover debts that are made by banks and financial
institutions. What is clear is that an application for review cannot
possibly be said to be an application filed under Section 19 even on
a cursory reading of the provisions of the Act, as it traces its origin to
Section 22(2)(e) read with Rule 5A of the Rules.
7. As a matter of fact, applications that are made to the Tribunal
under Section 19 of the Act are only made in order to recover a debt
from any person. Even Section 19(2), which is strongly relied upon by
Shri Dave, makes it clear that another bank or financial institution may
STANDARD CHARTERED BANK v. MSTC LIMITED
[R. F. NARIMAN, J.]
Application for Review including
review application in respect of
counter-claim
(a) against an interim order
(b) against a final order excluding review for correction
of clerical or arithmetical mistakes
Rs. 125
50% of fee payable
at
rates
as
applicable on the
applications under
section 19(1) or
19(8) of the Act,
subject
to
a
maximum of
Rs. 15,000
3.
Application for interlocutory order
Rs. 250
4.
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
5.
Rs. 20,000
Rs. 30,000
Vakalatnama
Rs. 5"
6.
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join an applicant bank or financial institution at any stage of the proceeding
before the final order is passed by making an application against the
same debtor for debts owed to such other bank or financial institution.
Also, under Section 19(5) of the Act, a written statement may include
a claim for set-off and/or a counter-claim and under Section 19(18)
of the Act, interim orders may be passed in applications filed for
recovery of debts under Section 19 of the Act. All this must be
contrasted with an application for review that is filed under Section 22
(2)(e) of the Act read with Rule 5A of the Rules. Such applications
are not for recovery of debts but are only applications to correct
errors apparent on the face of the record in a judgment that has
been delivered in an application filed under Section 19.
8. A reading of the Rules is also illuminating. Rules 2(b) and 2(c)
of the Rules define "applicant" and "application", respectively, as
including applicants and applications filed under Section 19, 31A as well
as appeals filed under Section 30(1) of the Act. An application
under Section 31A is an application to enforce a decree or order
passed by any court before the commencement of the Amendment Act
of 2000 and which has not yet been executed. An appeal under Section
30(1) is an appeal to the Tribunal against orders of the Recovery
Officer made under the Act. The reason why Rule 2(c) of the
Rules defines application as including an application under Section
31A and an appeal filed under Section 31 of the Act, apart from
applications filed under Section 19, is because under Rule 4 of the
Rules, the procedure for filing such applications/appeal is under Forms I
to III appended to the Rules. What is important to note is that even
this extended definition, under the Rules, does not include an
application for review filed under Rule 5A of the Rules. In point of
fact, Rule 7 makes it abundantly clear that each such application,
including applications for review, are viewed separately and
independently, as fees payable for filing such applications are vastly
different, as is clear from Rule 7(2) of the Rules.
9. In fact, this Court in International Asset Reconstruction
Company of India Limited (supra) had to consider whether Section 5
of the Limitation Act can be invoked to condone delay in the filing of an
appeal after the prescribed period of 30 days under Section 30(1) of the
RDB Act. The Court first stated, in paragraph 8, that the RDB Act is
undoubtedly a special law and a complete code by itself with regard to
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expeditious recovery of dues to banks and financial institutions. After
then noticing Section 22(1) in paragraph 9 and stating that Section 5
of the Limitation Act cannot proprio vigore apply to a tribunal as a
tribunal is not a Court (in paragraph 10), the Court went on to hold:
"11. An "application" is defined under Section 2(b) of the RDB
Act as one made under Section 19 of the Act. The latter
provision in Chapter IV deals with institution of original
recovery proceedings before a Tribunal. An appeal lies against
the order of the Tribunal under Section 20 before the
Appellate Tribunal within 45 days, which may be condoned for
sufficient cause under the proviso to Section 20(3) of the Act.
The Tribunal issues a recovery certificate under Section 19(22)
to the Recovery officer who then proceeds under Chapter V
for recovery of the certificate amount in the manner prescribed.
A person aggrieved by an order of the Recovery officer can
prefer an appeal before the Tribunal under Rule 4, by an
application in the prescribed Form III. Rule 2(c) defines an
"application" to include a memo of appeal under Section 30(1).
The appeal is to be preferred before the Tribunal, as distinct
from the Appellate Tribunal, within 30 days. Section 24 of the
RDB Act, therefore, manifestly makes the provisions of the
Limitation Act applicable only to such an original "application"
made under Section 19 only. The definition of an
"application" under Rule 2(c) cannot be extended to read it in
conjunction with Section 2(b) of the Act extending the meaning
thereof beyond what the Act provides for and then make Section
24 of the RDB Act applicable to an appeal under Section 30(1) of
the Act. Any such interpretation shall be completely contrary to
the legislative intent, extending the Rules beyond what the Act
provides for and limits. Had the intention been otherwise, nothing
prevented the Legislature from providing so specifically.
12. A comparative study of Section 30, pre and post- amendment
in the year 2000, reveals that the deemed status of proceedings
before the Recovery officer, as a Tribunal, stands denuded.
Had the proceedings before the Recovery officer deemed to
be before a Tribunal, entirely different considerations may
have arisen.
STANDARD CHARTERED BANK v. MSTC LIMITED
[R. F. NARIMAN, J.]
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13. The RDB Act is a special law. The proceedings are
before a statutory Tribunal. The scheme of the Act manifestly
provides that the legislature has provided for application of
the Limitation Act to original proceedings before the Tribunal
under Section 19 only. The Appellate Tribunal has been conferred
the power to condone delay beyond 45 days under Section
20(3) of the Act. The proceedings before the Recovery officer
are not before a Tribunal. Section 24 is lim- ited in its application
to proceedings before the Tribunal originating under Section 19
only. The exclusion of any provision for extension of time by the
Tribunal in preferring an appeal under Section 30 of the ct
makes it manifest that the legislative intent for exclusion was
express. The application of Section 5 of the Limitation Act by
resort to Section 29(2) of the Limitation Act, 1963 therefore
does not arise. The prescribed period of 30 days under Section
30(1) of the RDB Act for preferring an appeal against the order
of the Recovery officer therefore cannot be condoned by
application of Section 5 of the Limitation Act."
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 Section 29, an
order made by the Recovery
Officer in exercise of his powers
under Sections 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 Section 29, any
person aggrieved by an order
of the Recovery Officer made
under 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-section (1), the Tribunal
may, after 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 Sections 25
to 28 (both inclusive)."
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10. The judgment of this Court makes it plain, though in a slightly
different context, that the only application that is referred to by
Section 24 of the RDB Act is an application filed under Section 19 and
no other. This being the case, an application for review, not being
an application under Section 19, but an application under Section
22(2)(e) read with Rule 5A of the Rules, this judgment would apply
on all fours to exclude applications which are review applications
from the purview of Section 24 of the RDB Act.
11. However, Mr. Dave laid great stress on paragraph 12 of
the said judgment and, in particular, the sentence "had the proceedings
before the Recovery Officer deemed to be before a Tribunal,
entirely different considerations may have arisen". From this
sentence, the learned counsel sought to infer that it would not only be
applications under Section 19 that would come within the "application"
spoken of in Section 24, but other applications also.
12. We are afraid we are unable to agree with the aforesaid
submission. The clear ratio decidendi of this judgment makes it
abundantly clear that the only application referred to in Section 24 is an
application filed under Section 19 and to no other. The sentence that is
extracted and relied upon by Mr. Dave only makes sense in the context
of Section 30 unamended, when read juxtaposed with Section 30 as
amended. Under the unamended section, when the recovery officer's
order was deemed as an order of the Tribunal, appeals would lie to
the Appellate Tribunal. This would mean that Section 20 of the RDB
Act would apply, as a result of which Section 20(3) would kick in and
would permit condonation of delay. After the amendment, it is important
to note that the recovery officer is no longer considered a Tribunal,
as result of which an appeal from a recovery officer's order is made not
to the Appellate Tribunal, but to the Tribunal of first instance. It is in this
context that the aforesaid sentence in paragraph 12 of the Court's
judgment is to be read, making it clear that if the unamended Section
30 were to apply, the provision contained in Section 20(3) would be
attracted, permitting condonation of delay.
13. Mr. Dave's second contention that, in any case, a review
petition is only a correction of the order made in the original
proceeding, and therefore part and parcel of the original proceeding,
cannot be countenanced in view of this Court's judgment in Kamlesh
Verma vs.