Recently, the Supreme Court issued a notice in an SLP (Special Leave Petition), which raised the issue of whether the Debt Recovery Tribunal has the power to condone the delay in filing application u/s 17 of SARFAESI (Securitization and Reconstruction of Financial Assets and Reinforcement of Security Interest) Act.
The petition was filed against a Kerala High Court judgement wherein the court had set aside DRT’s order because it has no power to entertain time-barred application u/s 17 of the SARFAESI Act.
Before the Apex Court, the petitioners relied on the Supreme Court’s decision in Baleshwar Jaiswal vs Bank of India, where it was held that DRAT has the power to condone the delay in filing of Appeal u/s 18 of SARFAESI Act.
As per the petitioners, Section 18 and 17 were similarly worded; therefore, the mandate set in the Baleshwar Jaiswal decision would apply and Section 17 as well.
In 2017, a three-judge Bench of the Apex Court held that DRT has no power to condone the delay in filing of Appeal u/s 30 of RDB Act. The ruling was passed in International Asset Reconstruction Company Of India Ltd vs The Official Liquidator Of Aldrich Pharmaceuticals Ltd And Others.
In 2020, a Division Bench of the Supreme Court ruled that DRT does not have the power to condone the delay in filing a review petition under the RDB Act. The case was titled Standard Chartered Bank vs MSTC Ltd.
The Kerala High Court has referred the decision rendered in the Standard Chartered case and International Asset Reconstruction Company judgement to Supreme Court and held that DRT couldn’t condone the delay.
The High Court has also referred to the BAleshwar Dayal case decision wherein the Apex Court held that filing an Appeal u/s 18 of the SARFAESI Act cannot be delayed by DRAT. The High Court noted that the Top Court has stated that delay in filing Appeal u/s 18(1) of the SARFAESI Act can be condoned under Section 20(3) of the RDDB Act.
Hon’ble High Court also observed that Section 14(3) of the SARFAESI Act excludes the Limitation Act application and does not give power to DRT to condone the delay.