Case Note & Summary
The Petitioner, MSTC Limited, a Government of India Enterprise, filed a Writ Petition challenging the order dated 9 November 2022 passed by the Debt Recovery Appellate Tribunal (DRAT), Mumbai, which rejected the Petitioner's application for condonation of delay of 856 days in filing an appeal against the judgment and order dated 16 September 2017 passed by the Debt Recovery Tribunal (DRT). The DRT had allowed an application filed by the Respondent, Standard Chartered Bank, under Rule 12(5) of the DRT (Procedure) Rules, 1993, directing the Petitioner to pay an amount of Rs.222.51 crores as a decree on admission. The Petitioner initially filed a timely appeal (Miscellaneous Appeal No. 1 of 2018) before the DRAT challenging the DRT order. However, the Petitioner withdrew that appeal on 2 January 2018 with liberty to pursue a Review Application (Review Application No. 1 of 2018) filed before the DRT. The Review Application was dismissed on 21 April 2018 on the ground that the DRT had no power to condone delay in filing the review application. The Petitioner then filed a Writ Petition (Writ Petition No. 2765 of 2018) in the Bombay High Court challenging the dismissal of the review application, which was disposed of on 3 May 2019 with liberty to file a fresh appeal before the DRAT. Thereafter, the Petitioner filed a fresh appeal (Miscellaneous Appeal (Diary) No. 146 of 2021) along with an application for condonation of delay of 856 days. The DRAT rejected the condonation application, holding that the Petitioner had not shown sufficient cause for the delay. The Petitioner challenged this rejection in the present Writ Petition. The High Court analyzed the facts and held that the Petitioner's decision to withdraw the timely appeal was a deliberate choice, and the Petitioner could not rely on the pendency of the review application or the writ petition to explain the entire delay. The Court noted that the Petitioner had not pursued the appeal diligently and had not shown any sufficient cause for the delay of 856 days. The Court further held that the DRAT had correctly applied the principles of limitation and that the Petitioner was not entitled to condonation of delay. The Writ Petition was dismissed, and the DRAT's order was upheld.
Headnote
A) Limitation - Condonation of Delay - Sufficient Cause - Section 5 of Limitation Act, 1963 - The Petitioner withdrew a timely filed appeal to pursue a review application, which was dismissed as not maintainable. Thereafter, the Petitioner filed a fresh appeal with a delay of 856 days. The Court held that the Petitioner failed to show sufficient cause for the entire period of delay, as the decision to withdraw the appeal was a deliberate choice and not a mistake or circumstance beyond control. The DRAT's rejection of the condonation application was upheld. (Paras 1-20) B) Civil Procedure - Withdrawal of Appeal - Order 23 Rule 1 CPC - The Petitioner withdrew a timely appeal with liberty to pursue a review application. The Court held that such withdrawal does not entitle the Petitioner to ignore the limitation period for filing a fresh appeal. The Petitioner cannot circumvent the law of limitation by withdrawing a pending appeal and then filing a fresh appeal beyond limitation. (Paras 10-15) C) Debt Recovery - Decree on Admission - Rule 12(5) of DRT (Procedure) Rules, 1993 - The DRT passed a decree on admission directing the Petitioner to pay Rs.222.51 crores. The Petitioner challenged this decree by filing a review application which was dismissed as not maintainable. The Court held that the Petitioner's remedy was to pursue the appeal already filed, not to withdraw it and file a fresh appeal after the limitation period had expired. (Paras 3-5)
Issue of Consideration
Whether the DRAT erred in rejecting the application for condonation of delay of 856 days in filing the appeal, and whether the Petitioner had shown sufficient cause for the delay.
Final Decision
The Writ Petition is dismissed. The order dated 9 November 2022 passed by the Debt Recovery Appellate Tribunal rejecting the application for condonation of delay is upheld. No order as to costs.
Law Points
- Condonation of delay
- Sufficient cause
- Limitation Act
- 1963
- Section 5
- Order 23 Rule 1 CPC
- Withdrawal of appeal
- Decree on admission
- Debt Recovery Appellate Tribunal
- Recovery of Debts and Bankruptcy Act
- 1993
