NANDU D CHHABRIA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) Rule, by consent returnable forthwith. With the consent of Counsel and at their request the petition is taken up for hearing and final disposal. The Debts Recovery Tribunal issued a recovery certificate on 7 January 2010 in the sum of Rs. 17,65,787.99 against the petitioner and the second respondent in an application filed by the first respondent, the State Bank of India in 2006. The petitioner filed an application on 30 July 2010 for setting aside the recovery certificate on the ground that it was passed ex parte. The Registrar of the Tribunal by his order dated 11 August 2010 declined to register the application on the ground that such an application was governed by Article 123 of the Limitation Act and having been made beyond a period of thirty days of the order of the Tribunal, it was barred by limitation. The petitioner thereupon filed an appeal before the Tribunal which was dismissed on 15 February 2011. The order of the Tribunal was confirmed in appeal by the Debts Recovery Appellate Tribunal on 6 April 2011.

(2.) The Tribunal came to the conclusion that though it has been held by the Supreme Court in Nahar Industrial Enterprises limited Vs. Hong Kong and Shanghai Banking Corporation, 2009 8 SCC 646, that the Debts Recovery Tribunal is not a Civil Court and that the judgment and the recovery certificate issued by the Tribunal did not constitute a decree, nonetheless Article 123 of the Schedule to the Limitation Act also applies to orders which have the force of a decree and hence, an application for setting aside an order of the Tribunal would be governed by that Article. Both the Tribunal and in appeal the Appellate Tribunal have held that the object of the Recovery of Debts due to Banks and Financial Institutions Act 1993 would not be sub-served if residuary Article 137 were to apply. Consequently, the order refusing to register the application as being barred by limitation has been confirmed.

(3.) Counsel appearing on behalf of the petitioner submitted that - (i) Article 123 of the Schedule to the Limitation Act, 1963 applies to an application to set aside a decree passed ex parte or to rehear an appeal decreed or heard ex parte; (ii) Proceedings before the Debts Recovery Tribunal do not arise out of a suit and do not culminate in a decree; (iii) The expression "decree" in Article 123 of the Limitation Act 1963 must have the same meaning as contained in section 2(2) of the Code of Civil Procedure 1908; (iv) Consequently Article 123 can have no application where an application has been submitted to the Debts Recovery Tribunal to set aside a recovery certificate.