The Supreme Court in Standard Chartered Bank vs MSTC Limited interpreted Section 24 of RDDBFI Act on 21.01.2020. The Court held that provisions of Limitation Act, 1963 apply only to applications under Section 19. They do not extend to review petitions filed under Rule 5A. The case arose from Rs 222 crore claim by Standard Chartered Bank against MSTC. MSTC filed review with delay which DRT rejected. High Court restored it, but Supreme Court reversed. The judgment clarifies scope of "application" under Section 2(b). It distinguishes between original recovery proceedings and review proceedings. This is crucial for understanding DRT procedure and timelines.
Facts: Export Receivables Deal; DRT Jurisdiction Upheld; Review Dismissed For Delay
Bank and MSTC had Receivables Purchase Agreement in 2008. Dispute arose after insurance claim rejection. Bank filed Section 19 OA in DRT Mumbai in 2012. Jurisdiction challenge was dismissed in 2017. Bank then filed IA for judgment on admission. MSTC responded with appeal to DRAT and review to DRT. Review was filed beyond 30 days. DRT followed International Asset Reconstruction and dismissed review. High Court set aside DRT order and restored review, holding review is part of Section 19. Supreme Court granted leave and heard appeal on limitation issue.
The Court focused on definitions in Section 2(b) and Rule 2(c). "Application" means application under Section 19. Rule 2(c) extends it to Section 31A and Section 30 appeals, but not review. Section 24 expressly limits Limitation Act to "application made to Tribunal". Review traces origin to Section 22(2)(e), not Section 19. Rule 5A(2) uses mandatory language: "No application for review shall be made after expiry of 30 days". Contrast with Section 20(3) proviso which allows condonation. Legislative intent is clear to have strict timelines. Applying CPC to DRT is barred by Section 22(1) and Section 34 overriding clause.
Legal Reasoning: Why Review Is Not Part Of Section 19 Proceeding
Supreme Court relied on Kamlesh Verma to hold review is not same as original hearing. Review corrects error apparent, it does not seek debt recovery. Fee structure under Rule 7 also treats review separately. If review was part of Section 19, separate fee would not be needed. The 2016 amendment reducing time from 60 to 30 days shows intent for speed. Allowing Section 5 would defeat purpose of RDDBFI Act. Borrowers could file review anytime to delay recovery. Section 20 appeal with 25% deposit is proper remedy. Court also rejected argument based on paragraph 12 of International Asset case.
Conclusion:
Section 24 Limited To Section 19, Not To Reviews
Standard Chartered Bank vs MSTC clarifies rddbfi act section 24 limitation supreme court position. Supreme Court 21.01.2020 held review petitions have independent 30-day limit. As the law stands, DRT has no power to condone delay in review. Banks can insist on strict compliance with Rule 5A. Borrowers must use Section 20 appeal instead. The judgment upholds RDDBFI Act as self-contained code. It is essential precedent for DRT practice and banking recovery.
