Kerala High Court
Aravindakshan vs Federal Bank Ltd. on 18 August, 2006
Equivalent citations: II(2007)BC563, 2006(4)KLT477
Author: P.R. Raman
Bench: P.R. Raman, S. Siri Jagan
ORDER P.R. Raman, J.
1. The above matter came up before us based on a reference dated 19th October, 2005 by the Division Bench before whom the matter came up for hearing/The short question that requires to be answered in this reference is as to which is the appellate forum to which an appeal will lie from a decree passed by a civil court exceeding Rs. 10 lakhs in a suit instituted by a financial institution?
2. The suit O.S. 408/1995 was filed by the first respondent Bank before the Additional Sub Court, Kollam for realisation of Rs. 8,16,797/- with interest from defendants 1 to 7 who are the appellants. The suit originally instituted was for an amount of less than Rs. 10 lakhs and concededly, the suit has necessarily to be filed before the civil court as the valuation of the suit is less than Rs. 10 lakhs. If only it exceeds Rs. 10 lakhs, the Debt Recovery Tribunal gets jurisdiction over the matter. However, eventually when the suit was decreed, it exceeded the decree amount and including interest of Rs. 38,48,960/- it came to Rs. 46,65,757/-. It was contended by the appellants that the appeal would lie before the High Court whereas the respondent contended that the appeal will he only before the Appellate Tribunal constituted under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act"). The first respondent also relied on the decision of this Court in Glenny v. The Catholic Syrian Bank Ltd. 2003 (2) KLT 973 wherein there is a passing reference that in a case where a decree was passed by the civil court for an amount of Rs. 10 lakhs or more, appeal would lie before the Appellate Tribunal. Placing reliance on the decision in Cochin Malabar Estate & Industries v. State of Kerala 2002 (1) KLT 588, it was contended before the Division Bench that the Division Bench is bound by the Full Bench decision in Glenny's case 2003 (2) KLT 973. In the reference order the Division Bench held that in the Full Bench decision in Glenny's case 2003 (2) KLT 973 the question that came up for consideration was whether the provisions of the Act debar the civil court from setting aside an ex parte decree passed by it. An application under Order IX Rule 13 of the Code of Civil Procedure to set aside the exparte decree was filed which was dismissed by the court below holding that it has no jurisdiction to entertain the same. An appeal was preferred to this Court against the said order which was ultimately referred to the Full Bench. The question was whether the appeal has to be filed before the Tribunal constituted under the Act or before the High Court. There was no occasion in such circumstances to consider whether the appeal should be filed before the Tribunal or before the High Court in a situation like the present one when the decretal amount exceeds Rs. 10 lakhs, though the suit as such was instituted for less than Rs. 10 lakhs. However, in view of the Full Bench decision in Glenny's case 2003 (2) KLT 973 the matter was referred to us.
3. We have heard the learned Counsel for the appellants and the respondents. It is the specific contention of the respondent that when the decretal amount exceeds Rs. 10 lakhs, only the Appellate Tribunal constituted under the Act has jurisdiction to entertain any appeal against such a decree.
4. We have carefully gone through the decision in Glenny's case 2003 (2) KLT 973 and with great respect it has to be held that the question that arose for consideration in the said case is entirely different from the point that arises for consideration in the present case. Even though there is a casual observation made in the said judgment that an appeal against a decree for an amount exceeding Rs. 10 lakhs would lie before the Appellate Tribunal, it has to be considered that the question as such did not squarely come up for consideration before the Full Bench and as such the observation is only an obiter and cannot be taken as a ratio decedenti. However, in order to answer the question that is referred to us, it is necessary to consider the other contentions raised by the parties.
5. According to the learned Counsel for the respondent, an appeal against a decree passed by the civil court for more than Rs. 10 lakhs would lie before the Appellate Tribunal under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act. We shall examine the said contentions now. As per Section 20 of the said Act, an appeal would lie to the Appellate Tribunal from an order passed by the Debt Recovery Tribunal or deemed to have been passed by it. The argument is that even against an order deemed to have been passed by the Tribunal, under Sections 17 and 20, it must be held that when the decree exceeds Rs. 10 lakhs it must be deemed to be a decree passed by the Debt Recovery Tribunal for the purpose of Section I7 and 20 of the Act. We are unable to agree with this contention. The Act does not contain any specific provision as to when and in what circumstance an order would be deemed to have been passed by the Debt Recovery Tribunal. However, going by some of the provisions of the Act and Schemes therein it can be said that if the suit is instituted for an amount of more than Rs. 10 lakhs and a decree is passed prior to the commencement of the Act, then such decree may be deemed as one passed by the Debt Recovery Tribunal since after the appointed day, such claim would lie only before the Debt Recovery Tribunal in view of the specific bar contained in Section 22 read with Section 1(4) of the Act. Again, an order passed by the Recovery Officer prior to the amendment brought in 2000 by Act 1/2000 to Section 30 would also be deemed to be as an order passed by the Debt Recovery Tribunal for the purpose of an appeal to the Appellate Tribunal. By virtue of the amendment made later an appeal would lie to the Debt Recovery Tribunal against the order of the Recovery Officer itself. Section 17 however was not amended. It is settled law that a deeming provision in a statute is a creation, an act of the legislature, to bring something within the ambit and scope of an expression which otherwise normally may not fall within its scope and this may be done by an express provision or could be implied and gatherable from the provisions in the enactment. But it cannot be deemed that in a situation when a suit instituted rightly before a civil court, when the subject matter of the suit itself is of less than Rs. 10 lakhs, the decree eventually passed to be deemed as one passed by the Tribunal merely because the decree passed is for an amount more than Rs. 10 lakhs. It is only in the process of adjudication, that the amount swells into a figure of more than Rs. 10 lakhs because of the accumulation of interest pendente lite. Hence unless the provision regulating the appeal specifically provides for an appeal determinative of the value appealed against, normally the appeal will lie to the forum to which normally an appeal will lie based on the valuation at the time of institution of the suit. In a given case, if the order passed by the civil court, had it been passed on the appointed day, which could be shown to be incompetent or without jurisdiction, then only the authority competent to deal with the matter after the appointed day being the Debt Recovery Tribunal, it can be deemed to be one passed by it. But here, the situation is different. The suit as laid even today will lie only before the civil court. Therefore, the suit as laid was well within the jurisdiction of the civil court. It cannot, therefore, be stretched beyond the legislative intent and to say that the decree for an amount exceeding Rs. 10 lakhs is to be deemed as an order passed by the Debt Recovery Tribunal. Further, the jurisdiction, in the absence of any intervening event by any legislative enactment, is to be tested as at the time of institution. Further, the provision dealing with the appeal namely, Section 17 does not say that all appeals for amounts exceeding Rs. 10 lakhs would lie before the Tribunal. The determining factor is the forum which passed the order. Therefore, if the order is not one passed by the Debt Recovery Tribunal, or is shown to be one capable of being passed by the Tribunal, as per the valuation in the suit it cannot be deemed to be one passed by the Debt Recovery Tribunal. Further, an appeal is the creation of a statute and Section 17(2) of the Act provides for an appeal from the order of the Debt Recovery Tribunal. Thus, it does not take away the jurisdiction of the appellate court to which an appeal ordinarily would lie against a decree. Further, if the contention of the respondent is accepted, it would lead to an anomalous situation. If the suit claim exceeds Rs. 10 lakhs, the claim would lie only before the Debt Recovery Tribunal alone which is the competent authority who would have jurisdiction to entertain the claim instituted by the Financial Institution as per the provisions of the Act. Now, suppose after adjudication, the Debt Recovery Tribunal finds that the amount as claimed cannot be decreed and eventually a certificate for recovery is granted for an amount less than Rs. 10 lakhs, can it be said that the order passed is without jurisdiction? The answer can only be "No". Therefore, the mere fact that the decretal amount exceeds Rs. 10 lakhs, is not decisive in the matter of deciding as to the forum of appeal. It has been held by the Apex Court in Garikapati v. Subbiah Choudhry as follows:
The legal pursuit of a remedy suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. The right of appeal is not a mere matter of procedure, but is a substantive right and the institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise.
6. The above position has been reiterated by the Apex Court in Kasibai v. Mahadu in the following lines:
It is true that as a general rule, alterations in the law of procedure are retrospective, but a right of appeal to a particular forum is a substantive right and is not lost by alteration in the law, unless provision is made expressly in that behalf, or a necessary implication arises.
7. Admittedly, the suit as filed before the civil court was well within its jurisdiction as the valuation of the suit was less than Rs. 10 lakhs as on the date of the institution of the suit and so an appeal will lie before this Court. Therefore, there is a vested right and a substantive right to prefer an appeal before this Court. This has not been impaired by any express or implied provision in the special enactment. Therefore, it cannot be said that such a right of appeal has been taken away by the statute by any subsequent enactment.
8. Based on the above discussion, we answer the question as follows:
If the suit instituted before the civil court is well within its jurisdiction, merely because the decree eventually passed exceeds Rs. 10 lakhs the forum for preferring the appeal would not be changed and the appeal would lie to the same forum to which ordinarily the appeal would lie as per the position as on the date of institution of the suit. If so, in the present case, the appeal is perfectly maintainable before this Court. The question having been answered, we direct that the matter be listed before the Division Bench as per roster for final disposal.