Madras High Court
R.N.Ramesh vs The Debts Recovery Tribunal No.Ii on 13 November, 2008
Author: G.Rajasuria
Bench: G.Rajasuria
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 13/11/2008 CORAM THE HONOURABLE MR.JUSTICE G.RAJASURIA W.P(MD).No.3562 of 2005 R.N.Ramesh ... Petitioner Vs. 1.The Debts Recovery Tribunal No.II, Spencer Building IV Floor, Mount Road, Chennai. 2.The State Bank of India, Branch Manager, Railway Feeder Road, Virudhunagar. 3.M/s.P.R.K.Nadar & Co., represented by its partner, P.R.K.J.Nagarajan, Pattiveeranpatti. 4.M/s.P.R.Karuppiah Nadar & Co., represented by its partner, P.R.K.J.Nagarajan, Pattiveeranpatti. 5.M/s.M.A.V.R.Nataraja Nadar & Sons, represented by its partner, M.A.V.R.Nataraja Nadar. 6.M.A.V.R.Nataraja Nadar 7.N.Ravi (represented by his mother and guardian Lakshmi Ammal, the 8th respondent.) 8.Lakshmi Ammal 9.Stephen ... Respondents Prayer Writ Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorarified Mandamus, calling for the entire records in T.A.No.601 of 2001 (O.S.No.6 of 1984) from the file of the first respondent/the Debts Recovery Tribunal No.II, at Chennai and quash the claim of Rs.93,41,940.25p in plaint in T.A.No.601 of 2001 (O.S.No.6 of 1984) and direct the Principal District Judge, Madurai to decide the suit claim of Rs.6,707.82p on the plaint as well as the counter claim preferred by the first defendant in the T.A.No.601 of 2001 (O.S.No.6 of 1984). !For Petitioner ... Mr.A.D.C.Gurusamy ^For Respondents... Mr.SriBalaji for R.1 Mr.K.M.Vijayakumar for R.2 Mr.Rathina Asokan for R.3 and R.4 Mr.N.Subramanian for R.5 and R.6 Mr.R.Satheesh for R.7 and R.8 No appearance for R.9. * * * * * :ORDER
This petition has been focused for the issuance of a Writ of Certiorarified Mandamus so as to call for the entire records in T.A.No.601 of 2001 (O.S.No.6 of 1984) from the file of the first respondent/the Debts Recovery Tribunal No.II, at Chennai and quash the claim of Rs.93,41,940.25p in plaint in T.A.No.601 of 2001 (O.S.No.6 of 1984) and direct the Principal District Judge, Madurai to decide the suit claim of Rs.6,707.82p on the plaint as well as the counter claim preferred by the first defendant in the T.A.No.601 of 2001 (O.S.No.6 of 1984).
2. The epitome and re'sume' of facts absolutely necessary and germane for the disposal of this case could be portrayed and parodied thus:
The second respondent herein filed the original suit in O.S.No.6 of 1984 in the Court of Principal District Judge, Madurai South, for recovery of money (earlier the same suit was numbered as O.S.No.149 of 1983 on the file of the Subordinate Judge, Srivilliputtur and thereafter, it was numbered as O.S.No.145 of 1984 on the file of the II Additional Subordinate Judge, Madurai.) by arraying the petitioner as the third defendant therein and eight other persons. When there is some doubt about transferring of O.S.No.6 of 1984 from the file of the Principal District Judge, Madurai (South) to the Debts Recovery Tribunal, Chennai, this Court vide order dated 12.03.2001 in C.R.P.No.3633 of 1984, directed that O.S.No.6 of 1984 shall be transferred to the Debts Recovery Tribunal. An excerpt from it, would run thus:
"7. So it is hereby clarified and directed the learned Principal District Judge, Madurai (South) should transfer the suit in O.S.No.6 of 1984 pending on his file of file to the file of Debts Recovery Tribunal, Chennai is hereby directed to take the suit in O.S.No.6 of 1984 referred to above to his file and to dispose of the same within a period of six months from the date. It is also clarified and direction issued to the learned Principal District Judge, Madurai (South) to retain the suit in O.S.No.4 of 1984 on his file and to dispose of the same within a period of three months from this date. Clarification is issued accordingly for implementing the same without any further delay. The parties and the counsel appearing for such parties are hereby required to render all assistance to the courts for expeditious disposal of the suits referred to above within the stipulated time."
3. Based on that order alone as per the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, O.S.No.6 of 1984 was transferred as aforesaid and now, the matter is pending before the Debts Recovery Tribunal No.II, Chennai.
4. The petitioner filed the written statement with counter claim raising various pleas also in the said suit. Meanwhile, the present writ petition has been filed on the main ground that the second respondent Bank is having no right to proceed against the petitioner for recovery of any money much less a sum of Rs.93,41,940.25p as claimed in the original plaint in that suit and accordingly, he prayed for quashing the said claim.
5. The gist and kernel of the grounds as set out in the affidavit accompanying the writ petition as well as from the arguments submitted by the learned Counsel for the petitioner before this Court, could be set out thus:
In consideration of the loan borrowed by the petitioner and his father who were the partners constituting partnership firm, they pledged cardamom goods with the second respondent. In the meanwhile, the respondents 3 and 4 filed suits for the purpose of recovering some amounts from the said partnership firm comprised of the petitioner and his father and in that process, they obtained attachment of the said pledged goods which were in the hands of the second respondent. In fact, the pledged goods were at that relevant time, were in the godown of M/s.Patel Roadways at Bombay.
6. In fact, those goods were pledged with four banks by the said partnership firm comprised of the petitioner and his father. Unmindful of such pledge with those banks, the respondents 3 and 4 herein effected attachment, wherefore questioning the same, the petitions were filed for raising the attachment. In the meantime, since the cardamom goods were perishable, by order of the Court, the cardamon goods were sold and according to the learned Counsel for the petitioner, the claim petitions were decided by the lower Court in favour of the claimants and as against which, appeals were filed before this Court in A.A.O.Nos.91 to 95 of 1985 and ultimately, the Division Bench of this Court dismissed those appeals.
7. The second respondent was not diligent in safeguarding the pledged goods and they committed fraud on the petitioner. By virtue of Section 180 of the Indian Contract Act, the second respondent being the bailee of the pledged cardamom goods, was duty bound to safeguard the pledged goods but they failed to do so and in such a case, the second respondent is having no right to file the suit in O.S.No.6 of 1984 for recovering the amount from the petitioner which is now pending before the Debts Recovery Tribunal at Chennai in T.A.No.601 of 2001. The Division Bench of this Court as per the aforesaid order in A.A.O.Nos.91 to 95 of 1985 finally decided that the cardamom goods were pledged with the second respondent by the petitioner and his father who constituted the partnership and it was not a mere hypothication and in such a case, the second respondent after loosing the pledged goods, is having no right to recover the loan amount from the petitioner. The petitioner also filed the counter claim in the said suit which the Tribunal cannot hear it. According to the learned Counsel for the petitioner, only the civil Court could decide on the counter claim. In view of the apparent illegality in filing of the suit as against the petitioner, the writ has to be allowed as prayed for.
9. The learned Counsel for the petitioner also filed the Summary of facts involved in this writ petition and the same is extracted hereunder for ready reference:
"1.The Writ Petitioner is one of the partner of M/s. MAVR.Nataraja Nadar & Sons. It is his case that he and his father M.A.VR Nataraja Nadar carried on business under the name and style of MAVR Nataraja and Sons, Virudhunagar. They borrowed huge loan from State Bank of India and four other banks for their business of Cardamom.
2.It is the further case of the Writ Petitioner that M/s. MAVR Nataraja Nadar & Sons firm used to despatch cardamom consignments from Virudhunagar to Bombay to their Commission Agent at Bombay for export sale. The Cardamom Consignments were despatched from Virudhunagar to Bombay through Lorry Operator M/s.Patel Roadways Ltd Bombay. The moment the cardamom consignments were despatched from Virudhunagar by the FIRM, they would hand over the following three documents. 1)Lorry Way Bill(Lorry Receipts) 2)Invoice 3)On Demand Bill (Hundi) draw in the name of State Bank of India, Virudhunagar. This is known in Banking law as "Bills Purchasing System" by handing over the above three documents the FIRM have handed over and delivered symbolic delivery of the cardamom consignment to the State Bank of India at Virudhu Nagar and pledged the cardamom consignments and raised loan from the bank on the very same date. The Bank used to give credit on the value on the on Demand Bill (Hundi) amount.
3.M/s.Patel Roadways Ltd., Bombay entered an agreement with all banks to hold the goods pledged by business men on behalf of the bank. M/s. Patel Roadways Ltd., is an approved Lorry Operator approved by All India Bankers Association.
4.On 05-07-1980 M/s. P.R.K.Nadar & Co attached before Judgment 1934 bundles of Cardamom Consignments lying at the Bombay Godown of the Carrier M/s.
Patel Road Ways by filing a Money Suit for a sum of Rs.4,15,158.13 in I.A.1082 of 1980 in O.S.No.433 of 1980 on the file of Sub-Court Dindigul.
5.Immediately the State Bank of India filed a Claim Petition under Order 38 Rule 8 C.P.C in I.A.1296 of 1980 in O.S.No.433 of 1980 on the file of Sub- Court Dindigul and four other Banks also filed similar Claim Petitions under Order 38 Rule 8 C.P.C in the year 1980 in the suit O.S.No.433 of 1980.
6.All the proceeding against the FIRM were transferred to Madurai Sub- Court.
7.On 26-09-1984 all the proceeding against the FIRM and the Five Claim Proceeding filed by the Five Banks including State Bank of India were transferred to the Principal District Judge, Madurai as per High Court order passed in C.R.P.No.3633 of 1984.
8.On 21-12-1984 Judgment was pronounced by the Principal District Judge Madurai in the Claim Proceedings. All the five claim proceedings were clubbed together and full trial was conducted by the Principal District Judge, Madurai. Exhibit A1 to A360, Exhibit B-1 to B-110 were marked. Witnesses P.W1 to P.W.7 were examined on the side of the five claimant Banks. R.W.1 was examined on the side of the respondent. The Principal District Judge, Madurai in his Common Judgment dated 21-12-1984 held that the Cardamom Consignments were validly pledged by M/s. M.A.V.R Nataraja Nadar & Sons and the Attachment order was raised.
9.M/s. P.R.K.Nadar & Co preferred Five Appeal to the High Court at Madras and obtained interim stay.
10.On 24-04-1992 the Division Bench of this Hon'ble Court at Madras confirmed the judgment of the Principal District Judge Madurai and held that the Cardamom Consignment were validly pledged by the FIRM. The "C" schedule Cardamom consignment is the subject matter of litigation in the judgment of Division Bench.
11.M/s. P.R.K. Nadar & Co., preferred Five Special Leave Petition as against the Division Bench Judgment dated 20-04-1992. Notice was ordered by the Supreme Court.
12.Petitioner, his father and the FIRM received the Special Leave Petitions but they did not contest the proceedings at Delhi since they are living in penury.
13.At every stage P.R.K.Nadar & Co pleated that the Five Special Leave petitions were pending and abstracted the trial of suit.
14.On the date of final order dated 12-03-2001 in CRP.3633 of 1984 as well as the order passed on 20-07-2001 CMP.No.1955 of 2001 M/s. P.R.K.Nadar & Co represented Five Special Leave Petitions were pending. Only in the year 2004 petitioner, his father and the FIRM came to know during the trial of the suit O.S.No.4 of 1984 all the Five Special Leave Petitions were dismissed by the Supreme Court. Immediately the petitioner presented the present writ petition W.P.No.3562 of 2005."
10. Refuting and remonstrating, gainsaying and contradicting the allegations as against the second respondent, the learned Counsel for the second respondent would put forth his submissions to the effect that the matter is pending before the Debts Recovery Tribunal and it is ripened for trial; because of this writ petition, the matter could not be proceeded further; the Debts Recovery Tribunal has got the power to decide on the counter claim also; instead of participating in the proceedings before the Debts Recovery Tribunal, this writ petition has been filed by the petitioner and this Court while exercising the power under Article 226 of the Constitution of India, cannot go into the factual aspects and pass any order on facts; whatever point which the petitioner wants to rise, the same could be agitated before the Debts Recovery Tribunal and not before this Court.
11. The learned Counsel for the respondents 3 and 4 would also put forth his plea that factual aspects cannot be decided by this Court and the writ petition is untenable.
12. The point for consideration is as to whether this Court could quash the claim of the second respondent as against the petitioner in T.A.No.601 of 2001 as prayed in the writ petition?
13. Considering pro et contra, it is ex facie and prima facie clear that the grievance of the petitioner is based on lot of contractual matters and the relevant laws governing the same. It is a trite proposition of law that this Court while exercising writ jurisdiction, cannot evaluate the evidence or analyse the evidence or appraise the evidence and give a finding based on facts. The very nature of the prayer in the writ petition if to be allowed, then this Court certainly should delve deep into the factual aspects involved in the matter and arrive at a conclusion like a civil Court, but this Court is not expected to do so while exercising its power under Article 226 of the Constitution of India.
14. The learned Counsel for the petitioner himself admitted that the counter claim was filed by the petitioner who was a defendant in the suit pending before the Debts Recovery Tribunal and in such a case, it is for the petitioner to work out his remedy before the Tribunal.
15. The learned Counsel for the petitioner would submit that I.A.No.275 of 2004 was filed before the Debts Recovery Tribunal challenging the jurisdiction of the Tribunal. However, the learned Counsel for the second respondent would clarify that in I.A.No.275 of 2004, the Tribunal passed orders that the said I.A should be taken along with the main case itself.
16. I am of the considered opinion that already this Court vide order dated 12.03.2001 in C.R.P.No.3633 of 1984, passed a reasoned and discernible order holding that the Tribunal has got jurisdiction to entertain the petition and in such a case, the jurisdiction point is no more res integra and the Debts Recovery Tribunal has got powers to go into all aspects of the matter.
17. The learned Counsel for the second respondent also cited the decision in Venkateswara Textiles Traders & Printers v. Canara Bank reported in AIR 1998 ANDHRA PRADESH 282. An excerpt from it, would run thus:
"9.A perusal of the above provisions makes it clear that all the pending suits or applications including execution applications, in respect of which the Tribunal has got jurisdiction, shall stand transferred to the Tribunal. The contention, that pending claim petitions the suits or execution petitions cannot be transferred to the Tribunal, appears to be without substance. The Tribunals having constituted under the Act for expeditious adjudication and recovery of debts due to the banks and for all the matters connected therewith, all the suits or other proceedings filed by the bank or pending in the Civil Courts come within the jurisdiction of the Tribunals and the Tribunals have got exclusive jurisdiction to try the same. The claim application could also be decided by the Tribunal as if it is any other proceeding. Since the Act has got overriding effect, the procedure contemplated under the C.P.C to decide claim petitions filed under O.21 need not be followed by the Tribunal. As per Sect.31 (2)(b) of the Act, the Tribunal shall have to proceed to deal with such suits or other proceedings in the same manner as an application under Section 19 of the Act from the stage at which it was transferred. The Tribunal is not required to follow the procedure prescribed under the Code of Civil Procedure. Thus the contention that the Tribunal being not a Court is not competent to decide claim petitions has absolutely no meaning. When once the proceedings stood transferred all the applications including claim petitions have to be decided as per the procedure laid down under the Act. In the decision cited by the learned counsel for the petitioner in Cofex Exports Ltd's case supra, it was observed that the cross suit or cross claim or a plea in the nature of set off cannot be transferred to the Tribunal along with the suit with which it was associated and which was liable to be transferred to the Tribunal. The learned Judges have taken the view that the Tribunal is not competent to decide cross suit or cross claim in a suit filed by the bank. But in may view, the Tribunal is competent to decide all the applications including cross-suit or cross claim petitions since the Tribunals are established as a substitute to the Civil Courts to try the suits filed by the bank and all the applications arising out of the same. Thus the pendency of claim petition is not a hurdle, at all, for the transfer of suit or execution petitions. The contention in this regard is, therefore, negatived."
18. I am in respectful agreement with the view enunciated in the aforesaid decision of the Andhra Pradesh High Court. Taking into account this legal position, the Debts Recovery Tribunal should necessarily be held to be one having jurisdiction and power to decide the counter claim filed by the petitioner also. No doubt, the petitioner herein as a defendant is having claims as against the second respondent Bank as well as the respondents 3 and 4 herein who are also the defendants therein and in such a case, the Tribunal should necessarily decided on that. It is a rudimentary principle of civil jurisdiction that a Court has to decide taking into account the plea raised by the defendant. The Debts Recovery Tribunals to which the civil suits are transferred, are expected to decide the matter relating to the issues between the contesting parties. When the plaintiff affirms a fact and the defendant denies it, there arises an issue and consequently, that issue has to be decided by the Debts Recovery Tribunal. It would be against the logic and law to contend that such Tribunals are having power to decide the plaintiff's case only and not the defendant's plea. In connection with the plaintiff's claim, what are all the relevant pleas raised by the defendants should necessarily be gone into by the Tribunals as otherwise, the very purpose of constituting the Tribunal would be thwarted and set at naught and no more elaboration or dilation on that account is required as it is axiomatic and obvious. The aforesaid decision of the Andhra Pradesh High Court also, in my opinion, is sound and accordingly, I am of the firm and considered opinion that the Tribunal has got jurisdiction to consider the counter claim of the petitioner herein also.
19. The contention of the petitioner that the order of the Division Bench of this Court in A.A.O.Nos.91 to 95 of 1985, is binding on the Tribunal, is quite acceptable and this is purely based on law point. Hence, this Court could hold that the findings rendered by the Division Bench of this Court in A.A.O.Nos.91 to 95 of 1985 is binding on all the parties to the proceedings pending before the Debts Recovery Tribunal, because those parties happened to be the parties in A.A.O.Nos.91 to 95 of 1985 which were decided by the Division Bench of this Court.
20. The learned Counsel for the petitioner would advance his argument to the effect that for any reason this Court is not willing to issue a Writ of Certiorarified Mandamus, writ of Prohibition prohibiting the plaintiff from prosecuting his claim for Rs.93,41,940.25p as against the petitioner, could be issued. The learned Counsel for the petitioner cited the decision in Hari Vishnu Kamath v. Ahmad Ishaque and others reported in AIR 1955 SC 233 so as to support the plea that this Court could issue writ of Prohibition though not Writ of Certiorarified Mandamus. I am at a loss to understand as to how such a plea could be countenanced in this writ petition. My above discussion supra, would exemplify and demonstrate that based on factual aspects, this Count cannot be asked to give factual finding and in such a case, the direction based on factual findings cannot be given to the Tribunal. However, relating to the application of the decision of the Division Bench of this Court is concerned, it is purely a law point and accordingly, this Court observed as supra that it is binding on all parties.
21. The bedrock of the contention of the petitioner is that the second respondent committed fraud on the petitioner herein. Absolutely, there is no finding to that effect earlier by any one of the Courts precisely on this point. Fraud is a plea which the petitioner has taken as a defence should be proved before the Debts Recovery Tribunal.
22. The learned Counsel for the petitioner would also contend that as per Section 180 of the Indian Contracts Act, the second respondent a bailee should have claimed damages as against the respondents 3 and 4 herein who obtained attachment order and got it adjusted towards the present suit claim, but the second respondent Bank failed to do so. Section 180 of the Indian Contracts Act, is an enabling provision for the bailee also to take action as against the person who caused loss to the pledged goods, however the bailor namely the petitioner has also got the right to seek remedy as against such person who caused loss to pledged goods. In fact, in the pending suit before the Debts Recovery Tribunal, the plaintiff arrayed the respondents 3 and 4 as defendants, whereas the learned Counsel for the petitioner would submit that no relief has sought from the respondents 3 and 4 by the second respondent Bank in the proceedings. According to the learned Counsel for the petitioner, the petitioner herein sought the relief in the counter claim as against the respondents 3 and 4 also. The Tribunal has got full power to look into the rights and liabilities of the plaintiff and the defendants and accordingly, fixed the responsibility as to who should bare the brunt. These are all factual issues and simply this Court while exercising the power under Article 226 of the Constitution of India cannot give its finding without analysing the evidence.
23. The learned Counsel for the petitioner cited the following decisions,
(i) Morvi Mercantile Bank Ltd., v. Union of India reported in AIR 1965 Supreme Court 1954.
(ii) Lallan Prasad v. Rahmat Ali reported in AIR 1967 Supreme Court 1322, so as to fortify and buttress his contention that the second respondent Bank is not eligible to claim any amount from him. It is for the petitioner to cite all these decisions before the Tribunal which after arriving at a factual finding, would be in a position to appreciate the application of these decisions in the factual matrix of the case that would be established before it.
24. Hence, in this view of the matter, I could see no merit in this writ petition and accordingly, the writ petition is dismissed with a direction to the parties to this proceeding who are also parties before the Tribunal that they shall appear before the Tribunal and co-operate with the Tribunal for speedy disposal of the matter and the Tribunal shall do well to see that within a period of three months from the date of receipt of a copy of this order, it finally disposes the T.A.No.601 of 2001. No costs.
rsb To
1.The Debts Recovery Tribunal No.II, Spencer Building IV Floor, Mount Road, Chennai.
2.The State Bank of India, Branch Manager, Railway Feeder Road, Virudhunagar.