Bombay High Court
Bank Of Tokyo Mitsubishi Ltd. vs Chembra Estates And Ors. on 20 October, 2000
Equivalent citations: AIR2001BOM170, 2001(1)BOMCR821, [2001]105COMPCAS35(BOM), 2001(2)MHLJ206
Author: R.J. Kochar
Bench: R.J. Kochar
JUDGMENT R.J. Kochar, J.
1.The above chamber summonses are the offshoot in Suit No. 954 of 1987. I am called upon to decide the above chamber summonses when the suit itself, being a bank suit, has stood transferred from this court to the Debt Recovery Tribunal (DRT) established under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act), on and from December 16, 1999. A very strange and curious situation has arisen before me. The main suit proceedings are not in my hands while its offshoots are praying for appropriate orders at my hands. Though this court has no jurisdiction, powers and authority to entertain and decide applications from banks and financial institutions for recovery of debts due to such banks and financial institutions this court is called upon to decide the above chamber summonses taken out as interlocutory proceedings in the above suit which has already been transferred to the DRT as contemplated under Section 17 and Section 18 read with Section 31 of the Recovery of Debts Due to Banks and Financial institutions Act,
2. The reason for this situation is that by an order dated April 3, 1987, this court had appointed the High Court Receiver, High Court, Bombay in respect of the suit property, viz., a tea estate in Kerala, which was mortgaged as security with the plaintiffs-bank by defendants Nos. 1, 2, 3 and 4 for the loan advanced by the bank to defendant No. 1. The plaintiffs have filed the above suit for recovery of the said debt. The appointment of the Court Receiver was confirmed and by an order of injunction defendants Nos. 1 to 4 were restrained from creating third party interests in the tea estate. On and from April 25, 1990, T. P. Murlidharan and Associates were appointed as the agent of the Court Receiver for a period of eight years. The said agent appears to have floated a company by name Premier Plantation Limited on December 12, 1990. It appears that on account of their failure to make payment, by an order dated October 19, 1992, this court directed the said Premier Plantation Limited to deliver possession of the tea estate to the Court Receiver. During this period some changes in the structure of the company have taken place. It further appears that one Tra-vancore Malabar Estate was appointed as an agent of the Court Receiver for a period of two years till June 25, 1999, and the said agency continued till expiry of a further three months to enable the Court Receiver to invite fresh bids for the agency.
3. In Chamber Summons No. 1047 of 2000 the plaintiffs have prayed to this court for the following orders to the Court Receiver :
"(a) The Court Receiver, High Court, Bombay, receiver in H. C. Suit No. 954 of 1987 be ordered and directed to sell and/or dispose of the suit tea estate more particularly described in the schedule annexed and marked exhibit A hereto.
(b) The Court Receiver, High Court, Bombay, receiver in H. C. Suit No. 954 of 1987 be ordered and directed to complete the sale of the said suit tea estate expeditiously and on or before October 20, 2000."
4. In support of the chamber summons a detailed affidavit of one B. M. Chhabra has been filed. The plaintiffs have relied on a judgment and order dated July 19, 2000, passed by the DRT determining the whole debt payable by defendants Nos. 1 to 4 to the bank and directing the defendants to pay the same and granting the bank a recovery certificate for the detailed claim computed by the Tribunal. It was also held by the Tribunal that if the defendants failed to make payment of the amounts mentioned in Clauses 2, 3, 4 and 5 of the order the bank was entitled to sell the tea estate through the Court Receiver, High Court and it further directed the bank to approach this court for necessary direction to the Court Receiver, High Court, Bombay, for conducting the sale if required. It also directed that the sale proceeds be appropriated towards the amount due under the recovery certificate. I am informed across the Bar that the defendants have filed an appeal against the said order before the appellate forum provided under the Act. It is, therefore, clear that pursuant to the said judgment and order of the DRT the plaintiffs have approached this court for a direction to the Court Receiver to sell and dispose of the tea estate. An extremely strange and curious situation has arisen. The DRT has determined the amount of debt payable by the defendants to the plaintiffs-bank. It has completed its adjudication work and has finally computed the liability of the debtor. It has issued a recovery certificate. It has further directed the bank to approach this court for appropriate orders to the Court Receiver to sell the tea estate to realise the payment By this process the High Court is reduced to the status equal to that of a Labour Commissioner under the provisions of the Industrial Disputes Act, 1947. Under Section 33(c)(2) of the said Act the Labour Court determines and computes the amount of money due to the applicant workman and the Labour Commissioner is directed to issue a recovery certificate directing the Collector to recover the amount from the employer. In the present case the DRT has issued a recovery certificate and has directed the bank to approach the High Court to enforce the said recovery certificate by directing the Court Receiver to sell the property to realise the amount. Such a four-tier system is not contemplated under the Act. It is for the DRT to direct its own Recovery Officer to recover the debts due from the judgment-debtors. The same position has arisen in view of the judgment of this court (S. H. Kapadia J.) in the case of ICICI Ltd. v. Patheja Brothers Forgings and Stampings Ltd. . It is held by the learned judge that though this court has no jurisdiction to entertain and try suits of the nature covered by the Act since the DRT does not have infrastructure to take care and protect the property which is custodia legis under the Court Receiver appointed by this court and since the Court Receiver of this court cannot take directions from the DRT or any ether authority this court would continue to have power to issue directions to the Court Receiver in all such matters wherein the Court Receiver of this court is appointed. In these circumstances the DRT has issued the orders directing the bank to approach this court for a direction to the Court Receiver to recover the debt from the defendants as determined by the DRT.
5. I have therefore no other alternative but to make the chamber summons absolute in terms of prayer clauses (a) and (b). The above Chamber Summons No. 1047 of 2000 is disposed of with no order as to costs.
6. Chamber Summons No, 1221 of 2000 :
G. Sukumari, the applicant has filed the present Chamber Summons No. 1221 of 2000 for the following main prayer :
(a) the order dated September 13, 2000, passed in Chamber Summons No. 1047 of 2000 kindly be stayed and the High Court receiver and the Recovery Officer, Debt Recovery Tribunal, Mumbai, be directed not to sell the tea estate at Wynad district, sub-district Vythiri, Kerala.
The applicant has further prayed for its appointment as an agent of the Court Receiver for managing the aforesaid tea estate and other interim orders. In support of the chamber summons an affidavit of T.P. Murlidharan, holding a power of attorney of G. Sukumari is filed. The applicant has relied on several orders passed by this court from time to time in this matter. The plaintiffs have filed their affidavit in reply denying all the contentions of the applicant and opposing strongly the claim of the applicant to be appointed as an agent of the Court Receiver. Shri Madan, learned counsel for the plaintiffs-bank, has taken me through umpteen number of orders passed in the above proceedings wherein it is held that the applicants were unfit to be appointed as the agents of the Court Receiver in view of their bad past record in mismanaging the whole suit property. Shri Madan has read out the observations of different courts and their final conclusions that the applicants were unfit to be appointed as the agents of the Court Receiver. A very serious grievance is made and established before this court in different interlocutory proceedings in the above suit. In the aforesaid circumstances I am not able to take any other different view to depart from the similar orders which are binding on me, I am therefore, not able to accept the contentions of Shri Gorwadkar, learned counsel for the applicant, that there have been changes in the circumstances and that the past should not be considered while passing the order in the present chamber summons. Notwithstanding anything the fact remains that the DRT has finally determined the liability of the debt and has issued a recovery certificate and in view of my order in the above Chamber Summons No. 1047 of 2000, I am not at all inclined to pass any order in favour of the applicants in this chamber summons. Chamber Summons No. 1221 of 2000 therefore stands dismissed'with no order as to costs.
7. Chamber Summons No. 1202 of 2000 :
The plaintiffs-bank have taken out the present chamber summons for the following reliefs :
(a) That the defendants be ordered and directed to act as agents of the Court Receiver in respect of the suit tea estate more particularly described in the schedule annexed and marked exhibit A hereto for the period subsequent to October 20, 2000, till such time as the suit tea estate is sold or for such shorter period as this hon'ble court deems fit and proper ;
(b) That the Court Receiver, High Court, Bombay, be ordered and directed to take possession of the suit, tea estate more particularly described in the schedule annexed and marked exhibit A hereto on or before October 20, 2000 ;
(c) That after complying with prayer (b) above, the Court Receiver, High Court, Bombay, be ordered and directed to put the defendants in possession of the suit tea estate more particularly described in exhibit A hereto on or before October 20, 2000.
8. In support of the chamber summons an affidavit of one B.M. Chhabra has been filed. From paragraph four of the affidavit it is clear that one Travancore Malabar Estates were appointed as agents of the Court Receiver for the suit tea estate. The agency agreement was extended from time to time by various orders. The said Travancore Malabar Estates had opposed any further extension beyond July 20, 2000. It was however further directed to continue its agency up to October 20, 2000, in the interest of the vast tea estate of 1,900 acres. Paragraph five of the affidavit expresses apprehension of encroachment and likelihood of theft of various trees and crops on the suit tea estate. It is averred that it is a virtual township by itself wherein 500 families are housed and various facilities and amenities are to be continuously operated. Though I am of the opinion that such an agency agreement cannot be imposed on an unwilling party in the circumstances narrated in the affidavit in support of the chamber summons and coupled with the factor that the applicant in the above chamber summons G. Sukumari has been held to be unfit for grant of any agency agreement it would be expedient and in the interest of justice to appoint the defendants who were the owners of the tea estate and are familiar with the property and the business. They would be fit persons to be appointed as the agent of the Court Receiver for the suit tea estate from and after October 20, 2000. From the averments in paragraph six and also from the submission of Shri Chheda for the defendants they should be given this agency at least for a period of three months from October 20, 2000. Shri Chheda has fairly submitted that his client should be given at least three months period of agency to manage the affairs of the tea estate. He expressed that his clients would not be in a position to take over and reorganise the tea estate in any shorter period. I am in agreement with his submission that the agency agreement for a period of less than three months would be unjust. I therefore, make the chamber summons absolute in terms of prayer clauses (a), (b) and (c). It is clarified that the agency agreement between the Court Receiver and the defendants would be for a period of three months and after till such time the tea estate is sold by the Court Receiver. It would further be open to the defendants to bid in the auction sale of the tea estate and to purchase the same in accordance with the terms and conditions stipulated by the Court Receiver for sale of the property.
9. Jurisdiction : To issue directions to the Court Receiver, High Court: Though I have disposed of the above-referred to three chamber summonses on the merits, I am also called upon by the applicants in Chamber
10. Summons No. 1221 of 2000 to decide the question of jurisdiction of this court, to decide the present chamber summons in view of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act. under which from the appointed day of July 16, 1999, under Section 17 and Section 18 of the Act it is the exclusive jurisdiction, powers and authority of the Tribunal to entertain and decide all such applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.
11. Shri Madan, learned counsel for the plaintiffs-bank has submitted that though the suit proceedings have been transferred to the DRT on and after July 16, 1999, this court will have to issue directions and orders to the Court Receiver for management, administration and protection of the properties which are custodia legis under the Court Receiver appointed by this court. He has relied on a judgment of the learned single judge (S. H. Kapadia, J.) reported in ICICI Ltd. v. Patheja Brothers Forgings and Stampings Ltd. . The learned judge was requested by the Court Receiver for appropriate orders as in several proceedings, the parties had challenged ths right of the Court Receiver to manage the properties after July 16, 1999, in view of the ouster of jurisdiction of this court by the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Court Receiver had no authority to act in the matter. The learned judge framed the following two points for his determination (page 21 of 105 Comp Cas):
"(i) Whether this court has jurisdiction to issue directions to the Court Receiver in suits in which the Court Receiver stands appointed prior to July 16, 1999 ?
(ii) If not, whether this court is empowered to give directions to its Court Receiver regarding the properties which are in the custody of the said receiver till such time as the DRT/Central Government sets up alternate office/machinery with a proper infrastructure ?"
12. After tracing back the history of the office of the Court Receiver before and after 1929 while answering point No. 1 the learned judge has concluded in paragraph 7 as under (page 29) :
"It would be an anomalous position to say that although the main suit has been transferred to the DRT the interim proceedings in which the Court Receiver is appointed before the cut-off date continue to remain within the jurisdiction of this court. The scope of the various provisions, discussed hereinabove, clearly show that all suits and other proceedings pending in this court before the cut-off date shall stand transferred to the DRT. This will include even execution applications in which the Court Receiver is appointed prior to the cut-off date. It may be mentioned that as regards execution proceedings the decree holder will have to move the DRT. The DRT shall issue the recovery certificate after examining the quantified decretal amount and on such certificate the Recovery Officer, under the Act, can proceed to recover the decretal dues. The Act is a complete code by itself. Looking to the scheme of the said Act, as discussed above, it is clear that all suits and pending proceedings including interim proceedings pending before July 16, 1999, stand transferred to DRT, It needs to be reiterated that proceedings in which the Court Receiver is appointed before July 16, 1999, cannot be said to have worked out. They continue to remain pending on the cut-off date and, therefore, the said proceedings also stand transferred to the DRT. It is important to bear in mind that after the properties become custodia legis under the orders passed before the cut-off date the management of such properties is an ongoing continuous process and such monitoring/management requires appropriate directions to be given by the DRT. Therefore, all such pending cases stand covered by Section 31 of the Act. In the circumstances point No. 1 is answered in the affirmative."
13. While answering the second point the learned judge in paragraph 10 has concluded as under (page 34) :
"In the circumstances, it cannot be said that the Court Receiver appointed by this court stands automatically discharged after July 16, 1999. Till such rights are determined by DRT the property remains custodia legis. Even after coming into force of the DRT Act and the DRT the said rights to the possession of the funds/properties held by the receiver remain undecided and, therefore, till DRT appoints its receiver under the DRT Act, 1993, this court can certainly issue directions on the reports of the Court Receiver regarding management and protection of the assets which are custodia legis. The Court Receiver, High Court, Bombay, is hereby directed to act in all matters pending before her regarding fixation and recovery of royalties, regarding fixation of sale price, regarding implementation of agency agreements already executed, etc. In other words in all cases where the Court Receiver is seized of the properties and assets she is empowered to take all necessary steps to preserve and manage such properties. I am informed that there are some cases in which the Court Receiver was appointed prior to July 16, 1999. However, before the Court Receiver could take possession, the notification came; to be issued. Such marginal cases are kept for hearing on March 10, 2000."
14. If I have correctly understood the judgment of my learned brother the precis of the judgment is that on and after the notification dated July 16, 1999, under the provisions of the Act all pending suits and proceedings have stood transferred to the DRT but the Court Receiver appointed by this court in all such suits and proceedings does not stand automatically discharged and that the Court Receiver continues to function in that capacity until the DRT takes over all such properties which are custodia legis under the Court Receiver. The contention of the parties that the Court Receiver had no authority to issue directions for management and administration of the properties was negatived by the learned judge.
15. I am in respectful agreement with the learned judge as far as the first part of his judgment is concerned. However, I am not able to agree with his conclusion that this court can certainly issue directions on the reports of the Court Receiver regarding management and protection of the assets which are custodia legis. After holding so the learned judge has directed the Court Receiver "to act in all matters pending before her regarding fixation and recovery of royalties, regarding fixation of sale price, regarding implementation of agency agreements already executed, etc." This is where I am in respectful disagreement with the learned judge when he positively holds that even after the appointed date, i.e., July 16, 1999, this court continues to have power and jurisdiction to issue orders and directions to the Court Receiver in respect of administration, management and protection of the properties which are custodia legis under the Court Receiver. As far as the transfer of the jurisdiction of this court under sections 19 and 31 of the Act is concerned there is absolutely no doubt in the mind of the learned judge and I am in complete agreement with the said view as that is the law reiterated by him. He has also held that merely because suits and proceedings have been transferred to the DRT it cannot be said that whatever orders passed by this court in all such transferred proceedings would stand automatically vacated. All the suits and proceedings have stood transferred along with the interim orders including the orders where the Court Receiver was appointed. The Court Receiver continues to have powers and authority to act as Court Receiver for the administration and management of the properties. On transfer of the matters to the DRT the Court Receiver does not stand automatically discharged until further orders are passed by the DRT or by the Appellate Tribunal.
16. The crucial question which is troubling me is whether this court can continue to have power and jurisdiction to issue orders and directions to the Court Receiver in all such matters, which have been transferred to the DRT on and after the cut-off date July 16, 1999. The learned judge has answered this question affirmatively for the reason of expediency/practi cal difficulties. He has narrated the factual problem that the DRT has no infrastructure to take over the functions of the Court Receiver of this court, that there is no machinery provided under the Act to enable the DRT to administer, manage and protect the custodia legis properties worth more than Rs. 2,000 crores, which cannot be allowed to be dissipated. The learned judge has expressed his legitimate doubt whether the Court Receiver appointed by DRT would be in a position to take charge of the properties worth Rs. 2,000 crores from the Court Receiver, High Court, Bombay. The learned judge has narrated some administrative problems and has also expressed his opinion that the services of the Court Receiver, High Court, Bombay, cannot be lent to the DRT and he has further expressed that the Central Government should take immediate steps to set up an independent machinery to assist the DRT. The learned judge further finally concludes that during the transitional period this court notwithstanding transfer of suits and proceedings to the DRT can continue to give appropriate directions to the Court Receiver, High Court, Bombay, regarding management of the assets and properties in the hands of the Court Receiver till the receiver appointed by the DRT takes charge of the said assets and properties.
17. A legal impasse is created by this judgment of my learned brother on the point of exclusive jurisdiction of this court to give directions to the Court Receiver, as the Court Receiver was appointed by this court and that the DRT cannot issue any directions or orders to the Court Receiver, High Court, Bombay. Moreover as per the views expressed by my learned brother the services of the Court Receiver also cannot be lent to the DRT. And the Legislature unequivocally and categorically has divested this court of its jurisdiction to entertain and try all such suits and proceedings which have stood automatically transferred to the DRT under the provisions of Section 31 read with sections 17 and 18 of the Act. Parliament says the High Court is not entitled to exercise any jurisdiction, power or authority in relation to the matters specified in Section 17. By operation of Section 31 every such suit or other proceedings pending before this court has been transferred to the DRT. Can we still say that this court alone has power and jurisdiction to issue orders and directions in the matter where the Court Receiver, High Court, Bombay, is appointed though by operation of Section 31 all such matters have been transferred to the jurisdiction of the DRT ? Sections 25, 26, 27 and 28 of the Act make elaborate provisions for execution of the orders for recovery of debts. The DRT is empowered to appoint its receiver for the management of the movable or immovable properties of the defendants. The Legislature has stripped this court of its jurisdiction to entertain and try all the suits of the nature described under Section 17 of the Act. The law says that this court will have no jurisdiction, no power, no authority to entertain and try any such matter. The law further says that the DRT alone will issue recovery certificates and even appoint its own receiver to protect and manage the properties of the defendants. The provisions of the Act are crystal clear that this court is left with no jurisdiction and authority to deal with all such matters which find place in the shelves of the DRT on and from July 16, 1999. We cannot adjudicate the bank suits nor do we have any execution powers. The Supreme Court in Allahabad Bank v. Canara Bank [2000] 101 Comp Cas 64 ; [2000] 4 JT 411 has laid down the law as under in paragraphs 21, 22 and 23, which read as under (page 76 of Comp Cas) ;
"In our opinion, the jurisdiction of the Tribunal in regard to adjudication is exclusive. The RDB Act requires the Tribunal alone to decide applications for recovery of debts due to banks or financial institutions. Once the Tribunal passes an order that the debt is due, the Tribunal has to issue a certificate under Section 19(22) (formerly under Section 19(7)) to the Recovery Officer for recovery of the debt specified in the certificate. The question arises as to the meaning of the word 'recovery' in Section 17 of the Act. It appears to us that basically the Tribunal is to adjudicate the liability of the defendant and then it has to issue a certificate under Section 19(22). Under Section 18, the jurisdiction of any other court or authority which would otherwise have had jurisdiction but for the provisions of the Act, is ousted and the power to adjudicate upon the liability is exclusively vested in the Tribunal. (This exclusion does not however apply to the jurisdiction of the Supreme Court or of a High Court exercising power under Article 226 or 227 of the Constitution). This is the effect of sections 17 and 18 of the Act.
We hold that the provisions of sections 17 and 18 of the RDB Act are exclusive so far as the question of adjudication of the liability of the defendant to the appellant-bank is concerned.
(ii) Execution of certificate by Recovery Officer : is his jurisdiction exclusive ?
Even in regard to 'execution' the jurisdiction of the Recovery Officer is exclusive. Now a procedure has been laid down in the Act for recovery of the debt as per the certificate issued by the Tribunal and this procedure is contained in Chapter V of the Act and is covered by sections 25 to 30. It is not the intendment of the Act that while the basic liability of the defendant is to be decided by the Tribunal under Section 17, the banks/financial institutions should go to the civil court or the company court or some other authority outside the Act for the actual realisation of the amount. The certificate granted under Section 19(22) has, in our opinion, to be executed only by the Recovery Officer. No dual jurisdictions at different stages are contemplated."
18. This position has been conclusively pronounced in paragraph 25, which reads as under (page 78) :
"Thus, the adjudication of liability and the recovery of the amount by execution of the certificate are respectively within the exclusive jurisdiction of the Tribunal and the Recovery Officer and no other court or authority much less the civil court or the company court can go into the said questions relating to the liability and the recovery except as provided in the Act. Point No. 1 is decided accordingly."
19. In the controversy before the Supreme Court it has not spared even a little jurisdiction to the company court under the Companies Act, 1956, to determine the priorities of the debts in distribution of sale proceeds. I can do no better than to reproduce para. 50 of the judgment (page 88) :
"For the aforesaid reasons, we hold that at the stage of adjudication under Section 17 and execution of the certificate under Section 25, etc., the provisions of the RDB Act, 1993, confer exclusive jurisdiction in the Tribunal and the Recovery Officer in respect of debts payable to banks and financial institutions and there can be no interference by the company court under Section 442 read with Section 537 or under Section 446 of the Companies Act, 1956. In respect of the monies realised under the RDB Act, the question of priorities among the banks and financial institutions and other creditors can be decided only by the Tribunal under the RDB Act and in accordance with Section 19(19) read with Section 529A of the Companies Act and in no other manner. The provisions of the RDB Act, 1993, are to the above extent inconsistent with the provisions of the Companies Act, 1956, and the latter Act has to yield to the provisions of the former. This position holds good during the pendency of the winding up petition against the debtor-company and also after a winding up order is passed. No leave of the company court is necessary for initiating or continuing the proceedings under the RDB Act, 1993. Points Nos. 2 and 3 are decided accordingly in favour of the appellant and against the respondents."
20. In no uncertain terms the Supreme Court says that the DRT alone will decide the priorities among the banks and financial institutions and other creditors. We can compare the position of the Court Receiver, High Court, Bombay, with that of the company court under the Companies Act, 1956. Applying the logic and the criteria of expediency the company court could have been allowed to distribute the sale proceeds after deciding the priorities as is done by my learned brother in respect of the Court Receiver. But the Supreme Court has made it crystal clear that it was the DRT alone which can decide the priorities in distribution of the sale proceeds and the Companies Act has to yield to the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. They have left no manner of doubt that after the appointed day except the DRT no one else has power, authority or jurisdiction to touch the matters covered by the Act of 1993. The Supreme Court is absolutely clear on this aspect and there is no scope for any deviation or interpretation or distinction. They have laid down the law very dearly that after the appointed date the DRT has exclusive jurisdiction for adjudication of the debts and execution of decrees in the matters covered by the Act (emphasis is given by me). My learned brother hasalso come to the said conclusion but has allowed this High Court to retain its jurisdiction which it does not have to give directions to the Court Receiver. He has contemplated a dual system, the DRT should adjudicate and execute and this court should issue directions to the Court Receiver for management and protection of the custodia legis properties in furtherance to the orders passed by the DRT. The Supreme Court has not accepted and approved this dual system even in the case of decision of priorities and distribution of the sale proceeds. Had the Supreme Court approved the dual system it would have very conveniently and easily allowed the company court to decide the priorities, instead, it was held that the DRT alone had exclusive jurisdiction to decide even the priorities of the debts. The Supreme Court has very clearly discarded the theory of dual jurisdiction in paragraph 23 which reads as under (page 77) : "No dual jurisdictions at different stages are contemplated."
21. Following the Supreme Court's judgment I am not at all able to agree with the opinion of the learned single judge that this court aione can issue orders and directions to the Court Receiver appointed prior to the cut-off date even though all such matters have stood transferred to the DRT. I am also not able to agree with the conclusion of the learned judge that the Court Receiver cannot take any orders from the DRT directing the Court Receiver to continue to so function in the pending matters which have been transferred to the DRT. According to me, it does not amount to lending services to any other court such as the Small Causes Court, etc. Since we are more worried about the protection of the properties worth more than Rs. 2,000 crores instead of holding the jurisdiction judicially which is categorically barred by law, we can certainly direct the Court Receiver to take orders from the DRT till the Government make a provision and set up its own infrastructure and machinery. According to me, the Court Receiver does not stand any higher than the DRT so that he or she cannot receive any orders from the Tribunal. In our anxiety to protect the assets worth more than Rs. 2,000 crores it would only be appropriate for this court to show magnanimity to allow the Court Receiver to function so in the pending matters which are transferred from this court to the DRT to take all such appropriate orders from the DRT in respect of such matters. I, therefore, direct the Court Receiver to receive and act upon the orders passed by the DRT or the Appellate Tribunal in the matters where this court had appointed the Court Receiver and which were transferred to the DRT. It is clarified that the DRT shall not appoint the Court Receiver, High Court, Bombay, in any other matters, new or pending. In all such matters where the Court Receiver, High Court, Bombay was not appointed and if need be the DRT will make its own arrangement and; shall not issue any such directions in such matters.
22. The sequitur of the judgment of my learned brother has already been reflected in the. above chamber summonses, wherein the plaintiffs have prayed for a direction to the Court Receiver pursuant to the orders passed by the DRT. The DRT has directed the plaintiffs to take appropriate orders from this court after it had passed certain orders. This was so because the DRT could not directly issue orders to the Court Receiver, High Court, Bombay. Had it not been so the multiplicity of these proceedings would have been certainly avoided. After obtaining the orders from the DRT the plaintiffs have approached this court for a direction to the Court Receiver to act in accordance with the directions of the DRT, which I have already done while deciding the above chamber summonses. In the peculiar facts and circumstances and in view of the extreme urgency in the matter I have respectfully followed the judgment of my learned brother to that extent though I have expressed my difference in this final operation of the judgment.
23. I may mention here that the said judgment of my learned brother was approved by a Division Bench of our High Court in Execution Application No. 20 of 1991 in Suit No. 3066 of 1985. This judgment has not been reported so far as it was delivered only on September 15, 2000. The learned judges were called upon to answer a reference to resolve a conflict of opinion between different learned single judges of this court on the issue as to whether the execution proceedings pending before this court are required to be transferred to the DRT under the Act. The learned judges have answered the reference affirmatively. Secondly, however, there is no, and there could not be any, discussion or observation in respect of the view taken by the learned single judge (S. H. Kapadia, J.) that this court has jurisdiction to issue directions and orders to the Court Receiver even after the cut-off date. Had it been so, my job would have been made much easier.
24. Shri Gorwadkar, learned counsel for the defendants, has relied on the following judgments in support of his contention that this court has no jurisdiction to issue any orders to the Court Receiver. Though I have already decided in his favour I am merely referring to the said judgments which he has taken pains to cite before me :
(1) Budhia Swain v. Gopinath Deb [. Learned counsel has given emphasis on the aspect of lack of jurisdiction to pass any orders after the cut-off date.
(2) Allahabad Bank v. Radha Krishna Maity .
This judgment was under the same Act and the Supreme Court has held that the Tribunal can exercise powers contained in the Civil Procedure Code and caii even go beyond the Code as long as it passes orders conforming with the principles of natural justice. Section 22(1) of the Act has been given wide interpretation.
(3) Bank of Maharashtra v. Konkan Chemicals Pvt. Ltd. [2000] 100 Comp Cas 307 (Bom) ; [2000] 2 MHLJ 435.
(4) Dominion of India (Now the Union of India) v. Shrinbai A. Irani, .
Learned counsel has given emphasis on the following observations of the Supreme Court (headnote of ) :
"Courts are not concerned with the equities of individual cases. There may be cases in which the Ordinance worked to the prejudice of the owner of the requisitioned land. In such cases the necessary relief could be granted by the appropriate Government by releasing the immovable property from requisition. But the courts would be helpless in the matter. Once the conclusion was reached that a particular measure was lawfully enacted by a legislative authority covering the particular case in question the hands of the court would be tied and the legislative measure would have to be given its legitimate effect, unless mala fides or abuse of power were alleged."
I may observe here that it was the entire responsibility of the Legislature to have provided for complete infrastructure for allowing the functions of the Court Receiver and protecting the properties worth more than Rs. 2,000 crores. It was also the responsibility of the State to have visualised and contemplated its very obvious and apparent problem to be faced in all such matters. Lack of vision is the only reason for such unpardonable lacunae. The executive could have very well filled in these gaps. It is not only a simple crease which could be ironed out by us. Our attempt to iron out such a crease would clearly amount to encroachment upon the legislative function of Parliament.
(5) United Bank of India v. Debts Recovery Tribunal .
I do not think that this judgment directly helps learned counsel on the point before me though however, the Supreme Court has observed that it is the exclusive jurisdiction of the DRT and not the jurisdiction of the civil court.
(6) Industrial Credit and Investment Corporation of India Ltd. v. Grapco Industries Ltd. .
25. Even this judgment has no bearing on the question before me. It mainly concerns the power of the DRT to grant ex parte orders.
26. In the aforesaid circumstances I have expressed my disagreement with the view expressed by my learned brother to the extent that the Court Receiver High Court, Bombay, cannot take orders or directions from the DRT in the matters which have been transferred to the DRT under Section 31 of the Act and that this court continues to have jurisdiction to issue all such orders or directions to the Court Receiver in the matters which are transferred and pending before the DRT. I hold that this court has no jurisdiction and power to pass any orders in the matters which are transferred and which are pending" before the DRT and it is the exclusive jurisdiction of the DRT to adjudicate and to execute its orders. This court cannot be approached in all such matters to issue directions to the Court Receiver pursuant to the decision of the DRT. The Court Receiver can nominate her functionary if required, to attend all such matters which have been transferred to the DRT until such period as the DRT has its own machinery and infrastructure.
27. It will be useful to remember the following observations of the Supreme Court in the case of Consumer Action Group v. State of Tamil Nadu, , in the context of removal of hardship caused to the parties as well as the DRT for want of infrastructure. In para. 18 of the judgment it is said (page 3068) :
"All situation cannot be culled out which has to be judiciously judged and exercised, to meet any such great hardship of any individual or institution or conversely in the interest of society at large."
28. It is indeed legislative and executive failure to visualise the dire necessity to have provided for the infrastructure to man the vast property which is under custodia legis of the High Courts and the civil courts during the pendency of the suits and the proceedings. They have stood transferred to the DRT along with the interim orders including those of appointment of Court Receiver for the suit property. If it were not to be the Court Receiver, High Court, Bombay, such other Court Receiver would have continued as a matter of course until discharged or replaced by the DRT. The High Court has been divested of its jurisdiction to deal with all those matters but the orders passed by the High Court are not disturbed and the transfer of the matters is along with the orders and not without the orders. The situation which has arisen due to lack of far sight and foresight has been causing hardship to the litigants as also to the institution of the newly born DRT. In the interest of society at large we have to remove the unusual hardship caused to all by adopting a pragmatic approach without usurping the jurisdiction which has been statutorily denied to us. The only way which I can think of is to direct the Court Receiver, High Court, Bombay, to take orders in all the transferred matters from the DRT and the Appellate Tribunal under the Act until they have their own machinery to take over the charge from the Court Receiver, High Court or any other person appointed to act as Court Receiver by the other civil courts. The forums under the Act can always provide for judicially, cost, commission and expenses of the Court Receivers to be borne by the litigants.
29. The new legislation has not envisaged division of jurisdiction which is spelt out in the judgment of the learned single judge. The Legislature has created new forums to decentralise the judicial work, concentrated in the civil courts of law. It is a welcome change and successful experiment for early disposal of cases. Law has to lead the social changes and not to give in to any adverse experiences. If the Legislature has provided for quick recovery of debts of crores of rupees through an alternative statutory forum, the courts having failed to expedite such recovery to help the national economy, we must whole heartedly facilitate such change or switch-over to the new forums. Nothing will be lost if we lend the services of our Court Receiver for the time being indicating a definite time-limit to enable the Government to establish its own machinery to cope up with the new legislative goals under the new enactment, instead of treating the Tribunals as mere distant neighbours not to be assisted during their period of teething trouble. Nor is there any legal bar brought to my notice. In fact their creation is to ease out our ever mounting burden which we are unable to reduce in spite of our best efforts. This very suit has been finally decided by the DRT expeditiously. Indeed, we should not hesitate even for a moment to tell our Court Receiver to help our new neighbours. Let this unique office of ours continue its hitherto wonderful job for some time more and safeguard and protect the national assets which are custodia legis, worth more than Rs. 2,000 crores. Let him/her help the Tribunals to set up the new machinery on par with ours to effectuate the legislative object. Instead of clinging to the jurisdiction which we have been denied to insist to give directions to the Court Receiver in the matters which are already transferred to the DRT, I hereby direct the Court Receiver to take directions from the forums under the Act for a period of one year here-from by which time the Central Government would establish its own machinery to take over the charge of all the assets and properties which are custodia legis under the Court Receiver, High Court, Bombay. The concerned parties shall approach the DRT/Appellate Tribunal in all the pending transferred matters for appropriate orders, if any. Law must be helped to function pragmatically. The edifice of law must be built on logic and experience, both. Law devoid of logic would be lifeless, let us never forget. I have decided the above chamber summonses on their merits on the basis of the judgment of Kapadia J. (supra) as under :
(a) Chamber Summons No. 1047 of 2000 :
Chamber summons is made absolute in terms of prayer clauses (a) and (b) with no order as to costs.
(b) Chamber Summons No. 1221 of 2000 : Chamber summons stands dismissed with no order as to costs.
(c) Chamber Summons No. 1202 of 2000 :
Chamber summons is made absolute in terms of prayer clauses (a), (b) and (c).
30. However, as far as the issue of jurisdiction of this court after the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, is concerned I am of the considered opinion that since this court has ceased to have jurisdiction to entertain and try the above suits, the chamber summonses also cannot be entertained and tried by this court. The Court Receiver is hereby directed to take all the orders in the above suits from the forums under the Recovery of Debts Due to Banks and Financial Institutions Act.
31. Since I have respectfully disagreed with the view expressed by my learned brother Kapadia, J. in paras. 10 and 11 of the judgment, I request the learned Chief Justice to refer this issue to a larger Bench.
32. The prothonotary and senior master is hereby directed to place the above proceedings before the Hon'ble Chief Justice immediately for appropriate orders in view of expediency of the issue which arises frequently.
33. All concerned to act on an ordinary copy of this order duly authenticated by the Chamber Registrar.