Andhra HC (Pre-Telangana)
Venkateswara Textiles Traders & ... vs Canara Bank And Anr. on 2 March, 1998
Equivalent citations: 1998AIHC282, 1998(2)ALT680, [1998]94COMPCAS455(AP), AIR 1998 ANDHRA PRADESH 282, (1998) 1 LS 495, (1998) 1 APLJ 452, (1998) 2 ANDH LT 680, (1999) 2 BANKLJ 259, (1999) 1 BANKCAS 285, (1998) 3 ANDHLD 209, (1998) 3 CIVLJ 832, (1998) 94 COMCAS 455, (1999) 1 BANKCLR 520
Author: V. Rajagopala Reddy
Bench: V. Rajagopala Reddy
ORDER
1. The matter arises under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short, 'the Act').
2. This Civil Revision Petition raises an interesting question - Whether the suit and the Execution Petition is liable to be transferred under the provisions of the Act of the Debt Recovery Tribunal, pending decision on the claim petitions filed by third party under Order 21 Rules 58 and 99 C.P.C. with regard to the suit mortgaged properties.
3. The facts of the case, in brief, are as under: The 1st respondent-Bank filed suit O.S.202 of 1985 against the 2nd respondent herein for the recovery of certain sum and obtained a final decree on 7.3.1990. The 1st respondent filed E.P.7 of 1990 for execution of the said decree by way of sale of the properties and for recovery of Rs.20,34,089.10ps. The properties belong to the petitioner. The decree was obtained without his knowledge. The petitioner therefore filed E.A.15/91 and E.A.17/92 under Order 21 Rules 99 and 58 CPC, respectively and the petitions were being heard. Meanwhile the Act came into force w.e.f. 24.6.1993. The above E.P. and the E.As. were filed on 11-6-1990 ie., long prior to the commencement of the Act. This Court in a Circular dated 13-2-1995 directed all the Civil Courts not to entertain and decide suits and execution petitions where an amount of debt due to any Bank or financial institutions if Rupees Ten Lakhs and above further all such suits and execution petitions which are pending immediately before the date of establishment of Debt Recovery Tribunal shall stand transferred to the Tribunal at Bangalore. Apart from the above notification, in view of the provisions of the above Act, the suits and execution petitions filed by the Banks, wherein the debt was Rs.10 lakhs and above, also stood transferred to the Tribunal. The 1st respondent filed a memo to transfer the E.P. to the file of the Debt Recovery Tribunal at Bangalore. The 2nd respondent and the petitioner resisted the said application on the ground that the claim petitions in the E.P.7/90 were still pending before the Court and the claim petitions should be decided only by the executing Court, as if they were suits, that the Civil Court alone has jurisdiction to try the claim petitions and that the Tribunal was not competent to adjudicate upon the claim petitions. However, the Court below has rejected the objections of the petitioner and the 2nd respondent and transferred the suit and the E.P, to the Tribunal, Bangalore. Aggrieved by the same, the petitioner filed the C.R.P.
4. The only contention advanced by the learned Counsel for the petitioner is that the claim petitions shall have to be decided only in the Civil Court and in the same suit under the provisions of the Code of Civil Procedure and the Tribunal is not competent to try the same under the provisions of the Act. Hence, neither the suit nor the E.P. could be transferred to the Tribunal. The learned Counsel for the petitioner places reliance upon a decision of Delhi High Court in Cofex Exports Limited v. Canara Bank, AIR 1997 Delhi 355. The learned Counsel for the 1st respondent, however, submits that under the provisions of the Act, all the suits and execution petitions filed by a financial institution for the recovery of a sum exceeding Rs.10 lakhs, could be entertained and decided only by the Tribunal and that the pending suits or executions petitions should stand transferred to the said Tribunal. It is also submitted that in view of the notification and circular issued by the High Court to which the Civil Courts subordinate, the Civil Courts have no other option except to transfer the suits and the other proceedings to the Tribunal.
5. The only question that falls for consideration is whether the suit and the Execution Petition are liable to be transferred to the Tribunal.
6. The suit was filed by the 1st respondent-Bank and in pursuance of the mortgage decree passed by the Civil Court the 1st respondent-Bank had filed the Execution Petition for a sum admittedly exceeding Rs. 10 lakhs. It is not in dispute that a circular has been issued by this Court in its proceedings dated 13-2-1995 that the Civil Courts shall not entertain and decide suits and execution petitions where the amount of debt due to any Bank or Financial Institution is Rs.10 lakhs and above and all such suits and execution petitions, which are pending immediately before the date of establishment of Debt Recovery Tribunal shall stand transferred to the Debt Recovery Tribunal. In view of the above notification, the Court below has no option except to transfer the suit and the E.P. filed by the Bank, to the Tribunal and very rightly the Court below has transferred the suit and the E.P. to the Debt Recovery Tribunal at Bangalore. The difficulty, however, in the present suit is this. Admittedly, claim petitions were filed by the petitioner claiming title to the mortgaged properties in their favour under Order 21 Rules 58 and 99 C.P.C. It is well settled that all claim petitions shall be tried by Civil Courts as independent suits in the same suit. It is stated that in the said claim petitions evidence also has been adduced and they are part-heard. It is, therefore, contended by the learned Counsel for the petitioner that if the suit and the Execution Petitions are transferred, the petitioner's interests would be prejudiced as the Tribunal is not competent to try the claim petitions as suits and pass a decree in their favour if they succeed. The immediate question that crops up, therefore, is, whether the Debt Recovery Tribunal is competent to decide all the petitions including claim petitions filed under Order 21 C.P.C. Before we do so, it becomes necessary to examine, broadly, the purpose" for which the Tribunals have been established under the Act and the amplitude of their jurisdiction. The Act was enacted for the establishment of Tribunals for expeditious adjudication and recovery of debts due to Banks and other financial institutions and for matters connected therein or incidental thereto. The Act has application only if the amount of debt due to any Bank is more than Rs.10 lakhs. It is common knowledge that the trial of suits including the suits filed by Banks has been taking enormous time and the money due and payable to the Banks are getting blocked up with the debtors resulting in their taking advantage of the amounts in their hands to the detriment of the Banks. To avoid such situations the tribunals are established for the expeditious disposal of certain heavy suits where the debt was Rs.10 lakhs and more. The jurisdiction and powers of the Tribunals are incorporated in Section 17. It provides that, the Tribunals shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the Banks and financial institutions for recovery of debts due to such banks and financial institutions.
7. Section 18 of the Act places an embargo on the jurisdiction of other Courts to exercise any jurisdiction, powers or authority except the Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution. Thus, after the appointed day, all the suits or other applications for recovery of debts of Rs. 10 lakhs and above, shall have to be decided and tried only by the Tribunals. The Parliament has prescribed special procedure in contra distinction to the elaborate procedure laid down in the Code of Civil Procedure. Section 22 of the Act provides the procedure and powers of the Tribunal. As per the said provisions, the Tribunal is not bound by the procedure laid down by the C.P.C. It shall be guided by the principles of natural justice. It shall have powers to regulate its own procedure. Thus, the procedure is self regulatory and also summary.
8. Section 31 of the Act deals with transfer of pending cases which is crucial to consider the case on hand. It mandates that all pending suits or other proceedings before any Court, being a suit or proceeding which comes within the jurisdiction of the Tribunal shall stand transferred to the Tribunal. But on such transfer, the Tribunal shall proceed to deal with such suit or proceeding in the same manner as if an application was made under Section 19 of the Act from the stage which was reached before such transfer. Section 34 of the Act makes it clear that all the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law. Thus, the Act has overriding effect upon other Acts.
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 and 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 the claim petition filed under Order 21 need not be followed by the Tribunal. As per Section 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 my 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 suits or execution petitions. The contention in this regard is, therefore, negatived.
10. There is a challenge in the case to the vires of certain provisions of the Act. But it has to be seen that this matter arises under Section 115 CPC. In exercising the revisional jurisdiction, this Court is not competent to decide whether the provisions of the Act are valid or not, whether the Tribunal's jurisdiction to try the claim petition and the procedure that may be adopted in deciding the claim petitions is illegal or not?
11. In view of the above, I am of the view that the order passed by the Court below is perfectly valid and does not warrant interference. The C.R.P. is, therefore, dismissed. No costs.