Sikkim High Court
P.K. Saraswat, T.P. Sharma, Ravi ... vs Union Of India (Uoi) And Ors. on 4 September, 1998
Equivalent citations: AIR 1999 SIKKIM 16, (1999) 3 BANKLJ 38
Author: Anup Deb
Bench: Anup Deb
JUDGMENT
Anup Deb Actg. C.J.
1. All these four cases can be disposed of by a common judgment.
2. In Writ Petition No. 142 of 1998, the petitioner P. K. Saraswat has, inter alia, made the following prayers :
(a) for quashing the order dated May 15,1998, passed by the learned District Judge (East and North) at Gangtok in Civil Suit No. 15 of 1997 whereby the District Judge ordered that the suit stood transferred to the Debt Recovery Tribunal at Guwahati (in short the "Recovery Tribunal, Guwahati") at "Tapoban" H. C. B. Road, Uzan Bazar, Zorpukhuripar, Guwahati-781 001 under the provisions of Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (in short "the said Recovery Act").
(b) declaration that the District Judge (East and North) at Gangtok had no power or authority to transfer this civil suit and the order dated May 15, 1998, passed in the Civil Suit No. 15 of 1997 is without jurisdiction.
(c) that the extension of the said Recovery Act is ultra vires, illegal, bad in law and against the provisions of the Constitution.
(d) writ direction in the nature of certiorari or mandamus that the Union of India through Secretary, Finance Department, respondent No. 1 or each of the respondent not to act under the said Recovery Act and the declaration that the said Recovery Act cannot be implemented and extended in the State of Sikkim because of its peculiar nature and protection guaranteed by the Constitution of India.
3. In Writ Petition No. 208 of 1998, the petitioner Shri T. P. Sharma has, inter alia, made prayers for quashing the order dated April 27, 1998, of the District Judge (East and North) at Gangtok in Civil Suit No. 41 of 1994 and other prayers made in Writ Petition No. 142 of 1998 and in this writ petition are more or less similar.
4. In Writ Petition No. 424 of 1998, the petitioners Ravi Pradhan and Karma P. Thakapa have, inter alia, made the following prayers :
(a) for quashing the notification dated December 5, 1997, being annexure P-1 to the writ petition whereby the Central Government notified change in the area of jurisdiction of the Recovery Tribunal, Guwahati with effect from December 5, 1997, from the area of jurisdiction mentioned in column 3 to the area of jurisdiction mentioned in column 4 of the table incorporated in the notification in pursuance whereof the Debts Recovery Tribunal, Guwahati, may exercise jurisdiction over Sikkim and entertain and decide the applications coming under the purview of the said Recovery Act. A copy of the notification dated December 5, 1997, is extracted below :
"F. No. 1(8)/97-DRT GOVERNMENT OP INDIA DEPARTMENT OF ECONOMIC AFFAIRS (Banking Division) New Delhi, dated 5th December, 1997 NOTIFICATION G. S. R. (E).--In exercise of the powers conferred by Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), the Central Government hereby notifies change in the area of jurisdiction of the Debt Recovery Tribunal, Guwahati, with effect from December 5, 1997 (AN) from the area of jurisdiction mentioned in column 3 to the area of jurisdiction mentioned in column 4 in the Table below :
TABLE SL.
No. Place at which Tribunal is established Area of jurisdiction presently covered Area of jurisdiction which will be covered
1. "Tapoban" H. C. B. Road, Uzan Bazar, Zorpukhuri-par, Ward No.24, Holding No.76A, Guwahati-781001 States of Assam, Megha-laya, Manipur, Mizo-ram, Tripura, Aruna-chal Pradesh, Nagaland States of Assam, Meghalaya, Manipur, Mizoram, Tripura, Arunachal Pradesh, Nagaland and Sikkim.
(Sd.) (DRS Chaudhary) Joint Secretary to the Government of India."
(b) for issuance of declaration that the District Judge (South and West), Gangtok, has no power and authority to transfer Civil Suit No. 11 of 1998 to the Recovery Tribunal, Guwahati. Originally, the said civil suit was filed before the District Judge (East and North) being Civil Suit No. 4 of 1994 and the same has been numbered as Civil Suit No. 11 of 1998 in the court of the District judge (South and West) on transfer under the orders of this court.
(c) other prayers made in Writ Petition No. 142 of 1998, 208 of 1998 and in this writ petition are more or less similar.
5. In Writ Petition No. 452 of 1998, the petitioners Denzong Rubber Industries Private Limited and D. D. Mundra have, inter alia, challenged the order dated May 6, 1998, passed in Civil Suit No. 20 of 1995 by the District Judge (East and North) at Gangtok whereby the District Judge (East and North) ordered that the aforesaid suit stood transferred to the Recovery Tribunal, Guwahati, under the provisions of Section 31 of the said Recovery Act.
6. The grounds taken in Writ Petition No. 142 of 1998, Writ Petition No. 208 of 1998 and Writ Petition No. 452 of 1998 and prayers made are more or less similar. In Writ Petition No. 142 of 1998, the branch manager, State Bank of India, Gangtok branch, respondent No. 4 filed a civil suit being Civil Suit No. 15 of 1997 before the learned District Judge (East and North) for recovery of Rs. 15,50,991.61 p. from the petitioner and others and, vide order dated May 15, 1998, the learned District fudge (East and North) passed an order to the effect that the said suit stood transferred to the Recovery Tribunal, Guwahati, under the provisions of Section 31 of the said Recovery Act. In Writ Petition No. 208 of 1998, the State Bank of India, Gangtok branch, respondent No. 4, filed a civil suit being Civil Suit No. 41 of 1994 before the learned District Judge, East and North for recovery of Rs. 1,14,74,678.40 p. and, vide order dated April 27, 1998, the District Judge (East and North) passed an order that the suit stood transferred under the provisions of Section 31 of the said Recovery Act to the Recovery Tribunal, Guwahati.
7. In Writ Petition No. 452 of 1998, respondent No. 4, State Bank of India, Gangtok branch filed a civil suit being Civil Suit No. 20 of 1995 against the petitioner for recovery of Rs. 36,55,532.48 p. and other reliefs and, vide order dated May 6, 1998, the learned District Judge, East and North passed an order to the effect that the suit stood transferred under the provisions of Section 31 of the Recovery Act to the Recovery Tribunal at Guwahati. The grounds taken in Writ Petitions Nos. 142 of 1998, 208 of 1998 and 424 of 1998 are as follows :
(a) orders of the learned District Judge, East and North by which the civil suits stood transferred to the Recovery Tribunal, Guwahati, are bad in law as well as on the facts. Section 31 of the said Recovery Act does not empower the District Judge and the District Judge has no jurisdiction to transfer a suit from one State to another State. The District Judge not being superior to the Tribunal established under Sub-section (1) of Section 3 of the said Recovery Act, he cannot transfer the cases to the Tribunal.
(b) that the State of Sikkim has its own Companies Act, viz., Registration of Companies Act, 1961, and the State Bank of India being a public financial institution within the meaning of Section 4A of the Companies Act, 1956, as defined in Section 2(h) of the said Recovery Act and the Companies Act, 1956, not having been extended and enforced in Sikkim ; the State Bank of India is not entitled to file civil suit in Sikkim.
(c) the enforcement of the said Recovery Act is illegal and ultra vires as justice is not available at the door steps in Sikkim and the petitioner has to go all the way to Guwahati to attend the cases taking his life at risk as Assam is itself a disturbed area.
(d) shifting of jurisdiction from Sikkim to Guwahati is arbitrary. The action of the Central Government in bringing Sikkim within the jurisdiction of the Recovery Tribunal, Guwahati, is ultra vires and the same is vio-lative of Article 39A of the Constitution of India.
(e) the said Recovery Act being inconsistent in many respects with the provisions of the Sikkim Debt Law, 1910, and other laws relating to recovery of money protected under Article 371F(k), the Act encroaches a wide and unfettered ambit of Article 371F(k) guaranteed by the Constitution of India.
(f) that the petitioner could not raise the point of non-joinder of necessary party because of the fact that the order was passed by the learned District Judge that the case stood transferred to the Recovery Tribunal, Guwahati, on the very first day when the petitioner put in appearance.
(g) action of the Central Government in taking away the jurisdiction of the Gangtok court to the Recovery Tribunal at Guwahati, is violative of the rights guaranteed under articles 14 and 16 of the Constitution of India inasmuch as the litigants residing at Sikkim will have to travel through all difficult areas and the action of the respondents taking away the jurisdiction from Sikkim to Guwahati is directly depriving petitioner from participating in the proceedings.
8. In Writ Petition No. 424 of 1998, the petitioner has sought for quashing of the notification being F.No. l(8)/97-DRT, dated December 5, 1997, issued in exercise of the powers conferred by Section 3 of the said Recovery Act, whereby the Debt Recovery Tribunal, Guwahati, shall also cover the jurisdiction of Sikkim so far as cases under the said Recovery Act. It is submitted by Mr. B. Sharma appearing for the petitioners that in view of the decision in Sampath Kumar (S.P.) v. Union of India, AIR 1987 SC 386, a circuit bench of the said Recovery Tribunal has to be constituted in the State of Sikkim. Other grounds taken in the writ petitions are more or less similar to the grounds taken in Writ Petitions Nos. 142 of 1998, 208 of 1998 and 452 of 1998.
9. Mr. Moulik, appearing for the State Bank of India, respondent No. 4 relied upon the decision in Dr. Subramaniam Swamy v. Ramahrishna Hegde, AIR 1990 SC 113 and argued that the cardinal principle for the exercise of the powers under Section 24 or 25 of the Code of Civil Procedure is that the ends of justice demand the transfer of the suit, appeal or other proceeding. The question of expediency would depend on the facts and circumstances of each case but the paramount consideration for the exercise of the power must be to meet the ends of justice. But the paramount consideration must be to see that justice according to law is done ; if for achieving that objective the transfer of the case is imperative, there should be no hesitation to transfer the case even if it is likely to cause some inconvenience to the petitioner.
10. Section 31 of the said Recovery Act is very clear. Every suit or other proceeding pending before establishment of a Tribunal or if it had arisen after such establishment, within the jurisdiction of such Tribunal shall stand transferred on that date to such Tribunal. Section 31 of the said Act reads as follows-see [1993] 78 Comp Cas (St.) 120 at page 133 :
"31. Transfer of pending cases.--(1) Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding, the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal :
Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court.
(2) Where any suit or other proceeding stands transferred from any court to a Tribunal under Sub-section (1).
(a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceedings to the Tribunal ; and
(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceedings, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage or de novo as the Tribunal may deem fit."
11. The said Recovery Act is a special Act and the said Act has been enacted to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto. Specific provision for transfer of pending cases has been made in Section 31 of the said Recovery Act and, therefore, the provisions of the Code of Civil Procedure for transfer of suit as provided in Section 24 of the Code of Civil Procedure will not apply. It is not a case that the District Judge has transferred the case before the said Tribunal. All pending suits or proceedings filed by the banks and financial institutions for recovery of debts of rupees ten lakhs or more before any court in Sikkim shall stand transferred to a Tribunal for expeditious adjudication and by virtue of the notification dated December 5, 1997, cases pending in any court in Sikkim shall stand transferred under Section 31 of the Recovery Act by operation of Section 31 of the said Act. It is not the District Judge who has transferred the suit but the suit shall stand transferred by operation of law made by Parliament.
12. Mr. Sharma argued that the State of Sikkim has its own Companies Act and the State Bank of India being governed by the Companies Act, 1956, is not entitled to file civil suit against the petitioner and others in view of Clause (h) of Section 2 of the said Recovery Act where financial institution is defined as follows--see [1993] 78 Comp Cas (St.) 120 at page 122 :
'2. (h) "financial institution" means--
(i) a public financial institution within the meaning of Section 4A of the Companies Act, 1956 (1 of 1956) ;
(ii) such other institution as the Central Government may, having regard to its business activity and area of its operation in India, by notification, specify."
13. While giving a meaning to the words public financial institution, reference has been made to Section 4A of the Companies Act, 1956, and, therefore, there is no conflict with the Sikkim Registration of Companies Act, 1961. Though it is doubtful as to whether the Sikkim Registration of Companies Act, 1961, can be said to be a law on companies in the strict sense of term, this point will be resolved in an appropriate case. It is well-settled that the court should not decide as to the legality, validity or the vires of any law and strike it down unless it is absolutely necessary for the disposal of the case before it and the case cannot be disposed of without deciding that question. The power of the courts to strike down any illegal or invalid or ultra vires law is not disputed ; but what is disputed is the propriety of doing so without compelling necessity. It may be good to have a giant's power, but it would not always be good to use it as a giant and it can be taken to be the settled law that the court should not strike down a law merely for the pleasure of legal research.
14. So far as the conflict of Sikkim Debt Law and other laws within the said Recovery Act, the Division Bench of this court in the case of Bhanu Bhahta Lamichaney v. Tek Chand Agarwal, AIR 1985 Sikkim 1 observed that the Sikkim Darbar Gazette started being published from 1949-50 only and, therefore, there could be no occasion for publication of Sikkim Debts Laws, 1910, therein. Not that, no publication, no law. but that publicity is and should be the hallmark of all legislative process. The Sikkim Debt Law. 1910, has now been published in the Sikkim Code and this observation is no longer available.
15. Sub-section (2) of Section 1 of the said Recovery Act shows that it extends to the whole of India except the State of Jammu and Kashmir and, therefore, it has its application in the State of Sikkim. With the extension and enforcement of any Central Act, all corresponding Sikkim laws shall stand impliedly repealed. The said Recovery Act is a Central Act. With the extension and enforcement of any Central Act corresponding law would be deemed to have been over borne, over thrown and impliedly repealed by the extension and enforcement of the said Recovery Act and such Act is to be validly enforced without express repealment of corresponding' Sikkim law. Therefore, the Sikkim Debt Law and any other law on recovery of debts stand automatically repealed with the extension of the said Recovery Act, if such laws are corresponding to the Recovery Act.
16. The petitioners have rightly pointed out that it will cause undue hardship to the petitioners to appear before the said Recovery Tribunal, Guwahati, for various reasons as indicated in the petition. Dislocation of roads between Gangtok and Siliguri, between June and September every year is a regular affair. There were unfortunate incidents such as blasting of bombs on the railway line and other law and order problems in Assam are likely to prevent the people of Sikkim from going there. The weather of Guwahati also will not suit for the people of hilly Sikkim having cold weather throughout the year. I would, therefore, direct the Secretary, Ministry of Finance, Banking' Division, Government of India, to set up a Circuit Bench of the Tribunal at Gangtok, capital of Sikkim, as expeditiously as possible.
17. All these four cases are old cases and will have to be disposed of by the Recovery Tribunal, Guwahati. It shall be open to the petitioner to raise the points canvassed in the writ petitions before the said Tribunal and if canvassed the Tribunal shall dispose of the points in accordance with law.
18. The District Judge (East and North) Gangtok, is directed to transmit the records of Civil Suits Nos. 15 of 1991, 41 of 1994, 20 of 1995, if not already sent, to the Debt Recovery Tribunal, Guwahati, "Tapoban", H. C. B. Road, Uzan Bazar, Zorpukhuripar, Guwahati-781 001, within a week from the date of receipt of this order.
19. The District Judge (South and West) is directed to pass orders under the provisions of Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, in Civil Suit No. 11 of 1998 within ten days from the date of receipt of the order and shall transmit the records of Civil Suit No. 11 of 1998, to the Debt Recovery Tribunal, Guwahati, immediately.
20. There is no merit in Writ Petitions Nos. 142 of 1998, 208 of 1998, 424 of 1998 and 452 of 1998 and, therefore, dismissed. There will be no order as to costs.