Andhra HC (Pre-Telangana)
G. Siva Prasada Reddy & Company, And ... vs Presiding Officer, Debts-Recovery ... on 3 December, 1998
Equivalent citations: 1999(1)ALD723, 1999(2)ALT116, [1999]97COMPCAS803(AP)
Author: J. Chelameswar
Bench: J. Chelameswar
ORDER Motilal B. Naik, J.
1. Petitioners seek a writ of Certiorari or any other writ or Order calling for the records relating to Recovery Certificate of Debt Recovery Tribunal, Bangalore - first respondent in OA No. 1033 of 1995 and the consequential demand notice issued by the second respondent on 9-11-1998, and to quash the same as contrary to law and to pass appropriate orders as this Court deems fit and proper.
2. Petitioner No.1 is a partnership firm and the second petitioner is its Managing Partner. Respondents 4 to 8 herein are the partners of the first petitioner-Company which is engaged in doing civil contract works for the stales of Andhra Pradesh and Maharashtra. During the course of business, the first petitioner approached the third respondent-Bank for financial assistance. The third respondent-Bank sanctioned two facilities in the month of August, 1998, viz., (1) Rs.15 lakhs towards Cash Credit facility on hypothecation of stocks; and (2) Bank Guarantee upto a limit of Rs.35 lakhs. The Cash Credit account was operated by the first petitioner upto February, 1991. Thereafter, the account was not permitted to be operated by the third respondent-Bank on the ground that over-dues accumulated in the Cash Credit Account. The respondent No.3- UCO Bank paid a sum of Rs.8.45,000/- on 12-8-1988 towards Bank Guarantee facility. However, the said Bank guarantee was not utilised fully by the petitioners. Petitioners also paid some amounts to the Bank from time to time and the respondent No.3-Bank had also appropriated the interest oil FDRs kept by the petitioners with the Bank. Since February, 1991, there was no operation of Cash Credit Account by the Petitioners.
3. While so, the third respondent-Bank has filed OA No.1033 of 1995 against the petitioners 1 and 2 and respondents 4 to 8 herein for recovery of Rs. 19,31,313/- before the first respondent herein. Petitioners and respondents 4 to 8 herein have filed their reply, inter alia, contending that the third respondent-Bank had calculated interest at 22.25 per cent per annum over and above the contractual rate of interest fixed at 16.5%. It was further contended that an amount of Rs.27,77,085/- was paid to the Bank in CC account. It was also contended that an amount of Rs.4,46,860,11 ps. paid by the petitioners was not credited to the said account.
4. In the said OA No.1033 of 1995, the third respondent-Bank adduced evidence. The first respondent-Tribunal, on the basis of the evidence, decreed OA No. 1033 of 1995 on 21-8-1998.
5. Sri S. Surya Prakasa Rao, learned Counsel for the petitioners contended that the first respondent-Tribunal has erroneously decreed the OA No.1033 of 1995 without giving credit to the amounts already paid by the petitioners. It is further contended by the learned Counsel that the first respondent-Tribunal has not taken into account the objections raised by the petitioners and has erroneously observed that the petitioners had not proved the payment of amounts made by them to the Bank. Counsel for the petitioners contended that the first respondent-Tribunal directed the Bank to file a memo giving calculations of principal amount and interest and to inform the parties concerned. However, Counsel alleged that no such calculation memo was filed by the Bank and no opportunity was given to these petitioners to question the calculation memo.
6. Counsel nextly contended that the judgment and decree passed by the first respondent-Tribunal in OA No.1033 of 1995 were not sent to the petitioners as required under Section 19(5) of Recovery of Debts Due to Banks and Financial Institutions Act and Rules made thereunder. Learned Counsel further contended that certain procedural irregularities were committed by both the first and second respondents and surprisingly a demand notice dated 9-11-1998 issued by the second respondent was received by the petitioners which is also in a mechanical format. Counsel also submitted that the petitioners did not complain to the Appellate authority because the appellate authority also is bound by the Act and Rules and cannot ask the first respondent-Tribunal to vary the amount in Certificate or Demand Notice. Counsel therefore, submits that the petitioners have approached this Court under Article 226 of the Constitution of India seeking a direction as indicated above.
7. Heard Sri K.G. Sastry, learned Counsel for the third respondent-UCO Bank also in this regard.
8. For adjudication of disputes relating to recovery of amounts of more than Rs.10,00,000/- by Banks and Financial Institutions, a Debt Recovery Tribunal for Andhra Pradesh and Karnataka States has been constituted at Bangalore under "Recovery of Debts Due to Banks & Financial Institutions Act, 1993". It is admitted that the first petitioner-Company had been sanctioned two facilities in August, 1988 by the third respondent-Bank, viz., (1) Rs.15 lakhs towards Cash Credit facility on hypothecation of stocks; and (2) Bank guarantee upto a limit of Rs.35 lakhs.
However, as the first petitioner-Company failed to repay the said amounts, the third respondent-Bank had instituted OA No. 1033 of 1995 on the file of the first respondent-Tribunal against the petitioners and respondents 4 to 8. It is also not disputed that the said OA No.1033 of 1995 was decreed on 21-8-1998 against the petitioners and respondents 4 to 8.
9. As against the decrees passed by the first respondent-Debt Recovery Tribunal, Bangalore, the "Recovery of Debts Due to Banks and Financial Institutions Act, 1993" envisages filing of appeals before the Debt Recovery Appellate Authority at Mumbai. Strangely, when there is a statutory appellate forum constituted for deciding the appeals arising out of the decrees and judgments passed by the Debt Recovery Tribunal-first respondent, petitioners without taking recourse to filing an appeal against the decree and judgment passed in OA No. 1033 of 1995, have approached this Court under Article 226 of the Constitution of India. The explanation offered by the petitioners for not approaching the Statutory Appellate Forum at Mumbai, is all the more baffling. At para-8 in page-6 of the affidavit filed in support of this writ petition, the second petitioner has solemnly affirmed as under:
"The petitioners also cannot complain to the Appellate Authority because the Appellate Authority also is bound by the Act and Rules and cannot ask the Tribunal to vary amount in Certificate or Demand Notice."
The above averment would go to show that the petitioners are not inclined to move the statutory appellate Forum at Mumbai against the decree passed by the first respondent in OANo.1033 of 1995 dated 21-8-1998.
10. Though learned Counsel for the petitioners tried to contend that the first respondent-Tribunal while passing the impugned order, failed to take into account the amounts already paid by the petitioners to the credit of the CC account and the first and second respondents have committed certain procedural irregularities in passing the impugned order and demand notice, we are not inclined to accept the submissions, as we cannot decide disputed facts in the writ petition. We arc of the considered view, when there is a statutory appellate forum constituted for dealing with the appeals arising out of the decrees passed by the first respondent-Tribunal, it is not open for the petitioners to approach this Court under Article 226 of the Constitution of India, without taking recourse to filing a statute appeal against the decree passed by the first respondent-TribunaF. When there is an alternative and equally efficacious statutory remedy, it is not open for the petitioners to approach this Court invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.
11. It is not the case of the petitioners that there is no statutory appeal provided but they contend that the Appellate authority is also bound by the Act and Rules and cannot ask the first respondent-Tribunal to vary the amount in the Demand Notice dated 9-11-1998. We are not inclined to accept this contention of the petitioners for more reasons than one. Where statutory remedies are available or a Statutory Tribunal has been set up, a petition under Article 226 of the Constitution of India should not be entertained, unless the statutory remedies are ill-suited or where the alternative remedy is not effective or burdensome. In this case, petitioners have not contended that the filing of a statutory appeal is onerous or it involves inordinate delay or is illusory in nature, or the impugned order is palpably erroneous. Petitioners only contend that the appellate authority is bound by the Act and Rules and cannot ask the first respondent-Tribunal to vary the amount in the Demand Notice dated 9-11-1998. This contention of the petitioners is incongruous inasmuch as the Statutory Appellate Tribunal cannot deviate from the Rules framed under the Act and grant the relief to the petitioners. This tendency of the petitioners is reprehensible and we disapprove the same. When the statute provides an appellate forum, it is incumbent upon the petitioners to move the said appellate forum by filing an appeal against the decree of the first respondent-Tribunal. Having not done so, the petitioners are not entitled to move this Court invoking the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India.
12. Having regard to the facts and circumstances of the case, we are not inclined to grant the relief as prayed for, to the petitioners.
13. In the result, this writ petition is devoid of merits and the same is accordingly dismissed. However, no costs.