Calcutta High Court
Hindusthan Laminators Pvt. Ltd. & ... vs Central Bank Of India on 24 April, 1998
Equivalent citations: (1998)2CALLT281(HC), [2000]100COMPCAS472(CAL), AIR 1998 CALCUTTA 300, (1999) BANKJ 833, (1998) 2 BANKCLR 335, (1998) 1 CAL WN 579, (1998) 2 CALLT 279, (1998) 4 ICC 255, (1998) 2 CAL HN 473, (2000) 6 COMLJ 81, (2000) 100 COMCAS 472
JUDGMENT
B.M. Mitra. J.
1. The common point of controversy which requires the considered scrutiny of this court and the petitioners in all the pending petitions under Article 227 of the Constitution of india have Joined in chorus in contending that the statutory forum created under section 3 of The Recovery of Debts Due to Banks and Financial institutions Act, 1993 (Act No. 51 of 1993) does not have the jurisdiction to entertain prayers for mortgage in a substantive petition under section 19 of the said Act. The Debt Recovery Tribunal as constituted under section 3 of the connected Act is conferred with jurisdiction in terms of section 19 to entertain and decide applications of the Banks and the Financial institutions. The said Tribunal is authorised to have assumed jurisdiction from the appointed day when the connected Act has come into force with regard to initiation of any proceeding for recovery of debts due to Banks and Financial institutions and the said proceeding is required to be initiated in terms of the provisions under section 19 of the Act. All applications which have been filed on or after the appointed day as mentioned in the Act, the Tribunal is conferred with jurisdiction to entertain lis within the limited sphere and it has also been conferred with powers and jurisdiction to proceed with any pending proceeding before any court before the establishment of a Tribunal under the Act after transfer of pending cases in terms of section 31 of the Act. The challenge looms large on the score on a common ground that the statutory authority being the Debt Recovery Tribunal is divested of any authority and/or jurisdiction to entertain matters with other prayers or reliefs apart from debt as modulated therein. There is further relief by way of mortgage in the shape of the secured debts even relating to immovable property where hypothecation has been made with regard to those immovable property either by way of deposit of title deeds or by other methods which this court will dilate in detail at a later stage when it will deal with the question of mortgage in extenso as contemplated under the Transfer of Property Act.
2. This court has taken long pains and has consumed enoromous time to set on its process of thinking on motion to decide the ticklish question of controversy touching on the question of legal niceties where reference was made in abundance from the provisions of the Transfer of Property Act as well as from the Code of Civil Procedure. This court is also not unaware of some of the decisions of the other High Courts who are stated to have delivered Judgment touching on the said question but in view of the marathon arguments offered by series of illustrious lawyers appearing on behalf of the petitioners in different petition under Article 227 of the Constitution of India and it has the occasion to hear at length even the arguments advanced by the learned Additional Solicitor General as well as by Sri Hirak Mitter and other eminent lawyers appearing on behalf of the Banks and the Financial institutions. This court before plunging itself into the domain of controversy likes to have an initial look about the salient provisions of the concerned Act, namely. The Recovery of Debts Due to Banks and Financial institutions Act, 1993. At the outset it will like to have a first look at the salient provisions of the Act and it will first make reference to section 17 of the said Act. Section 17 as engrafted be speaks of the conferment of power and Jurisdiction on the Tribunal to entertain petitions, if filed at the instance of the Bank and Financial institutions against the private loanees and if it is for recovery of sum beyond a certain celling. The entire its has to be initiated and the same is to be commenced by filing of an application under section 19 of the Act. It is necessary to make a reference to the germane implication of relevant expressions contained in section 17 itself and after scanning of section 17 it appears that apart from other formalities the Tribunal is conferred with power to be in seisin of the controversy relating to recovery of debts. The jural expression 'debt' has been defined in section 2(g) which is quoted hereunder :--
"Debt' means any liability (inclusive of interest) which is alleged as due from any person by a Bank or Financial institution or by a consortium of Banks or Financial institutions during the course of any business activity undertaken by the Bank or the Financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise and subsisting on, and legally recoverable on the date of the application."
3. There is no iota of doubt that the Tribunal being a creature of the statute is concerned with jurisdiction and/or authority for recovery of debts due to Banks and Financial institutions. Significant expression contained in the aforesaid provision of section 17 is the debts due to such Banks or Financial institutions. The entire meaning of the construction of the expression 'debt' as contemplated in section 2(g) of the Act is required to be elucidated for which a close perspective of scrutiny by way of scanning of the composite definition of Debt under section 2(g) is required to be made and the court before arriving and/or venturing to give an elucidation of the statutory meaning of the word 'debt' will be further required to use other words used within the dimension of the definition of debt. This court will proceed with pause by packing up significant words separately and it will strlghtway ascribe meaning to each and every expression contained therein so that a picture of totality may emerge. At the doorstep of the definition of the expression 'debt', this court is confronted with the expression 'any liability' and naturally it occurs to the mind of this court as to why it has been attempted to be elucltated at the point of threshold as 'any liability'. The word 'liability' obviously means obligation. The term 'liability' in terms of its etymological significance means and connotes responsibility to the limited extent. The term 'liable' in terms of Webster's Seventh New Collegiate Dictionary suggests pecuniary obligation. The word 'obligation' though widely used in common parlance but it has a definite connotation in law as it has assumed legal significance and a reference may be made to the meaning of the Juristic expression of the word 'obligation' as sought to be defined in section 2(a) of the Specific Reliefs Act where 'obligation' includes every duty enforceable by law. It does not stand in the same parity with the circumscribed and narrow construction. A reference may be made in this context to the case of Fatik Lal Pal & Others v. Kaltpada Das & Others reported in 82 CWN, 607. In the perspective of the aforesaid connotation as indicated herein that it cannot have a narrow construction and the amplitude is widened because of the prefix added to the expression 'any' which is suggestive of widest amplitude.
4. The expression 'obligation' has been contemplated as including every duty enforceable by law. It was held in the case of Bhudeb Mukherjee v. Kalachand Malik. reported in AIR 1921, Calcutta, 129 that the word obligation in the relevant provision of the then Specific Relief Act may be taken to be a tie or bond which entailed a person to do or suffer something. A reference may be made to the case of W.W. Joshi & Others v. State of Bombay & Others, where it has been held that severance of words and phrases with the word 'liability' in its widest import means an obligation or duty to do something or to be refrained from doing something. There is no reason why any restricted meaning should be given to the word liability. It is significant to refer that in order to illustrate the meaning of the word liability, a reference may be made to the expression (namely inclusion of interest) which obviously indicates that liability tends to bring within the sweep of its ambit even liability other than that which is payable in terms of cash that is why in the definition portion a reference was made of interest. The said definition of debt further proceeds by inclusion of the expression 'due'. Before assessing the meaning of the word 'due' a distinction may be made between the debt owing and debt due. Mr. P.N. Chatterjee, one of the learned counsels appearing for one of the parties has highlighted said distinction and according to Mr. Chatterjee, when debt is ascribed as due it means due to the bank. Debt is due to the Banks and Financial institutions or analogous agency from any person and the expression owing means that such Financial institution owes money from the person concerned. The said subtellty of distinction between the coinage of expressions due and owing may not be of germane significance here as the definition of debt only contemplates the liability due from the person from whom the money is due. It has been hinted by Mr. Chatterjee therefore it is only a case of implication of fiscal liability and not any other type of liability. A reference may be made in this context to the case of Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla and Others, reported in 1992(3). Supreme Court Cases, 285 where it has been opined by the Supreme Court that on interpretation of fiscal law a delegated authority must act strictly within the parameters of the authority delegated to it under the Act and it will not be proper to bring the theory of implied intent of the concept of incidental and ancillary power in the matter of exercise of fiscal power. In this context a further reference may be made to the argument advanced by Mr. Anindya Mitra, learned Additional Solicitor General when dealing with the definition of the debt he has referred to the provision of section 29 of Debt Financial Corporation Act, 1951 and according to him, in terms of the language in which the expression used in that statute under section 29 of the said Act is almost similar to that of the definition of debt as given in the definition column of the connected statute being The Recovery of Debts Due to Banks and Financial institutions Act. 1993. Another reference may be made to the case of Commissioner of Police, Bombay v. Gordhandas Bhanji, where it has been held that in terms of section 45 of the then provisions of Specific Relief Act, 1877, the Jurisdiction conferred by that section is very special in kind and is strictly limited in extent though the ambit of the powers exercisable within those limits is wide. This observation is of significant importance as the powers exerclsable under the present statute are wide in nature excepting those which are circumscribed by the provisions of section 22 of the Act Section 22 of the present Act contemplates that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural Justice subject to other provisions of the Act. Even the procedure has been set out to a considerable extent as catalogued within section 22(2)(a) to (h) of the said Act. There is no specific exclusion or limited exclusion of the invocation and/or application of the provisions of Transfer of Property Act contemplated within the four corners of the connected statute with which we are to deal with. A passing reference is made to the same as at a later stage we will have the occasion to deal with the provisions of the concept of mortgage as perceived under the provisions of the Transfer of Property Act. Mr. Kasikanta Moitra. one of the learned Advocates appearing for one of the petitioners has submitted that on the question of Tribunal being one of the limited Jurisdiction whether Tribunal can embark upon the adaptation of uncanalised powers. Another reference may be made to the ease of P.S.L Ramanathan Chetttar & Others, v. O.R.M.P.R.M. Ramanathan Chettiar, where the apex court while dealing with Madras Agricultural Relief Act of 1938 has the occasion to refer to the meaning of the word 'debt'. The term 'debt' as per the provisions of the said local Act has been defined in section 3(iii) of the said Act as meaning "any liability in cash or kind, whether secured or unsecured due from an agriculturist whether payable under a decree or order of Civil or Revenue Court or otherwise but does not include rent" The said definition has been noted as to be of very wide import and would include any liability due from an agriculturist with the exceptions specified. It is necessary to refer with special emphasis about the widest ambit of the definition of 'debt' including 'any liability'. In this context, this court may refer to the case of Engineers (Overseas) Corporation Pvt. Limited v. West Bengal Financial Corporation, . A special procedure has been laid down under the State Act authorising the State Financial Corporation to recover loan advanced by the Financial Corporation by presenting the application under the mode envisaged by the statute by taking recourse to such provisions of the West Bengal Financial Corporation has been authorised to sell the properties without taking recourse to the provisions of Order 34, Rule 4 of the Code of Civil Procedure. Under the Act under reference even a mortgagee in respect of a loan advanced by it is not required to file a regular suit for enforcement of mortgage. A cursory glance through the case of Maganlal Chhaggantal Pvt. Ltd. v. Municiapal Corporation of Greater Bombay, , a seven Judges' Bench of the Supreme Court while upholding the validity of the Bombay Municlapal Corporation Act and the extract from the said decision is quoted hereun-der:--
"It is also necessary to point out that the procedure laid down by the two Acts now under consideration are not so harsh or onerous as to suggestion that a discrimination would result if resort is made to the provisions of these two Acts in some cases and to the ordinary civil court in other cases. Even though the officers deciding these questions would be administrative officers there is provision in these Acts forgiving notice to the party affected, to inform him of the grounds on which the order of eviction is proposed to be made, for the party affected to file a written statement and produce documents and be represented by lawyers. The provisions of the Code of Civil Procedure regarding summoning and enforcing attendance of persons and examining them on oath, and requiring the discovery and production of documents are valuable safeguards for the person affected. So is the provision for appeal .....".
5. The liability as referred to by way of the meaning of the word debt which is in force or existing and which includes within its compass such enforceable obligation to be paid in cash or otherwise it obviously entails that relinquishment of liability is required to be replenished by cash or otherwise. Some controversy seems to have erupted because of the contentions raised by the respective counsels of the parties as to what is meant by the expression 'otherwise' which follows as an appendage to the expression by way of Noun namely, cash. The word 'otherwise' in terms of ordinary English Grammer appears to be an Adverb which is preceded by interJecUon of the word 'or'. The term 'or* is capable of being conceived of eilher as a Preposition or as a Conjunction. A Preposition is a word before a Noun or a Pronoun. Therefore, the word 'or' cannot be conceived of as a Preposition as it is before the word 'otherwise' which is to be rated as Adverb. Accordingly, the word 'or* cannot but be conceived of as Conjunction which joins two words, namely, cash or otherwise. The Dictionary meaning of the word 'otherwise' tends to suggest and it means 'in a different way'. While construing the expression 'cash' or 'otherwise', lot of debate was advanced by way of adaptation of the concept of 'ejusdem generis' and conflicting decisions have been referred to. namely, the decisions (Anil Kumar Bhattacharjee v. Corporation of Calcutta) and (Chotonagpur Banking Association Ltd. & Ors. v. Govt. of India & Ors.). This court does not lean in favour of probing into questions of legal niceties as the controversy can be set at rest in consonance with grammatical construction and etymological significance of the expression which was highlighted before. Therefore, it can be reasonably opined that such liability may be by way of cash or in a different way which is the literal meaning of the word 'otherwise'. Next crucial scrutiny is confined to the meaning ascribed to the word 'liability', namely, secured and unsecured. There is no likelihood of problem being faced with regard to unsecured liability but problem may loom large when it becomes a question of secured liability. Such liability may be attempted to be secured by way of rendition of mortgage. There we will be at the door-step of the threshold of resolution of another facet of controversy as to whether the Debt Recovery Tribunal has the jurisdiction to entertain and the prayer of mortgage in a composite application under section 19 of the connected Act. It is salient to observe that this court has taken pain to assess an in depth analysis of the definition of debt as contemplated under section 2(g) of The Recovery of Debts Due to Banks and Financial institution Act, 1993 in order to have a clarity of conception about definition itself.
6. The entire Chapter IV of the Transfer of Property Act is a composite chapter relating to mortgage. In this context it is worthy of mention to make a reference to section 22 of The Recovery of Debts Due to Banks and Financial institutions Act. 1993 which contemplates that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural justice subject to other provisions of the Act. Even the extent of application of the Code of Civil Procedure has been adapted within the Act itself and the same has been catalogued in section 22(2) Clauses (a) to (h) of the same. It is worthwhile to remember that there is no specific exclusion or limited exclusion of the application of the provisions of Transfer of Property Act contemplated within the four corners of the connected statute. The term 'mortgage' has been defined in section 58 of the Transfer of Properly Act and as per definition a mortgage is transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan and existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. In the light of the definition, different types of mortgage are contemplated under the Transfer of Property Act, namely, (a) Simple Mortgage (b) Mortgage by Conditional Sale (c) Usufructuary Mortgage (d) English Mortgage (0 Mortgage by Deposit of Title Deeds and (g) Anomalous Mortgage. Accordingly, from the catena of different types of mortgage, as mentioned herein, there appears to be six types of mortgage. In terms of definition as given in section 58 of the Transfer of Property Act, the transferor is called mortgagor, transferee a mortgagee: the principal money and interest of which payment is secured for the time being are called mortgage-money and the instrument by which transfer is effected called a mortgage deed.
7. According to the definition given in the aforesaid section, the first requisite of a mortgage is that there should be a transfer of an interest in immovable property. The interest of transfer depends upon the character of the mortgage in a simple mortgage. The interest conveyed is the right to cause the property to be sold in a mortgage by conditional sate and in an English Mortgage the actual ownership ts transferred subject however to a condition. In Usufructuary Mortgage, the transferor made his right of possession and enjoyment of usufruct. A simple Mortgage is a contract creating a personal obligation to repay the loan. It also operates as a conveyance of an interest of the property mortgaged. It is 'a right in rem realisable by sale given to a creditor by way of access to the security of a right in personam". Interest which passes to the mortgagee is not the ownership of the property which notwithstanding the mortgage remains in the mortgagor to give to the right of redemption. In terms of the decision of the case of Dhapubai v. Chandranath, reported in AIR 1938, Calcutta, 524, it is held that until the property is actually sold and sale becomes absolute, ownership in the property continues in the mortgagor. A personal covenant carries with it by necessary implication a power of sale. An English Mortgage closely resembles an absolute sale with a condition of repurchase. Mortgage by deposit of title deed is almost akin to equitable mortgage. Three things are required for an equitable mortgage, namely, (1) a debt (2) deposit of title deed and (3) an intention that the transfer should be made security for the mere deposit of title deed would not create equitable mortgage unless the creditor has the intention to create a mortgage. In a mortgage by deposit of title deed, the same must be deposited with intent to create a security thereon. When title deeds are deposited with intent to create a security, the law implies creation of a mortgage and no registered instrument is necessary under section 59. Anomalous mortgage will include the following clauses, namely, combination of simple and Usufructory Mortgage, combination of mortgage by conditional sale and usufructory mortgage, legal mortgages and other miscellaneous mortgages. It is necessary to make a passing reference to one of the averments made by Mr. Subroto Roy, one of the learned Advocates appearing on behalf of the Bank and Financial institutions and according to him, the relief claimed is by way of sale of mortgaged property and as such according to him, usufructory mortgage or mortgage by conditional sale is excluded from the perspective of consideration. He has further contended that majority of the cases with which tills court is concerned belong to the type and category of simple Mortgage as the interest conveyed is the right to cause the property to be sold. Section 60 of the Transfer of Property Act confers a right on the mortgagee to redeem. As per section 60, at any time after the principal money has become due, the mortgagee has a right on payment or tender at a proper time and place of the mortgaged money to require the mortgagee to deliver to the mortgagor the mortgage deed and all documents relating to the mortgaged property which are in possession or power of the mortgagee. A right to redeem is a right conferred upon the mortgagor by enactment of which he can only be deprived by means and in the manner enacted for that purpose. Even a second mortgagee desiring to be deemed is bound to pay the whole amount due under the first mortgage and not merely the price realised by the sale held in execution of the first mortgagee's decree. Where a mortgagee has a right to sell and mortgagee enters into a contract for sale of the property, the mortgagor has still the right to redeem the mortgage. If during the continuance of mortgage and prior to redemption the mortgagee allowed a stranger to receive an additional advance from him on the same security and attorned to him. It would be ineffective to deprive the true mortgagor of his right to redeem. In a suit or proceeding for redemption, the mortgagor is required to prove that his claim for redemption is within time. A mortgage debt demands the portion of the amount secured by the mortgage which is still due. The word 'due' in this context means due by the mortgagor on the expiry of the time during which the mortgagee was authorised to retain possession of the property. There is noting in law to prevent the parties from being agreed that the mortgagor may discharge the debt within the specified period and take back the property. Section 67 is another important right in the form of right to foreclosure or sale as conferred by Transferred of Property Act. The mortgagee at any time after the mortgaged money has become due to him and before the decree has been made for the redemption of the mortgaged property or mortgaged money has been paid or deposited, a right can be availed of that the mortgagor shall be absolutely debarred of his right to redeem the property. In a Simple Mortgage, there being no transfer of ownership, the Simple Mortgage can bring the mortgaged property to sell. A mortgagee's suit for sale may comprise two reliefs, one, by way of sale of the properties mortgaged and other by way of a personal decree against the mortgagor for what may remain due after the mortgaged property is sold. It has been reiterated on repeated occasions by several Lawyers the well-known proposition that there cannot be a mortgage without a debt but debt is possible without mortgage. There is no room for controversy with regard to that well-known proposition. In this context, attention of this court has been drawn in extenso from Ghosh's Law of Mortgage, 5th Edition and specific attention was drawn to the observation made there in at page 70 that a promise by a debtor to repay the loan is a contract creating personal obligation. It may also be a conveyance as it passes to the creditor a real right in the property pledged. Further reference has been drawn from the said authority to page 75 to the effect that mortgage debt cannot be served from security. Even references were made from some of the decisions reported in AIR 1934, Rangoon, 250 at 255 in order to drive home the point that a suit for mortgage has been held to be a suit for land. While making reference to the definition of mortgage provided under section 58 of the Transfer of Property Act, it has been contended that mortgage is an interest in the land which is to be deemed as immovable property and in support of the same reference was made to the decision reported in 1929 1LR. Calcutta, p.1 (Full Bench).
8. In India the law of mortgage is codified in substantive form in Transfer of Property Act while proceeding for recovery of mortgage debt is to be found being covered by the provisions of Order 34 of the Code of Civil Procedure. The characteristic feature of mortgage is that the right in the property created by the transferor is accessory to the right to recover the debt. The debt substance in a mortgage while a transaction by which debt is extinguished is not a mortgage but a sale. It is worth-while to refer to the extracts from Ghosh on Law of Mortgage, 6th Edition, at page 61 and the observations made in Tagore Law Lectures can be quoted hereunder :
"A mortgage may be viewed in two aspects. In the first place it is a promise by the debtor to repay the loan and as such it is a contract which creates a personal obligation. Secondly, it is also a conveyance since it passes to the creditor a real right in the property pledged to him. However, the right, created in the land is only an accessory right, intended merely to secure due payment of debt."
A reference may be made to the case of State Bank of India v. Samneel Engineering Company & others where it has been observed that the quintessence of the definition of debt as provided in Act No. 51 of 1993 is the existence of any liability founded on an allegation as due from any person. The definition according to the said Judgment would cover all cases where the liability is secured by a mortgage, charge hypothecation or any other names known to law. An effort of curving out a mortgage out of the definition of debt is futile. The most commonly resorted form of mortgage by the Banks is an equitable mortgage by deposit of title deeds. It has been held in the above quoted Judgment that 'debt' as defined by clause (g) of section 2 of the Act includes mortgage of every . type within its meaning. In another decision of the State Bank of India & Others v. Gujarmal Modi Hospital and Research Centre for Medical Sciences reported in Banking Cases, Vol. 2 (1996). 341 which has approvingly quoted the earlier decision . This court is not oblivious of the recent pronouncement of these decisions of Delhi High Court and the second decision of Delhi High Court referred to herein has relied on to first decision of Delhi High Court by way of giving its approval for concurrence. The ratio of law as sought to be reflected in the said decision is to the effect that a mortgage debt is included within the meaning of debt defined under section 2(g) of the Act. A claim for recovery of such a debt lies within the Jurlsdlctlonal competence of the Tribunal and as a necessary corrollary the same is excluded from the Jurisdiction of Civil Court. This court before accepting the conclusions as sought to be arrived at in the aforesaid decisions of Delhi High Court tends to take recourse to its own reasoning. As indicated already, a reference was made about the procedures relating to the suit for mortgages of immovable property as focussed in the provision of Order 34 of the Code of Civil Procedure. Before adverting to the provisions of Order 34 of the Code of Civil Procedure, tills court is made to faulter at the doorstep in its investigation with regard to the adaptation of the procedure as confusion regarding the proceeding for recovery of debts and suit for mortgages of immovable property is required to be cleared. When the proceeding assumes the shape of the character of a subsisting list before the statutory forum under the Act, namely, the Debt Recovery Tribunal, the character of the list has to be commenced in terms of section 19 of the Debt Recovery Act being Act No. 51 of 1993. On perusal of the said section 19 the picture that has emerged fs about the proceeding for recovery of debts. Alternatively, it may assume the character on transfer of pending suits prior to the coming into force of the Act, namely, before the establishment of the Tribunal and the same will be required to be transferred namely, pending suits under section 31 of the Act. A combined reading of section 19 and section 31 of the Act projects a picture of initiation of a proceeding or transfer of a suit for repayment of dues covered by the texture of liability enforceable by the Bank or the Financial institutions. If the character of the proceeding retains an intrinsic texture for recovery of debt payable in terms of money and mortgage comes by way of accessory right, then, mortgage is created for securing the debt. Before the Debt Recovery Tribunal, it is primarily a proceeding for recovery of debt payable in terms of money and when security is offered the same may be offered by way of illustration in the form of deposit of title deeds in respect of immovable property. It is salient to make a reference to the case of Pradtp Chand Lal v. Grindlays Bank & Another where it has been observed that the court has to examine the frame of the suit and come to the conclusion whether or not the suit is one under mortgage for realisation of the mortgaged money. If the suit is not a suit by the creditor qua-mortgagee, it is essentially to enforce promissory note to attract the provisions of section 68 of the Transfer of Property Act and if the suit is not instituted by the plalntiff bank in the capacity as mortgagee, then, the suit is not for recovery of mortgage money. In order to scrutinise the question about exclusion of the jurisdiction of civil court. It is required to be scrutinised from the statute itself as to whether it has provided a machinery for the enforcement of the right. If there are concurrent remedies provided under the statute as well under the general law, then, by process of election statutory remedy may be preferred. The said observation finds its support from the decision in the case of RaJammKumarBhargavv. Union of india, . Even it is not out of context to remember the salient observations made by the apex court in the case of Munshtram & Others, where it has been laid down that if a special remedy is provided under the statute, then, general remedy of the suit is not barred. If a particular remedy is sought in a particular forum in a particular way. It is to be sought in the said forum and in the manner provided and all other modes and forms contemplated under the general law are to be excluded,
9. In order to interpret the statute a contextual jurlsdictional interpretation is required and the said interpretation should not be elongated to some such borderline as a result of which ft may frustrate the object of the Act. It has been observed in the case that, "Interpretation of statute must further not frustrate the object of the Act". In the background of the same it is to be kept in mind the statement of objects and reasons of The Recovery of Debts Due to Banks and Financial institutions Act. 1993 which is reproduced below:--
'Banks and Financial institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. The existing procedure for recovery of debts due to banks and financial institutions has locked a significant portion of their funds in unproductive assets, the value of which deteriorates with the passage of time".
"The Committee on the financial system headed by Sri M. Narasimham has considered the setting up of the special Tribunals with special powers for adjudication of such matter and speedy recovery as crucial to the successful implementation of the financial sector reforms. An urgent need was further felt to work out a suitable mechanism through which the dues to Banks and Financial institutions could be realised without delay. In 1981 a Committee under the Chairmanship of Shri T. Tiwari had examined the legal and other difficulties faced by Banks and Financial institutions and suggested remedial measures including changes in law. The Tiwari Committee had also suggested setting up of special tribunals for recovery of dues to the Banks and Financial institutions by following a summary procedure. The setting up of special tribunals will not only fulfil a long felt need but will also be an important step in the implementation of the report of Naraslmham Committee. Whereas on 30.9.90 more than 15 lacs of cases filed by the Public Sector Banks and about 304 cases filed by the Financial institutions were pending in various courts, recovery of debts involved more than Rs. 5,622 Crores of dues of Public Sector Banks and about Rs. 391 Crores of dues of the Financial institutions. The locking of such huge amount of public money in litigation prevents proper utilisation and re-cycling of the funds for the development of the country".
10. It is clear from the perusal of the statement of objects and reasons of the said Act from which it appears that background for enactment of the said Act is the experience of difficulties for recovering loans and enforcement" of securities charged with them. This court cannot overlook the expression contained in the statement of objects of the Act about enforcement of securities in the backdrop of the definition of debt as provided under section 2(g) of the Act which covers within the ambit of the same liability both secured or unsecured. While considering the question of mortgage, there is no gainsaying that it is absolutely a question of enforcement of securities charged with the bank. The preamble of the Act envisages expeditious adjudication and recovery of debts due to Banks and Financial institutions and for matters connected therewith or incidental thereto. Concept of mortgage connotes and implies the right in the property created by the transferor is accessory to the right to recovery the debt. As such the same fits in with the expression of the preamble of the Act, namely, matters connected therewith or incidental thereto. The underlying object of the Act is to protect and promote the interest of Banks and Financial institutions when pitted against the vast army of wilful defaulting borrowers and the pith and substance of the Act is recovery of debt due to banks and financial institutions. The Tribunal has been conferred also with the authority to settle any other matters connected with or incidental thereto while adjudicating such claims or directing recovery which brings within its compass, the concept of mortgage which is accessory to the right to recover the debt. While assessing the question of interpretation of the statute this court has been reminded by Mr. Mitter, the learned Additionl Solicitor General that there is imperative need and requirement to elemlnate the vices of statute. As an onlooker to the overall scenario, this court is over-taken by a feeling that when corridors of court are raided by army of wilful defaulting borrowers, it appears to be a calculated attempt to obstruct due course of Judicial procedure. A reference may be made to the case of Jenniston v. Baker, reported in 1972(1), All E.R., 997 and germane observation borrowed from there is quoted as hereunder:--
"The Law should not be seen to sit limply while those would defy it go free and those who seek its protection lose hope".
As pointed out by the Supreme Court in Shivanaraya Kabra v. State of Karnataka, , sound rule of interpretation of a statute is that statute so construed to prevent the mischief and to advance the remedy according to the true intention of the makers of the statute. In construing a provision and in determining its true scope, it is permissible to take into account the intetation of the legislature as reflected in the preamble of the Act. It has been observed in the case of Sirajul Khan v. Sunni Central Board of Wakf, U.P., that court should be slow to adopt a construction which tends to make any part of the statute meaningless or ineffective. If this court allows itself to be pursuaded to hold that relief by way of mortgage cannot come within the dimension of the expression 'secured' as an appendage to any type of liability clearifying the definition of debt, then, substantial part of the statute will become ineffective and it will have to limp as a result of which the object of the Act will not be fulfilled. Even in the case of Delhi High Court reported in 1995(35), D.R.J. (supra), Act No. 51 of 1993 has been conceived of as containing incorporation of definition of debt in its interpretation clause by way of abundant caution and gives it out a very wide meaning. The definition will cover all the cases where according to the aforesaid Judgment the liability secured by a mortgage, charge, hypothecation or in any other manner known to law. An effort of curving out a mortgage away and out of the definition of debt has been held is futile. It has been held in the said decision that even if a suit is founded on a relief or prayer based on a mortgage in a proceeding for recovery of debt is amply covered by the definition of debt for which a proceeding may be commenced under section 19 of the Act or transfer can take place with regard to pending proceedings prior to coming into operation of the instant statute in terms of section 31 of the Act. So far as application of Order 34 of the Code of Civil Procedure is concerned with regard to suits relating to mortgage of immovable property. It is worth-while to remember that section 22(1) of The Recovery of Debts Due to Banks and Financial institutions. Act, 1993 specifically provides that it shall not be bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural Justice and the Tribunal shall have the power to regulate its own procedure. The statute contemplates the proceeding for recovery of debt at the instance of the banks and financial institutions under section 19 of the Act as a recovery proceeding having a summary character and even if the prayer is made by way of a relief founded on the claim of mortgage, the same will retain its complexion and character as a recovery proceeding of debt due in cash or otherwise covering any type of liability inclusive of interest. Therefore, the prime emphasis is on a summary procedure for recovery of debt within the meaning of section 2(g) of the Act and the procedure guiding governance of the same will be regulated by section 22 itself of the statute and it cannot be said that it shall be guided and governed by Order 34 of the Code of Civil Procedure. If in view of prayer founded on mortgage it has to be deemed as a suit for mortgage, then, it will have to be deemed as a suit for land. In that view of the matter the Jurisdiction of the court will be in the place where the suit properly is situate, namely, location of the immovable property in terms of section 16 of the Code of Civil Procedure. As observed, if it is contemplated as a proceeding for recovery of debt due from any person by the bank or financial institution, the Jurisdiction is contemplated and covered by clauses (a) to (c) of section 19(1) of the Act, namely, where the defendant resides or carries on with the business and soforth and where the cause of action wholly or tn part arise. Therefore, the question of jurisdiction has to be gone into as focussed under section 19(1) clauses (a) to (c) are radically and substantially different from that of section 16 of the Code of Civil Procedure. As such the view being held by this court that it retains the character of a summary proceeding for recovery of debt within the meaning of section 2(g) in a proceeding under section 19 of the connected Act, then, Jurisdiction will be governed by the clauses (a) to (c) of section 19(1) of Act No. 51 of 1993 and not by section 16 of the Code of Civil Procedure. So far as right of redemption and foreclosure are concerned, reference was made about the same in the earlier portion and the said rights were conferred in terms of the substantive law, namely. Transfer of Property Act. There is no abridgement of application of enforceability of Transfer of Properly Act and for assertion of right of foreclosure and redemption against the financial institutions, the appropriate Civil Courts may be approached if there is survival of vestige of claim of any third party to a proceeding against any party inclusive of a bank or financial institution before a competent Court of Civil Jurisdiction.
11. Hence, after careful consideration of the facts and law on the subject, this court is of the considered view that Debt Recovery Tribunal, namely, the statutory forum created under section 3 of the Act No. 51 of 1993 has the jurisdiction to entertain the prayers for mortgage in a substantive petition under section 31 of the Act in respect of pending cases prior to the enforcement of the said Act which are required to be transferred on the appointed day. In view of answer in the affirmative to the question counter-posed hereinbefore that the Tribunal which is a crealure of statute under section 3 of the Act has the power and jurisdiction to entertain ihe prayer of mortgage for relief in a proceeding for recovery of debt within the meaning of the definition clause. Accordingly the Tribunal can adjudicate and decide the question in accordance with the procedure and adjudicate on the issue of the prayer for mortgage in. a summary manner as provided in terms of the procedure laid down under section 22 of the Act in accordance with the substanllve law of the relevant provisions of Chapter IV of the Transfer of Properly Act which is a composite Chapter relating to mortgage.
12. In the light of the above let this court deal with separate petitions under Article 227 of the Constitution in a serlatlve manner which are altogether 14 in number as a common question of law is involved in all the matters which are taken up for analogous hearing.
13. In the first matter before this court in C.O. No. 1082 of 1996 in the matter of Hindustan Laminators Pvt. Ltd. & Ors. v. Central Bank of India has preferred the connected petition against the order No. 2, dated 19.4.96 passed by the Presiding Officer, Debt Recovery Tribunal in O.A/84/97. In view of the analogous decision passed by this court analogous to Grapco industries v. Industrial Credit investment, reported in 1998(1) CLJ. 78 cannot sustain the operative part of the order as it is of the view that the Tribunal is not possessed of any authority, power or Jurisdiction to pass ad-interim exparte orders as contained in the said order. To that extent, the order impugned is set aside. The same is subject to the rider introduced in view of the grounds taken being grounds No. 2 and 3 as to the territorial Jurisdiction and about the Jurisdiction of the Tribunal to enforce mortgage of property situate in the State of Tamilnadu. It has been observed earlier that Jurisdiction of the Tribunal so far as relief of mortgage of immovable property is concerned is not to be guided and governed in terms of the provisions of section 16 of the Code of Civil Procedure but it is to be guided by the provisions of section 19(1)(a) to (c) of the Act No. 51 of 1993. In terms of the said provisions contained in the connected statute. It appears that from the perusal of the original application annexed to the revisional petition from which we find that column 3 has been filled up on, inter alia, the averments apart from the claim of the applicant being more than Rs. 10 lacs, the respondent is carrying with its business in Calcutta situate within the jurisdiction of the instant Tribunal. Accordingly, as per provisions of section 19(1) (a) and (b) and on a combined reading of the same, this court hereby answers to the question that the Tribunal has jurisdiction to entertain the original proceeding in the form of section 19 of the Act No. 51 of 1993.
14. Next matter before this court is another revislonal application in the matter of Tripathi Chitra Mandir & Ors. v. United Bank of India & Ors. where the revisionist petitioner challenged the orders dated 5.12.96 passed by the Debt Recovery Tribunal in O.A. No. 32 of 1996. By the impugned order the Tribunal took up the petitioner for rejection of the application under section 19 on the ground that it is a mortgage in respect of immovable property. This court for the reasons as stated hereinbefore is pleased to answer the question that the Tribunal has the power and authority to entertain the prayer for relief founded on a plea of mortgage in a composite petition under section 19 of the Act and accordingly in view of the reasons as enumerated earlier this court is not in a position to disagree with the conclusion arrived at and as such it upholds the Order No. 7. So far Order No. 8, dated 10.12.96 is concerned, in view of filing of the written statement, there is no question of filing of further written statement as it has been recorded that the copies of the document to be relied upon by the bank were not served on the opposite parties along with the plaint. Therefore, the question of giving directing to the bank to furnish further documents and particulars cannot arise. Accordingly, this court is also not in a position to interfere with the second order as quoted above. The second order also is allowed to remain. Accordingly, the said revisional application stands dismissed on contest.
15. Next case is the case of M/s. Multlrise Towers Pvt. Ltd. v. Allahabad Bank & Ors. being directed against Order No. 13, dated 28.1.97 and order dated 13.5.97 passed by the Debt Recovery Tribunal in O.A. No. 211 of 95. by the impugned order as aforesaid dated 28.1.97 a prayer was made on behalf of the respondents in the connected proceeding before the Tribunal on the ground of the marriage ceremony of the son of the learned Advocate scheduled to be held on 25.1.97. The same was rejected. This court intends to interfere with the discretion exercised by the Tribunal and that part of the order so far as rejection of the prayer of adjournment is concerned, it be granted and the order impugned is interfered with to the extent as indicated. The other point meted is on the ground that the entire proceeding under section 19(1) of the Act is liable to be quashed on the ground that there was a prayer founded on plea of mortgage. This court hereby, for the reasons as indicated before, holds that the proceeding cannot be treated as non est on the ground as mentioned in the body of the revisional application under section 19(1) as it involves determination or entertainment of ancillary prayer for mortgage. As the question is answered in the affirmative that the Tribunal has the right to proceed with the said claim, therefore, that portion of the order is interfered with. There is further direction contained in the impugned order regarding formation of opinion about the delay of disposal of the case and the Tribunal is directed that the written statement would be accepted on condition that the respondent No. 2 would be required to put in deposit 10% of the total claim of the bank within 7 days and in default, the concerned party would not be allowed to file written statement and written statement, if filed, would not be entertained. That portion of the order appears to be bristled with penal implication and as it is recolns in character, therefore, this court hereby wants to set aside the said penal portion of the order. It is well-known that just is finds its noblest fulfilment when it is tempered with consideration and not tinctured with vlndlctiveness. Dispensation of justice does not demand that it should be tinctured with vendetta. Therefore the said penal direction is set aside. Accordingly, the connected petition stands allowed-to the extent as indicated save and except that the question of assumption of jurisdiction of the Tribunal with regard to the entertainment of plea of mortgage in a proceeding under section 19(1) of the Act is answered in the affirmative. The Tribunal is directed to accept the written statement and to proceed with the proceeding expeditiously in order to bring about finality of adjudication. The instant petition thus stands disposed of.
16. Next case is C.O. No. 816 of 1996, namely. Bhargav Mukherjee v. United Bank of India & Ors. which is directed against Order No. 5, dated 22.3.96 passed by the Debt Recovery Tribunal in T.A. No. 235 of 1995. By the impugned order a plea was taken that as the connected proceeding is based on a relief for mortgage and the Tribunal has no Jurisdiction to entertain the mortgage matters. This plea will stand rejected in view of the decision arrived at by this court that the Debt Recovery Tribunal has the jurisdiction to entertain the same. The Tribunal is directed to give another date to the concerned respondent to file a written statement and/or written objection to the application under section 19 and is directed to proceed with the proceeding as expedlUously as possible. Accordingly, the same is disposed of.
17. Next case is the case of Biswabharati industries & Ors. v. State Bank of India. There has been a challenge thrown about the assumption of Jurisdiction as to the entertainability on the question of mortgage debt by the Tribunal in a proceeding under section 19(1) of the Act. In view of the decision herein the same is self-explanatory. In view of the nature of the order passed by directing an amount to be paid to the tune of Rs. 10,33,851.90 together with interest, the same is appealable in view of the provisions of the Act in terms of the statutory provisions. Therefore, the remedy against the impugned order is by way of appeal. If the petitioner is so advised, it can prefer the appeal before the appellate forum and can take the benefit of the pendency of this proceeding before this court for combination of the statutory period of limitation as contemplated under the statute. Subject to the same, the application stands disposed of.
18. Next case is the case of Jeewanlal Limited u. Bank of India & Ors. where in an order dated 11.12.96 passed by the Debt Recovery Tribunal in T.A. No. 413 of 1995 is under challenge. In view of the answer given by this court that with regard to a substantive petition under section 19 of the Act if a prayer is founded on a plea of mortgage, the Tribunal has jurisdiction to entertain the same for the reasons as aforementioned. Therefore, this court is in agreement with the conclusion not on the basis of the reasons as indicated in the order but on the reasons as spelt out hereinbefore. So far as the prayer for injunction is concerned, the same appears to have been on a contested hearing and as such it is not a case to be covered under the caption of ad interim order of injunction. Accordingly, this court does not feel inclined to interfere with the order impugned. Accordingly the revisional application stands dismissed on contest.
19. Next case is the case of GTR Company (P) Ltd. & Ors. v. United Bank of India & Anr. It appears from a petition enclosed to the original revislonal application wherein specified point has been taken that the Tribunal has no jurisdiction, power or authority to grant relief with regard to the question of mortgage which has been answered in the affirmative and it has been held that the Tribunal has the right to be in seisin of the controversy converted in the said point, it appears that the said petition is moved against Order No. 14, dated 23.6.97 by which an ad-lnterlm Receiver was appointed which the Debt Recovery Tribunal cannot pass in view of the order passed by this court Accordingly, the order is modified to the extent as indicated but in view of the answer that the plea of mortgage can be entertained by the Tribunal, it can proceed with the matter. Subject to above observations the revislonal application stands disposed of.
20. Next case is the case of Associated indian Mechanical Pvt. Ltd. & Anr. v. United Bank of India & Ors. The connected revisional application is directed against the order dated 20.11.96 passed by the Debt Recovery Tribunal in T.A. No. 318 of 1995. A prayer was made in the connected proceeding so that the Tribunal cannot proceed with the matter any further on the ground that relief is prayed for about mortgage and in view of the reasons as spelt out hereinabove and in view of the decision arrived at that the Tribunal has jurisdiction to entertain a plea of mortgage. In view of such decision let it be referred to the Tribunal so that it can proceed with the matter immediately in accordance with law and in terms of the provisions and the formalities by the statute. There is no reason to grant a stay of the proceeding and the order impugned is set aside and the revislonal application stands dismissed on contest.
21. Next matter is C.O. No. 2144 of 1996 in the case of M/s. Calcutta Refractory & Ors. v. United Commercial Bank & Ors. and the said application is directed against Order No. 19, dated 18.8.96 passed by the Debt Recovery Tribunal in T.A./261/94. The Tribunal by the impugned order has refused to entertain the prayer for return of the plaint on the question that the Tribunal has no authority to go into the question of mortgage. The same being answered in the affirmative whereby it has been held for the reasons as indicated hereinbefore that the Tribunal is empowered with Jurisdiction to decide the question of mortgage. Therefore, the is no question of interference to the order impugned. Accordingly, the revlslonal application stands dismissed on contest.
22. Next matter is C.O. No. 644 of 1996 in the case of M/s. Sasco & Ors. v. United Commercial Bank & Ors. which is directed against order No. 15, dated 15.2.96 passed by the Debt Recovery Tribunal in T.A./20/95. There are five applications which are compositely disposed of by one order. So far as the five petitions are concerned which are with a prayer to determine the jurisdiction of the Tribunal to consider question of law involving the mortgage matter and as to whether the Tribunal has any authority to deal with the same. As the matter in question is answered in the affirmative, therefore, the said prayer cannot be acceded to. This court does not feel inclined to interfere with the cost awarded in favour of the Bank for acceptance of the documents subject to payment of cost. The same may be done but the next date fixed for further orders by the Tribunal. This court also does not feel impressed with regard to the petition filed on behalf of the respondents to file their objections and they are directed to be permitted to file the objections but the payment of costs is required to be deleted. The evidence of affidavit filed on the day mentioned be accepted on behalf of the respondent No. 1 to 12 on the next day when it is fixed for orders with direction to put in the cost as awarded in the impugned order. The third petition is for prayer of analogous hearing of the instant proceeding before the Tribunal and Extra-ordinary Suit No. 15 of 1988 pending before this Hon'ble Court. As the Extra-Ordinary Suit No. 15 of 1988 is pending before another Forum and the instant proceeding is before a Tribunal, therefore, there is no question of analogous hearing of the carriage of two proceedings initiated before two separate forums and as such the said petition is liable to be rejected and this court does not lien in favour of making an interference with the same. This court also feels that marathon game of procrastination is being indulged to multiply the petitions and question of service of notice on the substituted parties as well as respondents No. 20 to 22 are the concerned of the Bank and as such no interference is required to be made. Accordingly the question of determination of framing of a particular issue, namely, the preliminary issue as sought to be hinted at probably based on the question of determination of the Jurisdiction of Tribunal to deal with the question of mortgage becomes redundant and as such the same becomes automatic and no useful purpose would be served. An opportunity on the whole for the ends of Justice should be offered to both the parties to file evidence on affidavit within a particular date as fixed by the Tribunal and it should proceed with the proceeding. It should discourage the practice by prolonging the litigation by vexatious proceeding of filing of plethora of applications to prolong the period of pendency of litigation. Subject to above observations the applications stands disposed of.
23. The next case is one of Duttapukur Hatcheries Pvt. Ltd. v. Bank of India which is directed against order dated 17.12.96 passed by the Debt Recovery Tribunal in O.A. No. 91 of 1996. The point canvassed in the impugned order is about the Jurisdiction of the Tribunal to entertain the controversy relating to mortgage which have to been answered in the affirmative. For the foregoing reasons as mentioned in the body of the petition this court does not feel inclined to interfere with the order impugned. Accordingly, subject to above observations the order impugned is not proposed to be interfered with.
24. Next case is the case of Kunwar and Company Pvt. Ltd. & Ors. v. Bank of India & Ors. which is directed against Order No. 7. dated 23.10.96 passed by the debt Recovery Tribunal in T.A/464/95. By the impugned order in view of the Judgment reported in 96 CWN. p. ISO as referred to and as such the question of Jurisdiction is referred and restricted to determination of clauses (a) to (c) of section 19(1) of the Act. So far as the question of entertainment of jurisdiction of Tribunal with regard to the claim of mortgage that being answered in the affirmative for the reasons as aforesaid in this Judgment, this court does not propose to interfere with the conclusion in the impugned order on the said point and as such it does not proposed to interfere with the order impugned. Accordingly, the revlslonal application stands dismissed on contest.
25. Next matter is C.O. No. 2520 of 1996 in the case of Sultan Shoe Co. Pvt. Ltd. & Anr v. United Commercial Bank which is directed against Order No. 11. dated 15.3.96 passed by the Debt Recovery Tribunal in O.A./ 200/95. As the relief sought for are for issuance of certificate and directing sale of the hypothecated and pledged assets and costs and the question was deferred to be decided on a future date. Therefore, the Tribunal is directed to fix the matter on compliance of formalities so that it may be proceeded with and prayer may be allowed to file the written statement by it within a scheduled date specified by the Tribunal but the award of costs for payment of Rs. 5,000/- will stand deleted. Subject to above condition of modification of the impugned order the application stands disposed of.
26. Next case is the case of S.R. Construction & Company & Ors. v. United Bank of India & Ors. which is directed against Order dated 7.10.96 passed by the Presiding. Officer, Debt Recovery Tribunal in Civil Application No.267 of 1994. So far as the question sought to be raised about the jurisdiction about Tribunal to entertain the plea for mortgage, it has been held that the Tribunal has power and authority to entertain the same and in view of the answer in the affirmative that question does not appear to be one of germane significance. It appears that the same is directed against an order which is a final nature and which is open to appeal and statutory remedy is provided for. As such this Revlslonal Court is not inclined to interfere but if the petitioner is advised to prefer an appeal, then, pendency of this proceeding before this court may be taken into account in order to obviate the difficulties of presentation of the appeal in condonation of limitation as prescribed by statute. Subject to same the application stands disposed of. If xerox certified copy is applied for by the parties, the office is directed to issue the same at an early date.
27. Petitions dismissed/disposed of