Madhya Pradesh High Court
Shri Ganga Narayan Mishra vs State Bank Of India And Others on 3 March, 2000
Equivalent citations: 2001(2)MPHT107
Author: C.K. Prasad
Bench: C.K. Prasad
ORDER C.K. Prasad, J.
1. The menace and difficulty in recovery of loan and enforcement of securities, charged with the banks and financial institutions came to the notice of the law makers. It was felt that the existing procedure for recovery of debts due to banks and Financial institutions has blocked a significant portion of their funds in unproductive assets. On a survey it was found that on 30-9-1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by financial institutions were pending in various Courts in which recovery of more than Rs. 5622 crores in dues of public sector banks and about Rs. 391 crores of dues of the financial institutions were involved. Law makers thought that the locking of such a huge public amount in litigation prevents proper utilisation and recycling of the funds for the development of the country. In order to provide adjudication and recovery of debts due to the banks and financial institutions, Parliament enacted the Recovery of Debts due to Bank and Financial Institutions Act, 1993 (hereinafter referred to as the Act).
2. While going through the scheme of the Act one finds that the provision of the Act shall not apply where the amount of debt due is less than Rupees Ten Lakhs and the Central Government has been given the power under Section 1(4) of the Act to fix such other amount, being not less than Rupees One Lakh. Section 3 of the Act provides for establishment of one or more Tribunals by the Central Government to be known as the Debts Recovery Tribunal to exercise the jurisdiction, powers and authority conferred on it under the Act. Qualification prescribed for appointment as Presiding Officer of the Debts Recovery Tribunal (hereinafter referred to as the Tribunal) is that the person is or has been or is qualified to be a District Judge. Section 8 of the Act provides for establishment of Appellate Tribunal. Qualification for appointment as Presiding Officer of the Appellate Tribunal is that the person is or has been or is qualified to be a Judge of a High Court or has been a member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or has held office as the Presiding Officer of a Tribunal for at least three years. Section 17 provides for jurisdiction, powers and authority of Tribunals whereas Section 20 provides for appeal to the Appellate Tribunal by any person aggrieved by an order made, or deemed to have been made, by a Tribunal under the Act. Section 21 mandates deposit of seventy five per cent of the amount of debt as determined by the Tribunal before the appeal is entertained by the Appellate Tribunal. However, proviso to the aforesaid section confers power on the Appellate Tribunal to waive or reduce the amount to be deposited under this section, for reasons to be recorded in writing. Section 18 bars the jurisdiction of every Court, except the Supreme Court and the High Court in relation to the matters over which the Tribunal or the Appellate Tribunal has jurisdiction, power and authority specified in Section 17 of the Act.
3. State Bank of India preferred an application impleading the petitioner herein for recovery of a sum of Rs. 10,87,493.90 under Section 19 of the Act. The Tribunal by order dated 2-11-1999 held that the Bank is entitled to recover a sum of Rs. 10,87,493.90 from the defendants severely and jointly. Without filing any appeal before the Appellate Tribunal one of the defendants has preferred this writ petition under Articles 226 and 227 of the Constitution of India and prays for quashing off the order dated 1-11-1999 whereby the defence of defendants 2 to 5 has been closed and the case was reserved for judgment. It may be stated that defendant No. 2 is the petitioner herein. Further prayer made by the petitioner is to quash the final order passed by the Tribunal dated 2-11-1999 whereby the Tribunal has adjudicated the dues of the bank outstanding against the defendants.
4. Mr. Ashok Agrawal appears on behalf of the petitioner. Respondent No. 1 is represented by Shri Rajesh Maindiretta. Mr. Maindiretta appearing on behalf of the bank raises a preliminary objection as regards to the maintainability of the writ petition in the face of the remedy of statutory appeal being available to the petitioner under Section 20 of the Act. He submits that the Act itself having provided for the entire mechanism, petitioner cannot be allowed to invoke the remedy provided under Article 227 of the Constitution of India.
5. Mr. Ashok Agrawal, however, appearing on behalf of the petitioner contends that the existence of right of appeal cannot oust the jurisdiction of this Court. He points out that Section 18 of the Act itself has preserved the power of the High Court under Articles 226 and 227 of the Constitution of India. Learned counsel for the petitioner contends that the orders impugned have been passed in breach of the principle of natural justice and hence existence of alternative remedy can not stand as impediment in petitioner's way to invoke this Court's jurisdiction under Articles 226 and 227 of the Constitution of India. Learned counsel has placed reliance on a judgment of the Supreme Court in the case of Whirlpool Corporation Vs. Registrar of Trade Marks, Mumbai and others, (1998) 8 SCC 1 and my attention has been drawn to Paragraph 15 of the judgment which read as follows :--
"Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or nor to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings arc wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field."
Another decision on which the learned counsel for the petitioner has placed reliance is the judgment of the Constitution Bench of the Supreme Court in the case of A.V. Venkateshwaran Vs. R.S. Wadhwani, AIR 1961 SC 1506. My attention has been drawn to the following passage from Paragraph 9 of the judgment which reads as follows:--
"We see considerable force in the argument of the learned Solicitor-General. We must, however, point out that the rule that the party who applies for the issue of a high prerogative writ, should before he approaches the Court, have exhausted the other remedies open to him under the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion."
6. True it is that power of this Court under Articles 226 and 227 of the Constitution of India has been preserved under Section 18 of the Act, but notwithstanding the same plenary power of this Court under Articles 226 and 227 of the Constitution of India cannot be curtailed by any enactment. In my opinion remedy under Article 227 of the Constitution of India being discretionary the High Court may refuse to grant it where there exists an alternative remedy equally efficacious and adequate unless there are good grounds to depart from well known practice. Existence of an alternative remedy may not be an absolute bar to the jurisdiction of this Court, but it is a rule which has been laid for exercise of discretion. In my considered opinion the plenary power under Articles 226 and 227 of the Constitution of India is not intended to circumvent statutory procedure and in a case where statutory remedies are available by invoking the remedy of appeal before the Appellate Tribunal, this Court would not overlook the existence of alternative remedy and exercise its discretion.
7. Learned counsel for the petitioner in order to over come this difficulty submits that the remedy of appeal available to the petitioner is ill-suited as the remedy is onerous because the petitioner is required to deposit seventy-five per cent of the adjudicated amount before his appeal can be entertained. As such, according to the learned counsel this is a fit case in which writ petition be not thrown out on the ground of existence of the alternative remedy. Learned counsel points out that a learned Single Judge of this Court by order dated 13-10-1999 passed in W.P. No. 2425/99 (Vishal Kumar Mahawar Vs. The State Bank of India and others), has set aside the final judgment delivered by the Tribunal in exercise of its jurisdiction under Article 227 of the Constitution of India.
8. Condition of deposit of seventy-five per cent of the adjudicated amount, before the appeal could be entertained by the Appellate Tribunal is one of the conditions which the Parliament in its wisdom has laid. In case the amount to be deposited is on the higher side, remedy is to appeal to the Parliament. However, it is to be borne in mind that the Act provides for recovery of the dues of public sector Banks and Financial Institution, which are custodian of public funds and no individual is benefited. Basic object underlying pre-deposit is to counter-act dilatory tactics adopted by recalcitrant litigants. Further proviso to Section 21 of the Act confers discretion on the Appellate Tribunal to waive or reduce the amount to be deposited. In such circumstances remedy of appeal cannot be said to be inefficacious or ill suited.
9. Now reverting to the authority of this Court in the case of Vishal Kumar Mahavar Vs. The State Bank of India, W.P. No. 2425/99, decided on 13-10-1999 (supra), this Court has set aside the final order passed by the Tribunal in exercise of its writ jurisdiction, but has not gone into the question as to whether in the face of remedy of appeal before the Appellate Tribunal the Writ Court shall be justified in interfering with the final order of the Court. It is well settled that decision in a case is an authority for what it decides and not what logically flows from it. As stated earlier, in the case referred to above this Court has not gone into the question of existence of alternative remedy at all and hence the said judgment cannot be said to have laid down a proposition that notwithstanding the remedy of appeal before the Appellate Tribunal, final order passed by the Tribunal is fit to be interfered in every case by this Court in exercise of writ jurisdiction. It is trite that availability of alternative remedy under the law, is not one which bars the jurisdiction of the High Court to entertain the petition or to deal with it, but is rather a rule which Courts have laid down for the exercise of their discretion. Precedents, on the question as to whether remedy before the Appellate Tribunal, is efficacious or not, are consistent and it has been held that appeal under Section 20 is an efficacious remedy. Reference in this connection can be made to a Division Bench Judgment of Rajasthan High Court in the case of Bharat Ispat Udyog Vs. Presiding Officer, 1998 ISJ (Banking) 11, wherein, it has been held as follows:--
"It is true that powers of High Court in exercise of Articles 226 and 227 have been kept intact by virtue of Section 18 of the Act and as such, it cannot be disputed that this Court has power to interfere with an order passed by the Tribunal in a proper case but at the same time, the power or application under Article 227 of the Constitution cannot be converted to a power in appeal which is specifically provided in the Act. In other words powers under Article 227 of the Constitution cannot be converted as Appellate power and in any case Article 227 of the Constitution should be exercised very sparingly in a rare of rarest cases when such exercise becomes utmost necessary to prevent miscarriage of justice or an abuse of the power by the Tribunals. One should not forget that statutory Tribunal have been constituted specially to decide all matters of recovery of dues due to the banks and financial institutions as defined under Section 2 of the Act. We have already noted the objects behind the Act. The very object of the enactment shall stand defeated if orders and judgments of the Tribunals are challenged before the High Courts under Article 227 or 226 of the Constitution in a casual and routine manner. When a statutory remedy by way of an appeal is provided, then, it is the statutory obligation of the aggrieved party first to avail the statutory remedy. Thereafter it they are aggrieved against the order passed by the Appellate Tribunal, the remedy under Article 226 or 227 may be availed in accordance with law. We are unable to subscribe the contention of Shri A.K. Sharma that this Court should examine entire matter as no final order/judgment has been passed by the Tribunal. We also do not agree with his contention that an appeal under Section 20 is not an efficacious remedy as the appellant would be required to deposit 75% of the amount of debt due from him as determined by the Tribunal under Section 19 or fees shall be required to be paid for filing an appeal. Section 20 provides an appeal against an order made or deemed to have been made by a Tribunal it does not speak about a final order determining amount of dues. Assuming for arguments asked that an appeal under Section 20 lies only against a final order/adjudication determining amount of dues by the Tribunal under Section 19, then too, ordinarily no interference should be made by this Court in halting further proceedings before the Tribunal. The aggrieved parties shall be entitled to challenge any interlocutory order of the Tribunal after final adjudication/determination of the dues, before the Appellate Tribunal. So far the present case is concerned, the Tribunal has decided all the issues after recording evidence of the parties. While deciding issue No. 6, the respondent bank has been asked to file an amended statement of interest after calculation as per finding on the issue, so that the debt amount may be finally adjudicated/determined. In fact, the present order is a final order in the sense that all questions necessary for determining of the debt amount have been decided and only calculation of interest was to be made as per finding of the relevant issue."
In the case of Sandeep Singh Sandhu Vs. Debt Recovery Tribunal, 1998 ISJ (Banking) 655 Punjab and Haryana High Court has stated the law in the following words:--
"The contention of Mr. Mittal, learned counsel for the petitioner, that the powers of this Court under Article 227 of the Constitution are very wide and can be exercised in matters like the present one where the Tribunal has acted illegally resulting in injustice to the petitioner, has no force because the Act provides an adequate and efficacious remedy for obtaining relief in respect of an order passed by the Tribunal by way of filing appeal before the Appellate Tribunal. The petitioner cannot be permitted to abandon resort to the statutory remedy of appeal and to invoke the extra-ordinary jurisdiction of this Court under Article 227 of the Constitution. The remedy provided under Article 227 of the Constitution is not intended to supersede the modes of obtaining relief before the Appellate Courts or Tribunals. Therefore, in view of the provisions of Section 20(i) of the Act, the remedy available to the petitioner is by way of filing appeal before the Appellate Tribunal and not by way of filing revision petition under Article 227 of the Constitution. Another contention of Mr. Mittal is that under Section 115 of the Code of Civil Procedure, revisional jurisdiction of this Court can be invoked to interfere in the order passed by the Tribunal, but I do not find any force in this contention in view of provisions of Section 20 of the Act wherein statutory remedy by way of filing appeal before the Appellate Tribunal has been provided."
Similar is the view of the Calcutta High Court in the case of Sushil Kumar Jaiswal Vs. Bank of India, 1996 ISJ (Banking) 464; wherein it has been held as follows:--
"6. Heard the submissions of the learned Advocate for the parties and considering the materials on record, it appears that admittedly this is a revision under Article 227 of the Constitution of India challenging the judgment and/or final order passed by the Tribunal. Admittedly, there is a provision in the Act, being Section 20 providing appeal against such judgment and/or order. Admittedly, Section 18 of the Act operate as a bar of jurisdiction regarding the Courts or other alternative Forum for exercising any jurisdiction powers or authority (except the Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matter specified in Section 17. Admittedly, the order impugned could be appealed against under Section 20 of the Act. It is also the admitted position that the petitioners did not prefer any appeal. There is no dispute that it is the settled law that the High Court or for that the Apex Court in exercise of its power under Articles 226 and 227 of the Constitution can interfere with such an order. But such interference shall not amount to exercise of the appellate power. Section 20 of the Act contemplates an appeal and the scope of this appeal is much more wider than the scope under Article 227 of the Constitution of India. That apart, Section 21 provides that where the appeal is preferred by any person from whom the amount is due to the Bank or a financial institution or a consortium of Banks or financial institutions, such appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent of the amount of debt so due from him as determined by the Tribunal under Section 19; provided that the Appellate Tribunal may, for reasons to be recorded in writing waive or reduce the amount to be deposited under this section.
7. The petitioners did not approach the Appellate Tribunal. It clearly shows that in order to by-pass Section 21 of the petitioner did not approach the Tribunal in time. No doubt, Section 18 of the Act provides the power of the High Court or for that the Apex Court regarding exercise of jurisdiction under Article 227 of the Constitution of India. But that provision has not been made for the purpose of avoiding another provision which affords wider relief to the petitioners. The scope of Section 20 of the Act, that is, the appeal is much more wider than the scope and ambit of Article 227 of the Constitution of India. What can be done directly that cannot be done indirectly. In order to avoid the rigor of Section 21 of the Act, the petitioners have resorted to an exercise of the revisional juris-
diction under Article 227 of the Constitution of India. That cannot be permitted."
Madras High Court in the case of Radha Ravi and another Vs. Indian Bank, Alwarpet Branch and another, II (1998) BC 690, has taken a similar view. In the said case it has been held as follows :--
"When a right is created by a statute, which itself prescribes the remedy or procedure resort must be had to that particular statutory remedy before seeking the discretionary remedy under Article 226 of the Constitution. This Court, where a statutory remedy is provided, may decline to interfere until the statutory remedy is exhausted, particularly when the decision of the question depends upon the appreciation of evidence. Of course, the Act contemplates deposit of certain amount to maintain the appeal, but it also provides for waiving or modifying the deposit contemplated. In the absence of any exceptional circumstances, a petition under Article 226 would not be maintainable merely because the statutory remedy is onerous. For example, the party has to deposit the amount as a condition precedent for preferring appeal. This is not a case of violation of principles of natural justice or complete lack of jurisdiction of the Tribunal to pass the impugned order, that too, the remedy provided not availed and when the order has become final, it is not appropriate to invoke the jurisdiction of this Court to interfere with the order and the recovery certificate."
Thus, precedents on this question, in unequivocal terms go to support the view that the remedy of appeal before the Appellate Tribunal is efficacious and the remedy of writ petition is inappropriate. I am of the considered opinion that when the right is created by statute which itself prescribes the remedy or in other words in a case when the statute itself has prescribed the entire mechanism resort must be had to that particular remedy before seeking the discretionary remedy under Articles 226 and 227 of the Constitution of India. In my opinion remedy of appeal before the Appellate Tribunal is adequate and efficacious remedy and the petitioner cannot be permitted to abandon resort to the statutory remedy of appeal and to invoke the extra-ordinary jurisdiction of this Court under Article 227 of the Constitution. Petitioner cannot be permitted to exercise the power of this Court as an appellate power. Having up held the preliminary objection as regards to the maintainability of the writ petition, I do not intend going into the merits of the case.
10. In the result, I do not find any merit in the writ petition and it is dismissed accordingly. However, dismissal of the writ petition shall not stand in the way of the petitioner to avail any other remedy available to him under the law.
11. Writ Petition dismissed.