Madras High Court
V.K.Rajeswari vs Uco Bank on 4 July, 2012
Author: G.Rajasuria
Bench: G.Rajasuria
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:4.07.2012 Coram: THE HONOURABLE MR.JUSTICE G.RAJASURIA C.R.P.NPD.No.1120 of 2011 and M.P.Nos.1 & 2 of 2011 1.V.K.Rajeswari 2.Indrakumar .. Petitioners vs. 1.UCO Bank, rep.by its Branch Manager, Purasawakkam, Chennai-600 007. 2.Maraikayar Kasim Mohammed 3.Mrs.Annam Yousuff ... Respondents Civil revision petition preferred against the order dated 9.2.2011 passed by the II Assistant Judge, City Civil Court, Chennai in I.A.No.3602 of 2010. For Petitioners : Mr.R.Subramanian For Respondents : Mr.T.A.Srinivasan for M/s.Sree and Associates for R1 Mr.T.K.S.Gandhi for R2 ORDER
Animadverting upon the order dated 9 9.2.2011 passed by the II Assistant Judge, City Civil Court, Chennai in I.A.No.3602 of 2010, this civil revision petition is filed.
2. Compendiously and concisely, the germane facts absolutely necessary for the disposal of this revision petition in a few broad strokes can be encapsulated thus:
(i) The respondent bank herein filed the suit O.S.No.1349 of 2005 with the following payer "to grant a judgement and decree i. directing the defendants 1 and 2 to pay a sum of Rs.9,79,215/- (Rupees nine lakhs seventy nine thousand two hundred and fifteen only) being principal and interest at rate of the 14.5% from the date of this plaint till the date of payment with quarterly rests; in default ii. Direct the sale of the immovable property under equitable mortgage to the plaintiff morefully described in the schedule hereunder.
iii. Permanent injunction restraining the defendants their men, servant, agent or anyone acting on their behalf from any alienating or dealing with the property morefully described in the schedule hereunder.
iv. Direct the defendants to pay the costs of the suit." (extracted as such)
(ii) Written statement was filed by the revision petitioners herein. However, subsequently, they remained ex-parte, whereupon ex-parte judgement and decree was passed.
(iii) Subsequently, the bank concerned filed the E.P. before the Debts Recovery Tribunal invoking the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
(iv) After receipt of notice from the Debts Recovery Tribunal in the execution proceedings, the revision petitioners herein did choose to file an application in I.A.No.3602 of 2010 before the II Assistant Judge, City Civil Court, Chennai, to get the delay of 546 days condoned in filing the application under Order 9 Rule 13 of C.P.C.to get set aside the ex-parte decree.
(v) The lower Court, after hearing both sides, dismissed the said I.A.No.3602 2010 on the ground that it had no jurisdiction in view of the fact that the Debts Recovery Tribunal was seized of the matter in the E.P. concerned filed for executing the said ex-parte decree.
3. Being aggrieved by and dissatisfied with the said order passed by the the II Assistant Judge, City Civil Court, Chennai, this civil revision petition has been focussed on various grounds.
4. The learned counsel for the revision petitioners, by placing reliance on the grounds of revision would put forth and set forth his arguements, which could tersely and briefly be set out thus:
(i) The lower Court committed error in holding that it had no jurisdiction to entertain the said application on the wrong assumption that the Debts Recovery Tribunal entertained the E.P., which was for recovering the decretal dues for more than Rs.10 lakhs.
(ii) The cause of action which existed as on the date of the suit as found evinced and evidenced in the plaint alone would govern the jurisdiction of the civil Court. Without taking this crucial point into account, the lower Court simply dismissed the application, warranting interference in revision.
5. The learned counsel also would cite a few precedents in support of his contention.
6. Per contra, in a bid to torpedo and pulverise the arguements as put forth and set forth on the side of the revision petitioners, the learned counsel for the first respondent/plaintiff would advance his arguements, which could pithily and precisely be set out thus:
(a) The law is well settled that once the Debts Recovery Tribunal is seized of the matter, that would be the end of the jurisdiction of the civil Court, even though a civil Court might have passed the exparte decree, which is sought to be executed before the Debts Recovery Tribunal in view of Section 31 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 .
(b) The lower Court taking into account the precedents correctly decided that the appropriate forum would not be the civil Court to set aside the ex-pare decree passed by it, but it would only be the forum contemplated under the the Recovery of Debts due to Banks and Financial Institutions Act, 1993, warranting no interference in revision.
7. The point for consideration is as to whether the lower Court is having jurisdiction to entertain the I.A. for getting the delay condoned in filing the application under Order 9 Rule 13 of C.P.C.in view of Section 31 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
8. At the out set itself I would like to fumigate my mind with the following precedents cited on the side of the revision petitioners:
(i) The Full Bench judgement of the Kerala High Court is reported in 2003(3) CTC 111 GLENNY,C.J V. THE CATHOLIC SYRIAN BANK LTD. Certain excerpts from it would run thus:
"15. This contention cannot be accepted. It is undoubtedly true that under the general law, the Court, which passes a ex parte decree along can set it aside. However, it deserves notice that under Section 17(1) of the Act, whenever the amount in dispute is Rs.10 lakhs or more, the Tribunal alone has the jurisdiction "to entertain and decide" it. Still further, under Section 18, the jurisdiction of the Civil Court has been completely barred. The Act specifically provides that from the appointed day no Court or authority shall be entitled to exercise any jurisdiction in relation to the recovery of debts due to banks and financial institutions. The power of the Supreme Court and the High Courts alone has been preserved. The effect is that the civil Court cannot entertain any application, which directly or indirectly relates to the recovery of debt of Rs.10 lakhs or more. This is a clear pointer towards the legislative intent. Clearly, the ouster of the jurisdiction of the civil Court is complete and comprehensive.
16. Thus, whenever an application has to be filed for the recovery of any debt, and the amount is Rs.10 lakhs or more, it can be filed only before the Tribunal. The 'debt', as defined under the Act, can even arise out of a decree passed by the civil Court. The mode of recovery is only by way of an application before the Tribunal. Not by way of a petition for execution before the civil Court. Thus, if an application for the recovery of the amount found due by the cil Court can be filed before the Tribunal only, there appears to be no special reason for allowing any other application to be presented before the civil Court. Why have parallel proceedings before two forums? Would it be conducive to any public or private interest? The answer can only be in the negative. Thus, it appears that an application for setting aside a decree, ex parte or otherwise, can be filed only before the Tribunal and not before the civil Court. The only condition in view of Section 1(4) is that the amount should not be less than Rs.10 lakhs.
23. The contention cannot be accepted. As already notice, 'debt' under the Act includes an amount due under a decree passed by the civil Court. Under Section 19, a bank can institute an application to recover any debt from a person. Thus, even an application for the recovery of an amount as due under a decree passed by the civil Court falls within the ambit of Section 19. . . . . . . . . In our view, even in a case where the decree has been passed by the civil Court for an amount of Rs.10 lakhs or more, the appeal shall lie before the Appellate Tribunal.. . . . . .
25. . . . . . . It is true that in sub-clause (g), the expression is "setting aside any order . . . .passed by it ex parte." Since the ex parte decree had been passed by the civil Court, it can legitimately be contended that the provisions of Section 22(2)(g) are not, strictly speaking, applicable. However, in this situation it deserves mention that the tribunal would be entitled to evolve any fair procedure, which may conform to the principles of natural justice. If it finds that the appellant had not been duly served, the Tribunal shall be entitled to set aside the ex parte decree."
(ii) The Full Bench judgement of the Kerala High Court is reported in 2006(4) KLT 477 ARAVINDAKSHAN V. FEDERAL BANK LTD. Certain excerpts from it would run thus:
"2. The suit O.S. 408/1995 was field by the first respondent Bank before the Additional Sub Court, Kollam for realisation of Rs.8,16,797/- with interest from defendants 1 to 7 who are the appellants. The suit originally instituted was for an amount of less than Rs.10 lakhs and concededly, the suit has necessarily to be filed before the civil court as the valuation of the suit is less than Rs.10 lakhs. If only it exceeds Rs.10 lakhs, the Debt Recovery Tribunal gets jurisdiction over the matter. However, eventually when the suit was decreed, it exceeded the decree amount and including interest of Rs.38,48,960/- it came to Rs.46,65,757/-. It was contended by the appellants that the appeal would lie before the High Court whereas the respondent contended that the appeal will be only before the Appellate Tribunal constituted under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the Act"). The first respondent also relied on the decision of this Court in Glenny v. The Catholic Syrian Bank Ltd. MANU/KE/0164/2003 wherein there is a passing reference that in a case where a decree was passed by the civil court for an amount of Rs.10 lakhs or more, appeal would lie before the Appellate Tribunal. Placing reliance on the decision in Cochin Malabar Estate & Industries v. State of Kerala 2002 (1) KLT 588, it was contended before the Division Bench that the Division Bench is bound by the Full Bench decision in Glenny's case MANU/KE/0164/2003. In the reference order the Division Bench held that in the Full Bench decision in Glenny's case MANU/KE/0164/2003 the question that came up for consideration was whether the provisions of the Act debar the civil court from setting aside an expart decree passed by it. An application under Order IX Rule 13 of the Code of Civil Procedure to set aside the expart decree was filed which was dismissed by the court below holding that it has no jurisdiction to entertain the same. An appeal was preferred to this Court against the said order which was ultimately referred to the Full Bench. The question was whether the appeal has to be filed before the Tribunal constituted under the Act or before the High Court. There was no occasion in such circumstances to consider whether the appeal should be filed before the Tribunal or before the High Court in a situation like the present one when the decretal amount exceeds Rs.10 lakhs, though the suit as such was instituted for less than Rs.10 lakhs. However, in view of the Full Bench decision in Glenny's case MANU/KE/0164/2003 the matter was referred to us.
3. We have heard the learned counsel for the appellants and the respondents. It is the specific contention of the respondent that when the decretal amount exceeds Rs.10 lakhs, only the Appellate Tribunal constituted under the Act has jurisdiction to entertain any appeal against such a decree.
4. We have carefully gone through the decision in Glenny's case MANU/KE/0164/2003 and with great respect it has to be held that the question that arose for consideration in the said case is entirely different from the point that arises for consideration in the present case. Even though there is a casual observation made in the said judgment that an appeal against a decree for an amount exceeding Rs.10 lakhs would lie before the Appellate Tribunal, it has to be considered that the question as such did not squarely come up for consideration before the Full Bench and as such the observation is only as obiter and cannot be taken as a ratio decedenti. However, in order to answer the question that is referred to us, it is necessary to consider the other contentions raised by the parties.
5. According to the learned counsel for the respondent, an appeal against a decree passed by the civil court for more than Rs.10 lakhs would lie before the Appellate Tribunal under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act. We shall examine the said contentions now. As per Section 20 the said Act, an appeal would lie to the Appellate Tribunal from an order passed by the Debt Recovery Tribunal or deemed to have been passed by it. The argument is that even against an order deemed to have been passed by the Tribunal, under Sections 17 and 20, it must be held that when the decree exceeds Rs.10 lakhs it must be deemed to be a decree passed by the Debt Recovery Tribunal for the purpose of Section 17 and 20 of the Act. We are unable to agree with this contention. The Act does not contain any specific provision as to when and in what circumstance an order would be deemed to have been . . . . . . . . . ."
(iii)1998-2-L.W.107 N.M.AHAMED ALI V. UNION BANK OF INDIA BY BRANCH MANAGER, TOWN HALL ROAD, MADURAI, certain excerpts from it would run thus:
5. There is no dispute that the Tribunal had been constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Sub-Section(4) of Section 1 of the said Act deals with the jurisdiction of the Tribunal as follows:-
"(4) The provisions of this Act shall not apply where the amount of debt due to any Bank or financial institution or to a consortium of Banks or Financial Institutions is less than ten lakhs rupees or such other amount, being not less than one lakh rupees, as the Central Government may by, notification, specify".
Hence, it is clear that the provisions of the Act will not be applicable where the amount of debt due to any Bank is less than Rs.10 lakhs. Section 18 bars the jurisdiction of the Civil Court to entertain any claim from the Bank or the Financial Institution. The limitation on the pecuniary jurisdiction specified under sub-section (4) of Section 1 would refer to the claim of the Bank on the date of the filing of the suit and not subsequent to the dates.
6. In fact, I asked the learned counsel to clarify about the pendency of the suit before this Court. It is well known fact that where the suit is filed for less than Rs.10 lakhs, those suit is have not been transferred to the Tribunal. The learned counsel for the petitioner also concedes the same. I also asked the learned counsel for the petitioner, that if the suit is taken for final disposal after 3 or 4 years and by virtue of the accrued interest, if the claim of the Bank on the date exceeds Rs.10 lakhs, whether this Court has jurisdiction or not to try the suit, the learned counsel for the petitioner fairly conceded that this Court has got jurisdiction to try the suit. When the learned counsel is very much clear about the jurisdiction of the Tribunal when the amount exceeds Rs.10 lakhs and the jurisdiction of the Civil Court when the amount is less than Rs.10 lakhs, I am of the view that the preliminary objection has been raised before the lower court only to delay the proceedings and nothing else. Equally, the revision has been filed only to drag on the proceedings and to delay the payment. When the statute is very clear, the objection raised by the petitioner's counsel is unwarranted and unsustainable.
7. It may be worthwhile to consider the legal position also. It has been held in the judgment reported in Kannayya Chetti v. Venkata Narasayya (40 I.L.R. Page 1) (DB) as follows:-
"We are, therefore, of opinion that in every case when the Court is seized of jurisdiction it cannot and does not lose it by any change in the value of the subject matter of the suit after the institution of the suit or by the precise ascertainment of its value in case which do not admit of such ascertainment at the time of institution, except when the plaint is allowed to be amended; and that is not really an exception.
On the same principle we think the court can award such sum as it finds due to the plaintiff although such sum is above the pecuniary limits of its jurisdiction. This can happen only in suits for accounts or mesne profits, as in all other cases the plaintiff without amending his plaint cannot get more than what he claims; even in suits for accounts or mesne profits, the plaintiff does not really get more than what he asks, for, the relief prayed for in those suits is not for a particular sum, but whatever sum the plaintiff is found ultimately entitled to, and the amount fixed approximately is for the purpose of determining the Court which has jurisdiction to try the suit."
(iv) AIR 1998 CALCUTTA 243 ALLAHABAD BANK V. GHANSHYAM DAS DAMANI, certain excerpts from it would run thus:
6. Therefore, the Order 9, Rule 13 of the Code of Civil Procedure and Section 22(2)(g) will be read side by side. In the earlier one the Court which was passed decree can pass an order to set aside and in the later one setting aside any order of dismissal of any application for default or any order passed by 'it' exparte. The cardinal principle is if the suit is decreed exparte by the Civil Court it should be revived by the Civil Court alone and if order is passed exparte before the Tribunal it will be revived by it alone. If the suit decreed by the High Court and recalled by the Tribunal under control and supervision of such High Court, it will be a last day of the judiciary. Incidentally High Court is one having different jurisdiction. There should be a limitation as to how far Tribunal should proceed with a matter assigned before it and an unfettered right to the Tribunal, if at all given by the legislature may create hazardous situation in the judicial discipline.
7. Moreover the suit filed in the original side is to be guided by the Original Side Rules. Original Side Rules has prevailing effect over the Code of Civil Procedure. In such a situation, an application of Order 9, Rule 13 cannot be said to be an application under Order 9, Rule 13 of the Code of Civil Procedure alone but an application both under the Original Side Rules as well as Code of Civil Procedure. Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 speaks about the Code of Civil Procedure, 1908 but silent about the Original Side Rules of a chartered High Court although there are various chartered High Courts in the country. The law-maker did not think about this aspect at the time of making the law.
9. A mere poring over and perusal of the above extracts including the whole judgements, would amply make the point clear that earlier the Full Bench decision of the Kerala High Court reported in 2003(3) CTC 111 GLENNY,C.J V. THE CATHOLIC SYRIAN BANK LTD would hold that the civil Court, which passed the ex-parte decree would not have jurisdiction to set aside the ex-parte decree, if as on the date of filing of the application to get the ex-parte decree set aside, the decreetal dues under the ex-parte decree exceeds Rs.10 lakhs.
10. However, subsequently the Full Bench of the Kerala High Court, in 2006(4) KLT 477 ARAVINDAKSHAN V. FEDERAL BANK LTD, referred to supra, would unambiguously and unequivocally, by referring to the earlier aforesaid Full Bench decision (2003(3) CTC 111 GLENNY,C.J V. THE CATHOLIC SYRIAN BANK LTD) of the same High Court would hold a different view.
11. At this juncture, my mind is reminiscent and redolent of the following maxims:
Judicia posteriora sunt in lege fortiora The later decisions are stronger in law.
12. I am also fully aware of the fact that if a Bench of co-ordinate jurisdiction passes the judgement oblivious of the earlier judgement of the same Court, then the subsequent judgement may not be treated as a biding precedent. But in this case, the Full Bench of the Kerala High Court in 2006(4) KLT 477 ARAVINDAKSHAN V. FEDERAL BANK LTD, referred to the earlier Full Bench decision and highlighted the salient features and unambiguously and unequivocally, pellucidly and palpably, laid down the law to the effect that the cause of action for the suit should be the criteria for filing appeal and consequently choosing the forum. The decisions of the Madras High Court and the Calcutta High Court also would support the argument of the learned counsel for the revision petitioners. If the application under Order 9 Rule 13 of C.P.C.is allowed, the suit valued at less than Rs.10 lakh would get revived and only the civil Court shall have jurisdiction and not the Debts Recovery Tribunal, which could deal with matters involving more than Rs.10 lakhs. Wherefore, axiomatically and obviously, the civil Court only has got the jurisdiction to deal with the application under Order 9 Rule 13 of C.P.C. if the valuation of the suit as on the date of the filing of the suit was less than Rs.10 lakhs.
13. However, the learned counsel for the first respondent/plaintiff would cite the decision of the Honourable Apex Court reported in (2000)6 SUPREME COURT CASES 655 PUNJAB NATIONAL BANK, DASUYA V. CHAJJU RAM AND OTHERS, certain excerpts from it would run thus:
7. Learned counsel for the respondents submitted that the use of the words cause of action in Section 31 indicated that it is only pending suits which could be transferred. We are unable to agree with this submission. The words cause of action are preceded by the words being a suit or proceeding. Section 31 contemplates not only the transfer of a suit but also transfer of a proceeding which may be other than a suit, like an execution application. Understood in this context, the words being a suit or proceeding the cause of action whereon it is based ... would mean that in the case of an execution application if the decree is for more than Rs 10 lakhs, then that is the cause of action or the reason for an application for execution being filed before the Tribunal.
8. To put matters beyond doubt, the Act has been amended by the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000 and Section 31-A has been inserted which reads as follows:
31-A. Power of Tribunal to issue certificate of recovery in case of decree or order.(1) Where a decree or order was passed by any court before the commencement of the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000 and has not yet been executed, then, the decree-holder may apply to the Tribunal to pass an order for recovery of the amount.
(2) On receipt of an application under sub-section (1), the Tribunal may issue a certificate for recovery to a Recovery Officer.
(3) On receipt of a certificate under sub-section (2), the Recovery Officer shall proceed to recover the amount as if it was a certificate in respect of a debt recoverable under this Act.
9. The aforesaid Section 31-A is clearly applicable in the present case. The decree was passed by the Court before the commencement of the Amendment Act and the same has not yet been executed. At least after the amendment, it is only the Tribunal which would have the jurisdiction of entertaining the application for execution of the decree inasmuch as the amount due for which the decree was sought to be executed is over Rs 10 lakhs. We are also unable to agree with the High Court that because the original decree which was passed was for principal sum of Rs 6,19,250 the Tribunal would get no jurisdiction. It is to be seen that decree was for a sum of Rs 6,19,250 plus interest at the rate of 16-1/2 per cent per annum from the date of filing of the suit till the recovery of money. As and when the amount due to the Bank under the decree became more than Rs 10 lakhs and an application for execution was filed, it could only be entertained by the Tribunal and not by the civil court. It is clear that in view of the provisions of Section 34 of the Act, the provisions of Order 21 Rule 10 CPC would have no application.
14. A mere perusal of the above precedent would unambiguously and unequivocally highlight the point that for the purpose of filing E.P., the cause of action should be taken as the decree. As such, as on the date of filing of the E.P. before the Debts Recovery Tribunal, if the amount due recoverable under the civil Court's decree was more than Rs.10 lakhs, then the Debts Recovery Tribunal only will have jurisdiction.
15. It is therefore crystal clear that for the purpose of ascertaining the true meaning of the phrase 'cause of action' as found set out under Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 , the cause of action relating to the suit or the E.P., as the case may be, should be construed.
16. Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act is extracted hereunder for ready reference:
"Sec.31. Transfer of pending cases (1) Every suit or other proceeding pending before any Court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal.
Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any Court.
(2) Where any suit or other proceeding stands transferred from any Court to a Tribunal under sub-Section (1) -
(a) the Court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and
(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage as the Tribunal may deem fit."
17. The Honourable Apex Court in the decision rendered in (2000)6 SUPREME COURT CASES 655 PUNJAB NATIONAL BANK, DASUYA V. CHAJJU RAM AND OTHERS, has not observed or stated anything to the effect that once the dues under the ex-pare decree crossed the limit of Rs.10 lakhs, the application to get the ex-parte decree set aside or the application to get the delay condoned in filing the application to get the ex-parte decree set aside, should be filed only before the Debts Recovery Tribunal. On the other hand, in that decided case, by way of upholding the maintainability of the execution proceedings before the Debts Recovery Tribunal, in respect of the decree passed by the civil Court, the Honourable Apex Court held that the dues recoverable under the ex-parte decree exceeded Rs.10 lakhs and hence the Debts Recovery Tribunal had the jurisdiction to entertain the execution proceedings.
18. Applying the same formula mutantis-mutandis if the matter is viewed it is clear that the cause of action for the suit should be taken as the cause of action, which includes the quantum of valuation, as found exemplified, detailed and delineated in the plaint.
19. Here, as on the date of filing of the plaint, the amount due recoverable as per the plaintiff Bank was less thanRs.10 lakhs and in such a case, it was well within the jurisdiction of the civil Court. In such a case, it is quite obvious and axiomatic that the application to get the delay condoned in filing the application to get the ex-parte decree set aside should be filed only before the civl Court and such a view would be in pari materia with the Honourable Apex Court's decision reported in (2000)6 SUPREME COURT CASES 655 PUNJAB NATIONAL BANK, DASUYA V. CHAJJU RAM AND OTHERS, as well as the latest Full Bench decision of the Kerala High Court reported in 2006(4) KLT 477 ARAVINDAKSHAN V. FEDERAL BANK LTD.
20. Wherefore, I set aside the order dated 9.2.2011 passed by the II Assistant Judge, City Civil Court, Chennai in I.A.No.3602 of 2010 and remit the matter to the same Court to deal with it on merits and dispose it within a period of two months from the date of receipt of a copy of this order.
21. In the result, the civil revision petition is allowed. However, there is no order as to costs. Consequently, connected miscellaneous petitions are closed.
Msk 04.07.2012
Index:Yes
Internet:Yes
Note to Office:
Issue order on 5.7.2012
G.RAJASURIA,J.
msk
To
The II Assistant Judge, City Civil Court, Chennai
C.R.P.(NPD) No.1120 of 2011
04.7.2012