Madras High Court
V.P.Thamaraiselvi vs The Indian Bank on 6 May, 2008
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 06.05.2008
CORAM
THE HONOURABLE Ms.JUSTICE K. SUGUNA
W.P. No. 11139 of 2007 & M.P.Nos.1 and 3 of 2007
V.P.Thamaraiselvi .. Petitioner
Vs.
1. The Indian Bank,
Main Branch, Court Street,
Tiruppur - 641 601
Rep. by its Chief Manager.
2. The Debts Recovery Tribunal,
Coimbatore.
3. The Recovery Officer,
Debts Recovery Tribunal,
Coimbatore.
4. P.Duraisamy
S/o M.Palanisamy Gounder,
382, Mangalam Road, Karuvampalayam,
Tirupur - 641 603
(R4 impleaded as per order dt.5.9.07
in M.P.2/07 in W.P.11139/07) .. Respondents
Prayer: Petition filed under Article 226 of the Constitution of India to issue a Writ of Declaration, declaring that the entire process undertaken by the respondent Nos.2 and 3 starting from the filing of O.A.No.287 of 2004 upto the auction sale dated 14.2.2007 is without jurisdiction, invalid and void abinitio and consequently non-est in law.
For Petitioner : Mr.P.K.Rajagopal
For Respondents : Mr.M.Balachandran for R1
R2 & R3 Tribunal
Mr.V.Balasubramanian for R4
O R D E R
This writ petition is filed for the issue of a Writ of declaration, declaring the entire process undertaken by the respondent Nos. 2 and 3 herein starting from the filing of O.A.No.287 of 2004 upto the auction sale dated 14.2.2007 is without jurisdiction, invalid and void abinitio.
2. The case of the petitioner is the petitioner's husband Late V.P.Palanisamy was originally a partner of a Firm called V.P.Garments. The said Firm availed certain loans and facilities from the first respondent Bank during the period between 4.12.1992 and 9.11.1994. However, the firm was dissolved and reconstituted into a partnership business in the name of the petitioner's husband Mr.V.P.Palanisamy. The properties of the petitioner's husband comprised in S.F.No.330 of Rakyapalayam Village, Avinashi Taluk, Coimbatore District were given as collateral security for the loans availed and equitable mortgage in respect of the properties was also created by Late Mr.V.P.Palanisamy in favour of the Bank. Subsequent to the death of the petitioner's husband, the Bank filed a suit before the Sub-Court, Tirupur in O.S.No.470/2000 for the following relief:
"26.Therefore, the plaintiff prays that this Honourable Court may be pleased to pass a preliminary decree:-
a]Directing the defendants personally to pay to the plaintiff a sum of Rs.8,52,228/-together with subsequent agreed rate of interest from the date of suit till the date of realisation in full at 18.50% p.a. with quarterly rests together with costs of the suit;
b]directing the 1st and 2nd defendant to pay or deposit in Court the sum of Rs.8,52,2228/- together with together with subsequent agreed rate of interest from the date of suit till the date of realisation in full at 18.50% p.a. with compounded quarterly rests together with costs on or before the date to be determined by this Hon'ble Court;
c]in case of defendants non-payment or deposit as provided in clause A and B supra, a final decree for sale of mortgaged properties may be passed;
d]directing the defendants to pay the costs of the suit to the plaintiff."
3.The said suit was filed against the petitioner and his son who was minor at that time. According to the learned counsel for the petitioner, the said properties were ancestral properties and the petitioner's husband had only 1/3rd share in the said property along with his sons V.P.Karthik Raja and V.P.Ashokkumar and the said V.P.Karthik Raja died on 16.10.1995. According to the learned counsel for the petitioner, consequently, the petitioner had become the sole heir as per the Hindu Succession Act. The second son namely V.P.Ashok Kumar had filed O.S.No.37/1997 for partition and the same was also decreed. In the said suit filed by the respondent Bank in O.S.No.470/2000, an exparte decree was passed by the Sub-Court, Tirupur on 8.8.2002 against the petitioner and the petitioner's son, for the payment of Rs.8,52,228/- with interest thereon at 18.5% per annum with quarterly rests from the date of the suit till the date of realisation. Subsequent to this, the first respondent Bank filed O.A.No.287/2004 under Act 51 of 1993 on the file of the second respondent. The petitioner herein has also entered appearance in the said application. Now, the stand of the petitioner is at that time, the petitioner was not aware of the fact that the Tribunal did not have jurisdiction to entertain the application filed by the I respondent. The said O.A. Was disposed of by order dated 04.10.2005 in the following terms:-
"In the result, it is ordered to issue Recovery Certificate in terms of the preliminary decree dated 08.08.2002 in OS.No.470 of 2000 of the Sub-court, Tiruppur for the recovery of the sum of Rs.15,45,367.50 {Rupees fifteen lakhs forty five thousand three hundred and sixty seven and paise fifty only] with interest on the sum of Rs.8,52,228/- [Rupees eight lakhs fifty two thousand two hundred and twenty eight only] @ 18.5% per annum from 26.08.2004 till realisation by sale of the 'B' schedule mortgaged property shown in the preliminary decree. The costs of the applicant bank in this proceeding shall b evidence costs in execution of the Recovery Certificate. Communicate copy of this order to both parties as provided in Rule 16 of the Debts Recovery Tribunal [Procedures] Rules, 1993 as amended in 2003."
As per the averment in the affidavit filed in support of the writ petition the Bank had initiated further recovery proceedings in R.P.No.150/2005 to bring the property for sale. The Interlocutory Application filed by the petitioner herein in I.A.No.644 of 2006 to cancel the proclamation of sale and issue a fresh proclamation of sale only with regard to 1/3rd share of the petitioner's husband was also dismissed. The petitioner had filed another application before the third respondent in I.A.No.334/2007 to defer the confirmation of the sale and set aside the auction dated 14.2.2007. When that I.A. was pending, the petitioner had filed this writ petition with the above said prayer.
4. According to the learned counsel for the petitioner, the order passed by the Tribunal, the second respondent herein is without jurisdiction. According to the learned counsel for the petitioner under Section 31-A with respect of the decrees which were passed prior to 17.1.2000 alone, the Tribunal has got power to entertain. As far as the case in hand is concerned, the said decree was passed on 08.8.2002. As such, according to the learned counsel, the Tribunal does not have jurisdiction to entertain that application. Consequently, the entire proceedings before the Tribunal and the consequential proceedings have become void abinitio, so also, the procedure adopted by the 3rd respondent in the matter of the sale of properties of the petitioner. Consequently, according to the learned counsel for the petitioner, right from the beginning of the filing of O.A.No.287/2004 which culminated in the sale of the properties comprised in S.F.No.330 of Rakyapalayam Village, Avinashi Taluk, Coimbatore District on 14.2.2007 has to be declared as null and void.
5. On the other hand, the learned counsel appearing for the first respondent Bank has submitted that Late Mr.V.P.Palanisamy deposited the title deeds pertaining to the property in question on 19.12.1992 and on 21.12.1992 the said late V.P.Palanisamy executed a memorandum of deposit of title deeds in favour of the Bank, confirming the deposit of the title deeds and creation of equitable mortgage. According to the learned counsel for the first respondent Bank, after the death of Mr.V.P.Palanisamy with the full knowledge that V.P.Palanisamy has deposited the title deeds in question, his son seems to have filed a suit in O.S.No.37 of 1997 with a view to avoid probable legal action taken by the Bank against the property mortgaged, for partition. According to the learned counsel for the first respondent Bank, the said suit was a collusive one and was only filed with an intention to defeat and delay the claim of the first respondent as secured creditor in respect of the entire property mortgaged to the Bank by late V.P.Palanisamy. According to the learned counsel for the respondent Bank since the mortgage created over the property in question was not cleared, the first respondent Bank filed O.S.No.470 of 2000 and obtained a preliminary decree for a sum of Rs.8,52,228/-. As the decretal amount exceeds Rs.10 lakhs payable by the judgment debtor and since the Civil Court seized to have the jurisdiction over the execution of the decree, the first respondent Bank preferred O.A.No.287/2004 on the file of the 2nd respondent. According to the learned counsel, as per Sec.2[g] of Act 51 of 1993 definition "debt" includes "decreetal debt" also, consequently, the Bank had filed O.A.No.287/2004. According to the learned counsel, the petitioner has also entered appearance in the said O.A. and the said O.A. was disposed of by an order dated 4.10.2005 and the Recovery Certificate was also issued in R.P.No.150/2005 on 7.11.2005. According to the learned counsel, having knowing fully well that they do not have a case on merit, the petitioner and her son had submitted before the Tribunal. Apart from this, according to the learned counsel for the respondent Bank, no appeal has been preferred by the petitioner or her son as against the order passed in O.A.No.287/2004 and even as against the order passed in I.A.No.644/2006 to issue a fresh certificate only in respect of 1/3rd share of the petitioner's husband. No appeal was filed. As such, according to the learned counsel for the respondent Bank, the matter has attained its finality and now, the petitioner cannot raise the point with regard to the jurisdiction. Apart from this, the decree passed in O.S.No.37/2007 does not bind the respondent Bank nor will alter the position of the mortgage in respect of the entire property created by V.P.Palanisamy. Basing on this, learned counsel for the respondent Bank, has prayed for the dismissal of the above said writ petition.
6. The auction purchaser, the fourth respondent had filed M.P.No.1/2007 to implead him as a party respondent in this writ petition. According to the learned counsel appearing for the fourth respondent, the petitioner herein had submitted herself to the jurisdiction of the Tribunal. The first respondent Bank,in pursuance of the orders passed by the second respondent,filed recovery proceedings in R.P.No.150/2005. In pursuant to the recovery proceedings in R.P.No.150/2005, the first respondent herein conducted a public auction on 14.2.2007 wherein the fourth respondent is the successful bidder and deposited the entire amount of Rs.41,90,000/- on 14.2.2007 and on 28.2.2007 with the third respondent. According to the learned counsel, the writ petition is not maintainable since an alternative remedy is available by way of appeal under Section 20 and 30 of Act 51 of 1993. Having failed in the proceedings before the 2nd and 3rd respondents, the petitioner ought to have filed an appeal but the petitioner without availing the alternative remedy has filed this Writ petition and the learned counsel for the fourth respondent relying on the judgment reported in 2005(1) C.T.C. 1 (Indian Additives Ltd. v. Indian Additives Employees' Union) and the judgment reported in 2001(6) SCC 569 (Punjab National Bank v. O.C.Krishnan) has submitted that on the ground of availability of the alternative remedy, this writ petition has to be dismissed. Apart from this, relying on the judgment reported in 2006(2) CTC 161, (Om Sakthi Renergies Limited v. Megatech Control Limited) learned counsel appearing for the fourth respondent had contended having submitted before the tribunal the petitioner is estopped from contending that the Tribunal does not have any power to entertain the application filed by the petitioner. Basing on this, learned counsel for the fourth respondent has prayed for the dismissal of the above said writ petition.
7.I have considered the above submissions of the respective learned counsel.
8.Admittedly, when the suit was filed as per the plaint filed by the Bank, the suit is for a recovery of a sum of Rs.8,52,228/- which is below Rs.10 lakhs. As such, in view of sub-section 4 of section 1, admittedly the Tribunal did not have the jurisdiction to entertain that claim. Besides, only in the year 2002, the Tribunal was formed in Coimbatore. Consequently, in the year 2000, when the suit was filed, no other option for the Bank except to file a civil suit. Admittedly, the said suit was decreed on 08.08.2002. As per the said decree the petitioner has to pay a sum of Rs.8,52,228/- with interest thereon at 18.5% with a quarterly rests from the date of the suit, i.e., 25.08.2000 till realisation. On the date on which the original application in OA.No.287/2004 was filed before the second respondent, the claim amount was Rs.15,45,367.50, i.e., more than Rs.10 lakhs. Now, the argument of the learned counsel for the petitioner is the Tribunal does not have power to entertain OA.No.287/2004. As far as this submission is concerned, as per the Judgment reported in 2000 [6] SCC 655 [ PUNJAB NATIONAL BANK, DASUYA VS. CHAJJU RAM AND OTHERS], the Apex Court has held in paragraph 9 as follows:-
"9.... 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 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."
9.Admittedly, as per the decree passed in O.S.No.470/2000 by order dated 8.8.2002 the amount due was Rs.15,45,367.50, i.e., more than Rs.10 lakhs. As per the above said judgment since the value of the claim is more than Rs.10 lakhs, admittedly, only the Tribunal is the proper Forum and in view of sub-section 4 of section 1 read with Section 18 of Act 51 of 1993, civil Court cannot entertain any such claim. It is true section 31[A] will apply only in respect of cases wherein decree was passed before the Constitution of the Tribunal or before the commencement of recovery of debts due to the Banks and Financial Institutions [Amendment Act of 2000] and which have not been executed. As far as the case in hand is concerned, admittedly, decree was passed only on 08.08.2002. Now the question arises, if a decree has been passed by a civil Court subsequent to the formation of the Tribunal [since the original claim was below Rs.10 lakhs] and if the decree amount exceeds more than Rs.10 lakhs whether the Tribunal is having jurisdiction or not is the issue in question. As far as this is concerned, the term 'debt' is defined in Sec.2[g] of Act 51 of 1993 which reads as follows:-
"[g]"debt" means any liability [inclusive of interest] which is claimed as due from any person by a bank or a 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 consrotium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil Court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application."
As per the above provision even the liability which is claimed as due from any person under a decree is also debt. Under section 19 of the Act, the application can be filed before the Tribunal, and as per sub-section 20 of section 19 read with sub-section 25 of section 19 of the Act which reads as follows:-
"19.Application to the Tribunal:-
[20]The Tribunal may, after giving the applicant and the defendant an opportunity of being beard, pass such interim or final order, including the order for payment of interest from the date on or before which payment of the amount is found due upto the date of realisation or actual payment, on the application as it thinks fit to meet the ends of justice.
[25]The Tribunal may make such orders and give such directions as may be necessary or expedient to give effect to its order or to prevent abuse of its process or to secure the ends of justice."
the Tribunal has got power to pass any interim order or final order with regard to the realisation of the amount due to the Bank or any financial institutions as the Tribunal thinks it fit to meet the ends of justice. As per sub-section 25 of section 19 the Tribunal has got power to pass such orders and give such direction which are necessary or expedient to give effect to its orders or to prevent abuse of its process or to secure the ends of justice. As such in view of the bar under section 18 and also since the decree amount exceeds Rs.10 lakhs in view of sub-sections 20 and 25 of section 19 and also in view of section 17, in my opinion, only the 2nd respondent has got the power to entertain the application filed by the first respondent Bank. In the Judgment reported in 2003 [3] CTC 111 [GLENNY C.J. Vs. THE CATHOLIC SYRIAN BANK LIMITED], the Full Bench of Kerala High Court has held in paragraphs 19 and 23 as follows:-
"19.... As already noticed, under section 17 the jurisdiction has been conferred exclusively on the Tribunal. Section 18 ousts the right of the Civil Court to try any matter relating to the recovery of an amount of Rs.10 lakhs or more. Thus, it cannot be said that once the Civil Court has passed the decree, the subsequent proceedings also shall be within its jurisdiction. This would not be in conformity with the Act.....
...
23...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. The statute does not really make any distinction between an application for recovery or execution. The aim and object is to secure the public dues. It is to recover the money...... The action of the Bank was in strict conformity with the provisions of the Act. It is not shown to be contrary to any provision of the statute. Thus, the contention as raised by the learned counsel for the appellant is rejected."
In view of this, the argument of the learned counsel for the petitioner since the decree has been passed on 08.08.2002, the Tribunal does not have any power to entertain OA.No.287/2004 application will not hold good. Besides, the petitioner had also not raised jurisdictional objection before the second respondent.
10.The first respondent has filed that application under section 31[A] of Act 51 or 1993. Admittedly, section 31[A] will apply in respect of decree which has been passed prior to the commencement of the Amendment Act of 2000. But by quoting a wrong provision of law will not make the proceedings taken by the 1st respondent void before the 2nd respondent Tribunal. Admittedly, an exparte decree has been passed in OS.No.470/2000 on the file of Sub-Court, Thiruppur by order dated 08.08.2002. Neither the petitioner herein nor the second defendant therein had taken any further steps as against the said decree. Having not taken any further steps as against the order passed in OS.No.470/2000 on the file of the Sub-Court, Thiruppur, dated 8.8.2002 and also not taking any further steps as against the order passed in I.A.No.644/2006 by order dated 10.01.2007, the petitioner had allowed the issue to reach the finality. As such, the contention of the learned counsel for the petitioner relying on the order passed in OS.No.37/1997 cannot hold good.
11.As rightly contended by the learned counsel for the respondents, as per the judgment reported in 2001 [6] SCC 569 [PUNJAB NATIONAL BANK VS. O.C.KRISHNAN AND OTHERS], the Hon'ble Apex Court has held in paragraph 6 as follows:-
"6.The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is a hierarchy of appeal provided in the Act, namely, filing of an appeal under section 20 and this fast-track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless, when there is an alternative remedy available, jurisdiction prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act."
Admittedly, this writ petition is filed without exhausting the alternative remedy available under the special statute.
12.In view of the above reasons, I am not able to grant the relief sought for by the petitioner. Hence, the writ petition is dismissed. No costs. Consequently, connected Miscellaneous petitions are also dismissed.
06.05.2008 Index : Yes Internet : Yes vsi/ap To
1. The Chief Manager Indian Bank,Main Branch, Court Street, Tiruppur - 641 601.
2. The Debts Recovery Tribunal, Coimbatore.
3. The Recovery Officer, Debts Recovery Tribunal, Coimbatore.
K.SUGUNA,J.
Vsi/ap W.P. No.11139 of 2007 06.05.2008