Kerala High Court
M.P. Abdul Khader vs Catholic Syrian Bank on 27 September, 2006
Equivalent citations: AIR2007KER67, IV(2007)BC488, AIR 2007 KERALA 67, 2007 (2) ALL LJ NOC 334, 2007 (2) ABR (NOC) 374 (KER), 2007 (2) AKAR (NOC) 188 (KER), (2007) 1 BANKJ 644, (2007) 4 BANKCAS 488, (2006) 4 KER LT 1003, (2007) 3 BANKCAS 678, (2007) 50 ALLINDCAS 705 (KER), (2007) 137 COMCAS 970, (2006) 3 KER LJ 761
Author: K.A. Abdul Gafoor
Bench: K.A. Abdul Gafoor
JUDGMENT K.A. Abdul Gafoor, J.
1. Admittedly by the writ petitioner he is the judgment-debtor in Ext. P1 decree. He has approached this Court with this writ petition seeking a declaration that Ext. P1 decree is a nullity. The basis for this contention is that Ext. P1 decree obtained by a scheduled bank is for a total amount of Rs. 15,60740/-. This being an amount in excess of 10 lakhs, it should have been passed only by a tribunal constituted in terms of Recovery of Debts Due to Banks and Financial Institutions Act. Therefore, the Civil Court did not have, on the appointed day, namely 4-11-1996, onwards, power to pass a decree like Ext. P.1. Thus it is a nullity and cannot be therefore executed. To fortify this contention the decisions of the 3 Apex Court in Allahabad Bank v. Canara Bank AIR 2000 SC 1535 and of this Court in Glenny v. The Catholic Syrian Bank Ltd. are relied on. Going by Section 17 of the Act only the tribunal constituted under it alone did have jurisdiction to pass such a decree. In other words, the counsel contends, going by Section 18 of the Act jurisdiction of Civil Courts, is barred to pass a decree for an amount of Rupees 10 lakhs or more in favour of a bank or a financial institution. Placing reliance on Section 31 of the Act it is contended that on the moment, when the subject matter of the suit exceeded the said limit, the suit ought to have been transferred to the tribunal. Therefore on any count, Ext. P1 is unsustainable and therefore is a nullity. It ought not to have been passed by the Subordinate Judge, Payyannur. It is further submitted that even in respect of a decree passed by a Civil Court before the appointed day, if the decree amount exceeds the limit it ought to have been sent to the recovery officer for appropriate execution.
2. In answer, it is contended by the counsel for the respondent/bank that the decision in Allahabad Bank's case does not in any way cover the issue, as it was a case concerning a matter related to the impact of the provisions of the Act in relation to the proceedings under Companies Act, 1956. It is further contended that the Full Bench decision in Glenny's case was in relation to the maintainability of a petition to set aside ex parte decree which at the material point of time excluded the prescribed amount. It is further submitted that when the suit in question which resulted in Ext. P1 decree was filed, the total amount due was only Rs. 6,52,445/-. The suit was filed in the year 1999, far later than the appointed day. Its disposal was delayed because of the attitude of the petitioner/defendant in not appearing and being set ex parte for more than one occasion and carrying the matter before this Court on each of the such occasions. Therefore the interest accrued to the tune of Rs. 8,52,34/-. Had the suit been disposed of, if the petitioner had co-operated, in time, within reasonable time after the filing, it would not have crossed the limit. It is further submitted that because of the interest accrued and a further amount of Rs. 55,935/- towards cost, the decree amount exceeded the limit of Rupees 10 lakhs. At the same time it is conceded that the decree could be executed only by resorting to the provisions of the Act.
3. The dictum of the Apex Court in Allahabad Bank's case does not have any application to the case on hand because that was in relation to a different fact frame. Of course the decision in Glenny's case is almost on similar facts as is revealed in para 2 of the said judgment. There a suit was filed against Glenny for an amount of Rs. 8,61,130/-. Glenny was set ex parte on 16-6-2000. An ex parte decree was passed. That decree was for an amount of more than 15 lakhs. Glenny attempted to set the ex parte decree aside and moved the Court which passed that decree. The Full Bench held that, that petition ought not to have been entertained by that Court, because the petition was to set aside a money decree exceeding Rs. 10 lakhs obtained by a bank. Therefore, only the tribunal constituted under the Act alone did have jurisdiction to entertain such an application to set aside a decree which exceeded Rs. 10 lakhs limit provided for in Sub-section (4) of Section 1 of the Act.
4. In this case, the petitioner had never moved to set aside Ext. P1 ex parte decree. On the other hand he is facing execution proceedings. In this respect it is to be noted that there was an earlier ex parte decree on 4-10-1999. The petitioner had willingly and with open eyes moved the Court to set aside that ex parte decree, obviously because even according to him, at that time the suit amount did not exceed the limit provided in Sub-section (4) of Section 1. His prayer was finally allowed.
Again he was set ex parte and Ext. P1 decree was passed. In such circumstances he cannot contend that as the amount had exceeded, because of the accrual of interest, the limit provided for in Sub-section (4) of Section 1 of the Act, the Sub Court did not have jurisdiction to pass the decree.
5. The contention of the petitioner that a suit competently filed after the appointed day before a Civil Court, being below the limit provided for in Section 1(4) of the Act, shall be transferred to the Tribunal as and when, the amount crosses the said limit due to accrual of interest pendente lite and of cost also cannot be countenanced. The only provision for transfer of the suit is that contained in Section 31. It is confined only to the "suit or other proceedings pending before any Court immediately before the date of establishment of a Tribunal". The suit in which the impugned decree was passed is one instituted far later than such establishment. At the time of filing the suit, it was admittedly maintainable before the Civil Court. There is no provision in the Act for transferring such suit for trial to a Tribunal on accrual in interest and thus crossing the limit provided in Section 1(4). When the suit was filed and the suit was continued it was below the prescribed level. Ext. P1 decree cannot be therefore said to be a nullity.
6. Mover over, it is also not fair in a proceedings under Article 226 to declare a decree passed by a competent Civil Court as a nullity, even if there is any error of jurisdiction. When a decree is passed by a Civil Court, that decree is amenable for an appeal in terms of Section 96, CPC. Therefore the right way of avoiding the decree, if it is illegal, was to file an appeal.
7. In such circumstances the prayer of the petitioner that Ext. P1 decree was a nullity cannot be accepted.
8. At the same time, the petitioner is well justified to contend that the execution of the decree cannot be enforced In a Civil Court. Going by the decision of the Full Bench in Glenny's case, execution will lie only before the appropriate authority under the said Act.
The writ petition is thus allowed in part. The Execution Petition forming subject-matter of this writ petition shall be returned to the decree holder for being presented to the appropriate authority.