Patna High Court
Durga Prasad Sah vs The State Of Bihar And Ors. on 29 April, 2003
Equivalent citations: 2003(2)BLJR1188, [2003]46SCL170(PAT)
JUDGMENT Ravi S. Dhavan, C.J. and R.N. Prasad, J.
1. This case should be an eye opener to the law makers of the nation and those who control the fiscal discipline of public finances. Time after time, this High Court has brought it to the notice of the governments in administration that there is something serious which needs to be addressed on the non-performing assets, that is to say, of loans which have been taken from public financing institutions and banks and such loans remain unpaid. The Court had asked this question from Counsel for the bank on what exactly be the position nationwide of amounts which stand in debt. On instructions this is indicated by Counsel for the State Bank of India as over Rs. 60,000 crores.
2. This amount is contributing to the deficit financing in the nation's economy. If this amount of Rs. 60,000/- crores represents loans outstanding against bad debtors then this deficit has to be made up by resorting to taxes, direct or indirect. Innocent people who have nothing to do with these had debts land up playing taxes and this amount alone perhaps may be the reason for deficit financing of the nation's planned economy. Deficit contributes to inflation which is over six per cent today.
3. The amount in this particular case was taken as a loan in 1986. It was Rs. 4,95,016.15. Today, it is 17 years and Counsel was unable to answer the inquiry of the Court whether any part of this amount was returned. Learned Counsel stated that he had no instruction on this. The result is on the record. Of the debt which was not cleared, the bank had to file a suit for recovery of this money. The suit was decreed on 6 September, 2000. The bank had to file an execution case. This aspect is not relevant and the execution proceedings virtually stood transferred to the tribunal constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993).
4. The amount under the decree stands at Rs. 35,38,237.70. The stark nakedness is of how to make a game out of taking loans and not paying it is clear from this case as an example. The claim on the date of filing of the suit stood at Rs. 4, 95,016.15, Upon adjudication the decree stands at Rs. 35,38,237.70.
5. If this is not all bad debtors make a business out of not paying their debts. They utilise public funds to seek loans from public banks and then resort to legal engineering as a device on how not to pay debts. This is a theme which goes on and on and it brings discredit to the nation. The nation also has a reputation that its banks lend monies and its debtors do not pay. The appellant is one of them.
6. Now, the Court is called upon to answer the question that this suit, should have been transferred to the tribunal upon coming Up of the Act, Legal architecture is being made on how to avoid the debt. Upon an inquiry as to whether the debt is acknowledged the answer is, yes. Is the decree waiting execution? The answer to this question is also in the affirmative. Has the debt been paid? The answer to this question is in the negative. When asked one simple question if the debt has not been paid why should not the petitioner discharge it now; learned Counsel says that he has no instruction on this,
7. The High Court is a Court of equity first. It is not a heaven for those who violate equity. Taking a loan is a contract. The contract rests on equity, plain and simple. In the circumstances, the Court is not about to open its door to bad debtors to yet contribute and be blamed that it has contributed to more deficit financing.
8. Legal ingenuity cannot be encouraged that a preliminary issue be debated first where the suit would lie, The civil court of principal jurisdiction or the tribunal? The petitioner could not have taken this preliminary issue because the suit was filed in 1986. The Tribunal was nowhere in sight for another 7 years. Now, the law sends the proceedings where it should be. The question was never raised in the suit and if the question is permitted to be raised now all that is going to happen is that further interest will pile up on Rs. 35,38,237,70, which the petitioner appellant had no intention of paying. The High Court is not a school for bad debtors. The process of realisation of the loan be set in motion forthwith.
9. A copy of this order be sent to the Governor, Reserve Bank of India, the Secretary, Ministry of Finance, Finance Division, Government of India, the Secretary, Ministry of Commerce, Government of India and the Secretary, Ministry of Law Government of India.