Calcutta High Court
Punjab National Bank vs Bengal Potteries Ltd. [In Liqn.] & Ors on 6 August, 2008
Author: Surinder Singh Nijjar
Bench: Surinder Singh Nijjar
COMPAIRED AND READY FOR CD
GA No.3441 of 2006
GA No.3168 of 2007
APOT No.564 of 2006
CS No.238 of 1996
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
PUNJAB NATIONAL BANK Appellant
Versus
BENGAL POTTERIES LTD. [IN LIQN.] & ORS. Respondents
For Appellant : Mr. P.K. Ghose, Sr. Advocate with Mr. Promit Roy and Mr. D. Pal, Advocates For Respondent No.1 : Mr. Biswapati Das, Advocate For Respondent No.2 : Ms. Sutapa Sanyal, Advocate For Respondent No.3 : Mr. Pratap Chatterjee, Sr. Advocate with Mr. Amitesh Banerjee and Mr. K. Mondal, Advocates BEFORE:
The Hon'ble CHIEF JUSTICE SURINDER SINGH NIJJAR The Hon'ble JUSTICE DIPANKAR DATTA Date : 6th August, 2008.
The Court : In view of the judgment rendered by a Learned Single Judge of this Court on 15th December, 1995 in the case of UCO Bank vs. Concast Products Ltd. (now in liquidation), reported in 1996(1) CLJ 380, the appellant bank chose to file the suit in this Court on 28th August, 1996. The suit was filed after obtaining specific leave from this court to institute the suit under Section 446 of the Companies Act, 1956. Leave was granted by Hon'ble Mr. Justice Shyamal Kumar Sen by order dated 20th August, 1996. Soon after institution of the suit the plaintiff filed an application for amendment of the plaint, to make a minor correction in the amount claimed. The second application was an interlocutory motion seeking injunction and attachment before judgment against respondent nos.2 and 3. Thereafter, the original respondent No.3 (substituted respondents No.3a to 3d) moved an application for rejection of the plaint and/or dismissal of the suit. All these applications were filed in the year 1996-97. It is not disputed that prior to the filing of the aforesaid suit The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act of 1993) had already come into operation and the Debts Recovery Tribunal was functioning. The suit was filed in this Court only on the apprehension that in view of the judgment of the learned Single Judge of this Court, in the UCO Bank's case (supra), the Debts Recovery Tribunal would not entertain the application under Section 19 of the Act of 1993. This judgment, however, has been held to be "not correct" by the Supreme Court in the case of Allahabad Bank vs. Canara Bank & Anr., reported in AIR 2000 SC 1535.
Therefore, as soon as the judgment in Allahabad Bank (supra) was pronounced by the Supreme Court, the appellant herein made an application before the Registrar for transfer of the suit to the Debts Recovery Tribunal under Section 31 of the Act. The request of the appellant was accepted and the suit was transferred to the Debts Recovery Tribunal. Thereafter, notices were issued by the Debts Recovery Tribunal to the respondent nos.2 and 3. Being aggrieved against the notice the respondent no.3 in the suit filed a writ petition being Writ Petition No.1932 of 2001. The aforesaid writ petition was allowed on 9th January, 2002 and it was held that the Registrar, Original Side of this Court had no jurisdiction to transfer the suit as Section 31 of the Act of 1993 would not be applicable in this case. Therefore, the proceedings pending before the Debts Recovery Tribunal were declared to be without jurisdiction. The Registrar of the Debts Recovery Tribunal was directed to transfer the records of the suit to this Court. However, it was observed as follows :-
"Therefore, there is a distinction between transfer of a suit by operation of law under Section 31 of the Act and a case where the Court in a pending suit has lost jurisdiction as a result of interpretation given to an act of parliament by the Apex Court. In so far as the second question is concerned, that is to be dealt with judicially by the Court and this aspect cannot be dealt with by the Registrar, Original Side of this Court in administrative capacity. Therefore, in the facts of the case, since Section 31 does not apply the suit cannot be transferred by operation of law to the Tribunal and the Tribunal has not acquired any jurisdiction as a result of unauthorized act of transfer of suit by the Registrar, Original Side of this Court. This Court, therefore, quashes the order which is Annexure P-4 to the writ petition and directs the Registrar, Debts Recovery Tribunal, respondent No.3 herein to transmit the records of the said suit to this Court as early as possible, preferably within a period of one month from the date of service of this Order upon the said Registrar. This Court, however, makes it clear that after the records of the suit are transferred before this Court and are placed before the appropriate Bench it may be open to the respondent Bank to make an application before the appropriate Court and ask for proper orders and if such an application is made it will be open to the respondent Bank to raise all questions and nothing said in this judgment will be considered as an expression of opinion on the Bank's application for seeking further orders from this Court including an order of transfer. This writ petition, therefore, succeeds to the extent indicated above and the impugned order being Annexure P-4 to the writ petition is quashed with the above observations."
Relying on the aforesaid observations, the appellant moved an application (GA 1387 of 2002) in the Company Court for transfer of the suit to the Debts Recovery Tribunal. The Trial Court noticed that the three applications filed in the suit are still pending. Thereafter, by order dated 07.10.2005 the application for transfer has been dismissed with the observations that "the present petition is not maintainable, and the prayer for transfer of the suit in the present petition cannot be granted."
This appeal has been filed by the plaintiff Bank, against the aforesaid order.
We have heard the learned counsel for the parties. Very elaborate arguments have been addressed which may be noticed at this stage.
Mr. Ghose, learned counsel has vehemently argued that the suit was filed in this Court only because there was a legal impediment to the filing of the suit before the Debts Recovery Tribunal. In case the suit had been instituted before the Debts Recovery Tribunal, the very application would not have been entertained, in view of the law laid down by this Court in UCO Bank case (supra). The learned Counsel further submitted that the Bank had made the necessary application for transfer immediately after the law was declared by the Supreme Court in Allahabad Bank case (supra). Therefore, in such circumstances, the appellant cannot now be left without a remedy. In support of his submission, learned Counsel has relied on a judgment of the Supreme Court in the case of United Bank of India, Calcutta vs. Abhijit Tea Company Pvt. Ltd., reported in AIR 2000 SC 2957. Mr. Ghose also submitted that the learned Single Judge in the facts and circumstances of this case had come to the conclusion that the petitioner has the right to have the suit transferred to the Tribunal. However, the prayer has been declined only on the ground that the judgment in UCO Bank case (supra) has not been approved by the Supreme Court. According to the learned counsel the learned trial Judge erred in law by not transferring the suit, even after observing, that once the judgment in UCO Bank (supra) has been overruled by the Supreme Court, if a suit was directed to be retained in this Court, no adjudication of the same can be made. Therefore, the learned Single Judge ought to have exercised jurisdiction under Rule 9 of the Company Court Rules, 1959. Mr. Ghose has also submitted that when the suit is transferred by operation of law, the Registrar performs only a ministerial act. In support of this submission he relied on a judgment of the Supreme Court in the case of Hara Parbati Cold Storage Pvt. Ltd. & Anr. vs. UCO Bank & Ors., reported in (2000)9 SCC 716. Mr. Ghose also relied on a judgment of the Supreme Court in the case of State Bank of India vs. Ranjan Chemicals Ltd. & Anr., reported in (2007)1 SCC 97, in support of the submission that a Court has the power in an appropriate case to transfer a suit. Therefore, in the facts of this case the Trial Court ought to have transferred the suit. The learned counsel further submits that learned Single Judge failed to appreciate that the suit cannot be transferred under Article 227. No application under Article 227 of the Constitution would lie in respect of a case pending before the High Court against itself. Therefore, it was a fit case for exercise of the powers under Rule 9 of the Company Court Rules, 1959.
Mr. Chatterjee,learned counsel for the respondent, on the other hand has submitted that after the enforcement of the Debts Recovery Tribunal, this Court would have no jurisdiction to entertain a suit for recovery of a 'Debt' filed by the Bank. The learned Counsel also submitted that in the present case the suit could not be transferred in view of Section 31 of the Act of 1993. It is also the submission of Mr. Chatterjee that judgment in UCO Bank case (supra) having been held by the Supreme Court as "not correct", the suit was liable to be dismissed as not maintainable.
We have anxiously considered the submissions made by the learned counsel for the parties. It is not disputed that the suit was filed by the Bank, in this case, after the Act of 1993 came into force. Section 17 of the Act clearly provides that on and from the appointed day, the jurisdiction, powers and authority to entertain and decide all applications by Banks and financial institutions, for recovery of debts, shall be exercised by the Debt Recovery Tribunal. Section 18 of the Act specifically excludes the jurisdiction of any other court in relation to matters specified in Section 17. Only the jurisdiction of the Supreme Court and the High Court under Article 226/227 has been saved. Section 34(1) of the Act provides that the provisions of the Act of 1993 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. This Act, therefore, has an overriding effect. However, sub-Section 2 further provides that the Act of 1993 shall be in addition to, and not in derogation of, The Industrial Finance Corporation Act, 1948 (15 of 1948), The State Financial Corporations Act, 1951 (63 of 1951), The Unit Trust of India Act, 1963 (52 of 1963), The Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), The Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and The Small Industries Development Bank of India Act, 1989 (39 of 1989). The Companies Act of 1956 is conspicuously absent from the aforesaid list. Thus, it is quite evident that the provisions of the Act of 1993 were not in addition to the Companies Act, 1956. That being the legal position, the Trial Court correctly came to the conclusion that "As per the provisions of Section 17 of the Act, the suit thus ought to have been initiated before the Tribunal."
Having come to the above conclusion, the Trial Court proceeded to frame the following issues :-
"Having considered rival submissions, I am of the opinion that two issues call for resolution in the present proceeding. The first issue is as to whether the suit in question at all can be transferred, admittedly having been filed after the establishment of the Tribunal, and if this issue is answered in the affirmative, then whether filing the present application is the correct procedure for effecting such transfer."
On a detailed consideration of these issues the Trial Court has come to the conclusion that "In the given facts, I am of the opinion that the petitioner has the right to have the suit transferred to the Tribunal." This conclusion is justified on the principle that an act of Court shall prejudice no man, "Actus Curiae Neminem Gravabit". In our opinion, the aforesaid principle would not be applicable in this case. This principle would apply where a party misleads a Court into passing an order or decree which is subsequently set aside, varied or reversed. Passing of such an order should result in either unjust enrichment of the party in whose favour the order was passed or cause the other party to suffer an impoverishment which it would not have suffered but for the order of the Court and the act of such party. In such circumstances, the Court would pass an order which shall undo the damage done. The Supreme Court in the case of South Eastern Coalfields Ltd. vs. State of M.P. & Ors. reported in (2003)8 SCC 648 has laid down the principle in the following words :
"28. That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the "act of the court" embraces within its sweep all such acts as to which the court may from an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the court being wrongful or a mistake or error committed by the court; the test is whether on account of an act of the party persuading the court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the court and the act of such party."
This principle has been statutorily recognised in Section 144 of the Code of Civil Procedure. It would not be applicable in the facts and circumstances of this case.
The law declared by the Supreme Court in Allahabad Bank (supra) was applicable from the date of the enforcement of the Act of 1993. The law has not undergone a sudden change on the pronouncement of the judgment by the Supreme Court in the Allahabad Bank case (supra). This judgment does not lay down that the date of enforcement of the Act of 1993, would be any date other than the date specified in the Act. Therefore, doctrine of prospective overruling cannot even be invoked in this case. The appellant has filed the suit in this Court on a wrong assumption or ignorance of the law. In our opinion, the apprehension of the Bank, that the application under Section 19 would not have been entertained by the Debts Recovery Tribunal cannot be a justification to file the suit in this Court. Even the leave granted by this Court, cannot entitle the plaintiff to continue a suit, which under the law ought to have been filed before the Debt Recovery Tribunal. The plaintiffs never presented the application before the Debts Recovery Tribunal under Section 19. Therefore, this suit cannot even be treated as an application which having been filed in the Court of competent jurisdiction(i.e. Debts Recovery Tribunal) had been erroneously returned to be presented in a Court having no jurisdiction (i.e., the High Court in this case). The bank has voluntarily filed the suit in this Court, without even approaching the Court of competent jurisdiction. The proper course for the appellant would have been to approach the Court of competent jurisdiction under the Act of 1993. Therefore, the voluntary act of the appellant in filing the suit in this Court cannot now be treated as a justification to claim that any prejudice has been caused to it, by any act of the Court.
Furthermore, even the justification with regard to impact of the judgment of the learned Single Judge in the case of UCO Bank (supra) would not be available in view of the judgment of the Supreme Court in the case of Allahabad Bank (supra). As noticed earlier, the Supreme Court had clearly observed that the decision in the UCO Bank case (supra) was not correct. The Supreme Court has also held as follows :-
"Thus, the adjudication of liability and the recovery of the amount by execution of the certificate are respectively within the exclusive jurisdiction of the Tribunal and the Recovery Officer and no other Court or authority much less the Civil Court or the Company Court can go into the said questions relating to the liability and the recovery except as provided in the Act. Point 1 is decided accordingly."
The aforesaid law would be applicable with retrospective effect as it has not been specifically made prospective. This proposition of law has been clearly laid down by the Supreme Court in the case of P.V. George & Ors., vs. State of Kerala & Ors., reported in (2007) 3 SCC 557, in the following words :-
"19. It may be true that when the doctrine of stare decisis is not adhered to, a change in the law may adversely affect the interest of the citizens. The doctrine of prospective overruling although is applied to overcome such a situation, but then it must be stated expressly. The power must be exercised in the clearest possible terms. The decisions of this Court are clear pointer thereto."
Again in the case of M.A. Murthy vs. State of Karnataka & Ors., reported in (2003) 7 SCC 517, the Supreme Court has clearly observed :-
"8. The learned counsel for the appellant submitted that the approach of the High Court is erroneous as the law declared by this Court is presumed to be the law at all times. Normally, the decision of this Court enunciating a principle of law is applicable to all cases irrespective of its stage of pendency because it is assumed that what is enunciated by the Supreme Court is, in fact, the law from inception. The doctrine of prospective overruling which is a feature of American jurisprudence is an exception to the normal principle of law, was imported and applied for the first time in L.C. Golak Nath v. State of Punjab. In Managing Director, ECIL v. B. Karunakar the view was adopted. Prospective overruling is a part of the principles of constitutional cannon of interpretation and can be resorted to by this Court while superseding the law declared by it earlier. It is a device innovated to avoid reopening of settled issues, to prevent multiplicity of proceedings, and to avoid uncertainty and avoidable litigation. In other words, actions taken contrary to the law declared prior to the date of declaration are validated in larger public interest. The law as declared applied to future cases. (See Ashok Kumar Gupta v. State of U.P. and Baburam v. C.C. Jacob.). It is for this Court to indicate as to whether the decision in question will operate prospectively. In other words, there shall be no prospective overruling, unless it is so indicated in the particular decision. ... ... ... ..."
In view of the above, there is no manner of doubt that the suit had to be filed by the Bank before the Debts Recovery Tribunal.
The voluntary act of filing of the suit by the Bank in this Court even after the Act of 1993 had been enforced cannot be construed as an act of the Court which has prejudiced the claim of the appellant. Therefore, the principle of actus curiae neminem gravabit cannot be invoked to permit the transfer of the suit. We are, therefore, unable to agree with the observations made by the learned Single Judge on this aspect of the matter.
We are also of the opinion that the learned Single Judge has misconstrued the ratio of law laid down by the learned Single Judge in W.P. No.1932 of 2001, Dr. Bharat Ram vs. Punjab National Bank. A careful perusal of the observations made in the case of Dr. Bharat Ram (supra), would clearly show that Justice Ganguly had drawn a distinction between transfer of a suit by operation of law under Section 31 of the Act and a case where the Court in a pending suit has lost jurisdiction as a result of interpretation given to an Act of Parliament by the Supreme Court. It is held that in so far as the second question is concerned, that is to be dealt with judicially by the Court and this aspect cannot be dealt with by the Registrar, Original Side of this Court in administrative capacity. These observations, in our opinion, do not lay down that a Bank suit not covered under Section 31 of the Act would be transferred by making an application on the judicial side. These observations have been made with regard to the pendency of the application of respondent no. 3 for dismissal of the suit as not maintainable. It must be remembered that the application of the respondent no. 3 is pending even now. Therefore, the judgment clearly says that in case such an application is made it will be open to the parties to raise all questions and "nothing said in this judgment will be considered as an expression of or opinion on the application of the Bank for further seeking orders from this Court including an order of transfer."
The second reason given by the learned Single Judge is that in Abhijit Tea Co. Pvt. Ltd. (supra), the Supreme Court in order to avoid the stalemate had observed that the High Court would be permitted to transfer the suit under Article 227 of the Constitution of India. According to the learned Single Judge, on parity of reasoning, the appellant herein could seek transfer of the suit under Article 227 of the Constitution of India. The observations relied upon by the learned Single Judge are as follows:-
"32. There is yet another aspect of the matter. Even assuming that the suit was not pending 'immediately' before the establishment of the Tribunal before the single Judge but came before him on remand after 27-4-94, the crucial date, and even assuming that the registrar of the High Court could not have transferred the suit to the Tribunal on 27- 4-94 as the appeal was pending before the Division Bench, it would, in view of the prohibition in Section 18, be necessary for the High Court to transfer the Bank's suit under Article 227 of the Constitution of India to the Tribunal."
In our opinion, the learned Single Judge has misconstrued the observations made by the Supreme Court. These observations have been made in the peculiar facts and circumstances of that case. It is well settled that the observations made by the Supreme Court have to be understood in the facts and circumstances of the case before the Supreme Court. The law on this aspect has been stated by Earl of Halsbury LC in the case of Quinn v. Leathem reported in 1901 AC 495 as follows :-
"Now before discussing the case of Allen v. Flood, (1898) AC 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical Code, whereas every lawyer must acknowledge that the law is not always logical at all."
These observations have been approved by the Constitution Bench of the Supreme Court in the case of State of Orissa vs. Sudhansu Sekhar Misra & Ors., reported in AIR 1968 SC 647. In the aforesaid case it has also been observed that :-
"13. ...... It is not a profitable task to extract a sentence here and there from a judgment and to build upon it. ...... .... "
Under Article 142 of the Constitution, only the ratio of the judgment of the Supreme Court is law declared, therefore, only the principle upon which a case has been decided would be binding as a precedent. The settled principle of law with regard to the doctrine of precedent has been restated by the Constitution Bench of the Supreme Court in the case of Krishena Kumar vs. Union of India & Ors., reported in (1990) 4 SCC 207. In the aforesaid case it has also been observed that :-
"18. The basic question of law that has to be decided, therefore, is what was the ratio decidendi in Nakara case and how far that would be applicable to the case of the PF retirees.
19. The doctrine of precedent, that is being bound by a previous decision, is limited to the decision itself and as to what is necessarily involved in it. It does not mean that this Court is bound by the various reasons given in support of it, especially when they contain "propositions wider than the case itself required". This was what Lord Selborne said in Caledonain Railway Co. v. Walker's Trustees and Lord Halsbury in Quinn v. Leathem. Sir Fredrick Pollock has also said : "Judicial authority belongs not to the exact words used in this or that judgment, nor even to all the reasons given, but only to the principles accepted and applied as necessary grounds of the decision."
20. In other words, the enunciation of the reason or principle upon which a question before a court has been decided is alone binding as a precedent. The ratio decidendi is the underlying principle, namely, the general reasons or the general grounds upon which the decision is based on the test or abstract from the specific peculiarities of the particular case which gives rise to the decision. The ratio decidendi has to be ascertained by an analysis of the facts of the case and the process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case under immediate consideration. If it is not clear, it is not the duty of the court to spell it out with difficulty in order to be bound by it. In the words of Halsbury (4th edn., Vol.26, para 573) "The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a tribunal for its judgment, all are taken as forming the ratio decidendi." It is also settled principle of law that a decision on a question which is neither raised nor argued would not be a binding precedent. In the case of M/s. Goodyear India Ltd., vs. State of Haryana & Anr. reported in AIR 1990 S.C. 781, it has been held as follows :-
"34. This ingredient was neither agued nor was considered, so the passing reference based on the phraseology of the section is not the dictum of Kandaswami's case (AIR 1975 SC 1871) ............... .................. ............... .....................
A decision on a question which has not been argued cannot be treated as a precedent. ........................."
In the case of Rajpur Ruda Meha & Ors. vs. State of Gujarat reported in AIR 1980 SC 1707, it has been held as follows :-
"6. Neither in the application for adducing additional grounds or in the order of the Court directing the matter to be placed before the Constitution Bench, there was any reference to the validity of S. 384 of the Cr. P.C. Neither was it pleaded during the arguments that S. 384 of the Cr. P.C. is ultra vires of the Constitution. As the question of validity of S. 384 of the Cr. P.C. was neither raised nor argued, a discussion by the Court after pondering over the issue in depth would not be a precedent binding on the Courts. The decision is an authority for the proposition that R. 15(1) (c) of O. XXI of the Supreme Court Rules should be read down as indicated in the decision."
Keeping in view the aforesaid principles of law, we may now examine the observations made by the Supreme Court. The Supreme Court in the Abhijit Tea Co. case (supra) was dealing with a case in which the suit had been undoubtedly instituted prior to the coming into operation of the Act of 1993. A compromise decree was passed by this Court 29.03.1994. The compromise decree was set aside by the Division Bench by order dated 11.08.1998. The matter was remanded back to the Trial Court. Therefore, the initial suit filed by the appellant/Bank revived being Suit No.410 of 1985. In the meantime, the Act of 1993 came into force in West Bengal on 27th April, 1994. In such circumstances, the debtor company then filed an application being T.No.276 of 1999 praying that the suit should remain on the Original Side of the Calcutta High Court and should not be transferred to the Tribunal under the Act. The contention was that on the crucial date i.e., on 27th April, 1994, the suit was not pending on the Original Side but the appeal was pending before the Division Bench and that under Section 31(1)(i) appeal did not stand transferred to the Tribunal. It was further argued that even though the suit stood revived by virtue of the Division Bench judgment dated 11th August, 1998 it was not a suit "immediately" pending on the Original Side of the High Court before the crucial date i.e., 27th April, 1994. Therefore, it was not covered by Section 31 of the Act. This application filed by the company was allowed by the learned Single Judge on 3rd September, 1999. The suit was, therefore, ordered to be retained in the High Court and the Registrar of the High Court was restrained from transferring the suit to the Tribunal. Against the aforesaid order, the Bank had moved the Supreme Court by Special Leave Petition. In these circumstances, the Supreme Court in the case of Abhijit Tea Co. (supra) has observed as follows :-
"15. It is true that under sub-clause(c) of Section 31, every suit or proceeding "pending before any Court immediately before the date of establishment of the Tribunal under the Act" shall stand transferred to the Tribunal. It is also true that under the proviso to Section 31(1), appeals pending on the date do not stand transferred. The suit of the Bank was in fact, pending in appeal on 27-4-94, and it is clear that this provision for transfer does not apply to an appeal pending as aforesaid before any Court.
16. But, it is now well settled that an order of remand by the appellate Court to the trial Court which had disposed of the suit revives the suit in full except as to matters, if any decided finally by the appellate Court. Once the suit is revived, it must, in the eye of the law, be deemed to be pending from the beginning when it was instituted. The judgment disposing of the suit passed by the single Judge which is set aside gets effaced altogether and the continuity of the suit in the trial Court is restored, as a matter of law. The suit cannot be treated as one freshly instituted on the date of the remand order. Otherwise serious questions as to limitation would arise. In fact, if any evidence was recorded before its earlier disposal, it would be evidence in the remanded suit and if any interlocutory orders were passed earlier, they would revive. In the case of a remand, it is as if the suit was never disposed of (subject to any adjudication which has become final, in the appellate judgment). The position could have been different if the appeal was disposed of once and for all and the suit was not remanded.
17. Applying the above principle, we are of the view that the suit 410/85 filed by the Bank in 1985, even though it was disposed of by judgment dated 29- 3-94, it stood revived with continuity by the remand order passed by the Division Bench on 11-8-98, and cannot be treated as a freshly instituted on 11-8-98 before the single Judge but must, in the eye of the law, be treated as pending on the crucial day i.e. 27-4-94.
... ... ... ... ...
33. For the aforesaid reasons, we hold that the principle of purposive interpretation is to be applied to Sections 18 and 31 of the Act and that suit 410/1985 filed by the Bank in 1985 and which stood remanded by the appellate Court on 11-8-98 must in the eye of the law be deemed pending before the single Judge and that it would stand transferred to the Tribunal. The High Court was, therefore, in error in retaining the same on the original side. Points 1 and 2 decided in favour of the appellant.
... ... ... ... ...
43. We, therefore, direct the Bank's suit 410/85 to be transferred by the Registrar, Calcutta High Court to the appropriate Tribunal under the Act. So far as the debtor company's suit 272/85 is concerned, action has to be taken likewise by the Registrar in the light of our finding which finding has become necessary in view of the contention on behalf of the debtor company before us, as explained above."
In our opinion, these observations make it abundantly clear that under Section 31(1) of the Act of 1993, the suits that were pending immediately before the date of establishment of a Tribunal under the Act of 1993 would stand transferred on that date to the Debts Recovery Tribunal. The observations of the Supreme Court in paragraph 32 of the judgment relied upon by the Trial Court would be of no assistance to the appellant in the facts and circumstances of the present case. The observations have been made on the basis of an assumption. There is not even a prayer for a direction that the suit could be transferred under Article 226/227 of the Constitution of India. Indeed, there is no reference in the judgment to any such submissions having been made by the learned counsel for the parties. Therefore, the observations are clearly, at best, obiter dicta. They are confined to the facts of the case. In our opinion, the observations have been made by the Supreme Court in exercise of the jurisdiction under Article 142 of the Constitution of India to do complete justice between the parties. These observations ought not to be confused with the ratio of law laid down that the Bank suits in relation to the matters specified in Section 17 of the Act of 1993 which were pending immediately before the crucial date, i.e., on 27th April, 1994 would stand transferred to the Tribunal.
The tendency of the High Court to treat the directions under Article 142 of the Constitution as the law declared has been noticed by the Supreme Court in the case of Indian Bank vs. ABS Marine Products (P) Ltd., reported in (2006) 5 SCC 72, in the following words :
"26. One word before parting. Many a time, after declaring the law, this Court in the operative part of the judgment, gives some directions which may either relax the application of law or exempt the case on hand from the rigour of the law in view of the peculiar facts or in view of the uncertainty of law till then, to do complete justice. While doing so, normally it is not stated that such direction/order is in exercise of power under Article 142. It is not uncommon to find that courts have followed not the law declared, but the exemption/relaxation made while moulding the relief in exercise of power under Article 142. When the High Courts repeatedly follow a direction issued under Article 142, by treating it as the law declared by this Court, incongruously the exemption/relaxation granted under Article 142 becomes the law, though at variance with the law declared by this Court. The courts should therefore be careful to ascertain and follow the ratio decidendi, and not the relief given on the special facts, exercising power under Article 142. One solution to avoid such a situation is for this Court to clarify that a particular direction or portion of the order is in exercise of power under Article 142. Be that as it may."
From the above, it becomes apparent that it is the duty of the High Court to cull out the ratio of the judgments from the obiter dictum as well as the direction under Article 142 of the Constitution of India.
In view of the above, we are of the opinion that the learned Single Judge has erred in law by granting liberty to the appellant to make an application under Article 226/227 of the Constitution of India for seeking transfer of the Suits.
Even otherwise, we need not concern ourselves as to whether it was necessary for the Trial Court to grant liberty to the appellant for seeking the transfer under Article 226/227 of the Constitution of India, in view of the specific grounds taken by the appellant in the memorandum of appeal herein. In Ground No. VIII, X and XI, the appellant has urged as follows :-
"VIII. For that the learned Judge failed to appreciate and erred thereby that Article 227 of the Constitution of India has any manner of application in the instant case.
X. For that it was not present to the mind of the Hon'ble Court when passing the impugned order that an application under Article 227 of the Constitution of India is in exercise of the power of the Hon'ble High Court's power of superintendence over all Courts and tribunals throughout the territories in relation to which it exercises its jurisdiction, that is, subordinate and/or inferior to the Hon'ble High Court, and cannot be exercised against the High Court itself by itself, even for administrative purposes, unlike the power under Article 226 of the Constitution of India for administrative purposes and therefore the judgment, to that extent is per incuriam by way of sub silentio.
XI. For that the law is well settled that no application under Article 227 of the Constitution of India would lie in respect of a cause pending before the Hon'ble High Court itself."
Having pleaded the aforesaid grounds the appellants have not even raised the issue before us. Mr. Ghose has sought the transfer on the basis of Rule 9 of the Company Court Rules, 1959, which prayer has been rightly rejected by the Trial Court.
The Trial Court, however, relied on the judgment of the learned Single Judge in Dr. Bharat Ram's case (supra)to conclude as follows :-
"But does the Act preclude transfer of a suit under any other condition, by a judicial order? In my opinion, it does not. In the decision of the Hon'ble Single Judge of this Court in W.P. No. 1932 of 2001, the power of the Court to transfer a suit where the court in a pending suit has lost jurisdiction as a result of interpretation given to an act of Parliament by the Apex Court, has been held to exist."
In our opinion, the judgment in Dr. Bharat Ram's case (supra) has been misconstrued by the learned Trial Court. Therein, the order of transfer passed by the Registrar was set aside, on the ground that the Registrar had no power to pass such an order, under Section 31 of the Act of 1993. It was left open to the Bank to apply for appropriate orders.
However, we are in agreement with the conclusions reached by the Trial Court that the suit cannot be directed to be transferred in exercise of the inherent powers of the Company Court under Rule 9 of the Company Court Rules, 1959. We may notice here the observations made by the Trial Court as under :-
"In my opinion, for the purpose of transferring the suit the inherent power of the Company Court under Rule 9 cannot be invoked. The inherent power of a Court is supplementary to the powers expressly conferred upon it, and cannot clothe the Court with new power. The said Rules have been framed by the Hon'ble Supreme Court in exercise of power under Section 643 of the Companies Act, and in sub- sections (1) and (2) of Section 643, the subjects which could be covered by such Rules have been indicated. Transfer of a proceeding pending before the Company Court, per se does not appear to come under these subjects. In the circumstances, I am of the view that Rule 9 does not empower the Company Court to transfer a suit to another Tribunal. If we take this power to be at par with a Civil Court's power under Section 151 of the Code of Civil Procedure, then also I do not think such power of Civil Court could be exercised to transfer a suit to a Tribunal constituted under a special Act."
In view of the aforesaid observations, clearly no directions could be issued in the present case for transfer of the suit to the Debts Recovery Tribunal.
We may also notice here that the Trial Court in the judgment specifically observed that it is the admitted position that under the Act of 1993 the only provision for transfer is contained in Section 31 of the Act. This provision contemplates a ministerial act for effecting transfer, subject to fulfillment of the condition precedent stipulated therein. This is apparent from the expression "shall stand transferred", as contained in that Section.
The judgment of the Supreme Court in the case of Hara Parbati Cold Storage Pvt. Ltd. (supra) lays down that cases which are covered by Section 31 are automatically transferred to the Debts Recovery Tribunal. Therefore, the Registrar performs only a ministerial act. In the present case, Section 31 has no application. In the case of State Bank of India (supra) the Supreme Court has held that, "A Court has the power in an appropriate case to transfer a suit for being tried with another if the circumstances warranted and justified it." In the present case the suit filed by the appellant is not in the nature of a counter claim. Therefore, these observations also cannot come to the aid of the appellant.
In our opinion, in the facts and circumstances of this case, the learned Trial Court had no option but to dismiss the application.
We, therefore, find no merit in the appeal. The appeal is, accordingly, dismissed. The applications are also dismissed.
Xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SURINDER SINGH NIJJAR, CJ.) (DIPANKAR DATTA, J.) SN.