Document Fragment View

Matching Fragments

W.P.(C)8592/2011 Page 5

7. On Section 22 of the Recovery Act, the Bank submits that its terms state that the DRT is not bound by the CPC but shall instead be guided by the principles of natural justice. Moreover, it is argued that since Section 10, CPC embodies a substantive rule it cannot be applied under Section 22 of the Recovery Act. Furthermore, it is argued that the CPC can apply in DRT proceedings only to the limited extent prescribed in Section 22(2), which specifies exactly what rules of the CPC apply to the DRT. Finally, it is argued that the DRAT's approach of considering the substance of Section 10 a rule of natural justice on the basis of NIMHANS (supra), was misguided and untenable.

11. To answer the first question, it would be necessary to excerpt Section 22 of the Recovery Act which provides the extent to which CPC binds the DRT.

"Section 22 - Procedure and Powers of the Tribunal and the Appellate Tribunal (1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.
(d) issuing commissions for the examination of witnesses or documents;
(e) reviewing its decisions;
W.P.(C)8592/2011 Page 8
(f) dismissing an application for default or deciding it ex parte;
(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte;
(h) any other matter which may be prescribed. (3) xxx"

12. It must be appreciated that while the DRT is not bound by the CPC under this provision, it is empowered to regulate its procedure, subject to compliance with the rules of natural justice, and the provisions of the Recovery Act and any subordinate legislation under the Act. This implies that the DRT is empowered to use rules of the CPC as part of the procedure to be followed during proceedings, since the discretion to regulate procedure is conferred on the DRT in Section 22(1). This view was accepted in Industrial Credit and Investment Corporation Ltd. v. Grapco Industries Ltd., (1999) 4 SCC 710 and affirmed in Allahabad Bank, Calcutta v. Radha Krishna Maity&Ors., (1999) 6 SCC 755. The Court observed in Grapco Industries in these terms:

"When Section 22 of the Act says that the Tribunal shall not be bound by the procedure laid by the Code of Civil Procedure, it does not, mean that it will not have jurisdiction to exercise powers of a Court as contained in the Code of Civil Procedure, Rather, the Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its powers is to observe the principles of natural justice."

Thus, as the DRT is empowered to regulate its own procedure, it is not foreclosed from applying Section 10 of the CPC in proceedings W.P.(C)8592/2011 Page 9 before it, and the argument that the DRT is not bound by the CPC under Section 22 of the Recovery Act is meritless in this context.