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2000 DIGILAW 77 (KAR)

A. G. SATYANARAYANA v. STATE BANK OF MYSORE

2000-01-25

R.V.RAVEENDRAN

body2000
R. V. RAVEENDRAN, J. ( 1 ) PETITIONER herein is the fourth respondent in O. A. No. 816/1997 on the file of the Debt Recovery Tribunal, Bangalore. The said O. A. No. 816/1997 was filed by the State Bank of Mysore, the first respondent herein against M/s. Srinivasa Oil Extractions and five others (namely, K. N. Radhakrishna Shetty, K. N. Shankara-narayana Shetty, A. G. Sathyanarayana Shetty (petitioner herein), M. K. Sashidar and M. S. Krishnamurthy) for recovery of Rs. 1,69,77,679. 43 with current and future interest, in terms of the final decree dated 28-8-1993 passed on O. S. No. 11/1991 on the file of the Civil Judge, Kolar and for consequential reliefs. The Debt Recovery Tribunal allowed the said application by order dated 31-8-1999 (Annexure-A) and directed issue of a Recovery Certificate in terms of the decree dated 28-8-1993 passed in O. S. No. 11/1991 on the file of the Civil Judge, Kolar. Feeling aggrieved, petitioner has filed this petition for quashing Annexure-A dated 31-8-1999 and seeking a direction to fourth respondent-Tribunal to re-open O. A. No. 816/1997 by giving him an opportunity to contest the same. ( 2 ) ). The petitioner has contended that the impugned order of the Tribunal is one without jurisdiction. It is also contended that the said order is passed in violation of principles of natural justice. It is therefore submitted that even though there may be an effective alternative remedy by way of an appeal under Section 20 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 ('act' for short) against the decision of the Tribunal, the writ petition is maintainable. ( 3 ) PETITIONER contends that the Bank had filed O. S. No. 11/1991 on the file of the Civil Judge, Kolar and a compromise decree was passed in the said suit. According to the petitioner, when the defendants in the suit failed to pay the amount due in accordance with the said decree, the remedy of the Bank is to file an execution petition and not to file an original application for grant of a recovery certificate before the Tribunal in terms of the decree. Petitioner would contend that filing of original application in the Tribunal would amount to initiating a second proceeding for recovery on the very same cause of action and is barred by principles of res judicata. Petitioner would contend that filing of original application in the Tribunal would amount to initiating a second proceeding for recovery on the very same cause of action and is barred by principles of res judicata. ( 4 ) SECTION 3 of the Act provides for establishment of Debt Recovery of Tribunal. Sec. 17 of the Act provides that the Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions. Section 18 of the Act provides that on and from the appointed day, no Court shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified under Section 17. Section 2 (g) defines 'debt' as follows :"'debt' means any liability (inclusive of interest) which is alleged as due from any person by a bank or a financial institution or by a consortium of banks or financial institution during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or whether payable under decree or order of any civil Court or otherwise and subsisting on, and legally recoverable on, the date of the application. "sub-section (1) of Section 34 provides that save as provided under sub-Section (2), the provisions of the Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than the Act. ( 5 ) IT would thus be seen that even an amount payable under a decree of Civil Court and subsisting on and legally recoverable on the date of application is a 'debt'. When once the amount due under a decree of Civil Court is a 'debt', the jurisdiction of the Civil Court to deal with the matter, even in execution of its own decrees, gets barred under Section 18 of the Act. When once the amount due under a decree of Civil Court is a 'debt', the jurisdiction of the Civil Court to deal with the matter, even in execution of its own decrees, gets barred under Section 18 of the Act. Consequently, in regard to matters in which decrees have been passed and which remain unsatisfied, it is necessary for the Banks or the financial institutions to approach the Debt Recovery Tribunal by means of an application for issue of a recovery certificate. Having regard to the combined effect of Sections 17, 18 and 34 of the Act read with the definition of 'debt' under Section 2 (g) of the Act. Admittedly, the defendants in O. S. No. 11/1991 have not discharged the decretal debt. ( 6 ) HENCE, the bank was constrained to file an application before the Tribunal for grant of a recovery certificate in terms of the final decree passed in O. S. No. 11/1991. The Bank has specifically stated in the plaint/application filed before the Tribunal as follows :"the jurisdiction of the said Court to enforce, execute the decree has now been barred pursuant to the establishment of this Hon'ble Tribunal, in terms of Section 18 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 and hereinafter referred to as 'the Act'. In terms of Section 17 of the Act such jurisdiction has been vested in this Hon'ble Tribunal. This Application has been made before this Hon'ble Tribunal for recovery of the decretal dues as per the procedure prescribed under the provisions of the Act. " ( 7 ) THE learned Counsel for petitioner contended that the subject matter in issue in the application before the Tribunal having already been decided by a Civil Court of competent jurisdiction, the application for recovery certificate is barred by the principles of res judicata and Section 11 CPC. Where a statute requires that recovery shall be in a particular manner specified in the Act, the question of bar of res judicata will not arise. The Bank is not seeking re-adjudication of the issues or subject matter of the suit, before the Tribunal. The Bank having obtained a decree, is merely seeking issue of a recovery certificate under the Act, on the basis of the decree of the Civil Court to enable recovery of the amounts due to it, in terms of the decree. The Bank is not seeking re-adjudication of the issues or subject matter of the suit, before the Tribunal. The Bank having obtained a decree, is merely seeking issue of a recovery certificate under the Act, on the basis of the decree of the Civil Court to enable recovery of the amounts due to it, in terms of the decree. If a Bank files a suit for recovery of an amount and if the suit is dismissed on contest, a subsequent application by the Bank before the Tribunal, for recovery of the same amount, may be barred by the principles of res judicata. But an application for issue of recovery certificate based on the decree of Civil Court is not barred. ( 8 ) PETITIONER next contended that O. A. No. 816/1997 is barred by limitation, on the basis of the original cause of action. In an application for issue of a recovery certificate, the cause of action is the decree itself and not the transactions which resulted in the decree. It is not disputed that the decree granted by the Civil Court is a mortgage decree and that O. A. No. 816/1997 has been filed within 12 years from the date of decree. Section 2 (g) of the Act defines 'debt' as including liability under a decree which is subsisting and legally recoverable on the date of the application to the Tribunal. Hence, the contention that it is barred by limitation is liable to be rejected. ( 9 ) LASTLY, petitioner contended that evidence should have been recorded and the Tribunal should have given him due opportunity to lead evidence; and as it failed to do so, the order of the Tribunal is opposed to principles of natural justice. The Tribunal has stated in its order that defendants-2 to 6 appeared through different counsel and filed their replies and the Bank filed an affidavit; but no evidence was let in by either of the parties and therefore, it was proceeding to post the matter for orders. Therefore the contention of petitioner that he was not given adequate opportunity to let in oral evidence cannot be accepted. Petitioner did not tender or offer to tender any evidence. Therefore the contention of petitioner that he was not given adequate opportunity to let in oral evidence cannot be accepted. Petitioner did not tender or offer to tender any evidence. Where the Bank has sought issue of a recovery certificate in terms of the final decree passed in a Civil Suit in pursuance of the compromise before the Civil Court, that is, a consent decree, there is very little scope for evidence. The Bank need not prove the amounts due with reference to any loan documents or statement of accounts. If the passing of the decree is not denied, there is no need for the Bank to let in any oral evidence. As far as the respondents are concerned, the evidence can be only in respect of any payments made towards the decree, if the Bank has not already given credit for the same. ( 10 ) WHERE the Tribunal is required to issue a recovery certificate in terms of the final decree, the question of Tribunal going beyond or behind the decree and examining the matter with reference to the original cause of action does not arise. The petitioner's counsel is not able to state, how the result would have been different, if he had let in evidence and in regard to what matters the petitioner would lead evidence, if he is given an opportunity to let in oral evidence. As held by the Supreme Court in S. L. Kapoor v. Jagmohan, AIR 1981 SC 136 where on the admitted facts or indisputable facts, only one conclusion is possible or permissible, the Court will not issue is writ to compel the observance of principles of natural justice. Therefore, merely because the petitioner feels that he should have had an opportunity to let in oral evidence, as a formality of observing principles of natural justice, this Court will not direct the Tribunal to re-open the matter. The following observation of the Supreme Court (in Managing Director ECIL v. B. Karunakar, AIR 1994 SC 1074 , in regard to principles of natural justice, in a somewhat different context, are relevant (at p. 1092) :". . . . . . . . . . . THE theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. . . . . . . . . . . THE theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an "unnatural expansion of natural justice" which in itself is antithetical to justice. " ( 11 ) THE petitioner has not shown any infirmity in the impugned order. Nor has he established want of jurisdiction on the part of Tribunal or violation of principles of natural justice. This writ petition is obviously an attempt to drag on the proceedings. The petitioner has no merit and it is accordingly rejected. Registry is directed to send a copy of this order to the Tribunal for expeditious disposal of O. A. No. 816/1997. --- *** --- .