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2001 DIGILAW 205 (KER)

Devassia v. South Indian Bank Ltd.

2001-04-05

M.R.HARIHARAN NAIR

body2001
Judgment :- M.R. Hariharan Nair, J. Petitioner is the judgment debtor in O.S. No. 317 of 1994 of the Sub Court, Pala, obtained by the first respondent bank. Pursuant to the constitution of the Debt Recovery Tribunal, the bank approached the said Tribunal seeking issuance of a certificate under S.31A of the Recovery of Debts Due to Banks and Financial Institutions Act. The petitioner is aggrieved that without giving him an opportunity to be heard the said request was allowed by the Tribunal vide Ext. P2 order. 2. Learned counsel for the petitioner submitted during hearing that the Tribunal, without affording an opportunity to the petitioner to represent in the matter, has preceded to issue the certificate simply following the amount claimed in the E.P. filed by the Bank and that the bank actually is not entitled to the full amount mentioned in the E.P. for the reason that Rs. 6 lakhs had been paid by the petitioner in various instalments and accompanied by memos, wherein specific mention had been made that the payments were intended to be appropriated towards principal alone. If the amounts were so appropriated the bank would not be entitled to full amount mentioned in the E.P. This is an aspect the petitioner could have brought to the notice of the Tribunal if only he was given an opportunity to be heard. Therefore, the prayer is to remit the matter to the Tribunal to afford such an opportunity. 3. Shri. K. Prabhakaran, who appeared for the first respondent, submitted that there is no provision in the Act of the Rules for issuing notice to the debtor before a certificate under S.31A is granted and in that perspective the impugned order does not suffer from any defect. The counsel further submitted that even if the petitioner is aggrieved, he has effective alternative remedy before the Appellate Tribunal constituted under the Act and as such writ jurisdiction cannot be involved to assail the impugned order. In answer to the above said contention the stand of the petitioner is that there is no effective remedy eventhough there is provision for appeal in so far as it is mandatory that the petitioner should deposit 75% of the decree amount if at all the appeal should be taken as maintainable. In answer to the above said contention the stand of the petitioner is that there is no effective remedy eventhough there is provision for appeal in so far as it is mandatory that the petitioner should deposit 75% of the decree amount if at all the appeal should be taken as maintainable. Here, in the instant case, what is impugned before the Tribunal is not the correctness of the decree amount; but only the validity of the order issued by the Tribunal specifying the amounts to be recovered by the certificate and that if it is made mandatory that even for raising such a contention before the Appellate Tribunal the petitioner should deposit 75% of the amount, the provision for appeal will be rendered ineffective and nugatory. Learned counsel also relied on case laws in support of his contentions. 4. A perusal of Ext. P2 shows that it has been passed without giving an opportunity to the debtor to be heard. Since the petitioner has a valid contention that an amount of Rs. 6 lakhs paid from time to time was intended to be appropriated towards principal and not towards interest, the mere copying of the amount mentioned in the E.P. in the certificate will certainly work out injustice. S.31A providing for issuance of certificate itself is a new provision introduced under the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Ordinance, 2000. Learned counsel for the "respondent has no case that any Rules have been framed under the said provision enabling challenge of the certificate before any authority, apart from invoking the general provision contained in S.20 of the Act. But then S.21 of the Act, provides that where an appeal is preferred by any person from whom the amount of debt is due to a bank or a financial institution, an appeal under S.20 shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal 75% of the amount of debt so due from him as determined by the Tribunal under S.19. To insist that even for challenging an order directing issue of a recovery certificate such deposit is essential, would work out injustice and difficulties. 5. According to the learned counsel for the first respondent the Original Petition itself is not maintainable in view of the appeal provision aforementioned. To insist that even for challenging an order directing issue of a recovery certificate such deposit is essential, would work out injustice and difficulties. 5. According to the learned counsel for the first respondent the Original Petition itself is not maintainable in view of the appeal provision aforementioned. The said contention cannot stand in view of the decision of this Court in James Koshy v. K.S.R.T.C. (1999 (3) KLT 533), where the court has taken the view that the rule which requires the exhaustion of alternative remedies as laid down in Ram & Shyam Co. v. State of Haryana (AIR 1985 SC 1147) is a rule of convenience and discretion, a self-imposed restraint on the Court rather than a rule of law and that it does not oust the jurisdiction of the Court. Where the order complained against is alleged to be illegal or invalid as being contrary to law a petition at the instance of person adversely affected by it would lie to the High Court under Art.226 and such a petition cannot be rejected on the ground that an appeal lies to another authority. When a citizen files a writ petition and if there is no complicated questions of fact to be determined it is too harsh to direct the party to approach civil court for redressal of his grievances undergoing long drawn litigation. In the present case what arises for consideration is only the justification for passing Ext. P2 order without following the principles of natural justice. Such a matter can be effectively disposed of by this Court and hence I find that the Original Petition is maintainable. 6. What arises next is the question whether the Tribunal was bound to follow the principles of natural justice before ordering issue of a certificate and in passing an order in the nature of Ext. P2. It is true that there is no specific rule which makes it mandatory. Even then since this is a matter affecting the rights of parties, a judicial forum like the Tribunal was bound to follow the principles of natural justice. If any authority is required, reference may be made to Rajendra Kurup v. Union of India, (1999 (3) KLT 480), where it is held that the principles of natural justice must be read into unoccupied interstices of the statute unless there is a clear mandate to the contrary. If any authority is required, reference may be made to Rajendra Kurup v. Union of India, (1999 (3) KLT 480), where it is held that the principles of natural justice must be read into unoccupied interstices of the statute unless there is a clear mandate to the contrary. Natural justice is an inseparable ingredient of fairness and reasonableness. Even if a statute is silent and there are no positive words in the Act or Rules spelling out the need to hear the party whose rights and interests are likely to be affected, the requirements to follow the fair procedure before taking a decision must be read into the statute unless the statute provides otherwise. 7. I respectfully follow the said decision and find that while passing orders like Ext. P2 issuing certificates intended for recovery of amounts, the Debt Recovery Tribunal is bound to follow the principles of natural justice and to issue notice to all affected parties, including the judgment debtor. This will be followed in all future cases as well, wherein orders are passed under S.31A of the Act. 8. In the circumstances Ext. P2 order is set aside and the matter is remitted to the Debt Recovery Tribunal, Ernakulam, with a direction to issue notice as aforementioned and to pass fresh orders in accordance with law. The Original Petition is disposed of as above.