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2002 DIGILAW 117 (MAD)

A. Vivekanandam v. Bank of Madura Ltd.

2002-02-15

P.SATHASIVAM

body2002
Judgment :- 1. Aggrieved by the common order dated 26-6-2001 made in I.A. No. 492/2001 and I.A. Nos. 2135 and 2136 of 2000 in T.A. No. 1665 of 1997 on the file of the Debts Recovery Tribunal, Chennai-second defendant-A. Vivekanandam has filed the above Revisions under Article 227 of the Constitution of India. 2. Bank of Madura Limited-first respondent herein initially filed a suit for recovery of money in O.S. No. 321 of 95 on the file of the Subordinate Judge, Salem against the defendants/petitioner and respondents 2 and 3 herein. After the constitution of the Debts Recovery Tribunal at Chennai, the said suit has been transferred to that Tribunal where it was renumbered as T.A. No. 1665 of 1997. By order dated 30-11-99, the Debts Recovery Tribunal passed an order declaring that the applicant Bank is entitled to a recovery certificate for a sum of Rs. 10,45,643-35 with future interest at 12 per cent per annum simple interest from the date of plaint till date of realisation with costs. Against the said order, respondents 2 and 3 herein/defendants 1 and 3 filed I.A. No. 2135 of 2000 to condone delay in filing a petition to set aside the ex parte order dated 30-11-99 and I.A. No. 2136 of 2000 to set aside the ex parte order passed in T.A. No. 1665 of 97 dated 30-11-99. The said applications were resisted by the Bank of Madura by filing a counter statement. By a common order dated 26-6-2001, the Debts Recovery Tribunal, after careful perusal of the earlier order dated 30-11-99, came to the conclusion that inasmuch as the Tribunal (Debts Recovery Tribunal) has given a decision on merits after considering the facts and documents, their remedy is to file an appeal before the Debts Recovery Appellate Tribunal, and rejected both the applications being devoid of merits. However, in order to render substantial justice and to give opportunity to the defendants to contest the suit on merits, the Tribunal directed the defendants to pay 50 per cent of the decretal amount within one month. The Tribunal has also made it clear therein that on furnishing a proof of the said payment, they shall be at liberty to file their reply statement and shall be permitted to contest the case on merits. The Tribunal has also made it clear therein that on furnishing a proof of the said payment, they shall be at liberty to file their reply statement and shall be permitted to contest the case on merits. The Tribunal further ordered that in such a situation, their I.A. is deemed to be allowed, and in case they fail to make payment within the stipulated period to the applicant bank, their I.A. shall stand dismissed after the stipulated period. Against the said order, the second defendant alone has filed the present Revisions before this Court. 3. Heard Mr. N. Dhamodaran, learned counsel for the petitioner and Mr. P.L. Narayanan, learned counsel for the first respondent-Bank. 4. Though learned counsel for the petitioner has argued the merits of the order of the Debts Recovery Tribunal which is under challenge, in view of the objection of the learned counsel for the first respondent regarding the maintainability of the revisions, I shall consider the said question at the foremost. There is no dispute that the impugned common order has been passed by the Debts Recovery Tribunal in applications filed by the defendants. Section 20 of the Recovery of Debts Due to Banks and Financia l Institutions Act, 1993 (hereinafter referred to as the ‘the Act’) speaks about appeal to the Appellate Tribunal. “20. Appeal to the Appellate Tribunal (1) Save as provided in sub-section (2), any person aggrieved by an order made, or deemed to have been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. (2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties. (3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed: PROVIDED that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty five days if it is satisfied that there was sufficient cause for not filing it, within that period. (4) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against. (5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Tribunal. (6) The appeal filed before the Appellate Tribunal under sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of receipt of the appeal.” By pointing out sub-section (1) of Section 20 of the Act, Mr. P.L. Narayanan, learned counsel for the respondent Bank, contended that the proper remedy for the petitioners is to file an appeal to the Appellate Tribunal and that the present revisions under Article 227 of the Constitution of India are not maintainable. On the other hand, Mr. N. Damodaran, learned counsel for the petitioner, by pointing out Rule 8 (2) of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 and also by referring the fact that there is no reference regarding court-fee for the orders passed in the Interlocutory Applications, contended that Section 20 of the Act is not applicable and that the only remedy is by way of Revision to this Court under Article 227 of the Constitution of India. A reading of sub-section (1) of section 20 of the Act makes it clear that except any order made by a Tribunal with the consent of the parties, any person aggrieved by an order of the Debts Recovery Tribunal has to prefer an appeal to the Appellate Tribunal having jurisdiction. Sub-section (3) provides limitation for filing appeal before the Appellate Tribunal. Proviso to sub-section (3) enables the Appellate Tribunal to entertain appeal even after the expiry of the said period of 45 days if it is satisfied that there was sufficient cause for not filing it within that period. Sub-sections (4) and (5) refer the procedure to be followed, whereas Sub-Section (6) fixes time limit to dispose of the appeal expeditiously not later than six months from the date of receipt of the appeal. The fee payable on the Memorandum of Appeal has been provided in Rule 8. Sub-sections (4) and (5) refer the procedure to be followed, whereas Sub-Section (6) fixes time limit to dispose of the appeal expeditiously not later than six months from the date of receipt of the appeal. The fee payable on the Memorandum of Appeal has been provided in Rule 8. Sub-Rule (2) of Rule 8 provides the amount of fee payable in respect of appeal under Section 20. It is true that there is no reference about Interlocutory Applications and orders made thereunder. However, the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 prescribe required fee for applications. Sub-rule (2) of Rule 7 speaks about various applications and the amount of fee payable. The Table appended to sub-Rule (2) shows that fee of Rs. 10/- is to be paid for each application in Interlocutory order. Even though there is no corresponding provision made in the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994, as rightly contended by the learned counsel for the respondent 3ank, the same fee as paid before the Debts Recovery tribunal is to be paid while filing appeal against the orders passed in Interlocutory Application. In the light of the specific language used in sub-Section (1) of Section 20 of the Act, I am of the view that the petitioner has effective statutory remedy by way of appeal to the Debts Recovery Appellate Tribunal. Without availing such remedy, the petitioner cannot be permitted to avail the constitutional remedy provided under Article 227 of the Constitution of India. In this regard, it is relevant to refer a recent judgment of the Supreme Court, in Punjab National Bank v. O.C. Krishnan , reported in 2001 (3) C.T.C. 555 = 2002 1 L.W. 65. In that case, a suit was filed by the appellant for recovery of money from the principal debtor as well as the guarantors. The suit was transferred to the Debts Recovery Tribunal and thereafter on 17th May, 1996 a decree was passed by the debts Recovery Tribunal, Calcutta. A certificate was also issued to recover the amount. The respondent who was a guarantor and whose property was stated to have mortgaged filed a petition under Article 227 before the High Court at Calcutta. The suit was transferred to the Debts Recovery Tribunal and thereafter on 17th May, 1996 a decree was passed by the debts Recovery Tribunal, Calcutta. A certificate was also issued to recover the amount. The respondent who was a guarantor and whose property was stated to have mortgaged filed a petition under Article 227 before the High Court at Calcutta. The High Court allowed the petition by observing that as the mortgaged property was situated in Chennai, the Debts Recovery Tribunal had no territorial jurisdiction in respect thereto and it could not have directed sale of mortgaged property. It, accordingly, held that the Bank would be at liberty to proceed against defendant No. 4, respondent therein, in appropriate forum for recovery of debts by sale of mortgaged property. In that circumstance, the Punjab National Bank has file d an appeal before the Supreme Court. After considering the rival contentions and in the light of the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Rules made thereunder as well as the jurisdiction of the High Courts under Articles 226 and 227 of the Constitution of India, Their Lordships have held: — “5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short ‘the Act’). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whether the order passed by the Tribunal was co rrect or not has to be decided before an appropriate forum. 6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional, provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.” The said decision of the Supreme Court is directly on the point and, as stated earlier, the proper remedy for the petitioner is to avail of the remedy as provided under Section 20 of the Act. 5. In Industrial Credit and Investment Corporation of India Ltd. v. Grapco Industrial Ltd. , reported in 1999 (II) CTC 460, the Honble Supreme Court has held that the High Court can interfere with interim orders of courts and Tribunals while exercising jurisdiction under Article 227 of the Constitution if the order is made without jurisdiction. However, the order under challenge is not an interim order, nor the Debts Recovery tribunal has no jurisdiction to pass such order. The learned counsel for the petitioner relied on a Division Bench decision of this Court in Pattammal, M. alias Murugayee v. R. Velan Jagannathan , reported in 1988 2 L.W. 509. The said decision is cited to the effect that the Tribunal is not justified in passing an ex parte order. We are not concerned with the merits of the order under challenge. It is open to the petitioner to rely upon this decision either before the Tribunal or before the Appellate Tribunal to support his case. 6. In the light of what is stated above, particularly in the light of the language used in sub-Section (1) of section 20 of the Act, against an order of the Tribunal, the aggrieved party may prefer appeal to the Appellate Tribunal having jurisdiction. 6. In the light of what is stated above, particularly in the light of the language used in sub-Section (1) of section 20 of the Act, against an order of the Tribunal, the aggrieved party may prefer appeal to the Appellate Tribunal having jurisdiction. Since the impugned common order is an order passed by the Debts Recovery Tribunal, and if the petitioner is aggrieved of the said order, the proper remedy for him is to prefer an appeal to the Appellate Tribunal as provided under the statute. When such remedy is available under the statute, I am of the view that petitioner is not entitled to move before this Court to avail the constitutional remedy under Article 227 of the Constitution of India. As observed by the Honble Supreme Court, the Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. Section 20 of the Act enables the aggrieved person to file an appeal and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Sections 226 and 227 of the Constitution of India. Though there is no express bar in the Act regarding the exercise of jurisdiction under Articles 226 and 227 of the Constitution, when there is an effective alternative remedy available in the Act, judicial prudence demands that the Court refrains from exercising its jurisdiction under the constitutional provision, namely Article 227. On this ground, both the Civil Revision Petitions are liable to be dismissed; accordingly dismissed. No costs. Inasmuch as the Debts Recovery Tribunal itself has shown concessions to the defendants, the petitioner herein/second defendant is granted two weeks time from today to avail the said concessions as stated in para 6 of its order or else file an appeal before the Appellate Tribunal as per Section 20 of the Act. It is made clear that if the petitioner avails the appellate remedy, the time taken by him in prosecuting the above Revisions before this Court shall be excluded for the purpose of limitation. Connected C.M.P. No. 11689 of 2001 is dismissed.