Research › Search › Judgment

Kerala High Court · body

2011 DIGILAW 1056 (KER)

Rani v. Federal Bank Ltd.

2011-10-18

THOMAS P.JOSEPH

body2011
ORDER : First respondent filed O.S. No.131 of 2000 in the court of learned Sub judge, Alappuzha against petitioner and respondents 2 and 3 for recovery of money and obtained a decree on 24.07.2002 for realization of Rs. 3,93,0257- with interest at the rate of 19% per annum from the date of decree till date of recovery and costs of the suit. There was an earlier execution petition - E.P. No.27 of 2003 filed by the first respondent but that was dismissed as there was no bidder for the property when it was brought for sale. Thereafter first respondent filed E.P. No.182 of 2005. Property was sold in court auction and purchased by the first respondent. Petition to set aside the sale was dismissed. Petitioner challenged that order in F.A.O. No.38 of 2009. While that appeal was pending, petitioner offered to pay the amount due to the first respondent before 30.06.2010 and recording that submission the FAO was disposed of by judgment dated 22.12.2009 issuing certain directions also in the matter. Thereafter petitioner filed E.A. No.338 of 2010 under Sec.151 of the Code of Civil Procedure (for short, "the Code") contending that the execution petition was not maintainable before the learned Sub judge, not to say about the proceedings taken thereon including the sale of property since, according to the petitioner only the Debt Recovery Tribunal (for short, "DRT"), under the provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short, "the Act") had jurisdiction to entertain the application (for execution). That objection was overruled by the executing court on two grounds - firstly; as per the execution petition the amount due was less than Rs. Ten lakhs and secondly, claim of petitioner regarding maintainability of the execution petition is barfed by res judicata in view of various proceedings taken in the execution court and which culminated in the judgment in FAO No.38 of 2009. Executing court has also referred to Rule 90(3) of Order XXI of the Code. 2. It is argued by learned counsel for petitioner that none of the reasons stated by the executing court to dismiss E.A. No.338 of 2010 is sustainable. According to the learned counsel, though the execution petition is dated 16.08.2010 stating the amount due as Rs. Executing court has also referred to Rule 90(3) of Order XXI of the Code. 2. It is argued by learned counsel for petitioner that none of the reasons stated by the executing court to dismiss E.A. No.338 of 2010 is sustainable. According to the learned counsel, though the execution petition is dated 16.08.2010 stating the amount due as Rs. 9,99,241/-, it was filed in the court of learned Sub judge only on 25.08.2010 on which date the amount due calculated as per the decree and petition for execution exceeded Rs. Ten lakhs and hence the learned Sub Judge had no jurisdiction to execute the decree. Only the DRT possessed the power to execute the decree. It is a question affecting the jurisdiction of learned Sub Judge to execute the decree and if it is found that learned Sub Judge lacked jurisdiction to execute the decree in view of the provisions of the Act, it follows that whatever proceedings taken in the execution proceeding is without jurisdiction and hence null and void. It is argued that the rule of res judicata does not apply to a wrong decision on jurisdiction on a point of law as parties cannot, by consent confer jurisdiction. Nor could the rule of res judicata confer jurisdiction on a court. Learned counsel has placed reliance on the decision in Punjab National Bank v. Chaiju Ram ([2000] 6 SCC 655). 3. Learned counsel for first respondent contends that the argument based on filing of the execution petition before the learned Sub Judge on 25.08.2010 and the amount due as on that day was not raised before the executing court. Such a contention is not reflected in the Civil Revision also and hence the said contention cannot be entertained in this petition. The further argument advanced by the learned counsel for first respondent is based on the judgment in FAO No.38 of 2009. 4 Section 17(1) of the Act deals with the jurisdiction, powers and authority of the DRT and states that the DRT 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. 4 Section 17(1) of the Act deals with the jurisdiction, powers and authority of the DRT and states that the DRT 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 deals with bar of jurisdiction and says that on and from the appointed day, no court or other authority 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 in Section 17. Section 19(1) says that where a bank or a financial institution has to recover any debt from any person, it may make an 'application' to the DRT within the local limits of whose jurisdiction and, under clause (a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business or personally works for gain. 5. Section 2(g) of the Act defines 'debt' as meaning any liability (inclusive of interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions 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 assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on the date of application. The expression 'application' is defined in Sec.2(b) of the Act as meaning an application made to the DRT under Section 19. 6. Going by the above scheme of the Act it is clear that if on the date the application (which includes an application for execution of a decree for money due to the bank or other financial institution coming within the purview of the Act) is preferred the amount exceeds Rs. Ten lakhs the application (be it for execution) has to go before the DRT. 7. Ten lakhs the application (be it for execution) has to go before the DRT. 7. The above position is clear from sub-sec.(4) of Sec.1 of the Act and the decision in Punjab National Bank v. Chaiju Ram's case (supra). There, the decree was passed on 16.02.1994 for recovery of principal sum of Rs. 6,19,2507- (the Act came into force on 25.06.1993). On 21.12.1994 the bank filed application foe execution of the decree. Amount payable under the decree exceeded the limit of Rs. Ten lakhs. It was held that notwithstanding that the decree was passed by the civil court, the jurisdiction to entertain the application for execution of the decree was possessed by the DRT and not by the civil court. 8. The same principle should apply in the present case also notwithstanding that the decree was passed by the civil court for an amount below the prescribed limit of Rs. Ten lakhs provided, if on the date the application for execution was filed in the executing court, the amount due to exceeded Rs. Ten lakhs. 9. Learned counsel for first respondent has raised an argument that in the light of the decision in FAO No.38 of 2009 plea of petitioner regarding lack of jurisdiction for the executing court is barred by principles of res judicata. That argument, I am unable to accept if it is found that on the day the execution petition was filed before the learned Sub Judge the amount due to the first respondent exceeded Rs. Ten lakhs. For, it is not merely an objection as to pecuniary limit of jurisdiction of the Sub Court which otherwise has jurisdiction to entertain the application but a matter which attracted the bar under Sec.19 of the Act to entertain the application for execution. If the application for execution was not maintainable on account of the bar under S.19 of the Act it follows that all proceedings taken in that application are without jurisdiction. As learned counsel for petitioner has rightly urged, a wrong decision on a question of law as to jurisdiction is not res judicata as parties cannot by consent confer jurisdiction. Nor could the rule of res judicata confer jurisdiction. 10. As learned counsel for petitioner has rightly urged, a wrong decision on a question of law as to jurisdiction is not res judicata as parties cannot by consent confer jurisdiction. Nor could the rule of res judicata confer jurisdiction. 10. The crucial question to be decided is when actually E.P. No.182 of 2005 was filed before the learned Sub judge and what was the amount 'due' to the first respondent on that day calculated as per the decree and as claimed in the petition for execution. On that question there is conflict of opinion between the parties, petitioner contending that though the execution petition is dated 16.08.2010 it was filed only on 25.08.2010 on which day amount 'due' calculated as per the decree and the execution petition exceeded Rs. Ten lakhs and the first respondent maintaining that execution petition was filed on 16.08.2010 for a sum of Rs. 9,99,241/-. A finding on that question should decide the jurisdiction of learned Sub Judge to execute the decree and the question relating to the bar under Sec.19 of the Act on the date the execution petition was filed. 11. Though learned counsel for the first respondent has argued that E.P. No.182 of 2005 must be considered as being in continuation of E.P. No.27 of 2003, I am unable to accept that argument since it is not disputed by both sides that E.P. No.27 of 2003 was dismissed as there was no bidder for the property brought up for sale. That is a dismissal of the execution petition by a judicial order and not by a ministerial order for statistical reasons so that, E.P. No.182 of 2005 could be treated as one in continuation of or for revival of E.P. No. 27 of 2003. 12. In the light of what I have stated above the executing court has to decide when actually E.P. No.182 of 2005 was filed in that court and what was the amount due calculated as per the decree and the petition for execution on the day the execution petition was filed. Based on that finding the executing court has to decide whether it had the jurisdiction to entertain the execution petition in view of the bar under Sec.19 of the Act and pass appropriate orders as provided under the law. Resultantly, this Civil Revision is allowed. Based on that finding the executing court has to decide whether it had the jurisdiction to entertain the execution petition in view of the bar under Sec.19 of the Act and pass appropriate orders as provided under the law. Resultantly, this Civil Revision is allowed. The order dated 12.01.2011 in E.A. No.338 of 2010 in E.P. No.182 of 2005 in O.S. No.131 of 2000 is set aside and E.A. No.338 of 2010 is remitted to the court of learned Sub judge, Alappuzha for fresh decision on the question of jurisdiction as above stated. Parties shall appear in the court of learned Sub Judge Alappuzha on 17.11.2011. All pending Interlocutory Applications will stand dismissed.