Research › Search › Judgment

Rajasthan High Court · body

2013 DIGILAW 1784 (RAJ)

UCO Bank v. Commercial Tax Officer, Madanganj

2013-10-03

GOPAL KRISHAN VYAS

body2013
ORDER Instant writ petition has been filed under Article 227 of the Constitution of India to challenge the order dated 19-12-2012 passed by the D.R.A.T., Delhi in Appeal No. 158/2011 whereby the order dated 21-1-2011 passed by the D.R.T., Jaipur in Appeal No. 34/2004 was upheld. 2. At the threshold, I have examined the maintainability of the writ petition filed under Article 227 of the Constitution of India and, for that purpose, after hearing learned counsel for the petitioner, it emerges from the facts that in the judgment rendered by the Hon'ble Supreme Court in Civil Appeal Nos. 617/618 of 2013, arising out of SLP (C) Nos. 22808-22809 of 2010, the Hon'ble Supreme Court passed an order on 22-1-2013 in the case of Union of India v. Debt Recovery Tribunal Bar Association (reported in 2013 AIR SCW 917) in which, while considering Section 18 of the RDDBFI Act held that Article 227 of the Constitution of India stipulates that every High Court shall have superintendence over all Courts and tribunals throughout the territories interrelation to which it exercise jurisdiction. This power of superintendence also extends to the administrative functioning of these Courts and tribunals. 3. While observing the above, certain directions were issued by the Hon'ble Supreme Court that all the High Courts shall keep a close watch on the functioning of DRTs and DRAT which fall within their respective jurisdiction and ensure smooth, efficient and transparent working of the said Tribunals. The adjudication made by the Hon'ble Supreme Court in the aforesaid order reads as under : 11. We are confident that the aforementioned measures proposed by the UOI, shall go a long way in improving the administration of justice in these Tribunals. We are in agreement with these proposals and hope that they will be implemented efficiently and expeditiously by the concerned authorities. Having said that, it is necessary that the exercise undertaken by this Court must reach its logical end sans any delays and glitches or any other hindrances in the implementation of these suggestions. To this effect, we issue the following directions : i. All the aforementioned proposals and measures agreed upon by the UOI in response to the suggestions made by the learned amicus curiae and the Addl. Solicitor General shall be implemented expeditiously within a suitable time frame. To this effect, we issue the following directions : i. All the aforementioned proposals and measures agreed upon by the UOI in response to the suggestions made by the learned amicus curiae and the Addl. Solicitor General shall be implemented expeditiously within a suitable time frame. In the event that the UOI or the concerned authority fails to comply with the aforesaid assurances, it will be open to the learned amicus curiae to bring the same to this Court notice for appropriate directions. ii. Further, we believe that the High Courts are empowered to exercise their jurisdiction of superintendence under Article 227 of the Constitution of India in order to oversee the functioning of the DRTs and DRATs. Section 18 of the RDDBFI Act leaves no scope for doubt in this behalf. It reads thus : 18. Bar of Jurisdiction. 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. Article 227 of the Constitution stipulates that every High Court shall have superintendence over all Courts and tribunals throughout the territories interrelation to which it exercise jurisdiction. This power of superintendence also extends to the administrative functioning of these Courts and tribunals (Shalini Shyam Shetty v. Rajendra Shankar Patil (2010 AIR SCW 6387)). Hence, in light of the above, we expect that all the High Courts shall keep a close watch on the functioning of DRTs and DRAT, which fall within their respective jurisdictions. The High Courts shall ensure a smooth, efficient and transparent working of the said Tribunals. We are confident that through the timely and appropriate superintendence of the High Courts, the Tribunals shall adhere to the rigour of appropriate standards indispensable to the fair and efficient administration of justice. 4. In view of above, it is abundantly clear that this Court can exercise power under Article 227 of the Constitution of India to examine the validity of order passed by the DRT, Jaipur dated 21-1-2011 and order dated 19-12-2012 passed by the DRAT, Delhi in Appeal No. 158/2011 whereby the appellate Tribunal upheld the order passed by the DRT, Jaipur. 5. 5. Brief facts of the case are that Commercial Taxes Officer, Madanganj Kishanganj (District Ajmer) preferred an appeal against order dated 25-3-2004 passed by the Recovery Officer of the Debt Recovery Tribunal, Jaipur upon Objection Petition No. 17/2002 filed in Recovery Case No. 145/2000, UCO Bank v. M/s. Mahesh Metal Works. The appellant Bank advanced certain loan facilities to the said firm which is a partnership firm, in which, respondent No. 2 was partner, on hypothecation and mortgage of certain properties. The borrower firm failed to repay the loan, therefore, the appellant Bank filed a suit for recovery of the outstanding amount against the said firm in the Court of District Judge, Ajmer which was later on transferred to the DRT, Jaipur on coming into force of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. 6. During the pendency of the OA, certain properties of the borrower firm lying at its immovable property were sold by auction for a sum of Rs.16,42,917/-. As application was filed by respondent No. 1 before the D.R.T., Jaipur claiming first charge of the Commercial Tax Department of the State of Rajasthan over the aforesaid amount under Section 11-AAAA of the Rajasthan Sales Tax Act, 1954, Section 50 of the Rajasthan Sales Tax Act, 1994 and Section 9(2) of the Central Sales Tax Act, 1965 on the ground that an amount of Rs.50,75,450.80 was outstanding against the borrower firm as per tax assessment orders. The D.R.T. however without making an order on that application disposed of the OA vide order dated 8-6-2000 and allowed it for recovery of Rs.95.52,995/- along with pendente lite and future interest and cost with observation that realized amount of Rs.16,42,917/- would be adjusted against the decretal amount. In pursuance of the recovery certificate issued by the D.R.T. the RO initiated proceedings of RC No. 154/2000 for the recovery of the awarded amount. 7. Respondent No. 1 filed a similar application before the RO on 25-2-2002 in the RC proceedings for payment of the entire auction money claiming first charge over it but the RO dismissed the said application vide order dated 25-3-2004. Aggrieved by the said order appeal No. 35/2004 under Section 30 of the RDDBFI Act was filed before the DRT, Jaipur along with application for condonation of delay. Aggrieved by the said order appeal No. 35/2004 under Section 30 of the RDDBFI Act was filed before the DRT, Jaipur along with application for condonation of delay. The DRT allowed the condonation application as well as appeal and set aside the RO order with direction to make payment of the dues of the Commercial Tax Department of the State of Rajasthan out of the proceeds received from the sale of the properties of the borrower firm. 8. Learned counsel for the petitioner submits that the Debt Recovery Tribunal, Jaipur as well as the Debt Recovery Appellate Tribunal, Delhi committed gross error while passing order to first make payment of the dues of the Commercial Tax Department of the State of Rajasthan because the original suit was filed by the petitioner Bank for recovery of the loan, therefore, both the orders impugned deserve to be quashed. Learned counsel for the petitioner submits that in the recovery proceedings no such order was to be passed by the D.R.T., Jaipur, therefore, both the orders under challenge may be quashed. 9. After hearing learned counsel for the petitioner, this Court is of the opinion that the finding given by both the Tribunals below that Section 50 of the RST Act, 1994 which is pari materia to Section 11-AAAA provides that the amount of tax payable by a dealer shall be first charged on the property of the dealer notwithstanding anything to the contrary contained in any law for the time being in force does not require any interference because as per the verdict given by the Hon'ble Supreme Court in the case of Central Bank of India v. State of Kerala, reported in (2009) 4 SCC 94 : (2010 AIR SCW 2436) and in the case of State Bank of Bikaner and Jaipur v. National Iron and Steel Rolling Corporation, reported in (1995) 96 STC 612 : (1995 AIR SCW 214), the Supreme Court has given precedence to the charge created by operation of local sales tax laws over the charge by way of an existing mortgage or by a secured creditor. Therefore, no case is made out for interference under Article 227 of the Constitution of India because both the Tribuals below gave finding after considering the verdict given by the Hon'ble Supreme Court. 10. Therefore, this writ petition is hereby dismissed. Petition dismissed.