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2015 DIGILAW 1007 (BOM)

In Re: Radhika Malhotra & Ors. v. .

2015-04-16

R.S.DALVI

body2015
JUDGMENT R.S. Dalvi, J. 1. The plaintiff/decree holder has sought to execute the decree passed by this Court in the above suit against the defendants/judgment debtors. The defendants have applied for dismissal of the execution application on the ground that this Court has no jurisdiction to execute the decree passed by it. 2. An admitted chronology of dates and events must be first seen. The suit was filed in 2000. The plaintiff was not a financial institution then. A decree came to be passed on 3rd December 2002. The plaintiff was not a financial institution even then. The plaintiff was notified as financial institution in 2004. The Recovery of Debts Due to Banks and Financial Institutions Act 1993 (DRT Act) was enacted in 1993 and amended in 2000. It would apply to the plaintiff from 2004. The plaintiff has taken out the execution application in 2012. 3. It is contended by the plaintiff that under Section 38 of the CPC this Court is the executing Court since it is the Court which passed the decree. It is contended by the defendant that the execution proceedings should be transferred to the DRT and the plaintiff must apply for a recovery certificate from the DRT and then execute it. 4. The decree of this Court came to be passed when the plaintiff was not a financial institution. Hence this Court had inherent jurisdiction to try the suit and pass the decree. That has not been challenged. 5. Mr. Balsara on behalf of the defendant would contend that the execution application must be transferred to the DRT under Section 31A in Chapter VI of the DRT Act, which runs thus: "31. A. Power of Tribunal to issue certificate of recovery in case of decree or order (1) Where a decree or order was passed by any Court before the commencement of the Recovery of Debts Due to Banks and Financial Institutions (Amendment) Act, 2000 and has not yet been executed, then, the decree-holder may apply to the Tribunal to pass an order for recovery of the amount. (2).. (3).. The Section requires to be analysed. The title of the section speaks of the power of the tribunal. It is the power to issue a certificate of recovery in case of a decree or order. The decree or order must be the one passed by any Court before the Amendment Act came into force. (2).. (3).. The Section requires to be analysed. The title of the section speaks of the power of the tribunal. It is the power to issue a certificate of recovery in case of a decree or order. The decree or order must be the one passed by any Court before the Amendment Act came into force. The Amendment Act is of 2000. It came into force on 17th January, 2000. The decree passed by the Court before 17th January 2000 is contemplated under the section. That must be a decree which was passed and not executed. The conjunction "and" shows that the section would apply when a decree was passed and that it was not executed. The decree would have to be passed before 2000 and not be executed. It is in those cases only when the decree holder has the option to apply to the tribunal to pass the order for recovery of the amount. In other cases the decree which has been passed would have to be executed by the Court which passed it. Even in cases where a decree was passed by the Court and remain to be executed the decree holder may apply to that Court in execution. The expression "may" would suggest an option. 6. This would be clarified upon seeing Section 31 of the Act in the same Chapter VI of the Act to which my attention was drawn by Mr. Kanade. Section 31 deals with pending cases. The relevant part of Section 31 runs thus: "CHAPTER VI MISCELLANEOUS 31. Transfer of pending cases (1) Every suit or other proceeding pending before any Court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal." 7. Hence for pending cases being suits or other proceedings the mandate under Section 31 is that both would stand transferred upon the establishment of the tribunal. The tribunal was established in 2000. Suits and execution of banks and financial institutions pending in any Civil Courts before 2000 would "stand transferred" to the DRT. This was not one such suit. It was filed in 2000 by a non-financial institution. The tribunal was established in 2000. Suits and execution of banks and financial institutions pending in any Civil Courts before 2000 would "stand transferred" to the DRT. This was not one such suit. It was filed in 2000 by a non-financial institution. Therefore, it was not transferred to the DRT. The Civil Court's jurisdiction was not barred. The decree was passed by the Court having jurisdiction. The decree would have to be executed also by that Court. 8. Mr. Kanade justifiably argued that if the plaintiffs were to get the above execution application transferred to the DRT or had filed it before the DRT the DRT would not have had the power to issue recovery certificate for the decree passed in the above suit. It would refuse to issue the recovery certificate because the decree was not passed prior to the commencement of the Amendment Act on 17th January, 2000, it having been passed on 3rd December, 2002. 9. In the case of Raghunath Rai Bareja & Anr Vs. Punjab National Bank & Ors. 2006 DGLS (Soft.) 902 2007(11) JT 542 : 2006 (13) Scale 511 : 2007 (2) SCC 230 the Supreme Court considered the purview of Section 31 of the DRT Act relating to transfer of pending cases. In that case the decree was passed in 1985 86. No case was pending. The execution application was sought to be transferred in 2005 after the tribunal was established. It was held that because no suit was pending at the time the tribunal was established no transfer could take place under Section 31 of the Act. It was observed that apart from Section 31 there was no other provision for transferring a suit or other proceeding before the tribunal and hence the order of 2005 transferring execution proceedings of the decree passed in 1985 86, though it was before the commencement of the Recovery Act, was held to be wrongfully transferred because the decree was correctly passed when the tribunal was not constituted. 10. Mr. Balsara relied upon the case of Allahabad Bank Vs. Canara Bank & Anr. AIR 2000 SC 1535 in which the exclusive jurisdiction of the tribunal is set out. That is, of course, for banks and financial institutions; it would not apply to the plaintiff at the time the suit was filed. 11. In the case of Punjab National Bank Dasuya Vs. Chajju Ram & Ors. Canara Bank & Anr. AIR 2000 SC 1535 in which the exclusive jurisdiction of the tribunal is set out. That is, of course, for banks and financial institutions; it would not apply to the plaintiff at the time the suit was filed. 11. In the case of Punjab National Bank Dasuya Vs. Chajju Ram & Ors. (2000) 6 SCC 655 also relied upon by Mr. Balsara the decree passed in favour of a bank by a Civil Court prior to the establishment of the DRT, but which remained in execution came to be considered. The observations in the case of Allahabad Bank (supra) came to be considered in para 5 of that judgment. It was observed in the case of Allahabad Bank that the word "proceeding" in Section 31 would include execution proceeding. Hence, if any execution proceedings were pending in a Civil Court before the commencement of the Act, it would stand transferred to the DRT under Section 31 of the DRT Act. The decretal amount was observed to be a debt and was hence held to attract sections 17 and 18 of the Act which gave exclusive jurisdiction to the DRT for all questions regarding recovery of debts by banks and financial institutions and required transfer of those proceedings to the DRT under Section 31 of the DRT Act. This was because the execution proceedings were for recovery of a debt. The debt is defined in Section 2(g) of the DRT Act as any liability which is claimed under the decree. However that claim has to be by a bank or a financial institution. When the plaintiff filed the suit it was not the financial institution. When the plaintiff sought to execute the decree it was a financial institution. Hence Mr. Balsara would argue that the decretal amount is the debt claimed by the financial institution under the decree. It was held in para 8 of the judgment that Section 31A came to be instituted to put matters beyond doubt. Upon enactment of Section 31A the decree or order which was passed before the commencement of the Act and not executed could be referred to the tribunal for passing an order for recovery which would be by issue of a recovery certificate. 12. Upon enactment of Section 31A the decree or order which was passed before the commencement of the Act and not executed could be referred to the tribunal for passing an order for recovery which would be by issue of a recovery certificate. 12. Hence it was held in para 9 of the judgment that Section 31A was clearly applicable in that case since the decree was passed before the commencement of the Amendment Act and was not executed. Hence it was held that DRT had jurisdiction to execute the decree. 13. The decree was not passed before the commencement of the Amendment Act in this case. Hence DRT would not have the jurisdiction to execute the decree in this case. 14. Mr. Balsara further relied on the judgment in the case of Manilal Govindji Khona Vs. Indian Bank 2012(6) Bom.C.R. 544 in paragraph 5 of which the case of Punjab National Bank Dasuya (supra) has been reproduced and considered. In that case the execution application of Indian Bank was pending in the Civil Court when the Act came into force and was, therefore, held liable to be transferred to the DRT. 15. This case is different. No execution application was pending in the Civil Court when the Act came into force and hence the above execution application cannot be transferred to the DRT. 16. Consequently this Court being the executing Court has jurisdiction to execute the decree. 17. Thus seen the notice taken out by the plaintiff is made absolute. The Notice of Motion of the defendants is dismissed. The execution shall proceed.