Bank of India v. Registrar, Debt Recovery Tribunal, C. G. O. Complex
2015-03-23
A.M.BADAR, VASANTI A.NAIK
body2015
DigiLaw.ai
ORAL JUDGMENT (Per Smt.Vasanti A. Naik, J.) Rule. Rule made returnable forthwith. The writ petition is heard finally at the stage of admission as a notice for final disposal was issued to the respondents and all the respondents are duly served. 2. The issue involved in this writ petition pertains to the jurisdiction of the Registrar to refuse to register an original application under the Debts Recovery Tribunal (Procedure) Rules, 1993 on the ground of tenability. 3. The petitioner nationalized bank had granted financial assistance to a limited company and Ms Avantika Chauhan was a guarantor to the said transaction. The principal borrower, the limited company defaulted in making the payment of dues to the petitioner-Bank and an original application, bearing No.21 of 2006 was filed by the petitioner against the principal borrower and the guarantors including Ms Avantika Chauhan. The original application was decreed in favour of the petitioner-Bank and a recovery certificate was issued. Since the non-applicants failed to pay the decretal amount, the property in question was auctioned in the recovery proceedings for a consideration of Rs.21,00,000/. When the proceedings for execution of the decree were in progress, the petitioner-Bank had invoked the provisions of the Securitisation and Reconstruction of Financial Assets 3/6 and Enforcement of Security Interest Act, 2002 in respect of the mortgage of the property by guarantor Ms Avantika Chauhan in favour of Smt. Shila Gaikwad the respondent No.2 herein. The said original application was dismissed and an appeal filed by the petitioner-Bank against the order in the original application was also dismissed. It was observed by the Presiding Officer, Debts Recovery Tribunal that the petitioner-Bank could take steps for recovery of the amount refunded to Smt. Shila Gaikwad against the indemnity bond and enforce its right before the Civil Court and not before the Tribunal as Smt. Shila Gaikwad was not a party in the matter before the Tribunal. After the Debts Recovery Tribunal dismissed the appeal filed by the petitioner against the order rejecting the original application, the petitioner-Bank presented the original application, bearing lodging No.201 of 2013, seeking recovery of an amount of Rs.14,00,000/- against Smt. Shila Gaikwad and the respondent No.3 in this petition.
After the Debts Recovery Tribunal dismissed the appeal filed by the petitioner against the order rejecting the original application, the petitioner-Bank presented the original application, bearing lodging No.201 of 2013, seeking recovery of an amount of Rs.14,00,000/- against Smt. Shila Gaikwad and the respondent No.3 in this petition. The Registrar, Debts Recovery Tribunal, however, refused to register the original application on the basis of the order passed by the Debts Recovery Tribunal on 13/04/2011 permitting the petitioner-Bank to take steps for recovery of the amount refunded to Smt. Shila Gaikwad before a Civil Court and not before the Tribunal. 4. It is submitted on behalf of the petitioner by referring to Rule 5 of the Debts Recovery Tribunal (Procedure) Rules, 1993 that the Registrar did not have jurisdiction to refuse to register the original application filed by the petitioner on the ground of maintainability. It is 4/6 stated that the Registrar could not have considered the merits of the case and the order of the Debts Recovery Tribunal, dated 13/04/2011 while refusing to register the original application. It is stated that in view of the provisions of Rule 5 of the Rules of 1993, the Registrar could only scrutinize the original application to consider whether there is a formal defect in the original application and grant an opportunity to the applicant to rectify the defect. It is stated that while refusing to register the original application presented by the petitioner-Bank, the Registrar entered into the merits of the matter and did not refuse to register the same on the ground that it was defective and the applicant had failed to rectify the defect within the time allowed by the Registrar. 5. Shri Darda, the learned counsel for the respondent No.1Registrar, supported the order and submitted that the Registrar was justified in considering the order of the Debts Recovery Tribunal, dated 13/04/2011 dismissing the appeal filed by the petitioner-Bank and permitting the petitioner to file the proceedings in the Civil Court against Smt. Shila Gaikwad, if necessary. It is stated that the petitioner has an alternate remedy of filing an appeal against the order of the Registrar under subrule (5) of Rule 5 of the Rules of 1993 before the Presiding Officer concerned, in the chamber and it would be necessary for the petitioner to avail the alternate remedy. 6.
It is stated that the petitioner has an alternate remedy of filing an appeal against the order of the Registrar under subrule (5) of Rule 5 of the Rules of 1993 before the Presiding Officer concerned, in the chamber and it would be necessary for the petitioner to avail the alternate remedy. 6. On hearing the learned counsel for the parties and on a perusal of Rule 5 of the Rules of 1993 and the impugned order, it 5/6 appears that the Registrar does not have jurisdiction to refuse to register the original application presented by the petitioner-Bank on the ground of maintainability by considering the facts of the case. The Registrar could not have considered the facts of the original application and the question of tenability thereof by referring to the order passed by the Debts Recovery Tribunal, Nagpur on 13/04/2011 asking the petitioner to avail the remedy against Smt. Shila Gaikwad in a Civil Court. It is clear from a reading of the provisions of Rule 5 of the Rules of 1993 that the Registrar is only empowered to scrutinize an original application filed by an applicant and consider whether it suffers from a defect which is formal or technical in nature. If the Registrar notices a formal defect, the Registrar is empowered to allow the party concerned to rectify the defect in his presence and if the said defect is not formal in nature, the Registrar is empowered to permit the applicant such time to rectify the defect as he may deem fit. The word “defect” as mentioned in Subrule (3) of Rule 5 cannot be given an extremely wide meaning and its scope cannot be enlarged to the extent of inclusion within its ambit, the question of maintainability of the original application. The term 'defect' is referable to a defect in the presentation of the original application. The Registrar could not have held that the second original application was barred. In the instant case, the Registrar did not consider whether there was any formal or other defect in the original application filed by the petitioner and proceeded to refuse the registration of the original application in view of the order of the Debts Recovery Tribunal dated 13/04/2011, asking the petitioner to enforce 6/6 its right against Smt.Shila Gaikwad in a Civil Court.
The question of maintainability of the original application could have been decided by the Debts Recovery Tribunal and not by the Registrar, by considering the documents annexed by the petitioner-Bank to the original application, including the order of the Debts Recovery Tribunal dated 13/04/2011. The order suffers from a jurisdictional error and the same cannot be sustained. Since the order suffers from a jurisdictional error, we overrule the preliminary objection raised on behalf of the respondent No.1Registrar to the tenability of the writ petition on the ground of alternate remedy. 7. Hence, for the reasons aforesaid, the writ petition is allowed. The impugned order is quashed and set aside. The respondent Registrar is directed to register the original application, in accordance with the provisions of Rule 5 of the Rules of 1993. Rule is made absolute in the aforesaid terms with no order as to costs.