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2017 DIGILAW 745 (BOM)

Chanchal Rajesh More v. State Bank of Patiala

2017-04-12

S.RAVI KUMAR

body2017
JUDGMENT : S. RAVI KUMAR, CHAIRPERSON 1. In all these Appeals, Miscellaneous Applications are filed by Appellants seeking waiver of statutory deposit under Section 21 of the Recovery of Debts Due To Banks And Financial Institutions Act, 1993 (the RDDBFI Act). In view of amendment of this provision with effect from (w.e.f.) 1st September, 2016 arguments were heard as to the application of amended provisions as preliminary point on the request of Applicants. Therefore, as the point involved is very limited, it is not necessary to go into the merits and demerits of individual cases. 2. Both sides argued matter classifying the issues under two heads. First head is whether amendment has prospective or retrospective effect, and second point is whether right of waiver is vested right, accrued right or an enabling right. On behalf of Applicants and Respondent Banks written submissions were also filed. From the written submissions and oral submissions coupled with the judgments cited it can be safely recorded that on first point both sides agree that amended provision is prospective in nature and there is no specific provision giving retrospective effect. Therefore, only the issue left over is as to the right of Applicants. 3. Before going into that aspect, I may also mention here that proviso to Section 21 of RDDBFI Act is amended by removing power of total waiver and restricting it to 25% and reducing statutory deposit from 75% to 50% making it at par with provision contained in Section 18 of the Securitization and Reconstruction of Financial Assets and Enforcement Security Interest Act, 2002 (for short the SRFAESI Act). Now core argument on behalf of Applicants is all these applications were filed prior to amendment, their request for 100% waiver has to be considered and ordered. On the other hand, it is the contention of Advocate for Banks that the amendment only regulates discretionary power of this Tribunal which is neither a vested right, nor accrued right to the Applicants. 4. On behalf of Applicants arguments were advanced at length by referring to judgments of the Hon'ble Supreme Court and other Hon'ble High Court to impress upon this Tribunal that it is the vested right of Appellants to file their applications seeking waiver. 4. On behalf of Applicants arguments were advanced at length by referring to judgments of the Hon'ble Supreme Court and other Hon'ble High Court to impress upon this Tribunal that it is the vested right of Appellants to file their applications seeking waiver. On behalf of Banks judgment of Chancery Division and judgments of Hon'ble Supreme Court are cited as an answer to the contentions of the Applicants that they have vested right to file applications seeking waiver. It is the contention of Applicants that amended provisions do not curtail discretion of this Tribunal to grant total waiver of pre-deposit in respect of cases in which applications are filed prior to amendment. 5. Appellant relied on judgment of Hon'ble Supreme Court in case of Hoosein Kasam Dada (India) Ltd. v. The State of M.P., AIR 1953 S.C. 221 ) for the preposition that Appeals filed before amendment and waiver application filed therein will continue to be governed by old law by giving discretion to the Tribunal to grant 100% waiver. This decision is under Central Provinces and Berar Sales-tax Act, 1947 and the amendment was in respect of penalties for violation of provisions of the said Act. They have also relied on decision of Hon'ble Supreme Court in case of Himachal Pradesh State Electricity Regulatory Commission v. Himachal Pradesh State Electricity Board, AIR 2014 S.C. 101 , for the preposition that when there is no specific mention in the amended provision giving retrospective effect, it will have prospective effect. They have also relied on decision of the Hon'ble Supreme Court in case of Subodh S. Salaskar v. Jayprakash M. Shah, AIR 2008 S.C. 3086 , arising out of amendment under Section 138 of the Negotiable Instruments Act, giving bar to condone delay in filing cases. They have also relied on decision of the Hon'ble Supreme Court in case of State of Punjab v. Bhajan Kaur, AIR 2008 S.C. 2276 , which is on the point of no fault liability under Motor Vehicles Act. They have also relied on decision of the Hon'ble Supreme Court in case of Union of India v. Kartick Chandra Mondal, AIR 2010 S.C. 3455 , which is again on the point whether application of amended provision will have prospective effect or retrospective effect. They have also relied on decision of the Hon'ble Supreme Court in case of Union of India v. Kartick Chandra Mondal, AIR 2010 S.C. 3455 , which is again on the point whether application of amended provision will have prospective effect or retrospective effect. Besides the above, they also referred to judgment of Hon'ble Supreme Court in Criminal Appeal No. 353 of 2013 (Arising out of S.L.P. (Crl.) No. 5663 of 2011), Ramesh Kumar Soni v. State of Madhya Pradesh, which is also on the point whether amended provision will have prospective effect or retrospective effect. But, all these decision have no bearing to the case in hand, in view of the fact that both sides agreed on the point that amended provision has only prospective effect. 6. As already referred to above, the second point is whether Applicants have any vested right or accrued right, and whether such right was affected on account of amendment is to be examined. Now it may be relevant to refer here provision that has come into force from 1st September, 2016 and the provision that was in force prior to 1st September, 2016 which reads as follows: Before 1st September, 2016 Section 21 of The Recovery of Debts Due to Banks and financial Institute Act, 1993 After 1st September, 2016 Section 21 of Recovery of Debts & Bankruptcy Act, 1993 Deposit of amount of debt due, on filing Appeal. Deposit of amount of debt due, on filing Appeal. Where an Appeal is preferred by any person from whom the amount of debt is due to a Bank or a Financial Institution or a consortium of Banks or Financial Institutions, such Appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent of the amount of debt so due from him as determined by the Tribunal under Section 19. Deposit of amount of debt due, on filing Appeal. Where an Appeal is preferred by any person from whom the amount of debt is due to a Bank or a Financial Institution or a consortium of Banks or Financial Institutions, such Appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal fifty per cent of the amount of debt so due from him as determined by the Tribunal under Section 19. Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. Provided that the Appellate Tribunal may, for reasons to be recorded in writing reduce the amount to be deposited by such amount which shall not be less than twenty-five per cent, of the amount of such debt so due to be deposited under this section. 7. Either under the provision prior to 1st September, 2016 or under the amended provision after 1st September, 2016, the right that Appellants have got is only to make a request for waiver of statutory deposit and that was not taken away. Prior to 1st September, 2016 the Tribunal had power to waive total deposit by recording reasons, but by way of amendment that was restricted to 25%. As rightly pointed out by advocate for Respondent Bank, the amendment is only in respect of discretionary power of this Tribunal, but not with the rights of the borrowers or the Appellants. For exercising discretion by any Court or Tribunal it should be vested with the Before 1st September, 2016 Section 21 of The Recovery of Debts Due To Banks And Financial Institutions Act, 1993 Deposit of amount of debt due, on filing Appeal.-Where an Appeal is preferred by any person from whom the amount of debt is due to a Bank or a Financial Institution or a consortium of Banks or Financial Institutions, such Appeal shall not be entertained by the Appellate Tribunal unless such person has deposited with the Appellate Tribunal seventy-five per cent, of the amount of debt so due from him as determined by the Tribunal under Section 19. Provided that the Appellate Tribunal may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this section. power as on date of passing of the order and it cannot exercise a power which is deleted or taken away or are an anticipated power. At the time of passing order, any Court or Tribunal has to satisfy itself that it has power in passing such order on the date of making it. Now, if argument of advocate of Applicants is accepted, the Tribunal has to exercise discretionary power which was not there on the date of passing of the order which was taken away from 1st September, 2016. Now, if argument of advocate of Applicants is accepted, the Tribunal has to exercise discretionary power which was not there on the date of passing of the order which was taken away from 1st September, 2016. Though Appellants have filed their applications when the Tribunal was having that power, no orders were obtained on those applications for various reasons for which nobody can be blamed. The point that has to be examined is whether the Tribunal is vested with the discretionary power on the date of passing of the order. If that is done after 1st September, 2016, this Tribunal's power is restricted to waive pre-deposit amount upto 25% only and beyond that this Tribunal has no power. However, prior 1st September, 2016 Appellants have to deposit 75% for entertaining their Appeals, but by way of amendment that 75% was reduced to 50% therefore, now this Tribunal cannot even insist the Applicants to deposit 75% after 1st September, 2016, though applications for waiver of pre-deposit are filed prior to 1st September, 2016. 8. Advocates for Banks have relied on decision of the Hon'ble Supreme Court in case of Laxman Marotrao Navakhare v. Keshavrao, (1993) 2 SCC 270 wherein it is held that discretionary power cannot be construed as a vested right while referring to Article 136 of Constitution of India. Here also in proviso to Section 21 confirmed discretionary power on this Tribunal and such power can be exercised as it exists. So in all these applications, this Tribunal can only exercise the power under the amended provision, but it cannot exercise the power that was taken away because these applications were filed prior to amendment. If the argument of the Applicants is to be accepted, order passed on this date has to date back to the filing of applications which is not permissible and every order will be effective and in force from date of passing but not from date of application or filing of proceedings. 9. As already referred to above, this Tribunal is vested with the power as on the date of passing of the order, therefore, as all these applications have to be decided after amended provision, and discretionary power as on filling. 10. 9. As already referred to above, this Tribunal is vested with the power as on the date of passing of the order, therefore, as all these applications have to be decided after amended provision, and discretionary power as on filling. 10. For these reasons I am of the considered view that this Tribunal has to exercise its discretion as per law existing as on the date of passing of the order, but not otherwise. It is made clean that Tribunal can only exercise discretionary power as per amended provisions of the RDDBFI Act in all these applications, therefore, preliminary point is answered against Applicants. 11. Post all these Miscellaneous Applications for passing appropriate orders with regard to waiver of pre-deposit amount. Preliminary point answered.