1. This petition under Article 227 of the Constitution of India takes exception to the action of respondent No.3, the Recovery Officer of Debts Recovery Tribunal, Jabalpur, in the matter of recovery proceedings regarding the decree obtained by the respondent-Bank, and is filed mainly claiming the following reliefs :
7.1. That this Hon'ble Court may graciously be pleased to issue a writ in the nature of certiorari and may further be pleased to quash the orders dated 23.11.2005 and 06.11.2000 (Annexure P-7 and P-8) in the interest of justice.
7.2. That this Hon'ble Court may further be pleased to hold that the Recovery Officer has acted beyond jurisdiction, authority and power in the matter and the entire action on part of respondents is bad in the eyes of law.
7.3. Any other writ/writs relief/reliefs, order/orders and direction/directions which this Hon'ble Court deem fit and proper in the facts and circumstances of this case be passed by this Hon'ble Court, in the interest of justice.
7.4. Cost of instant lis may also be awarded in favour of petitioner in the interest of justice.
2. It is the case of the petitioners that a loan was obtained by them from the respondent-Bank after executing certain mortgage deeds. The bank filed a suit for recovery against the petitioners which was proceeded ex parte. The judgment and decree was passed by the Civil Court on 07.10.1994 in the following manner :
(A) The plaintiff Bank is entitled to get Rs.24,69,699.90 jointly and severely from the defendants.
(B) The plaintiff Bank is entitled to receive interest from the date of suit till recovery on the amount of term loan of Rs.2,69,578.80 @ 13.5% per annum, on cash credit Hypothecation No.1 amount of Rs.13,35,627.61 @ 16.5% per annum, on cash credit Hypothecation No.2 amount of Rs.2,21,540/- @ 16.5% per annum, on C.C. Pledge amount of Rs.2,68,492.80 @ 16.5% per annum and on T.O.D. amount of Rs.3,84,440.29 @ 17.5% per annum.
(C) The plaintiff Bank will be entitled to get the costs of litigation from the defendants. The Counsel fees if certified to the extent of schedule be added.
(D) If the amount as decreed is not paid within a year by the defendants, the plaintiff Bank would be entitled to recover the loan amount by sale of mortgaged property and encashment of Bank guarantees.
3. It is the case of the petitioners that since the decree so passed was only a preliminary decree and no final decree was passed by the Civil Court, the same was inexecutable. The respondent Bank thereafter filed an execution application before the Civil Court, the same was dismissed for this reason in Execution Case No.437-A/1994 on 12.10.1996. Even after this order no attempt was made by the respondent-Bank to get a final decree, nor the order of the Executing Court was called in question anywhere.
4. However, when a Debts Recovery Tribunal (herein after referred to as 'DRT' for short) under the provisions of the Recovery of Debts due to Banks and Financial Institution Act, 1993 (hereinafter referred to as 'Act' for short), was constituted at Jabalpur, yet another application for execution of decree was filed under Section 22 of the Act before the respondent No.3 Recovery Officer of DRT by the Bank and such an application has been entertained ignoring the objection regarding jurisdiction of the Recovery Officer and ultimately such objection is rejected by the impugned order dated 23.11.2005, hence this writ petition is required to be filed. It is the case of the petitioners that such order is bad in law and deserves to be set aside. In fact the objection of the petitioners is to be sustained.
5. Upon service of the notice of writ petition, the respondent-Bank has filed a return and has raised the preliminary objection regarding maintainability of the petition before this Court on the ground of availability of alternative statutory remedy of appeal under the Act against the impugned order and delay of few months in filing the petition. However, it is also contended that Recovery Officer has the jurisdiction to execute the decree obtained by the Bank and therefore the impugned order is just and proper, which need no interference by this Court.
6. While addressing the Court learned senior Counsel for the petitioners has referred the provisions of the Act relating to the jurisdiction of DRT and specific Rules made thereunder and has contended that on and from appointed date the jurisdiction of the Civil Court is vested in the DRT and accordingly such execution of preliminary decree is not permissible unless certification of the same is done by the DRT. The Recovery Officer of DRT is not the competent authority to grant such certification and, therefore, the Presiding Officer of DRT has ordered in this respect at the initial stage when DRT was constituted. In terms of those instructions as well as the settled law, the Recovery Officer was having no jurisdiction to initiate such proceedings. Learned Counsel for respondent-Bank has confined his submission only with respect to preliminary objection of maintainability of petition and has relied on certain decisions.
7. Heard learned Counsel for the parties at length and perused the records and law.
8. First of all it has to be examined whether the decree obtained by the respondent-Bank was preliminary one or final decree. For the said purpose the decree as drawn is required to be seen. As extracted herein above, the decree of Civil Court had three parts, one where the entitlement of the Bank to get the loan amount was set out. The second part was the command to the defendants in suit to pay the said amount within a year and third part was the mode of recovery of decreetal amount on failure of defendants in suit to deposit the said amount within a year. As far as the first two parts of decree are concerned, they are final in nature, if were not challenged and modified by higher appellate forum of Civil Court. For the third part which in fact requires the execution, finality was not attached in the decree of Civil Court for the simple reason that it was depending on non-compliance of other parts of the decree. Thus, the decree granted by the Civil Court was part final and part preliminary. As per the law laid-down by the Apex Court in the case of Shankar Balwant Lokhande (Dead) by LRs. vs. Chandrakant Shankar Lokhande and another, (1995) 3 SCC 413 and Bimal Kumar and another vs. Shakuntala Debi and others, (2012) 3 SCC 548, the decree has to be interpreted in such a manner. This being so, when in case of failure on the part of defendants to comply with their part of decree, instead of asking for a final decree, when the execution was filed by the Bank, the same was rightly rejected. Otherwise also the rejection of the execution application by the said order has attained finality inasmuch as it has not been challenged by the Bank in higher forum. Thus, the decree obtained by the Bank was a partly preliminary decree, execution of which was not permissible under the provisions of Order 34 Rule 5 of the Code of Civil Procedure.
9. Having considered thus, now the procedure for getting a final decree as prescribed under the Act has to be examined. Section 17 of the Act prescribes the jurisdiction of the DRT. Section 18 of the Act creates a bar to entertain such claims which fall within the jurisdiction of DRT by any other Courts except the Supreme Court and High Court. Section 31 of the Act provides transfer of civil suits and other proceedings to DRT on its establishment. Section 31- A of the Act provides issuance of certificate for recovery in the case of decree and orders, by DRT. Such powers are not available to the Recovery Officer of DRT, as he is required to take action under Section 25 of the Act only when certification of recovery is done by the Presiding Officer of DRT. If a preliminary decree was to be made a final decree, in fact the application was to be filed under Section 31-A of the Act before the DRT by the Bank. The Recovery Officer could have proceeded to recover the amount if a certificate of recovery was issued by the DRT under Section 31-A(2)(3) of the Act and not otherwise. It is a fact that passing of final decree by Civil Court as alleged by the Bank was not found proved by the Civil Court itself while rejecting the execution application of the decree filed by the Bank by the order dated 12.10.1996 passed in Execution Case No.437-A/1994. Therefore, it was not opened to the Bank to file execution application again without praying for grant of final decree before the DRT specially when the order of rejection of earlier application was not challenged in higher forum. It appears that Bank was ill-advised in this respect.
10. If the part of decree was not complied with by the Judgment Debtor, the Decree Holder was not required to sit idle. Rather it was a necessary requirement to reach the Court earliest to get back the sum of loan with interest from the Judgment Debtor by converting the preliminary decree, into a final decree in terms of provisions of Order 34 Rule 5 of the Code of Civil Procedure so as to get it executed through execution or recovery proceedings. It was nothing but sheer negligence of the Bank officials who have not taken care and interest in this respect. It is unbelievable that Bank like respondent-Bank which is a Nationalized one would act without the proper legal assistance in such important matters. This further looks to be unbelievable because such a fact was never even taken note of after filing of this petition before this Court in the year 2006 and even after filing return in this petition on 01.09.2008 and basically only a preliminary objection was raised regarding maintainability of this petition before this Court. However, these are the matters to be looked into by the higher Officers of the Bank, therefore, nothing much is required to be said in this respect.
11. This now has become necessary for this Court to look into the preliminary objection of maintainability of this petition as raised by the respondent-Bank. No doubt the well settled law is that this Court is not required to exercise its extraordinary power under Article 226 or 227 of the Constitution of India if a statutory remedy of appeal or otherwise any remedy is available to the petitioners. However, it is equally well settled that this Court has not been denuded with its powers only because of availability of statutory remedies. These powers are to be exercised sparingly in rare cases as the caution has been sounded by the Apex Court on several occasions in this respect.
12. Even in the case of United Bank of India vs. Satyawati Tondon and others, (2010) 8 SCC 110, the Apex Court has looked into these aspects and while dealing with such a situation has held that the Courts are not required to exercise such power when it is pointed out that the remedy of appeal is statutory remedy and it should not be overlooked. On the other hand the High Court must insist that before availing remedy under Article 226 of the Constitution of India, a person must exhaust the remedies available under the relevant statute. However, in paragraph 44 of the very same judgment, the caution is sounded by the Apex Court. The findings recorded by the Apex Court in paragraphs 43 and 44 read thus :
43. Unfortunately, the High Court overlooked the settled law that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. In our view, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc., the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi judicial bodies for redressal of the grievance of any aggrieved person. Therefore, in all such cases, High Court must insist that before availing remedy under Article 226 of the Constitution, a person must exhaust the remedies available under the relevant statute.
44. While expressing the aforesaid view, we are conscious that the powers conferred upon the High Court under Article 226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self-imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Article 226 of the Constitution.
13. True it is that the order was passed by the Apex Court in the case where the remedy was not only available under the Act but also the remedy available under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were not resorted to by the writ petitioner before approaching the Court. Here in the case in hand the distinction is that the remedy of appeal against the order of Recovery Officer though provided under the Act is required to be exhausted only when an order is passed by the Recovery Officer within his competence. True it is that the provisions of Section 30 of the Act prescribe the appeal against the order of the Recovery Officer but it is to be seen that the entire scheme of Chapter-V is recovery of debt determined by Tribunal, by the Recovery Officer where the modes of recoveries, validity of certificate and amendment thereof, stay of proceedings under certificate and amendment or withdrawal thereof, other modes of recovery, and application of certain provisions of Income Tax Act are prescribed. If an action is taken by the Recovery Officer beyond his jurisdiction while not empowered to take any action under Section 31-A(2) and (3) of the Act and no case is made out to exercise the power under Section 25 or 28 of the Act, as the case may be, by the Recovery Officer, it cannot be said that without exhausting the statutory remedy of appeal, a writ petition could not be filed before this Court. More so it has to be seen that while creating bar under Section 18 of the Act, the powers of the High Court and the Supreme Court of exercising jurisdiction under the provisions of Constitution of India, specifically under Article 226 and 227 and Article 32 of the Constitution of India respectively are protected. This makes it clear that this Court can still exercise the power in given circumstances even when the remedy of appeal is not resorted to by the writ petitioners.
14. Learned senior Counsel for the petitioner has placed his reliance in the case of Whirlpool Corporation vs. Registrar of Trade Marks. Mumbai and others, AIR 1999 SC 22, and has contended that in the aforesaid law the Apex Court has categorically held that if an order is without the jurisdiction of the authority, the same can be challenged in a writ petition before the High Court, inasmuch as the power of superintendence of the High Court under Article 227 of the Constitution of India is still protected by the Act. It is contended that if that is the situation, the bar will not come in the way of the petitioners in the matter of filing of the present writ petition without resorting to the remedy of appeal.
15. As has been pointed out, learned Counsel for respondent Bank has placed his reliance only in the case of United Bank of India (supra) and has further relied on a Division Bench decision of the Gujarat High Court in the case of Bank of Baroda vs. Balbir Kumar Paul and others, 2011 (1) Bankers' Journal 695, wherein the Division Bench of the Gujarat High Court was dealing with a situation where the order passed on an application under Section 19 of the Act and a certificate issued for recovery and the action taken by the Recovery Officer in respect of such certificate was sought to be challenged. The Division Bench held that in such circumstances without resorting to the remedy of appeal, the writ petition was not to be filed before the Single Judge and that being so, the order passed by the Single Judge was said to be bad in law.
16. The facts of the present case are squarely different than that of the case of Bank of Baroda (supra). Again it has to be reiterated at the cost of repetition that there was no certification by the Presiding Officer of the DRT for recovery of any amount from the petitioners. There was no final decree granted even by the Presiding Officer of DRT under Section 31-A(1) of the Act, yet the proceedings were initiated by the Recovery Officer and the objection raised by the petitioner regarding maintainability of such execution application before the Recovery Officer was rejected. Since the Recovery Officer of the DRT acted beyond the jurisdiction, the respondent-bank would get no assistance from the law laid-down by the Division Bench of the Gujarat High Court in the case of Bank of Baroda (supra). Such reliance placed by the learned Counsel for the respondent- Bank in the factual circumstances of the present case are totally misconceived and inappropriate.
17. This Court fails to understand as to why an application could not be filed for making of a final decree under the provisions of Order 34 Rule 5 of the Code of Civil Procedure before the DRT on its establishment, to make the decree dated 07.10.1994 a final decree for recovery of the dues of the respondent-Bank. It is to be seen that instead of making any application in appropriate manner, the respondent-Bank filed the execution case again in the year 2000 under Order 21 Rule 10 and 11 read with Section 151 of the Code of Civil Procedure. The prayer made was initiating recovery of Rs.81,35,732.50 from the petitioners herein with the cost of execution. When the Bank was aware of the fact that there was no final decree, atleast an application could have been filed under Section 31-A(1) of the Act for making of the preliminary decree a final decree so as to recover the said amount of dues. It appears that the application under Section 22 (2-B) of the Act together with the provisions of Order 21 Rule 10 and 11 or 12 and 14 of the Code of Civil Procedure was simply filed before the Recovery Officer. If it was a case that such an execution application was not maintainable, atleast the Recovery Officer was required to return it back to the respondent-Bank for presenting the same in appropriate manner. If any proforma of making of an application under Section 31-A(1) of the Act was prescribed under the Rules, the Bank was required to move the application before the DRT and not an execution application. This being so, it appears that there was some nexus to cover up the faults committed by the Bank in making the recovery from the petitioners even after the decree granted by the Civil Court and, therefore, such attempts were made. This cannot be said to be an appropriate action on the part of the Bank. If the legal advise was not obtained in appropriate manner, that too was a folly of the Bank. In no case the Recovery Officer has jurisdiction to entertain the execution application of the respondent-Bank.
18. In view of the aforesaid circumstances, the preliminary objection raised by the respondents regarding maintainability of the writ petition before this Court is turned down. Consequently, the writ petition is allowed. The impugned order dated 23.11.2005 is set aside. As a consequence, the entire proceedings initiated before the respondent No.3 by the respondent-Bank stands quashed. However, the respondent-Bank would be at liberty to resort to the remedy available under the law for recovery of the dues from the petitioners as decreed by the Civil Court.
19. The writ petition stands allowed to the extent indicated herein above. However, looking to the peculiar facts and circumstances of the case, there would be no order as to costs.