Skip to content


Kanak Udyog (India) and ors. Vs. State of Assam and ors. - Court Judgment

SooperKanoon Citation
Subject;Banking
CourtGuwahati High Court
Decided On
Judge
AppellantKanak Udyog (India) and ors.
RespondentState of Assam and ors.
DispositionPetition dismissed
Prior history
B.K. Sharma, J.
1. All the three writ petitions involving the same parties have been heard together and are being disposed of by this common judgment and order.
2. The basic issues, involved in the writ petitions arc in respect of the proceedings before the Debts Recovery Tribunal and the order passed therein, are as follows:
(i) Whether Sub-rule (2), (5) of Rule 7 of the Debts Recovery Tribunal (Procedure Amendment Rules, 2003 is ultra vires the Constitution of India and the Recovery of Debts
Excerpt:
- - be it stated here that the proceedings before the tribunal were initiated by the bank on failure of the writ petitioners to repay the loan taken. it has been observed in the order that the petitioners have failed to comply with the judgment and decree already passed and, have defaulted in making payment of the dues to bank. this is precisely the reason as to why the learned counsel for the petitioners has tried to bring the principle relating to equity which is totally misplaced. if the petitioners plea that the orders passed by the recovery officer are assailable on any legal ground, they can very well invoke the provisions of section 30 of the act. sharma, learned senior counsel representing the bank as well as mr. when such a law authorizes filing of appeal, it can impose..... b.k. sharma, j.1. all the three writ petitions involving the same parties have been heard together and are being disposed of by this common judgment and order.2. the basic issues, involved in the writ petitions arc in respect of the proceedings before the debts recovery tribunal and the order passed therein, are as follows:(i) whether sub-rule (2), (5) of rule 7 of the debts recovery tribunal (procedure amendment rules, 2003 is ultra vires the constitution of india and the recovery of debts due to the banks and financial institutions act, 1993?(ii) whether the execution proceeding before the debts recovery tribunal in respect of an original proceeding, which has attained its finality, shall remain suspended on ground of institution of a suit by the judgment debtor in the civil court.....
Judgment:

B.K. Sharma, J.

1. All the three writ petitions involving the same parties have been heard together and are being disposed of by this common judgment and order.

2. The basic issues, involved in the writ petitions arc in respect of the proceedings before the Debts Recovery Tribunal and the order passed therein, are as follows:

(i) Whether Sub-rule (2), (5) of Rule 7 of the Debts Recovery Tribunal (Procedure Amendment Rules, 2003 is ultra vires the Constitution of India and the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993?

(ii) Whether the execution proceeding before the Debts Recovery Tribunal in respect of an original proceeding, which has attained its finality, shall remain suspended on ground of institution of a suit by the judgment debtor in the Civil Court making the decree holder and Anr. party-defendants for decree by way of declaration that the judgment debtor is entitled to receive compensation from the defendants?

3. The first two writ petitions being WP(C) No. 6398 of 2003 and WP(C) No. 6399 of 2006 are in respect of original applications being O. A. No. 56 of 1997 and O.A. No. 57 of 1997 since attained finality. The Tribunal by its common judgment and order dated 22.7.2003 held that the applicant/Bank, i.e., the respondent No. 4 is entitled to get the certificates to recover the amounts from the defendants/ petitioners. Accordingly, the certificates in respect of both the original applications have been issued towards recovery of the amounts indicated in the judgment and order. Be it stated here that the proceedings before the Tribunal were initiated by the Bank on failure of the writ petitioners to repay the loan taken. At the time of institution of the writ proceedings, the total liability of the petitioners stood at Rs. 78,85,510.44 in respect of O.A. No. 56 of 1997 and Rs. 1,14,94,681.85 in respect of O.A. No. 57 of 1997. The amount was calculated up to 31.10.2003.

4. There is no dispute that the aforesaid common judgment and order passed by the Tribunal has attained its finality and the petitioners have not preferred any appeal against the same. The Tribunal has passed the decree in both the original applications holding the defendant Nos. 1,2,3 and 6 in O.A. No. 56/1997 and the defendant Nos. 1, 2, 3 and 4 in O.A. No. 57/1997 jointly and severally liable for the decrectal amount. However, the present proceedings have been initiated only by the defendant No. 1 in O.A. No. 56/1997 involving W.P. (C) No. 6399/2006 and by the defendant Nos. 1 and 2 involving O.A. No. 57/1997 in WP.(C) No. 6398/2006.

5. In the normal circumstances, there is no question to stay of the execution proceedings before the Tribunal when the aforesaid judgment and order passing the decree in favour of the Bank i.e. (decree-holder) has attained its finality. The judgment and decree has been passed taking into account all the contentions raised by both the parties about which a mention has been made in both the writ petitions.

6. It appears that during the pendency of the proceedings before the Tribunal in O.A. Nos. 56/1997 and 57M997 which in fact, originated from title Suit Nos. 13/ 1999 and 11/994, the petitioner instituted Title Suit Nos. 55/2000 and 56/2000 against the Bank and the State of Assam in the Department of Industries claiming the aforesaid decree that the Bank and the State are jointly and severally liable for the debacle of the industry set up by the petitioner and for the declaration that the petitioner is entitled to receive compensation from them for the debacle. Be it stated here that the contentions raised in the suits were already urged in the written statements filed before the Tribunal in O.A. Nos. 56/1997 and 57/1997. However, no opinion is expressed in this regard since the suits are now pending before the Civil Court. Be it also stated that the plaints in the suit were returned by the Trial Court for filing the same by way of counter-claim before the Tribunal in the proceedings in O.A. Nos. 56/1997 and 57/1997. However, this order has been set aside on appeal being F.A.O. Nos. 35/2003 and 37/2003 holding that the claim of the petitioner cannot be treated as counter claim in the proceedings before the Tribunal as the relief sought for also involved another party apart from the Bank.

7. After the aforesaid judgment and order passed by the Tribunal and issuance of the certificate of liability of the petitioner, the execution proceedings started before the Tribunal and the Tribunal by its orders dated 21.2.2005 passed in O.A. Nos. 56/1997 and 57/1997 respectively prohibited and restrained the petitioners from transferring or charging specific property in any way to another person. On receipt of the order dated 21.2.2005, the petitioners submitted applications before the Tribunal contending that since the subsequent two suits filed by the petitioners being Title Suit Nos. 55/2000 and 56/2000 are pending in the Court of the learned Civil Judge (Sr. Divn.), Karimganj, further proceedings of execution proceedings should be stayed. However, the Recovery Officer of the Tribunal by orders dated 14.7.2005 has rejected the petitions filed by the petitioners. It has been held that the subsequent suits filed by the petitioners having had no nexus with the recovery proceeding which has attained its finality, the prayer made by the petitioners for stalling the execution proceeding cannot be granted.

8. After the aforesaid orders passed by the Recovery Officer on 14.7.2005, the petitioners filed the aforesaid two writ petitions. The writ petitions were entertained by orders dated 23.9.2005 without, however, any interim order. Thereafter, the petitioners filed two Misc. Applications being Misc. Case No. 4275/2005 in W.P, (C) No. 6398/2005 and Misc. Case No. 4276/2005 in W.P.(C) 6399/2005. In both the Misc applications, the petitioners have referred to the order dated 6.12.2005 passed by the Recovery Officer in both the proceedings ordering attachment of the land belonging to the judgment-debtors/petitioners in terms of the notice of attachment already published in the newspaper. It has been observed in the order that the petitioners have failed to comply with the judgment and decree already passed and, have defaulted in making payment of the dues to Bank.

9. In both the Misc applications, the orders have been passed on 6.2.2006 staying further proceedings of execution proceeding in O.A. Nos. 56/1997 and 57/ 1997 pending before the Tribunal. The proceedings were stayed till the next returnable date fixed as 27.2.2006 and it appears that thereafter, the interim orders so passed, have not been extended. Thus, technically speaking, there are no stay orders as on date stalling the execution proceedings of the aforesaid original applications.

10. Mr. M.K. Choudhury, learned Senior Counsel representing the petitioners in both the cases assisted by Mr. M. Dutta, learned Advocate, has strenuously argued that in all fairness, the Tribunal ought to have stayed the execution proceedings in view of the pendency of the subsequent suits filed by the petitioners in the Civil Court. However, he fairly submitted that the contentions raised in the written statement in the proceedings before the Tribunal are the contentions raised in both the suits, but he submitted that the issues involved in the suits are altogether different having no nexus with the proceedings before the Tribunal which have already attained finality. He has put emphasis on the principle of equity. He submitted that when the suits filed by the petitioners are pending final adjudication, in all fairness, the execution proceedings in respect of the earlier proceedings in O.A. Nos. 56/1997 and 57/1997 should be stayed inasmuch as the execution of the decree passed by the Tribunal during the pendency of the suits would cause serious prejudice to the petitioners and will have telling effect on the very survival of the petitioners.

11. Countering the above argument, Mr. S.S. Sharma, learned Senior Counsel assisted by his junior Counsel submitted that the judgment and decree passed by the Tribunal having attained its finality cannot be stalled merely because the petitioners have filed the title suits praying for the decree of the aforesaid declaration. He submitted that there is no law even to remotely suggest that in such situation, the execution proceedings should be stayed. According to him, the plea of the petitioners to invoke the principles of equity is misplaced. Emphasizing the need for financial soundness of the financial institutions and early recovery of the loan amount along with the interest, he submitted that the device adopted by the petitioner is just to delay the execution proceeding.

12. I have considered the submissions of the learned Counsel for the parties and the materials on record. As already noted, the proceedings in O. A. Nos. 56/1997 and 57/1997 have already attained its finality and thus, no fault can be attributed to the Bank for initiating the execution proceedings. Whatever steps are required to be taken towards executing the judgment and decree passed by the Tribunal will have to be adopted. It is also not the case of the petitioners that there is any procedural irregularity in the proceedings of the execution proceedings and passing the orders of attachment etc.

13. The emphasis put on equity is simply misplaced. Article 14 of the Constitution of India or the principle of non-discrimination is an equitable principle and, therefore, any relief claimed on that basis must itself be founded on equity and not be alian to that concept. In my opinion, granting of the relief to the petitioners, as has been claimed in the writ petitions, would be inequitable instead of its refusal being discriminatory as asserted by the learned Counsel for the petitioners. The jurisdiction of the High Court under Article 226 of the Constitution of India cannot be frittered away for such a purpose. The Writ Court cannot be a party to direct the Tribunal to act contrary to the law.

14. The Bank financed the petitioners heavily and large sum of amount has remained unrecovered. The normal process of recovery of debts through Courts is lengthy and time consuming. For financial assistance, rendered to the industries by the financial institutions, the final liquidity is essential failing which there is blockade of large sums of amount creating circumstances which retard the economic progress followed by large number of other consequential ill effects. Considering all these circumstances, the Recovery of Debts Due to the Banks and Financial Institution Act was enacted in 1993 and as has been observed by the Apex Court in Mardia Chemicals Limited v. Union of India and Ors. : AIR2004SC2371 , it has also not brought the desired results.

15. The claim of the petitioners to stall the execution proceedings before the Tribunal is not on any violation of substantive and/or procedural law. It is solely on hypothesis. The petitioners assert that both the suits filed by them would be decreed in their favour and upon execution of the decrees, they would be entitled to the decretal amount from the Bank and the State and it is only on such an eventuality the Bank can execute the decree already passed in its favour. In absence of any law to stall the execution proceeding and when as per the own assertion of the petitioners, both the suits are separate and distinct, the proceedings before the Tribunal cannot be stayed till such time the proceedings before the Civil Court attain its finality. The petitioners are not supported by any law in this regard. This is precisely the reason as to why the learned Counsel for the petitioners has tried to bring the principle relating to equity which is totally misplaced.

16. There is another aspect of the matter. The provisions of the Act provide for alternative remedy by way of preferring appeal against any order passed by the Recovery Officer. Section 30 of the Act provides for preferring appeal by any person aggrieved by an order of the Recovery Officer made under the Act within 30 days from the date on which a copy of the order is issued to him. If the petitioners plea that the orders passed by the Recovery Officer are assailable on any legal ground, they can very well invoke the provisions of Section 30 of the Act. instead of invoking the writ jurisdiction. It will be a sound discretion not to exercise writ jurisdiction when the Act itself provides for alternative remedy. None of the principles underlying deviation from the normal principle of availing alternative remedy instead of straightaway coming to the Writ Court has been urged in the writ petitions. However, the third writ petition being W.P. (C) No. 3476/2006 has been filed dealing with the question of right of petitioners in preferring appeal against the orders passed by the Recovery Officer.

17. After having answered the first two writ petitions in the above manner, 1 now proceed to deal with the third writ petition, i.e., W.P. (C) No. 3476/2006.

18. The petitioners possibly realizing the fallacy in initiating the writ proceedings by way of the aforesaid two writ petitions in view of the alternative remedy of preferring appeal against the orders of the Recovery Officer, have filed this writ petition on the ground that the provisions of Rule 7 Sub-rule 2(5) of the Debts Recovery Tribunal (Procedure) Amendment Rules, 2003 is unconstitutional and is ultra vires the Constitution of India and the parent Act of 1993. As noted above, Section 30 of the Act provides for remedy of appeal against any order passed by the Recovery Officer. However, it is the contention of the petitioner that since the provisions of the Act, more particularly, Section 30 of the Act do not provide for payment of any Court fee, the prescription of the same by Rule 7(2)(5) of the Amendment Rules, 2003 is unconstitutional. Learned Counsel for the parties have argued extensively on the point by referring to various provisions of the Act, Rules and the formats of preferring the appeals.

19. According to Mr. Choudhury, learned Counsel for the petitioners, there being no prescription in Section 30 of the Act in terms of which the petitioner is entitled to prefer appeal within the Tribunal against the orders passed by the Recovery Officer, the rule making authority could not have prescribed fee for preferring appeal. In this connection, he has referred to Section 20 of the Act, which is another provision relating to appeal to be Appellate Tribunal in which there is mention of prescription of fee for the purpose. He has also referred to the. formats of preferring the original applications and appeals to draw the analogy that when the parent Act itself did not provide for any fee for preferring appeal, the rule making authority could not have prescribed the same by bringing the amendment in 2003. He has placed reliance on the decision of the Apex Court as State of Kerala v. K.M. Charia Abdulla : [1965]1SCR601 .

20. Countering the above arguments of Mr. Choudhury, Mr. S.S. Sharma, learned Senior Counsel representing the Bank as well as Mr. D.C. Chakraborty, learned Central Government Counsel submitted that the plea of the petitioners that no fee could be prescribed for preferring appeal is misconceived. Mr. Sharma, learned Counsel submitted that having regard to the earlier position and its effect before the amendment of the Act of 1993, the rule making authority brought the amendment in 2003 prescribing particular fee to company the appeal and there is nothing wrong in it.

21. I have considered the submissions made by the learned Counsel for the parties. I have also gone through the provisions of the Act and the Rules. Before proceeding further, a little discussion about the decision on which Mr. Choudhury has placed reliance. This case has been referred to with the argument that Section 36 of the Act, which empowers the Central Government to make the Rules, does not provide for making Rules so as to prescribe fee for preferring appeal under Section 30' of the Act. Section 36 of the Act of 1993 is reproduced below:

36. Power to make rules-(1) The Central Government may, by notification, make rules to carry out the provisions of this Act.

(2) Without prejudice to the generality of the foregoing powers, such rules may, provide for all or any of the following matters, namely-

(a) the salaries and allowances and other terms and conditions of service of (the Chairpersons, the Presiding Officers), Recovery Officers and other officers and employees of the Tribunal and the Appellate Tribunal under Sections 7, 12 and 13;

(b) the procedure for the investigation of misbehaviour or incapacity of (the Chairpersons of Appellate Tribunals and the Presiding Officers of the Tribunals) under Sub-section(3) of Section 15;

(c) the form in which an application may be made under Section 19, the documents and other evidence by which such application shall be accompanied and the fees payable in respect of the filing of such application;

(d) the form in which an appeal may be filed before the Appellate Tribunal under Section 20 and the fees payable in respect of such appeal;

(e) any other matter which is required to be, or may be, prescribed.

22. Referring to Section 36(d) of the Act, the learned Counsel for the petitioners submitted that the provision having prescribed for fees only in respect of the appeal to the Appellate Tribunal, by necessary implication, prescription of fee is excluded in respect of appeal preferred within the Tribunal. On the other hand, the learned Counsel for the respondents submitted that the rule making authority being empowered under other provisions of the section, has prescribed the requisite fee for preferring the appeal and there is no question of holding the amended Rules to be ultra vires the Constitution or the provisions of the Act.

23. Before I proceed to deal with the aforesaid contentions, let me first answer the basic question as to whether the prescription of fee and/or deposit of any percentage of awarded amount for preferring appeal can be said to be illegal.

24. The Division Bench of this Court in the case of Sri Manoranjan Chakraborty v. State of Tripura and Ors. (1990) 1 GLR 147, held the provisions of proviso to Sections 20 and 21 of the Act prescribing deposit of 50% of the awarded amount ultra vires Article 14 of the Constitution of India. The judgment has been set aside by the Apex Court by the decision State of Tripura v. Manoranjan Chakraborty : (2001)10SCC740 . It has been held that the issue is no longer res integra in view of the earlier two decisions of the Apex Court in Gujarat Agro-Industries Co. Ltd. v. Municipal Corporation of City of Ahmedabad : [1999]2SCR895 and Shyam Kishore v. Municipal Corporation of Delhi : AIR1992SC2279 . For the reason contained in the said two decisions, it has been held by the Apex Court that the provisos to Sections 20 and 21 of the Tripura Sales Tax Act are valid. The observation of the Apex Court in Gujarat Agro-Industries Co. Ltd. (supra) in Para-8 of the judgment may have relevance to the present proceeding and thus, quoted below:

This Court said that right of appeal is the creature of a statute and it is for the Legislature to decide whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. Right of appeal which is statutory right can be conditional or qualified. It cannot be said that such a law would be violative of Article 14 of the Constitution. If the statute does not create any right of appeal, no appeal can be filed. There is a clear distinction between a suit and an appeal. While every person has an inherent right to bring a. suit of a civil nature unless the suit is barred by statute. However, in regard to an appeal, position is quite apposite. The right to appeal inheres in no one and therefore, for maintainability of an appeal there must be authority of law. When such a law authorizes filing of appeal, it can impose conditions as well.

25. According to the learned Counsel for the petitioners, the condition of deposit is a condition of impossibility which renders the remedy made available before the Tribunal itself as negatory and illusory. In various decisions of the Apex Court, such condition of pre-deposit has been upheld. In this connection, the decisions of The Anant Mills Co. Ltd. v. State of Gujarat : [1975]3SCR220 ; Seth Nand Lal v. State of Haryana 1980 Supp. SCC 574; Vijay Prakash D. Mehta v. Collector of Customs (1988) 7 SCC 402, apart from the above decisions may also be referred to. The principle enunciated in the decisions is that the provision of appeal is made to repudiate the exercise of the right of the appeal conferred upon a person. The purpose is that the right of appeal may not be abused by way recalcitrant party and there may not be any difficulty in enforcing the order appealed against if ultimately it is dismissed and there may be speedy recovery of the amount due to the financial institution. Right to appeal is neither an absolute right nor an ingredient of natural justice which principles are to be followed in judicial and quasi-judicial proceedings. A right of appeal is a statutory right and it can be circumscribed by the condition. The condition is for the purpose to act in terrorem to make the people comply with the provisions of law.

26. The decision on which Mr. Choudhury, learned Counsel for the petitioners has placed reliance i.e. K.M. Charia Abdulla (supra) is on the principle that the power to frame rules is conferred by the Act upon the authority and that power may be exercised within the strict limits of the authority conferred. If in making a rule, the State transcends its authority, the rule will be invalid, for, statutory rules made in exercise of delegated authority are valid and binding only if made within limits of authority conferred. It has been observed in the said decision that the validity of the rule whether it is declared to have the effect as if enacted in the Act or otherwise is always open to challenge on the ground that it is unauthorised. However, the moot question involved in the present proceeding is, can it be said that Rule 7(2)(5) of the Rules is anti-thesis to the provisions of the Act and/or, the rule making authority has transcended its authority in making the rules towards prescribing the particular fee for the purpose of preferring appeal under Section 30 of the Act?

27. Section 20 of the Act provides for appeal to the Appellate Tribunal against an order made or deemed to have been made. This deeming provision for the purpose of preferring appeal can be traced to unamended Section 30 of the Act. As per the provisions of Section 30 of the unamended Act, the orders of the Recovery Officer were to be deemed as orders of Tribunal. Such deemed orders of the Tribunal, although in fact, passed by the Recovery Officer being the orders within the meaning of Section 20 of the Act and there being provisions of fee in Section 20 of the Act itself, even before the un-amended Section 30 of the Act, appeals against orders of the Recovery Officer were to be accompanied by the prescribed fee. The fee has been prescribed in Rule 8 of the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 which is, as in the amended Rules of 2003 which is Rs. 30,000/-, since the amount involved in the execution proceeding is more than Rs. 30,00,000/-.

28. After the amendment of Section 30 of the Act brought by Act-I of 2000 with effect from 17.1.2000, the provision has been made for preferring appeal within the Tribunal and not before the Appellate Tribunal against the orders passed by the Recovery Officer. Thus, the deeming provision to the effect that the orders passed by the Recovery Officer shall be deemed to have been made by the Tribunal as contained in the pre-amended Section 30 of the Act has been done away with and now, anybody aggrieved, can prefer appeal within the Tribunal and he is not required to approach the Appellate Tribunal.

29. In view of the above change and the exclusion of deemed orders from the purview of Section 20 of the Act of 1993, which otherwise was covered by prescription of fee as envisaged under Rule 8 of the Procedure Rules of 1994. the rule making authority has brought the amendment by way of the 2003 Rules prescribing the same fee as it stood before the pre-amendment of Section 30 of the Act and in my considered view, this cannot be said to be ultra vires the Constitution of India and the provisions of the Act of 1993. By the amending Rules of 2003 the position as it stood, before the amendment of Section 30 of the Act has only been restored and thereby it cannot be said that the prescription of particular fee for preferring appeal in ultra vires the Constitution and the Act of 1993.

30. A statute dealing with the substantive right differs from a statute which relates to procedure. As has been observed by the Apex Court in the case of Gujarat Agro-Industries Co. Ltd. (supra), the right of appeal is the creature of statute and it is for the Legislature to decide as to whether the right of appeal should be unconditionally given to an aggrieved party or it should be conditionally given. The right to appeal inheres in no one and, therefore, for maintainability of an appeal, there must be authority of law. When such law authorises filing of an appeal, it can impose condition as well.

31. Introducing the amended Rules of 2003, no conflict has been brought with the substantive provisions of the Act. As noticed above, before the amendment of Section 30, Section 20 of the Act took care of deemed orders of the Tribunal which in fact, had been passed by the Recovery Officer. Section 20 provides for fee to accompany the appeal against the orders passed by the Recovery Officer. Before the amendment of Section 30, the appeal against the order of the Recovery Officer was to be preferred before the Appellate Tribunal, but after the amendment, now it is to be preferred in the Tribunal itself exercising the original jurisdiction. To give effect to the procedural aspect of the matter as it stood before the amendment, if the rule making authority has made the provisions prescribing fee for preferring the appeal, such rule cannot be said to be ultra vires the Constitution or the provisions of the Act.

32. Having held that Rule 7(2)(5) of the amended Rules of 2003 is valid and not un-constitutional, there is no escape from compliance of the provisions of Section 30 of the Act in terms of which orders passed by the Recovery Officer are appealable. In this connection, the decision of the Apex Court in Punjab National Bank v. O.C. Krishnan II (2001) BC 642 (SC) : 2001 AIR SCW 2993, may be preferred to in which it has been held thus:

5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the Act'). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate Forum.

6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the Banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the Court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article-227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.

33. Section 36 of the Act of 1993 empowers the Central Government to make Rules. The provisions have been quoted above. Section 36(1) empowers the Central Government to make Rules to carry out the provisions of the Act and Section 36(2)(e) empowers the Central-Government to make Rules in respect of any other matter which is required to be or may be prescribed. Thus, the rule making authority, for the purpose of carrying out the provisions of the Act or for the purpose of dealing with any other matter which is required to be prescribed and having regard to the position which stood prior to amendment of Section 30 of the Act, felt the necessity to bring the amended Rules of 2003 so as to prescribe the particular fee for preferring appeal against the order of the Recovery Officer. This cannot be said to be not within the competence and jurisdiction of the rule making power as envisaged under Section 36 of the Act.

34. As has been held by the Apex Court in R.K. Gorge v. Union of India : [1982]133ITR239(SC) , the first rule is that there is always presumption in favour of the constitutionality of a statute. This rule is based on the assumption, judicially recognised and accepted, that the Legislature understands and correctly appreciates the need of its own people, its laws are directed to problems made manifest by experience. The Court must, therefore, adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions.

35. In view of the above, I cannot persuade myself to accept the submission made by the learned Counsel for the petitioners that irrespective of the appellate provision, to soften the rigor, recourse can be had to the High Court by way of a petition under Articles 226 and 227 of the Constitution, in the kind of situation in which the present cases are in. The resort to Articles 226 and 227 of the Constitution needs to be discouraged when there is an alternative remedy. A more satisfactory solution is available on the terms of the statute itself. Even otherwise also, I do not find any of the principles involved in the present proceedings having regard to which the bar of alternative remedy can be diluted so as to exercise the power of judicial review under Article 226 of the Constitution of India.

36. There is another aspect of the matter. As in the case of the first two writ petitions, all the judgment debtors who have been made jointly and severally liable in respect of the dues payable to the Bank are not before this Court and it is one of the defendants, who is before this Court, raising the plea that in the given circumstances the execution proceedings are required to be stayed and that the amended Rules of 2003 is unconstitutional. According to him, the prescription of high fee has debarred him from preferring appeal in respect of the orders passed by the Recovery Officer. This plea was never taken in the earlier writ petitions. By efflux of time, he became wiser and visualises the likely confrontation of the argument that the writ petitions are not maintainable. In view of the alternative remedy provided in the statute itself, he has filed the third writ petition making a challenge to the very prescription of particular fee for preferring the appeal. However, none of the other defendants has made any grievance, as has been raised by the petitioner alone. Be that as it may, having held that the provisions under challenge is constitutional and that the writ petitions are not maintainable, the petitioners are not entitled to any relief.

37. In view of the above, all the 3 writ petitions merit dismissal which I accordingly do. The interim orders passed, although do not have any effect; now by efflux of time, stands specifically vacated by this order.

38. Writ petitions are dismissed. However, there shall be no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organize Client Files //