1. This writ petition for and on behalf of debtors of the State Bank of India (respondent No, 2), is directed against the order dated 19-1-2000 (Annexure-3), passed by the Presiding Officer, Debt Recovery Tribunal, Patna, in Misc. Appeal No. 11/99, whereby he has rejected the application of the petitioners for setting aside the ex parte order dated 2-2-99 (Annexure-1), passed by the Tribunal in case No. P.T. 32 of 1998 (arising out of Money Suit No. 21 of 1994), decreeing the suit and for directing issuance of certificate under Section 19(7) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the Act'), for execution against the petitioners. It is further prayed that the records of Money Suit No. 21 of 94 as well as Misc. Case No. 1 of 96 (the debtors application under Order 9, Rule 13, C.P.C., which was pending before the Sub-Judge on the eye of transfer of the entire proceedings before the Tribunal) , be sent back to the subordinate Judge-Ill, Deoghar, for disposal ofMisc. Case No. 1 of 96. This Misc. Case No. 1 of 96 was filed by the petitioners herein (the defendants in the suit), before Subordinate Judge-111, Deoghar, under Order 9, Rule 13, C.P.C., for setting aside the ex parte judgment and decree passed by the Sub-Judge.
2. The respondent Bank had sanctioned cash credit facility up to Rs. 17,28,000/- to the petitioner Companyin the year 1988. The company fell in arrears and, therefore, the Bank instituted Money Suit No. 21 of 94, in the Court of the Subordinate Judge-I, Deoghar, for recovery of a sum of Rs. 34,36,298.70 P Inclusive of interest calculated up to December, 1992, and a further sum of Rs. 10.33.000/- towards interest from January 1993 to September, 1994. In spite of repeated opportunities given to the defendants (the petitioners herein), they refused to appear in the suit which was taken up ex parle and decreed by judgment dated 18-12-95. The defendants then promptly filed an application under Order 9, Rule 13, C.P.C. for setting aside the ex parte judgment and decree which was registered as Misc. Case No. 1 of 96.
3. While Misc. case was pending before the Subordinate Judge, Deoghar, the Central Government, In exercise of the powers informed by Section 3 of the Act Issued notification dt. 24-1-97, whereby a Debt Recovery Tribunal was established In Patna having jurisdiction over the States of Bihar and Orissa, as a result of which the Tribunal was constituted and established In Patna w.e.f. 24-1-97. Let it be recorded for the sake of completion of record that the Registrar of this Court had issued letter dated 10-3-97 to all the District and Sessions Judges of Bihar directing them to transfer the relevant case records to the Tribunal. Consequently, the aforesaid Misc, Case No. 1 of 96, which was pending before the Sub-Judge on 24-1-97, was transferred to the Tribunal along with the records of Money Suit No. 21 of 94. It appears that in exercise of its powers under Section 31 (2)(b) of the Act, the Tribunal took up Money Suit No. 1 of 96 De Novo, and decreed the same ex parte by the judgment dated 2-2-99 (Annexure-1). The petitioners herein thereafter filed an application under Section 22(2)(g) of the Act before the Tribunal for setting aside the ex parte order dated 2-2-99 (Annexure-1) which has been rejected by the impugned order dated 19-1-2000 (Annexure-3). The petitioners have also pre-, ferred an appeal under Section 20 of the Act before the Appellate Tribunal which is pending. It appears that the Recovery Officer of the Tribunal (respondent No. 3) has passed order dt. 4-1-2000 (Annexure-4), for issuance of proclamation of sale of properties, and a public notice has been published in the local dailies of 1-2-2000, inviting tenders for purchase by public auction of the assets of the petitioner company.
4. While assailing the validity of the impugned order, learned counsel for the petitioners submitted that transfer of Misc. Case No. 1 of 96, from the Court of Subordinate Judge, Deoghar. to the Tribunal, is against the scheme of the Act and is bad in law. He relies on the judgment of a learned single Judge of this Court, reported in (1998 (1) Pat LJR 383 (Arbind Kumar v. State Bank of India). In his submission, the judgment lays down that an application under Order 9, Rule 13, C.P.C. for setting aside an ex parte judgment and decree passed by the Civil Court cannot be transferred to the Tribunal, and that the civil Court retains Jurisdiction over such an application even after constitution of the Tribunal.
5. Learned counsel for the respondent Bank submits that in view of the provisions of the Act, all suits, applications and proceedings pending before the Tribunal on the appointed date i.e. 24-1-97 stood transferred to the Tribunal by automatic operation of law, the only exception being appeals pending before the Civil Courts, as contemplated by the proviso to Section 31(1) of the Act. The aforesaid application under Order 9, Rule 13, C.P.C., not being an appeal within the meaning of the proviso to Rule 31(1) of the Act, stood transferred to the Tribunal by automatic operation of law. He relies on the Judgment of a learned single Judge of the Delhi High Court, reported in AIR 1997 Delhi 239 (Risk Capital & Technology Finance Corporation Ltd. v. Harnath Singh Bapna).
6. Having considered the rival submissions of the parties, I am of the view that this writ petition has to be dismissed. Section 1 (3) of the Act lays down that the Act shall be deemed to have come into force on 24-6-93. Section 2(C) defines 'appointed day' according to which the date of establishment of the Tribunal or the Appellate Tribunal shall be the appointed day. In the exercise of the powers conferred by Section 3 of the Act, the Central Government has issued notification dated 24-1-97, establishing the Tribunal in Patna having jurisdiction over the States of Bihar and Orissa. Section 17(1) of the Act confers the power and authority on the Tribunal, and Sub-section (2) confers the power and authority on the Appellate Tribunal. Section 18 of the Act completely bars the jurisdiction of Courts & other authorities in relation to the matters specified in Section 17. Sections 17 and 18 are set out herein below for the facility of quick reference :
" 17. Jurisdiction, powers and authority of Tribunals
(1) A Tribunal shall exercise, on and from the appointed day, the Jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions.
(2) An appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act.
"18. Bar of jurisdiction On and from the appointed day, no Court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court-exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified in Section 17.
Section 22 lays down the procedure and powers of the Tribunal and the appellate Tribunal, Sub-section (1) whereof provides that the Tribunal and the appellate Tribunal shall not be bound by the procedure laid down by the Civil Procedure Code, but shall be guided by the principles of natural justice, and shall have the powers to regulate their own procedure. Section 22(2) (g) provides for setting aside any order of dismissal of any application for default or any order passed by it ex parte.
Section 31 relates to transfer of pending case, is of great relevance in the present case, and is set out hereinbelow for the facility of quick reference :
"31. Transfer of pending cases
(1) Every suit or other proceeding pending before any Court immediately before the date of establishment of aTribunal 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 the date to such Tribunal :
Provided that nothing In this sub-section shall apply to any appeal pending as aforesaid before any Court.
(2) Where any suit or other proceeding stands transferred from any Court to a Tribu-nal under Sub-section (1),--
(a) the Court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and
(b) The Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage or de novo as the Tribunal may deem fit."
Section 34 is the non-obstante clause, and lays down that the provisions of the Act shall have overriding effect over any other law for the time being in force.
7. The law relating to Judgments being Per Incurtam has been the subject-matter of a long line of cases. In one sense it is an exception to the doctrine of precedents where the Court refuses to feel bound by a judgment which normally binds it. Before I recapitulate some of the decisions directly on the point, I would like to notice the well-known Judgment of the Supreme Court, reported in AIR 1955 SC 661 (Bengal Immunity Co. v. State of Bihar), Paragraph 22 of which is relevant in the present case, and is set out herelnbelow :
"(22) It is a sound rule of construction of a statute firmly established in England as far back as 1584 when - 'Heydon's case', (1584) 3 Co Rep 7a, was decided that -
"....... for the sure and true interpretation of all Statutes in general (be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered :
1st. What was the common law before the making of the Act,
2nd. What was the mischief and defect for which the common law did not provide,
3rd. What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and 4th. The true reason of the remedy; and then the office of all the Judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle Inventions and evasions for continuance of the mischief, and pro private commodo', and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, 'pro bono publico'".
In - 'In re, Mayfair Property Co.' (1898) 2 Ch 28 at p. 35 Lindley M.R. In 1898 found the rule "as necessary now as it was when Lord Coke, reported 'Heydon' case (1584 (2) Co Rep 7a). In - 'Eastman Photographic Material Co. v. Comptroller General of Patents, Designs and Trade Marks', 1898 AC 571 at p. 576 Earl of Halsbury re-affirmed the rule as follows :
"My Lords, it appears to me that to construe the Statute In question, It is not only legitimate but highly convenient to refer both to the former Act and to the ascertained evils to which the former Act had given rise, and to the later Act which provided the remedy. These three being compared 1 cannot doubt the conclusion."
It appears to us that this rule is equally applicable to the construction of Art. 286 of our Constitution. In order to properly Interpret the provisions of that Article it Is, therefore, necessary to consider how the matter stood immediately before the Constitution came into force, what the mischief was for which the old law did not provide and the remedy which has been provided by the Constitution to cure that mischief."
7.1. The Supreme Court has dealt with the law relating to Per Incuriam in its Judgment, reported in (1990) 3 SCC 684 (Punjab Land Development and Reclamation Corporation Ltd. v. The Presiding Officer). The following portion of the Judgment occurring in paragraph 40 of the judgment illumines the position :
"We now deal with the question of Per Incuriam by a reason of allegedly not following the Constitution Bench decisions. The Latin expression Per Incuriam means through inadvertence. A decision can be said generally to be given Per Incuriam when this Court has acted in ignorance of a previous decision of its own or when a High Court has acted in ignorance of a decision of this Court, . ."
The Supreme Court observed as follows in paragraph 43 of the report,
"As regards the judgment of the Supreme Court allegedly rendered in ignorance of a relevant constitutional provision or other statutory provisions on the subjects covered by them, it is true that the Supreme Court may not be said to "declare the law" on those subjects if the relevant provisions were not really present to its mind. . . . ."
7.2. This issue had arisen before the Supreme Court in its judgment, reported in (1991) 4SCC 139(State of U.P. v. Synthetics and Chemicals Ltd.). Paragraphs 40 and 41 are relevant in the present context and are set out hereinbelow for the facility of quick reference.
"40. 'Incuria literally means 'carelessness' In practice, Per Incuriam appears to mean per ignoratlum. English Courts have developed this principle in relaxation of the rule of stare decisis. The 'quotable in law' is avoided and ignored if it is rendered, 'in ignoratlum of a statute or other binding authority'. (Young v. Bristol Aeroplane Co. Ltd.) (1944 (1) KB 718). Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law. In Jaisri Sahu v. Rajdewan Dubey, (AIR 1962 SC 83) this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury's Laws of England incorporating one of the exceptions when the decisions of an appellate Court is not binding.
41. Docs this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law Here again the English Courts and Jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio. "A decision passes sub-sllentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind." (Salmond on Jurisprudence 12th Edn., p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd., (1941 (1) KB 675), the Court did not feel bound by earlier decision as it was rendered without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur (AIR1989 SC 38). The Bench held that, precedents sub-silentio and without argument are of no moment'. The Courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Sharma Rao v. Union Territory of Pondicherry, (AIR 1967 SC 1480) it was observed, "it is trite to say that a decision is binding not because of its conclusions but in regard to Its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law."
8. Learned counsel for the petitioners has relied on the judgment of a learned single Judge of this Court reported In the case of Arbind Kumar (1998 (1) Pat LJR 383) (supra) wherein it has been held that the Misc. case under Order 9, Rule 13, C.P.C., for setting aside the ex parte decree, which was pending before the Civil Court on the appointed day should not be transferred to the Tribunal, and the Civil Court will continue to retain Jurisdiction over the same. With great respect, 1 disagree with the ratio of that judgment for the reasons indicated hereinbelow and also for the reason that, In my view the same is Per Incuriam. It overlooks some of the vital provisions of the Act. I may incidentally clarify that the head-note of the judgment in Arbind Kumar's case, reported in (1998) 1 Pat LJR 383 is inaccurate. It speaks of a Misc. Appeal which is not borne out by the text of the judgment. According to the facts stated In the judgment, an application under Order 9, Rule 13, C.P.C. was on the appointed day pending before the Sub-Judge and not appeal thereto. Paragraphs 5 to 8 of the judgment are set out hereinbelow for quick reference :
"5. There cannot be any doubt, in view of the alms and objects of the Act and the express provisions thereof, that it is only the suit or proceeding by the Banks and Financial Institutions which are to be entertained and decided by the Tribunal and therefore It is only such suits or proceedings pending before the Courts or other authorities which are to be transferred to the Tribunal. The Act contains provisions regarding appeals from such suits which may be pending before any Court on the appointed day. The proviso to Section 31 lays down that the proviso regarding transfers shall not apply to any pending appeals. No provision however has been made as to the miscellaneous proceedings arising out of such suits. The Act is silent on the point, A suit by the Bank or Financial Institution might have been dismissed in default and an application for its restoration might be pending on the appointed day. Likewise, the suit might have been decreed ex parte and an application for setting aside the ex parte decree might be pending on the appointed day, as in the present case. The question is whether these miscellaneous cases are to be transferred to the Tribunal. The answer to the question has to be found in Section 31 which is the only provision regarding the transfer of suits or other proceedings.
6. As noted above, Section 31 extends to suits or proceedings which are founded on any cause of action which falls under the jurisdiction of the Tribunal. In my opinion, in order to attract the provisions of Section 31 or Section 18, the suit or proceeding must be one for recovery of debt. The proceeding for restoration of the suit or setting aside the ex parte decree is not one for recovery of debt. It Is only after the ex parte decree is set aside and the suit is restored, that the provisions of Section 18 or Section 31 becomes applicable. The expression cause of action occurring in Section 31, according to me, has to be given a restricted meaning. Thus, even if the cause of action for filing the Misc. Case is passing of the decree in a suit which, had it been alive, would have stood transferred, the Misc. Case cannot be transferred. On general principles also, in the absence of any statutory provision, it is only that Court which has passed the decree or dismissed the suit in default, which would be competent to restore the same. If the suit has been decreed ex parte, the cause of action for filing the Misc. Case under Order IX, Rule 13, CPC is certainly passing of the ex parte decree. But where the ex parte decree is passed or the suit is dismissed in default immediately prior to the 'appointed day', say a day earlier, can the Misc. case at the Instance of the debtor or the bank be filed before the Tribunal Possibly not. If that be so, I do not_ think, a pending Misc. case can be transferred.
7. Section 22(2)(g) of the Act also conveys the same thing. Section 22 contains provisions regarding procedure and powers of the Tribunal. Clause (g) of Sub-section (2) lays down that the Tribunal shall have same power as vested in the Civil Court under the Civil Procedure Code, while trying a suit in respect of "setting aside any order of dismissal or any application for default or any other order passed by it ex parte". The words "application" and "it" suggest that the Tribunal's power of setting aside dismissal and ex parte decree is confined to orders passed by it, and not by the Civil Court or other authorities.
8. Counsel for the opposite party submitted that the words "or other proceedings" occurring in Section 31 are wide enough to include Misc. Case for setting aside the ex parte decree. The submission is wholly misconceived. The words "other proceedings" refer to proceedings before other authorities. From the provisions of the Act it is clear that the Act is to apply not only to suit pending in the Civil Court but also to proceedings before other authorities, such as proceedings in the nature of Certificate proceedings under the relevant State Public Demands Recovery Act before the Certificate Officer. If such proceedings are at the Instance of the Bank or other Financial Institution, within the meaning of the concerned Act, the authorities have no Jurisdiction to entertain or decide the same and they too would stand transferred to the Tribunal."
9. I am of the view that Section 18 of the Act in unmistakable terms completely bars the Jurisdiction of all other Courts or authority (except the Supreme Court, and a High Court under Articles 226 and 227 of the Constitution) in relation to matters specified in Section 17 of the Act. The entire power, authority, and jurisdiction to adjudicate the recovery of debts due to the Banks and financial Institutions in India has under Section 17 of the Act been conferred on the Tribunal which can be challenged in appeal before the Appellate Tribunal, subject of course, to the Jurisdiction of the Supreme Court, and the High Court under Articles 226 and 227 of the Constitution. Various provisions of the Act have been amended by the Recovery of Debts Due to Banks and Finaneial Institutions (Amendment) Ordinance, 2000, which has been promulgated on 17-1-2000, and has come into effect at once. Section 19 of the Act has been substituted by Section 9 of the Ordinance which, inter alia, provides that the defendant's claim to set-off shall be adjudicated by the Tribunal along with the main application. In the entire scheme of the Act, the only exception with respect to the total jurisdiction of the Tribunal is to be found in the proviso to Section 31(1) of the Act which lays down that "Provided that nothing in the sub-section shall apply to any appeal pending as aforesaid before any Court". In view of this strict mandate of law, the only possible conclusion which appears to be to follow is that after constitution of the Tribunal, all matters shall stand transferred to the Tribunal by automatic operation of law Including an application under Order 9, Rule 13, C.P.C., which was pending before the Civil Court on the appointed day and the only exception is the appeals pending before the Courts on the appointed day. Jurisdiction of the Courts has been retained by express provisions of the Act over a very limited category of cases which is temporary and transitory, namely, the appeals pending before the Courts on the appointed day. I am unable to give a restricted meaning to the expression 'or other proceeding', or 'the cause of action', occurring in Section 31(1) of the Act, and also for the reasons stated In the Judgment of the Delhi Court discussed below. Proceedings like applications for restoration of suits dismissed for default, for setting aside ex parte Judgments, review applications would, inter alia, be covered by the expression 'or other proceeding'. This has also to be read with the legislative intent and object of the Act which is to take out matters relating to recovery of debts due to the Banks and financial institutions from thejurisdiction of the Court and to provide for their adjudication by special Tribunal so that those could be realised expedi-tiously.
9.1. It appears to me that the rule of construction evolved in Heydon's case (1584) 3 Co. Rep. 7a (supra), which has become classical in legal literature and has been approved by the Supreme Court as a sound rule of construction, fully applies in the present case. In order to properly Interpret the provisions of the Act, it is, therefore, necessary to consider how the matter stood immediately before the Act was enforced. The Legislature has taken note of the position that the Civil Courts are clogged, and an enormous amount of money of the Banks and financial Institutions is blocked, which are actually needed for the development of the nation. The Civil Courts are called upon to adj udicate a large variety of litigations and, therefore, the subject-matter relating to realisation of the dues of Banks and financial institutions needed an exclusive and specialised Tribunal. Such being the aim and object of the Act, the word 'proceeding' has to be given a construction which is capable of embracing any adjudication or a legal step in a matter relating to and connected with the recovery of debt due to the financial Institutions and Banks. Putting a restricted construction on the wordings of Section 31(1) of the Act would be a step to defeat the intent, purpose, and scope of the Act.
10. There is another aspect of the matter to which the attention of the Hon'ble Judge was not invited in Arblnd Kumar's case (1998 (1) Pat LJR 383) (supra). Section 31(2)(b) of the Act provides that after the records are transferred. It is open to the Tribunal to proceed in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage or De Novo, as the Tribunal may deem fit. After the records were received in the present case, the Tribunal decided to proceed De Novo and has passed a fresh judgment and certificate, completely Ignoring the ex parte Judgment and decree of the Civil Court, as well as the petitioner's application under Order 9, Rule 13. In fact, after the Tribunal decided to proceed De Novo In the matter, the application under Order 9, Rule 13 became meaningless and has been ignored by the Tribunal. If a restricted meaning is given to the expression "or other proceeding pending before any Court', or "cause of action", occurring in Section 31 of the Act, the aforesaid power and jurisdiction of the Tribunal under Section 31 (2) (b) is truncated, which would be contrary to the legislative Intent. In fact, it will render the provisions of Section 31(2)(b) unworkable, may be the entire Act. This is an additional reason for not giving a restricted meaning to the expression 'other proceeding', or 'cause of action', occurring in Section 31 of the Act, which is the bed-rock of the judgment in Arblnd Kumar's case.
11. I also with respect disagree with the reasoning assigned in paragraph 6 of the judgment in Arbind Kumar's case (1998 (1) Pat LJR 383) to the effect that "..... on general principles also, in the absence of any statutory provision, it is only that Court which has passed the decree or dismissed the suit in default, which would be competent to restore the same. . . ."
In the scheme of the Act, creation of the jurisdiction to try the suits and transfer thereof, to the Tribunal is total, subject to the exception of pending appeals. The main matter shall automatically stand transferred by operation of law along with all the steps taken in that direction on the appointed day. After all the applications for setting aside the ex parte judgment is an adjunct to the main matter and has no separate existence de hors the same. There is yet another aspect of the matter. In view of the nature and scope of Section 31 (2) (b) of the Act discussed in this judgment, if the civil Court is allowed to retain jurisdiction over an application vide Order 9, Rule 13, the provisions of Section 31(2)(b) Is rendered unworkable, nay the whole Act, which is clearly demonstrated by the facts and circumstances of the present case itself. After the entire records including the application under Order 9, Rule 13 was transferred to the Tribunal, it decided to proceed De Novo and the very existence of the application came to an end. In this view of the matter also, there is no scope to hold that the same Court shall deal with such an application which had passed the ex parte Judgment and decree. That principle is applicable in the usual situation where the jurisdiction in the main matter continues with the same Court and not in a situation like the present one where the Jurisdiction has been completely abolished. Section 9. CPC provides that 'The Courts shall (subject to the provisions herein contained), have jurisdiction to try all suits of a civil nature excepting suits of which their cognisance is either expressly or implledly barred. ....." Where has in the present case remained the scope with the civil Court to deal with the application. And the overriding factor with its brooding omni-presence is the legislative intent, purpose and the scheme of the Act that the transfer of Jurisdiction to the Tribunal Is total, except the appeals which were pending on the appointed day which is transient. If the substratum is gone, where Is the question of the super structure.
12. The judgment in Arbind Kumar's case (1998 (1) Pat LJR 383) (supra) overlooks the provision of Section 31(2)(b) of the Act which, to my mind, makes a vital difference in reaching the conclusion, and discussed hereinabove. It also overlooks the non-obstante clause to be found in Section 34 of the Act. In that view of the matter, with great respect, I express my Inability to follow the judgment in Arbind Kumar's case. The view I have taken is entirely supported by the judgment of a learned single Judge of the Delhi High Court, reported in AIR 1997 Delhi 239 (Risk Capital and Technology Finance Corporation Ltd. v. Harnath Singh Bapna). Paragraph 9 of the judgment is relevantin the present context, and is set out hereinbelow for the faciltty of quick reference ;
"9. Under Section 31 of the Act, a suit or other proceeding instituted and pending in any Courtbefore the date of establishment of a Tribunal under the Act, shall stand transferred to the Tribunal where the cause of action for which is such that it would have been if it had arisen after the date of such establishment, within the jurisdiction of such Tribunal, This clearly implies that any suit or other proceedings pending in any Court before the establishment of the Tribunal under the Act in relation to the matters which fall within the jurisdiction of the Tribunal by the sheer force of the statute automatically stand transferred to the Tribunal on the appointed date. Section 31 opens with the words "every suit or other proceeding pending". As would be seen, the words "other proceeding" is preceded by the word "suit" and in between the two expressions, the word 'or' occurs. The section not only talks of the suit but also of "other proceeding". The term proceeding is of a very wide connotation. The object of the Act was to take out matters relating to recovery of debts due to the banks and financial institutions from the jurisdiction of the Courts and to provide for their adjudication by Special Tribunals so that they could be realised without delay. This being the philosophy behind the Act, the word 'proceeding' has to be given an interpretation which is capable of embracing any adjudication or a legal step in a matter relating to and connected with the recovery of debt due to the financial institutions."
13. Learned counsel for the petitioners is equally right In placing reliance on an unreported Judgment dated 24-1-2000, passed by a Division Bench of this Court, in L.P.A. No. 92/99 (State Bank of India v. State of Bihar) where, though in a different context, the Division Bench examined the scheme of the Act and held as follows :
"It would thus appear that on and from the appointed day, i.e. from the date of establishment of the Tribunal, the jurisdiction to entertain and decide applications from banks and financial institutions for recovery of debts due to such banks and financial institutions vested solely in the Tribunal. Therefore, once the Tribunal was established, no civil Court could entertain and decide such claims, nor could it proceed with the matter already pending before it. Section 31 in express terms provides that such suit or other proceeding pending before any Court Immediately before the date of establishment of aTribunal under the Act shall stand transferred on that date to such Tribunal. It is not in dispute that the Tribunal established by notification dated 24-1-1997 had jurisdiction to try the suit in question. Once the Tribunal was established, the law operated to transfer to the Tribunal such suits or proceedings pending before any Court. The transfer of such suits or proceedings was effected by the operation of law and nothing more was required to be done. We must, therefore, hold that on 24-1-1997, when the Tribunal was duly established by the Central Government the instant suit also stood transferred to the said Tribunal, and the Subordinate Judge II, KishanganJ, had no Jurisdiction left in the matter. Even if he had only to pronounce the judgment, he was denuded of that jurisdiction as the suit stood transferred to the Tribunal.
The learned Judge has dismissed the writ petition holding that even if the judgment and decree passed by the Subordinate Judge II was without jurisdiction, the bank must seek its remedy by way of appeal. We do not agree. Since the transfer of the suit took effect by operation of law, on the date the judgment was passed i.e. 18-3-1997, the Subordinate Judge had no jurisdiction whatsoever in the matter. This is not a case where the jurisdiction was in doubt, but a case where subordinate Judge had no jurisdiction whatsoever to decide the claim in suit and, therefore, a case of complete lack of jurisdiction. In such a case, the judgment and decree may even be ignored as a nullity."
14. This Court gets a very clear impression from a perusal of the records that the petitioners are extremely unscrupulous persons. They allowed the proceeding to go ex parte before the Civil Court, so that further time is gained in seeking restoration of the proceeding, and stepped in with utmost alacrity and filed their application under Order
9. Rule 13, on 2-1-1996 as if they were watching from the wings. The entire matter pending before the Subordinate Judge was transferred to the Tribunal on 12-5-98. and the Tribunal had to proceed De Novo in the matter in spite of repeated service and publication of notices. Even though transfer of the entire proceedings from the Civil Court to the Tribunal took place in the presence of the petitioners, they chose to abstain from the proceeding before the Tribunal and allowed an ex parte judgment dated 2-2-99 to be passed, and stepped in with alacrity for setting aside the same before the Tribunal by filing an application under Section 22(2)(g) of the Act.
15. The present proceeding is undoubtedly a mala fide proceeding for one more reason, namely for the delay in challenging the transfer of the proceeding from the civil Court to the Tribunal which had taken place on 7-4-97 and that too in a collateral proceeding where the dominant relief sought for is to set aside the Tribunal's order dt. 19-1-2000 (Annexure-3). The present proceeding is mainly directed against the Tribunal's order dated 19-1-2000, whereby the application for setting aside the ex parte order dated 2-2-99. has been rejected. In that view of the matter, it is impermissible for the petitioners to challenge the transfer of the matter from the civil Court to the Tribunal which had taken place way back on 7-4-97 and this writ petition has been instituted on 1-2-2000. The petitioners cannot be allowed to challenge the same in a collateral proceeding, Having submitted to the jurisdiction of the j Tribunal and having taken the chance of a j judgment, it cannot turn around and challenge Its jurisdiction. From this angle, the question of validity of transfer of the petitioner's application under Order 9, Rule 13, C.P.C., from the Civil Court to the Tribunal, really does not arise in the present case. I have, however, dealt with the same to finally adjudicate the issue, and also for the reason that the learned counsel for the petitioners during the course of oral arguments had only challenged the validity of transfer of the application under Order 9, Rule 13. Apart from the Court's conviction that transfer of he entire proceeding to the Tribunal is the only possible course in the scheme of the Act, and any effort on the part of any body to retain the Jurisdiction of the civil Court except the appeals pending on the appointed day, would be a nullity.
16. This writ petition is accordingly dismissed.