1. The important question of vesting or acquiring the jurisdiction directly by the Recovery Officer in a transfer execution proceedings is involved in this appeal preferred by the judgment-debtors.
2. The facts leading to the transfer of execution proceedings are as below : Consent decree in Suit No. 170/84 was obtained by the decree-holder Bank on 20.10.1986 for Rs. 10,13,745.06. The decree also directed the payment of future interest. The copy of the decree is however not produced on record. The Bank sought to execute this decree in execution proceedings bearing No. 165/1988 in Jullandhar Court who had passed the decree by attachment and sale of the properties belonging to the judgment-debtors and also by civil imprisonment.
The Exerting Court had even issued the warrant of arrest on or about 17.3.1990.
There were in all eight (8) decrees and all of them were sought to be executed by the arrest of the judgment-debtors. The decrees in 7 (seven) were fully satisfied and as such the question of arrest and detention did not arise. We are not concerned with them in this appeal. The judgment-debtors had preferred revision petitions in the High Court against the order of arrest with which we are concerned.
The said revision however, was withdrawn alleging inter alia that the High Court had no powers to entertain the execution proceedings in view of the coming into operation of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as Act). The High Court of Punjab and Haryana directed the execution to be transferred to the Tribunal. This is how the execution petition filed in 1988 for the recovery of Rs. 18,204,58.06 up to 31.5.1988 was transferred and directly received by the Recovery Officer, Debts Recovery Tribunal, Jaipur on 24.5.1990. The Recovery Officer took the cognizance and registered it as recovery proceedings bearing No. 62/1996.
3. The Recovery Officer had issued the notice of demand on 16.7.1996.
The judgment-debtors were directed by this notice of demand to pay Rs. 34,52,669.75. Even the order of attachment of immovable properties was issued on 15.7.1997, the judgment-debtors had put in appearance before the Recovery Officer and applied for the stay of the proceedings on the ground that the same properties which were under attachment were being dealt with in the similar execution proceedings before Debts Recovery Tribunal, Delhi. It may be relevant to know at this stage that the Bank has obtained 15 decrees in Delhi Court and 12 decrees in Jaipur Court against the judgment-debtors and their sister concerns. This application for stay was rejected by the Recovery Officer initially on 3.10.1997 and also by the order dated 24.10.1997. Aggrieved by these two orders a common appeal is preferred by the judgment-debtors challenging the transfer of execution proceedings and taking its cognizance directly by the Recovery Officer in the absence of Recovery Certificate.
4. The respondent Bank resisted the appeal on the ground that common appeal is not maintainable and that the Recovery Officer was justified in entertaining the execution proceedings. It was further contended that the preferring of an appeal is nothing but the protraction of the proceedings to delay the payment.
5. On the basis of the submissions made before me, the following points arise for determination : (i) Whether the Recovery Officer in the absence of Recovery Certificate issued by the Presiding Officer can take cognizance of the execution proceedings transferred to him directly from the Civil Court (ii) Whether the judgment-debtors had submitted to the jurisdiction of the Recovery Officer? If so, its effect? 6. Section 31 of the Act refers to the transfer of pending cases. The transfer of other proceedings referred to therein includes the execution proceedings. There cannot be any dispute that the execution proceedings filed in 1988 in Jullandhar Court was received on transfer directly by the Recovery Officer and not through the Presiding Officer.
It was entertained on and from 24.5.1996. The provision of Section 31 of the Act clearly shows the transfer to the Tribunal and not to the Recovery Officer who under Section 7 of the Act discharges the functions under the General Superintendence of the Presiding Officer.
Mr. Singh, learned Advocate on behalf of the Bank tried to urge that transfer to the Tribunal would include the transfer to the Recovery Officer. I find myself unable to accept this contention. The provisions of the Act no doubt are not happily worded as far as the procedure for execution and the transfer of execution for proceedings. Section 31 does not prescribe any foolproof procedure about the execution proceedings and about taking cognizance by the Recovery Officer. On the contrary it lays down that "other proceedings pending before any Court..... shall stand transferred to the Tribunal". It also further lays down that where the other proceedings stands transferred, the Tribunal has 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 (under line supplied). The provision of Section 31 has thus to be construed and read along with Section 19 and Sections 25, 26 and 28 of the Act.
"The Presiding Officer shall issue a certificate under his signatures on the basis of the order of Tribunal, to the Recovery Officer for recovery of the amount of debt specified in the certificate." Sections 25 and 28 come under Chapter V which deals with recovery of debt determined by the Tribunal. While prescribing the modes of recovery of debts, it provides that: "The Recovery Officer shall, on receipt of the copy of the certificate under Sub-section (7) of Section 19, proceed to recover the amount of debt specified in the certificate by one or more of the following modes." Similarly, requirement of certificate is prescribed under Section 28 which reads : "Where a certificate has been issued to the Recovery Officer under Sub-section (7) of Section 19, the Recovery Officer may, without prejudice to the modes of recovery specified in Section 25, recover the amount of debt by any one or more of the modes provided under this section." 8. On plain reading of all these relevant provisions in the Act, it is clear that the Recovery Officer comes into the picture on receipt of the Recovery Certificate. Even Regulation 69 of the Regulations of Practice issued under Section 22 of the Act shows that the Recovery Officer starts discharging his functions on receipt of the certificate and not otherwise. Admittedly, no such Recovery Certificate was ever issued by the Presiding Officer much less forwarded to the Recovery Officer. It is true that all the sub-clauses or rather the entire procedure prescribed under Section 19 of the Act cannot be made applicable to the execution proceedings. That appears to be the reason as to why the wording, "in the same manner as in the case of an application under Section 19" is used in Section 31(b) of the Act. The purpose of issuing the certificate is obvious. The Presiding Officer has to determine the debt and on such determination has to issue the Recovery Certificate for being executed. Because the correctness of such certificate cannot be challenged under Section 26 of the Act. The Presiding Officer cannot of course go behind the terms of the decree.
Even then while issuing the certificate even on transfer of execution proceedings he has to see whether the interest is duly calculated in terms of the decree or not. Secondly, the Presiding Officer has to see whether the debt under the decree was subsisting or legally recoverable. In short, the question of limitation if involved has to be determined by the Presiding Officer and not by the Recovery Officer.
9. Mr. Singh, the learned Advocate on behalf of the Bank urged that the issue of jurisdiction of the Recovery Officer was never raised by the judgment-debtors before the Recovery Officer. On the contrary according to him the judgment-debtors submitted to his jurisdiction and simply applied for stay. The reliance is placed on the rulings reported in AIR 1981 Supreme Court 1683, Pathumma v. Kuntlan Kutty; AIR 1989 NOC 75, Gurmit Kaur and Ors. v. Dhanto; and 1972(3) SCR 530, Senior Superintendent, K.M.S., Cochin and Anr. v. K. V. Gopinath, Sorter, to show that the issue of jurisdiction has to be raised at the earliest opportunity and that the wording of the Act has to be construed in its ordinary sense. The first two citations deal with the territorial jurisdiction and the place of suing.
One does not know as to how the question of territorial jurisdiction is relevant in the case with which we are concerned. We are concerned with the pecuniary jurisdiction and not the territorial jurisdiction. Mr.
Udeshi, the learned Advocate on behalf of the judgment-debtors referred to me the rulings reported in AIR 1991 Supreme Court 993, Smt. Isabella Johnson v. M.A. Susai (Dead) by LRs., and 1997(3) Mh.LJ. 444, Ramchandra v. Chander Sharma. Both of them at the outset I may observe are again not relevant. The plea of res judicata and the question about the transfer to subordinate Court was involved therein. The rulings cited has thus no application at all.
10. Judgment-debtors no doubt had never raised any objection about the jurisdiction before Recovery Officer. On getting notice of attachment or notice of demand they applied for the stay of the execution proceedings on the ground that the same property which was sought to be attached was being sold under the order of Debts Recovery Tribunal, Delhi. The question of jurisdiction is being raised for the first time by way of this appeal. That itself does not in my opinion debar them from challenging the jurisdiction of the Recovery Officer. The fact however, remains that the conferment does not depend upon the act of parties. It has to be under the Statute. The issuance of certificate by the Presiding Officer under the provisions referred to above alone would give jurisdiction to the Recovery Officer. Here again the application contemplated under Section 19 of the Act is a sine qua non for obtaining the necessary certificate under Sub-clause (7) of Section 19. As indicated above Section 19 does not specifically deal with execution proceedings or the procedure on transfer. But then this provision has to be read harmoniously along with the Section 31 of the Act. If so read, it contemplates the filing of the application by the Bank even in case of transfer of execution proceedings to the Tribunal.
In that case the decree-holder Bank shall not be required to pay any fees on the claim amount. The proviso of Sub-clause (2) of Section 19 would be attracted. The intention of the Act is not to recover double fees. In case of fresh execution proceedings or the transfer of the execution proceedings, Rule 7 of the Procedure Rules cannot be made applicable.
11. On transfer and on application by the decree-holder about the mode of execution and about the details of the properties which are sought to be attached and sold for realisation of the dues, the Presiding Officer under the principles of natural justice has to issue the notice to the judgment-debtors and on giving hearing the amount of debt no doubt in terms of the decree has to be determined. On such determination the certificate has to be issued and forwarded to the Recovery Officer for execution. It is then only the Recovery Officer would exercise his powers to recover the dues.
12. The judgment-debtors have alleged that the appeal is being filed against the orders dated 3.10.1997 and 24.10.1997. It is, therefore, advanced on behalf of the Bank that the common appeal against such orders is not maintainable. The judgment-debtors had in fact, at the earliest opportunity applied on 27.8.1997 for the stay on the ground that the coercive methods adopted by the Bank may be kept in abeyance.
The said application remained unattended or the orders were not passed thereon. The judgment-debtors, therefore, again applied on 3.10.1997 inviting the attention to their earlier application to which the Bank had not filed any reply. This application was taken cognizance of and the order rejecting the prayer for stay was passed by the Recovery Officer. Thereafter one of the judgment, debtors remained present on 24.10.1997 as per the direction given by the High Court while disposing of the revision petition. While noting the presence, the Recovery Officer has observed that the order rejecting the earlier application was already passed on 30.10.1997. Thus in reality there is only one order against which the appeal is filed. The judgment-debtors were aggrieved by the cognizance taken by the Recovery Officer and as such the appeal preferred against the earlier order dated 3.10.1997 is quite maintainable in law.
13. The result is that the Recovery Officer to whom the execution proceedings pending from 1983 were transferred cannot take cognizance in the absence of Recovery Certificate. The Bank has to take the recourse of Section 19 read with Section 31 of the Act for obtaining the necessary certificate. The appeal thus will have to be allowed.
Under the circumstances there shall be no order as to costs.
Appeal is allowed. The cognizance taken by the Recovery Officer on 24.5.1996 and thereafter was without jurisdiction and as such the proceedings before him are quashed.
The Recovery Officer shall only lake cognizance on getting the certificate issued by the Presiding Officer and shall exercise his powers for execution of the certificate.