1. Both these appeals can be disposed of by this common order as issues involved in both the appeals are same, parties are same and submissions made therein by all the Advocates are also identical.
2. Both the appeals are filed by the appellants/original defendants being aggrieved by the order dated 3.2.2004 passed by the learned Presiding Officer of Debts Recovery Tribunal, Ahmedabad in Original Application No. 166 of 2001. By the impugned order, the learned Presiding Officer dismissed the application taken out by the appellants praying for direction to the applicant Banks to produce on record the requisite documentary evidence to show that they had obtained necessary clearance from the Cabinet Committee constituted for the purpose of giving clearance to the dispute before agitating the same in a Court/ Tribunal. It was further prayed that pending production of the documentary evidence, an ex parte order passed by the learned Presiding Officer against them, be forthwith vacated.
3. I have heard all the Advocates. I have gone through the proceedings including the impugned order, and in my view, there is no error in the impugned order.
4. It is revealed from the proceedings that the Original Application No. 166 of 2001 has been filed by the applicant Banks for recovery of certain amounts due and payable by M/s. Petrofils Co-operative Limited/appellants herein. The appellant No. 1 appears to be Multi State Co-operative Society in liquidation and the appellant No. 2 appears to be Liquidator appointed in accordance with law. It appears that an ex parte order was passed by the learned Presiding Officer on 24.4.2001 against the respondents in favour of the Bank, which is still in force. The original application is still pending.
5. It was the contention of the appellants that the proceedings of the present Original Application No. 166 of 2001 should not be proceeded with. It was their contention that the applicant Banks were public sector enterprises. It was further submitted that the Government of India had a major stake and controlling interest in the affairs of all the applicant Banks, as was a State within the meaning of Article 12 of the Constitution of India. It was further stated that the appellant society was also a public sector undertaking incorporated and registered under the Multi State Co-operative Society Act, 1984 and that the Government of India was holding 85 percent of the total equity shares in the paid up equity share capital of the appellant society, while 5 percent of the total equity shares was held by the National Co-operative Development Corporation and the balance equity shares were being held by about 1435 Weavers Co-operative spread all over the country. According to the appellants, public sector undertakings of Government of India should not be engaged in litigations, as huge expenses would be incurred and no useful purpose would be served. It was contended that in the case of Oil and Natural Gas Commission and Anr. v. Collector of Central Excise, reported in 1995 Supp (4) Supreme Court Cases 541, the Hon'ble Supreme Court was pleased to direct that the Government of India should set up a committee consisting of representatives from the Ministry of Industry, Bureau of Public Enterprises, the Ministry of Government of India, Ministry of Public Sector Undertakings in between themselves to ensure that no litigation should come to a Court or to a Tribunal without the matter having been first examined by the Committee and its clearance for litigation. The appellants' contention was that in view of this background, before approaching the Tribunal by filing the present original application, the applicant Banks had not referred the dispute to this committee referred above and there was nothing on record to show that the applicant Banks referred the dispute to the committee and obtained its clearance. Objection was taken by the appellants to the very maintainability of the original application on the ground that there was no such clearance given by the said committee. It was, therefore, prayed that the applicant Banks be directed to produce on record certificate of clearance issued by the said Committee with regard to the dispute raised in the present original application and till that time, the proceedings be stayed. It was also prayed that an ex parte order passed by the Tribunal be vacated.
I have carefully gone through the application made by the appellants in the Tribunal. In the application nothing is stated on merits as to why the order of an ex parte injunction passed on 24.4.2001 should be vacated and what is the prejudice (if at all) caused by such an ex parte order. Entire application consists of averments made with respect to the said committee and clearance certificate, if any, issued by the said committee.
6. Mr. Pandit, the learned Advocate appearing for the appellants orally also submitted that since the appellant No. 1 was a Multi State Co-operative Society, as per Section 101 of the Multi State Co-operative Societies Act, 1984, the applicant Banks ought to have filed a notice before the Central Registrar of Co-operative Societies, Government of India, that the Bank ought to have given clear 90 days notice and that without complying with these provisions, proceedings against the Multi State Co-operative Society ought not have been initiated.
According to Mr. Pandit, The Multi State Co-operative Societies Act, 1984 being a special Act has precedence over the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It is also submitted that an ex parte order passed way back in the year 2001, ought not to have been in force for such a long period and, therefore, it has to be vacated.
7. Mr. Colabawalla, the learned Advocate appearing for the Bank vehemently submitted that points about the appellant No. 1 being a Multi State Co-operative Society and giving notice under Section 101 of the Multi State Co-operative Societies Act, were not taken up in the Debts Recovery Tribunal and, therefore, the appellants should not be permitted to argue these points at this appellate stage. Mr.
Colabawalla submitted that had the appellants taken these points in the Debts Recovery Tribunal, they would have filed appropriate reply and now at this appellate stage, these points should not be allowed to be raised, when they were not before the learned Presiding Officer of Debts Recovery Tribunal for consideration.
8. Mr. Colabawalla also pointed out relying upon the Supreme Court decision in the case of Steel Authority of India Limited v. Life Insurance Corporation of India and Ors. reported in AIR 1997 SC 2590, that it was not obligatory on the part of the Banks to refer the dispute, before filing original application in the Debts Recovery Tribunal to the High Power Committee. He argued that the only fiscal disputes and that too, in case of major policy matters, to save the public money and Court's valuable time, were required to be referred to the said committee.
9. Having heard all the Advocates at length and having gone through the judgment in the case of Oil and Natural Gas Commission and Anr. v.Collector of Central Excise, reported (supra), so also the decision in the case of Steel Authority of India Ltd. v. Life Insurance Corporation of India reported (supra), I find substance in the submissions of Mr.
Colabawalla. In para 3 of the Supreme Court decision in the case of Steel Authority of India Ltd. (supra), the Supreme Court has held that: "3. The object of issuing direction in those matters was to decide the fiscal disputes in case of major policy matters to save the public money and Court's valuable time, and disputes could amicably be settled between the public sector undertaking and the Government of India or the State Government. The intention was not to resolve the disputes like eviction of a company of Public Undertaking under Public Premises (Unauthorised Occupants) Act; such petty disputes are not directed to be dealt with by the high level officers whose otherwise duty and time is of very important nature...." The above observations of the Hon'ble Supreme Court make it quite clear that the matters which are to be referred to the High Power Committee referred to in ONGC's case, are the matters involving fiscal disputes, in case of major policy matters and petty disputes are not directed to be dealt with by the high level officers whose otherwise duty and time is of very important nature.Canara Bank and Ors. v. National Thermal Power Corporation and Anr. reported in I (2001) BC 613 (SC), wherein the Supreme Court has observed as follows: "What the Court has directed in ONGC's case is that frivolous litigation between Government Departments and Public Sector Undertakings of the Union of India should not be dragged in the Courts and be amicably resolved by the committee. The judgment is intended to prevent avoidable litigation between the Government Departments and the Undertakings of the Union of India. In the present litigation, there does not appear to be a genuine disputes between the Government of India Undertakings. In this case, one of the Public Sector Undertaking is shown to be acting not as an Undertaking but as Trustee of a Trust. The Board was, therefore, justified in holding that "that the real litigation in this case, therefore, is between Mutual Fund and NTPC" and not between the two Undertakings. The meaning of word "dispute" is "a controversy having both positive and negative aspects. It postulates the assertion of a claim by one party and its denial by the other." 10. In the present case at hand, Mr. Colabawalla, so also Mr. Deepak Thakkar appearing for the respective Banks drew my attention to the averments made by the appellants in their respective written statements filed in the Debts Recovery Tribunal and pointed out that the appellants had admitted their liability and there was no 'dispute' about the same. It was submitted by both the learned Advocates that there was assertion of claim by one party namely the Banks, but there was no denial of the same by the other, namely the appellants.
I find myself in agreement with the submissions made by Mr. Colabawalla and Mr. Deepak Thakkar. Indeed, there was no denial of the liability and, therefore, there was no dispute. Therefore, there was nothing to be referred to the High Power Committee and there was no necessity for obtaining any clearance certificate by the Banks to initiate their original application against the present appellants. I, therefore, reject submissions made by Mr. Pandit on this point.
11. As far as oral submissions (which were not made before the learned Presiding Officer of Debts Recovery Tribunal) with respect to appellants being the Multi-State Cooperative Society and, therefore, the Multi-State Co-operative Societies Act having precedence and about giving a notice under Section 101 of the Multi-State Co-operative Society Act etc. etc. are concerned, a simple answer to all these averments, is to be found in the Supreme Court's celebrated judgment in the case of Allahabad Bank v. Canara Bank and Anr., . In this case, issue involved was with respect to the jurisdiction of Debts Recovery Tribunal and Recovery Officer vis-a-vis Company Court and the Hon'ble Supreme Court observed that: "even where a winding up petition is pending or a winding up order has been passed against the debtor company, the adjudication of liability and execution of the certificate in respect of debt payable to the Banks and financial institutions are respectively within the exclusive jurisdiction of the Debts Recovery Tribunal and the Recovery Officer and in such a case the Company Court's jurisdiction under Sections 442, 537 and 446 of the Companies Act stands ousted. Hence, no leave of Company Court is necessary for initiating such proceedings under the RDB Act nor can the Company Court transfer to it or otherwise interfere with such proceedings." "even the priorities among various creditors can be decided only by the Debts Recovery Tribunal in accordance with Section 19(19) of the RDB Act read with Section 529-A of the Companies Act and in no other manner." Further, in this case a conclusive finding is given by the Supreme Court that: "provisions of RDB Act in this regard being inconsistent with those of Companies Act override the provisions of Companies Act." In view of the aforesaid discussion, submissions of Mr. Pandit that since Liquidator of the appellants' society was in picture and that no notice was given by the Bank to the Central Registrar under Section 401 of the Multi State Co-operative, Societies Act, etc. completely fall to the ground.
In view of the above, in my view, the Misc. appeals are absolutely without any merit and have to be dismissed. Hence, following order is passed: Misc. Appeal No. 121 of 2004 and Misc. Appeal No. 139 of 2004, both are hereby dismissed.
In view of this, Misc. Application 139 of 2004 in Misc. Appeal No. 121 of 2004 and Misc. Application No. 199 of 2004 in Misc. Appeal No. 139 of 2004 do not survive and are disposed of accordingly.