R.C. Lahoti, J.
(1) The review application under consideration raises an important question as to the jurisdiction of Debt Recovery Tribunal to hear, try and dispose of the mortgage suits.
(2) The plaintiff bank has instituted a civil suit for recovery of an amount of Rs. 1,53,60,063.41 with costs and interest against the defendants. There are several transactions between the parties. One of them is a mortgage by deposit of title deeds with the plaintiff bank securing the advance made by the plaintiff to the defendants enumerated in the plaint, the deposit of title deeds having been made with the intention of creating an equitable mortgage in favor of the plaintiff bank. The suit is styled as one under Order 34 Civil Procedure Code seeking relief of the sale of mortgage property and hypothecated goods as also a money decree for the recovery of the suit amount.
(3) On 1.5.95, this court directed the records of the suit to be transmitted to the Debt Recovery Tribunal on the ground that the suit lay within the jurisdiction of the Debt Recovery Tribunal (herein after referred to as `the Tribunal', for short). The order was made at the stage of preliminary hearing in the suit when the defendants were yet to be noticed. The defendants have now sought for review and recall of the above said order dated 1.5.95 submitting that the order was not warranted inasmuch as the suit was within the jurisdictional competence of the civil court and hence it could not have been transmitted to the Tribunal.
(4) On the defendant's application the plaintiff bank has been noticed.
(5) The learned counsel for the parties have addressed the court on the question-whether in view of the provisions contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993) (hereinafter referred to as `the Act', for short), a suit for recovery of mortgage debt is to be tried by civil court or by the Tribunal on and after 24.6.93, the date on which the act has come into force; the Tribunal having been constituted too.
(6) Apart from the counsel for the parties Mr Rajiv Mehra Advocate sought leave of the court for intervention at the hearing. He too has been heard. He has supported the stand taken by the counsel for defendants/ review-applicants.
(7) It is submitted by the learned counsel for the defendants-applicants that there is a distinction between a debt and a mortgage debt. The term 'debt' as defined in the Act would not embrace within its meaning a suit for enforcement of any liability arising out of a mortgage. It is contended on behalf of the bank that in the Act, the definition of debt is a wide and sweeping one and would embrace a suit for the enforcement of a liability arising out of a mortgage also.
(8) It will be useful to notice the Statement of Objects and Reasons leading to the enactment of the Act. It is as under :
'BANKS and financial institutions at present experience considerable difficulties in recovering loans and enforcement of securities charged with them. The existing procedure for recovery of debts due to the banks and financial institutions has blocked a significant portion of their funds in unproductive assets, the value of which deteriorates with the passage of time. The Committee on the Financial System headed by Shri M. Narasimham has considered the setting up of the Special Tribunals with special powers for adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sector reforms. An urgent need was, thereforee, felt to work out a suitable mechanism through which the dues to the banks and financial institutions could be realised without delay. In 1981 a Committee under the Chairmanship of Shri T. Tiwari had examined the legal and other difficulties faced by banks and financial institutions and suggested remedial measures including charges in law. The Tiwari Committee had also suggested setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfilll a long-felt need, but also will be an important step in the implementation of the Report of Narasimham Committee. Whereas on 30th September, 1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 filed by the financial institutions were pending in various courts, recovery of debts involved more than Rs. 5622 crores in dues of Public Sector Banks and about Rs. 391 crores of dues of the financial institutions. The locking up of such huge amount of public money in litigation prevents proper utilisation and re-cycling of the funds for the development of the country.
(9) The Bill seeks to provide for the establishment of Tribunals and Appellate Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions. Notes on clauses explain in detail the provisions of the Bill.'
(10) The Preamble to the Act reads that it is 'an act to provide for the establishment of the Tribunal for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto.' I may have a brief resume of the salient features and relevant provisions of the Act in so far as necessary for the purpose of answering the question posed. 10.1 The term 'debt' has been defined in clause (g) of Section 2 of the Act as under : '(g) 'debt' means any liability (inclusive of interest) which is alleged as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institutions or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or whether payable under a decree or order of any civil court or otherwise and subsisting on, and legally recoverable on, the date of the application.' 10.2. Sections 3 and 4 deal with establishment and composition of the Tribunal. Section 17 provides that jurisdiction, power and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions shall be exercised by a Tribunal on and from the appointed date. Then no court or other authority shall have or be entitled to exercise any jurisdiction, power or authority in relations to the matters within the competence of the Tribunal. The jurisdiction so provided carves out an exception in favor of the Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution. Section 19 provides for an application in the prescribed form to the Tribunal of competent territorial jurisdiction by a bank or a financial institution where it has to recover any debt from any person in the prescribed form. Sub section (6) vests the Tribunal with a power to make an interim order whether by way of injunction or stay against the defendant to debar him from transferring alienating or otherwise dealing with or disposing of any property and assets belonging to him without the prior permission of the Tribunal. Sub -section (7) provides that presiding officer shall issue a certificate under his signatures on the basis of the order of the Tribunal to the Recovery Officer for recovery of the amount of debt specified in the certificate. Section 22 vests the Tribunal with some of the powers of a civil court but at the same time provides for the Tribunal not being bound by the procedure laid down by the Code of Civil Procedure. The Tribunals shall be guided by the principles of natural justice and shall regulate their own procedure including the places at which they shall have their sittings. Section 34 gives an overriding effect to the provisions of the Act over any other law or instrument in force if they be inconsistent with the provisions contained in the Act. Section 35 makes provision for removal of difficulties in effectuating the provisions of the Act. 10.3 Chapter V makes provision for recovery of debt determined by the Tribunal. It contemplates a Recovery Officer with power, inter alia, to attach and sell movable or immovable property of the defendant.
(11) What is a mortgage 11.1 Fisher & Lightwoods in their Law of Mortgage (10th Edn) define 'mortgage' as a form of security created by contract, conferring an interest in property defeasible ( i.e. annullable) upon performing the condition of paying a given sum of money, with or without interest, or of performing some other condition. 11.2 The classic definition of mortgage given by Lindley M.R. in Santley vs Wilde (1899) 2 Ch 474 Ca is in the following terms :
'A mortgage is a conveyance on land or an assignment of chattels as a security for the payment of a debt or the discharge of some other obligation for which it is given.'
11.3 'The mortgagor's interest under a mortgage consists of two elements- his contractual right to sue for the debt and his proprietary rights in the security. A mortgage debt is usually a speciality debt, and in accordance with the rule as to such debts, it is situate where the mortgage deed happens to be'. (Fisher & Lightwoods- Law of Mortgage, p.19) 11.4 'The mortgagee's remedies for the recovery of the debt are either against the mortgagor personally, or by enforcement of the security. The remedy against the mortgagor personally is by an action for the debt. Usually the mortgage contains a covenant for payment, and the action is on the covenant. As just stated, the mortgagee is entitled to preservation of the security, and in general, he is entitled to enter into possession immediately upon the execution of the mortgage. In the latter case he may obtain repayment out of the rents and profits. Or, without entering into possession, he can appoint a receiver. Realisation of the security is effected by sale, or the mortgagee may, by foreclosure, deprive the mortgagor of his equity of redemption, and himself become the owner of the property. Thus, the mortgagee's remedies are: (1) action on the debt; (2) appointment of a receiver; (3) possession; (4) sale; and (5) foreclosure. The remedies by action for the debt, or by a receiver, or by sale, or by foreclosure do not arise until the debt has become due and there has been default in payment; and even then the remedies by a receiver and by sale are subject to restrictions'. (ibid, pp.280-281) 11.5 Every mortgage implies a loan and every loan implies a debt, for which the borrower is personally liable, though he has entered into neither bond nor covenant for payment of it, but the debt is of the nature of simple contract only, unless there is a bond or an express or implied covenant to give it the character of specialty. The principal secured by the mortgage, and the interest thereon, are distinct debts, and may be separately recovered.' ( ibid p. 306) 11.6 Ghose in Law on Mortgage ( 6th Edn. Tll, at page 61) states : -
TLL- Tagore Law LECTURE. 'A mortgage may be viewed in two aspects. In the first place it is a promise by the debtor to repay the loan and as such it is a contract which creates a personal obligation. Secondly, it is also a conveyance, since it passes to the creditor a real right in the property pledged to him. However, the right created in the land is only an accessory right, intended merely to secure the due payment of the debt.'
(12) In India the law of mortgage is codified. For substantive law one may refer to the provisions of the Transfer of Property Act while procedure for recovery of mortgaged debt is to be found contained in the provisions of the CPC.
(13) Section 58(a) of the Transfer of Property Act defines a mortgage as a transfer of an interest in specified immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan and an existing or future debt or performance of an acknowledgement which may give rise to a liability. Clause (b) to (g) of Section 58 proceed to define different kinds of mortgages. 13.1 The characteristic features of mortgages is that right in the property created by the transfer is accessory to the right to recover the debt. The debt subsists in a mortgage, while a transaction by which a debt is extinguished is not a mortgage but a sale ( See-Mulla on the Transfer of Property Act, 7th Ed. p.352)
(14) Sterling L.J. has stated the law in Taylor vs London and County Banking Company 1901(2) Ch 231 as under :
'ALTHOUGH a mortgage debt is a chose in action, yet, where the subject of the security is land, the mortgagee is treated as having `an interest in land' and priorities are governed by the rules applicable to interests in land, and not by the rules which apply to interests in personality'. It is stated by Sir William Grant in Jones v. Gibbons (1804) 9 Ves 407,: a mortgage consists partly of the estate in the land, partly of the debt. So far as it conveys the estate the assignment'- that is of the mortgage- 'is absolute and complete the moment it is made according to the forms of law. Undoubtedly it is not necessary to give notice to the mortgagor, that the mortgage has been assigned in order to make it valid and effectual. The estate being absolute at law, the debtor has no means of redeeming it but by paying the money. thereforee, he, who has the estate, has in effect the debt; as the estate can never be taken from him except by payment of the debt.'
(underlining by me)
(15) What is a debt. 15.1 The dictionaries are one on the meaning of debt. It is the sum of money due from one person to another. 15.2 In Kaushlaya Devi vs Baba Pritam Singh, : [1960]3SCR570 the term 'debt' as defined by Section 2(6) of the Displaced Persons ( Debt Adjustment) Act, 1951 came up for the consideration of their Lordships. This Act defines 'debt' to mean any pecuniary liability, whether payable presently or in future or in a decree or order of civil or revenue court or otherwise or whether ascertained or to be ascertained. It was contended that a mortgage debt was not a pecuniary liability and, thereforee, did not fall within the definition. Rejecting the contention as of no force, their Lordships have held : @SUBPARA = ' The definition of a mortgage in Section 58 of the Transfer of Property Act No.4 of 1982 shows that though it is the transfer of an interest in specific immovable property, the purpose of the transfer is to secure the payment of money advanced or to be advanced by way of loan or to secure an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. The money advanced by way of loan, for example, which is secured by a mortgage, obviously creates a pecuniary liability. It is true that a mortgage in addition to creating the pecuniary liability also transfers interest in the specific immovable property to secure that liability; none the less the loan or debt to secure which the mortgage is created will remain a pecuniary liability of the person creating the mortgage. thereforee, a mortgage debt would create a pecuniary liability upon the mortgagor and would be covered by the definition of the word 'debt' in S. 2(6).' (underlining by me) In Prithi Nath Singh vs. Surj Ahir and Ors, : [1963]3SCR302 , mortgage as defined in Section 58 of the Transfer of Property Act itself came up for the consideration of their Lordships. It was a case of usufructuary mortgage. Their Lordships have held :
'WHEN a mortgage money is paid by the mortgagor to the mortgagee, there does not remain any debt due from the mortgagor to the mortgagee, and thereforee, the mortgage can no longer continue after the mortgage money has been paid. The transfer of interest represented by the mortgage was for a certain purpose and that was to secure payment of money advanced by way of loan. A security cannot exist after the loan had been paid up. If any interest in the property continues to vest in the mortgagee subsequent to the payment of the mortgage money to him, it would be an interest different from that of a mortgagee's interest. The mortgage `as a transfer of an interest in immoveable property for the purpose of securing payment of money advanced by way of loan' must come to an end on the payment of the mortgage money.'
'FURTHER,the definition of usufructuary mortgage itself leads to the conclusion that the authority given to the mortgagee to remain in possession of the mortgaged property ceases when the mortgage money has been paid up. The usufructuary mortgage, by the terms of its definition, authorises the mortgagee to retain possession only until payment of the mortgage money, and to appropriate the rents and profits collected by him in lieu of interest or in payment of the mortgage money, or partly in lieu of interest or partly in lieu of payment of the mortgage money. When the mortgage money has been paid up, no question of appropriating the rents and profits accruing from the property towards interest or mortgage money can arise. It is clear thereforee that on the payment of the mortgage money by the mortgagor to the mortgagee the mortgage comes to an end and the right of the mortgagee to remain in possession also comes to an end.'
15.4 A Full Bench of Mysore High Court has in Dasappa V. Jogiah Air 1965 Mys 54 opined :-
'The essential ingredients of a transaction of mortgage are a debt and a transfer of interest in immovable property as security for that debt. The need for a document, the nature of the recitals, stamp, registration, etc., are all matters which bear upon the mode of executing a mortgage and cannot be regarded as essential ingredients of the transaction of mortgage itself. '
15.5 In Manik Chand v. Baldeo Air 1951 Pat 527, the Division Bench has taken the following view :-
'A mortgage is a transfer of an interest in specific immovable property as security for the repayment of a debt. The debt subsists in a mortgage whereas a transaction by which a debt is extinguished is not a mortgage but a sale.'
15.6 A Division Bench of Patna High Court has held in Dwarkadas Marwari vs Kalipada Dey 38 Pat 538 :
'It is clear from the terms of Order 34 Rule 2 Civil Procedure Code and also from Section 58(C) and 67(a) of the Transfer of Property Act, 1882, that a suit for foreclosure by a mortgagee by conditional sale is a suit for the recovery of money, it is a suit for recovery of loan advanced by him..'
15.7 Ganpat Rao vs. Jagannath Rao , Bhagwant Rao vs Damodar Air 1938 Nag 112, Jhaverilal vs. Emperor : AIR1950Bom119 , Neelamani Sahu vs Khetrabasi Sahu : AIR1954Ori37 , Gama Gurunadh Rao vs Dasarathi Sahu Air 1953 Ori 338 are all Division Bench decisions wherein different High Courts have in the context of debt laws held `mortgage' included in `loan' and suit based on mortgage to be a suit for recovery of loan. 15.8 It is, thereforee, clear that debt is an essential ingredient of a mortgage. There may be a debt without a mortgage but there can be no mortgage without a debt. Properties are offered as security only for securing recovery of debt. If debt is repaid the mortgage ceases to be a mortgage. Even if the term debt would not have been defined in Act No. 51 of 1993 the mortgage would have been included within the meaning of debt. This is the general law and settled trend of judicial opinion. However, Act 51 of 1993 incorporates the definition of debt in its interpretation clause by way of abundant caution and gives it out a very wide meaning. The quaint essence of the definition is the existence of any liability founded on an allegation as due from any person; the creditor being a bank or a financial institute or a consortium of the two. The liability may be in cash or otherwise. It may be secured or unsecured. A decree or order of any civil court or otherwise may intervene or not; the only rider being that the liability must be legally recoverable. The definition would cover all the cases where the liability is secured by a mortgage, charge, hypothecation or in any other manner known to law. An effort at carving out a mortgage away and out of the definition of debt is futile. 15.9 thereforee a suit based on a mortgage is a suit for recovery of a debt without regard to the nature of the mortgage and the nature of the relief sought for by the plaintiff.
(16) It is widely known and even a judicially noticeable fact that banks and financial institutions usually secure a loan advanced by them or credit facilities extended by them by securing mortgage of property. The most commonly resorted to form of mortgage by the banks is an equitable mortgage by deposit of title deeds. The Statement of Objects and Reasons in the Act reveals the experience of the Parliament to considerable difficulties being faced by the banks and financial institutions in recovering loans and enforcement of securities. In spite of the banks and financial institutions trying to play as safe as possible the outstandings recoverable to them had mounted to more than Rs. 5622 crores in the field of public sector banks alone. This was virtually causing an economic crisis preventing economic development of the country by blocking the funds. The Act was enacted with the object of ameliorating banks and financial institutions from such crisis. It is also a judicially noticeable fact that process for recovery initiated by banks and financial institutions before the civil courts is a time consuming process. Unscrupulous borrowers resort to false and technical pleas in their defense resulting in protracting of trial caught in the procedural odds before the civil courts and providing another argument in the mouth of critics speaking of legendary delay in disposal of court cases.
(17) The establishment of the Tribunal and vesting it with summary jurisdiction and proceeding for procedure consistent with the principles of natural justice only is sure to accelerate the recovery of debts. Provisions of the Act must, thereforee receive an object oriented interpretation. 17.1 It is a recognised rule of interpretation of statutes that expressions used therein should ordinarily be understood in sense in which they best harmonise with the object of the statute, and which effectuate the object of the legislature. ( New India Sugar Mills Ltd vs. Commissioner Sales Tax, : AIR1963SC1207 . When two interpretation are feasible the court will prefer that which advances the remedy and suppresses the mischief as the legislature envisioned. ( Carew & Co. vs. Uoi : [1976]1SCR379 The words of a statute, when there is a doubt about their meaning are to be understood in the sense in which they best harmonies with the subject of enactment and the object which the legislature has in view. Their meaning is found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or in the occasion on which they are used and the object to be attained. ( Workmen of Dimakuchi Tea Estate vs Management of Dimakuchi Tea Estate, : (1958)ILLJ500SC The preamble of a statute like a long title is a part of the Act is an admissible aid to construction. Although not an enacting part, the preamble is expected to express the scope and purpose of the Act more comprehensively than the long tithe. It may recite the ground and cause of making the statute evil sought to be remedied ( The Secretary Regional Transport Authority vs D.P. Sharma, : AIR1989SC509 . According to Chief Justice Dyer preamble is a key to open the mind of the makers of the Act and the mischief which they intend to redress ( Stowell vs Lord Zouch (1569) 1 Plowd 353) 17.4 Reference to the Statement of Objects and Reasons as permissible for extending the background, antecedents, state of affairs, surroundings circumstances in relation to the statute, and the evil which the statute was sought to remedy (Sanjivi Jivraj Gherwar Chand : (1969)ILLJ719SC ). In Shashikant Laxman Kale vs Uoi, : [1990]185ITR104(SC) , their Lordships of the Supreme Court have held :-
SEE para 16 For determining the purpose or object of the legislation, it is permissible to look into the circumstances which prevailed at the time when the law was passed and which necessitated the passing of that law. For the limited purpose of appreciating the background and the antecedent factual matrix leading to the legislation, it is permissible to look into the Statement of Objects and Reasons of the Bill which actuated the step to provide a remedy for the then existing malady. In A. Thangal Kunju Musaliar v. M. Venkitachalam Potti, : [1956]29ITR349(SC) , the Statement of Objects and Reasons was used for judging the reasonableness of a classification made in an enactment to see if it infringed or was contrary to the constitution. In that decision for determining the question, even affidavit on behalf of the State of ' the circumstances which prevailed at the time when the law there under consideration had been passed and which necessitated the passing of that law' was relied on. It was reiterated in State of West Bengal v. Union of India, : [1964]1SCR371 - that the Statement and Objects and Reasons accompanying a Bill, when introduced in Parliament, can be used for `the limited purpose of understanding the background and the antecedent state of affairs leading up to the legislation.' Similarly in Pannalal Binjraj v. Union of India, : [1957]1SCR233 a challenge to the validity of classification was repelled placing reliance on an affidavit filed on behalf of the Central Board of Revenue disclosing the true object of enacting the impugned provision in the Income-tax Act.'
(18) Though I have held that the term `debt' as defined by clause (g) of Section 2 of the Act includes mortgage of every type within its meaning; I have also held that even if the term debt would not have been defined in the Act, it would have included mortgage within it. Having regard to the historical background of enactment, the Statements of Objects and Reasons the preamble, spelling out the mischief which is sought to be cured and prevented by the Act, the object with which the Act has been enacted, the Act has to be so interpreted as 'to give the laws its claws'. So has to be assigned the term debt its meaning. Having already noticed that most of the loans advanced by the banks are secured by mortgages, the Act would be reduced to a futility if mortgage was to be excluded from the definition of debt.
(19) It has been vehemently urged on behalf of the defendant-applicants that the Transfer of Property Act as well as Order 34 Civil Procedure Code confer certain valuable rights on the mortgagors and afford them substantial protection so as to save their property subject to mortgage being liquidated so long as the recovery of debts was possible otherwise. It is submitted that such rights and safeguards would meet with a smiling goodbye before the Tribunal vested with summary jurisdiction. This argument though attractive is devoid of any merit. It is one thing to say that a suit for recovery of a debt based on a mortgage is excluded from the cognizance of the Tribunal; it is another thing to say that if not so excluded what will be the exact procedure to be adopted at the stage of recovery. There is no reason to assume that a Tribunal or the Recovery Officer would not be bound by the substantive law of mortgage or the covenants contained in the deed entered into by the parties. The Tribunals are still in their infancy. On difficulties arising care would be taken to solve them by resorting to Section 35 of the Act. The Central Govt would also be better advised in framing rules for carrying out the provisions of the Act in such a manner as to provide the procedure to be adopted by the recovery officer while effecting recovery of debts determined by the Tribunal consistently with the nature of the debt transactions usually entered into by the banks and financial institutions. Be that as it may, so far as the question of jurisdictional competence of the Tribunal to try a claim for recovery of debt based on a mortgage is concerned, I am clearly of the opinion that a mortgage debt is included within the meaning of the debt as defined under section 2(g) of the Act. A claim for recovery of such a debt lies within the jurisdictional competence of the Tribunal. As a necessary corollary the same is excluded from the jurisdiction of civil court.
(20) Placing reliance on Section 67 of the Transfer of Property Act and Full Bench decision in Haji Mohd Haji Wali Mohd vs Ramappa , it was contended that if there is no covenant for personal liability included in the terms of the deed, then the mortgagor cannot be held personally liable for the recovery of the loan and the suit filed on the basis of such a deed ceases to be a suit for recovery of a debt. It was further submitted that in a usufructuary mortgage or anomalous mortgage or a mortgage by way of conditional sale there is no personal liability to pay and a suit based on such mortgage would not be a suit for recovery of a debt. Reliance was also placed on Full Bench decision in Palaniappa vs. Narayanan Air 1936 Mad 34, wherein it has been held :
'A mortgage suit for sale may comprise two reliefs, one by way of sale of the properties mortgaged and the other by way of a personal decree against the mortgagor for what may remain due after the mortgaged properties have been sold. Though the plaint prays for both the reliefs, the Court is in the first instance expected to deal only with the relief by way of sale. The preliminary decree contains a declaration of the amount due on foot of the mortgage and contains directions as to what is to happen (1) if the defendant pays the amount into Court and (ii) if the payment is not so made; but both the directions relate only to the property mortgaged. The plaintiff's right to the other relief is not tried either at the stage or even at the stage of the final decree; so that the final decree under Order 34 Rule 5 Cpc, cannot be said to involve any ' adjudication' as to this part of the suit and much less to have 'completely disposed' of it. After ascertainment of the deficiency arising on the sale of the mortgaged properties, the Court under Order 34 R. 6 takes up this portion of the plaint claim, tries the question whether called a 'supplemental' decree or by any other name, this is the only decree on this part of the claim in the plaint.'
IT was submitted on the basis of the above ruling that when a relief for personal decree and any other relief such as foreclosure or sale are both available to the mortgagee then the court is competent to grant only the other relief and relief of personal decree cannot be granted in the first instance. So if the plaintiff mortgagee chooses to seek a relief of personal decree then he has to specifically abandon all other reliefs ( which can be granted only by a civil court by reference to Order 34 CPC) before the plaintiff may opt to invoke the jurisdiction of the Tribunal.
(21) None of the submissions so made has impressed me. Firstly, I have already taken the view that a suit based on a mortgage is a suit essentially and basically a suit for recovery of a debt. Consequently, in so far as the question of jurisdictional competence of a tribunal is concerned, it shall have to be determined by reference to the nature of the suit whether it was one to recover any debt, without regard to which relief that the Tribunal would grant. Secondly there is yet another angle of looking at the question raised which I propose to deal with hereinafter. 21.1 Section 19(1) of the Act provides as under :
'WHERE a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction - (a) the defendant, or each of the defendants where there are more than one, at the time of making application, actually and voluntarily resides, or carries on business or personally works for gain; or (b) any of defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business, or personally works for gain; or (c) the cause of action wholly or in part arises.
When an appeal under Section 20 is preferred to the Appellate Tribunal, Section 21 enjoins 75% of the amount of debt due as determined by the Tribunal to be deposited as a condition precedent to the entertainability of the appeal, which amount may of course be waived or reduced in the discretion of the Appellate Tribunal. Sub- section (7) of Section 19 provides that the presiding officer shall issue a certificate under his signatures on the basis of the order of the Tribunal, to the Recovery Officer for recovery of the amount of debt specified in the certificate. Chapter No. V of the Act is devoted to recovery of debt determined by the Tribunal. The modes of recovery are provided by Sections 24 and 28 of the Act. Section 25 provides as under :
'25.Modes of recovery of debts.-- 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 of more of the following modes, namely:- (a) attachment and sale of the movable or immovable property of the defendant' (b) arrest of the defendant and his detention in prison ; (c) appointing a receiver for the management of the movable or immovable properties of the defendant.
Section 28 makes a detailed provision for recovery of money by garnishee orders, as also by distraint and sale or movable property of a defendant in the manner laid down in Third Schedule of the Income Tax Act 1961. 21.2 A perusal of the several provisions contained in Chapter V goes to show the object and intention of the legislature is to secure recovery of money due to the banks and financial institutions without regard to the nature of transaction between the parties. In certain kinds of mortgage such as usufructuary mortgage, remedy of foreclosure is available, still by virtue of the provisions as contained in the Act, the remedy of attachment and sale of movable or immovable property of the defendant, his arrest and detention in prison and appointment of receiver for the management of his properties, garnishee orders etc. are not excluded. All this has been provided with the avowed object of securing recovery of money at the earliest, avoiding cumbersome procedures. 21.3 I may hasten to add that the modes of recovery prescribed by Chapter V are to be read in addition to modes of recovery which would be available to the creditor institutions under the substantive law on mortgage contained in the Transfer of Property Act. Here the word 'and' occurring between `attachment' and `sale' in clause (a) of Section 25 shall have to be read as 'or'. In case of hypothecation and mortgage it would not be necessary to effect an attachment of the property and the Recovery Officer may straightaway proceed to hold a sale of the property. This power of sale would be available to Recovery Officer, if the words `attachment and sale' are read as `attachment or sale'. It is well settled rule of interpretation of statute that the word 'or' is normally disjunctive and is normally conjunctive but at times they are read vice versa to give effect to the manifest intention of the legislature as disclosed from the context. (Ishwar Singh Bindra vs State of U.P. : 1969CriLJ19 .)
(22) Incidentally, it may be noticed that recovery of debt is a cause of action before it is treated as a relief. Jurisdiction on the Tribunal has been conferred by reference to cause of action and not by reference to the nature of the relief sought for. Section 19 of the Act vesting territorial jurisdiction in the Tribunal deserves to be read in juxtaposition with Section 16 of the CPC. The situs of the property is irrelevant and the Tribunal acquires jurisdiction to hear an application by reference to the residence of the defendant or the place where cause of action arose. Section 31 of the Act also attracts transfer of the pending cases from the court to the Tribunal by reference to 'cause of action whereon it is based'.
(23) It was contended that the view which I have taken hereinabove would result into depriving the mortgagor-borrower of the several benefits available to him under Order 34 CPC. The contention was illustrated by submitting that in spite of passing a decree for foreclosure or sale the civil court grants time for payment and it is only on the lapse of time appointed by the court that the court may proceed to pronounce actual foreclosure or sale of the property determining the rights of the mortgagor while the procedure prescribed by the Act permits sale straightaway of the mortgaged property. This is yet another reason why a distinction should be drawn between a suit seeking a personal decree and a suit based on a mortgage seeking the relief of foreclosure or sale. This contention is also to be rejected for several reasons. 23.1 Order 34 Civil Procedure Code is procedural merely. It does not create or confer any vested right on any party. The parties may contract themselves out of the provisions of Order 34 by means of deed of compromise and pray for a decree being passed at variance with the provisions contained under Order 34 CPC. This is the view taken in Haran Chandas vs Hyderabad State Bank : AIR1960AP56 , Bansi Dhar vs Sitala and Qazi Ghulam Amir vs Mst Masuda Khatun : AIR1943All321 . If the provisions of Order 34 Civil Procedure Code can be contracted out they can certainly be done away with by force of any legislation to the contrary. No provision of Order 34 Civil Procedure Code can come in the way of debt being recovered in the mode prescribed by the provisions of the Act. Moreover, if there be any conflict between the provisions of the Transfer of Property Act and the Civil Procedure Code on the one hand and provisions of the Act No. 51 of 1993 on the other, then by virtue of Section 34 of the Act the provisions contained in the Act shall have an overriding effect on any other law or instrument for the time being in force. 23.2 Banks do not run by foreclosing properties. They do not always gain by securing sale of properties mortgaged. Foreclosure and sale do not expedite recovery of money by which the bank and financial institutions run. The Act No. 51 of 1993 thereforee provides for recovery of money even in those cases in which the nature of mortgage secured by the bank would have entitled it to seek foreclosure or sale merely but for the provisions of the Act.
(24) For all the foregoing reasons I am of the opinion that a suit for recovery of a debt based on mortgage of any nature whatsoever lies within the jurisdictional competence of the Tribunal. The order dated 1.5.1995 transmitting the record of the suit to the Tribunal cannot be found fault with. The application seeking review/recalling of the order dated 1.5.95 is rejected.