Mahmood Ali Khan, J.
1. These two petitions filed under Article 227 of the Constitution of India have impugned the orders of Debt Recovery Tribunal passed in Original Applications No. 547/1997 and 550/1997, both dated 8.6.1999 by which the claim of the applicant (respondent No. 2 herein) has been accepted and the petitioners were directed to pay money and the recovery certificates have been drawn and issued in terms of the orders. Except the amount claimed which is different in two cases, other questions of facts and the law involved in them are common. They are, thereforee, being disposed of by this common order.
2. The parties and the facts related in the order will be as they are applicable in Civil Miscellaneous (Main) No. 719/1999, but the judgment will govern the decision in both the cases.
3. C.M.(M) No. 719/1999 has been filed to assail the order of the Debt Recovery Tribunal dated 8.6.1999 by which in OA No. 547/1997 filed by the respondent No. 2-Indian Bank against the petitioners an order directing the petitioner to pay a sum of Rs. 6,35,03,215/- Along with pendente lite and future interest @ 20.75% per annum from the date of the filing of the application till the date of its realisation Along with the cost of the suit was made against the petitioners. The petitioners were held liable to pay the aforesaid amount jointly and severely within four weeks from the order. A recovery certificate was also issued in terms of this order. In CM(M) No. 720/1999 on the application of the respondent No. 2-Indian Bank, bearing No. 550/1997, the Debt Recovery Tribunal by order dated 6.9.1999, ordered the petitioners to pay a sum of Rs. 1,55,14,476/- Along with pendente lite future interest @ 20.75% p.a. from the date of filing of the application till the date of its realisation and the cost of the petition against the appellant. The appellants were held liable to pay the aforesaid amount jointly and severely within four weeks from the date of the receipt of the order. A recovery certificate was issued in terms of this order.
4. In the application filed by respondent-Bank against the petitioners in CM (M) No. 547/1997, the allegations were that in May, 1992, the appellant No. 1 M/s. Allied Equipment & Services approached the bank for advance of Rs. 2 crores for the purpose of promoting its business activities. The bank arranged for inter corporate deposit of Rs. 2 crores between May, 1992 to August, 1992 which the petitioner No. 1 undertook to repay Along with interest accrued thereon on the due dates. On this promise, the bank agreed to repay the amount of inter corporate deposit Along with interest to the public Sector Undertaking/Corporation from which the said deposits were arranged. The petitioner No. 1 faulted in making the payment on due date, thereforee, the respondent-Bank had to discharge its obligation and make the payment to the public sector undertaking/corporation. The petitioner thereafter requested the bank to arrange the fresh inter corporate deposits for the petitioner No. 1 or get the said inter corporate deposit rolled over. On 31.5.1993, the respondent-bank further rolled over such inter corporate deposit Along with interest added thereto. The petitioner No. 1 still failed to make the payment of the outstanding debts. The bank debited the account of the petitioner No. 1 with Rs. 2,50,52,910/- on 28.6.1993. Since the amount was not paid, this sum was added to the debit account of the petitioner company. It was further submitted in the application that in order to secure the facility, the petitioners executed the necessary loans documents, particulars of which were mentioned i para 5 of the application. This facility was further secured by personal guarantee of the petitioner Nos. 2 and 3 by executing the agreement dated 21.1.1993 under which they undertook to secure the liability of the respondent bank to the extent of Rs. 2 crores. These petitioners, thereforee, were jointly and severally liable to pay the amount due from the petitioner No. 1. Defendant No. 4 M/s. Shashi Prabha Mittal (not party to these petitions) also pledged 10,000 shares of M/s. Rossell Industries Ltd., stood in her name. She agreed to the terms and conditions of the loan. She also become liable to the extent of the share pledged by her. Besides, the appellants were also pledged 60,000 shares to M/s. Rossell Industries Ltd., as security with the respondent bank for the loan advanced, details of which was mentioned in the para 5 of the application. In Addition, 18,000 equity shares of Rossell Industries Ltd., were also allotted in the name of the respondent-bank in terms of the scheme of arrangement between M/s. Rossell Industries Ltd., and M/s. Rossell T. Ltd., which was held as security against the loan, but the value of these shares was insignificant to the loan given to the petitioner. The petitioner failed to fulfill their commitment for the payment of IOD on due date. thereforee, the account of petitioner No. 1 was debited time and again and the amount shown as outstanding is liable to be recovered from the petitioners. The notice of demand was served on the petitioners who failed to comply with it and clear the debt. This led to the filing of this petition for recovery for a sum of Rs. 6,35,03,215/- with interest @ 20.75% p.a. from the date of the filing of the application till the date of its realisation.
5. The notice of the application was served on the petitioners who filed a reply. It was alleged that the respondent bank had not come to the court with clean hands. During the investigation of a criminal proceedings initiated against the petitioner and some officers of the bank, the CBI conducted a raid on the premises of the petitioner and seized almost all the documents and records of the petitioner. The CBI has declined to hand over the documents concerning various transactions, statement of accounts and details of the various facilities and payments made to different institutions and Banks. thereforee, the reply to the application is being filed on the basis of whatever little material was available with the petitioner and the petitioner reserved their right to present appropriate reply as and when the time and the circumstances warranted. It was averred that the petitioner No. 1 company is a subsidiary of Scantill Pvt. Ltd., which has been declared a sick company by the BIFR and a rehabilitation package for the revival of the company was pending consideration before the BIFR. The petitioner company form an integral part of the revival package. thereforee, the proceedings on the application may be adjourned till the claim was disposed of by the BIFR. There was misguide of petitioner No. 4. She was not a director or a guarantor of the petitioner company. Her assertion was limited to the extent that pursuant to the ICD which was arranged by the respondent bank for the purchase of the shares, some shares were allotted to and purchased by her to overcome the mandatory obligation/requirement and which subsequently were transferred to the respondent bank. Further allegations were that the applicant from the inception adopted a high handed approach and thrust upon the petitioner company, the terms and conditions which suited its convenience. A ICD from the Indian Railways Finances Corporation was got arranged by the respondent company to the petitioner company in order to finance the payment of the custody of the parent company M/s. Scantal T. Industries Ltd., to an understanding between the respondent bank and the petitioner company, whereby the respondent bank were asking the petitioner to purchase the shares. Accordingly, the petitioner bought 60,000 shares of the value of Rs. 1 crore from the proceeds of ICD through the respondent bank and got it transferred in its claim. Since the shares were duly transferred to the bank and was with the bank, the responsibility arises out of the understanding upon the petitioner was discharged and the petitioners were not liable for the payment of ICD. On the maturity of the ICD, the respondent bank was compelled to pay to IRFC treating the entire amount as loan to the company. There was no loan advanced to the petitioner company by the respondent bank. The loan documents were signed by the respondent. The applicant has not come to the court with clean hands, thereforee, does not deserve recovery of any amount. It has deliberately suppressed certain facts and the material on record with ulterior motive. The documents relied upon by the applicant to substantiate its claim were misconceived as these documents were not executed in the present form. The representation concerning the recital of the documents made to the petitioner company at the time of the execution of the documents was absolutely different and was contrary to what has been stated to the Tribunal. In view of the bad position of the respondent in regard to the finances, the petitioner company could not bargain and had no option but to agree to whatever terms and conditions were imposed by the applicant upon it. The conduct of the applicant in imposing harsh terms and conditions which are against the principles of law deserve to be denounced. The petitioners have also stated that while extending the facility, the applicant did not disclose the terms and conditions which governed the transactions and they induced the petitioners company to sign the documents and they believed that they were in accordance with the prevalent practice and the various guidelines of the Reserve Bank of India. The applicant bank got the signatures of the petitioners on the documents as a condition precedent to the sanctioning and advancement of the loan and facilities. The very existence of the petitioner company, which was in its infancy, was in danger. thereforee, the petitioner company had no alternative but to succumb to the pressure tactics of the applicant bank. The contract between them, is thereforee, voidable under Section 16 of the Contract Act. It is stated that the allegations made in the application are bereft of any material. From the averment made in the application, it appears that the petitioner had credited Rs. 67.90 Lacs in the petitioner's account on 2.6.1992, but the respondent bank failed to keep a regular account and also failed to explain as to what was the total outstanding amount on 2.6.1992. The petitioner company suffered losses on account of the various acts of commission and omission of the respondent bank. thereforee, the petitioners were obliged to undertake exercise for settling the account. It was lastly stated that the respondent bank had no case on merits and it had fabricated documents which had no legal sanctity and validity in law. It was prayed that the application should be dismissed.
6. The learned Tribunal after hearing the parties held that the correctness of account submitted by the respondent bank had not been questioned. No documents were laid on record to support the written statement filed by the petitioners. The petitioners were required to file all the documents Along with the written statement to substantiate their defense. The plea that the documents were executed under duress had been taken up only after the application was filed by the respondent for passing an order of recovery of the amount. The plea regarding execution of the document is a sham plea and was devoid of force. Holding that the petitioners have failed to show any cause to the relief claimed by the bank and the claim of the respondent bank was proved, he passed the order as aforesaid.
7. In OA NO. 550/1997, the respondent Bank in the application filed before the Tribunal alleged that in January, 1991, the petitioner requested for grant of overdraft facility of Rs. 50 lacs for the purpose of promoting their business activities. The respondent bank sanctioned overdraft facility of Rs. 25 lacs, in favor of the petitioner No. 1 M/s. Inder Kartikeya Pvt. Ltd., on 28.1.1991. The petitioner executed a demand promissory note of Rs. 25 lacs, a letter of continuity; covering letter for loan in the absence of special agreement and agreement of guarantee covering the aforesaid overdraft facility by the petitioner Nos. 2 and 3, on 25.1.1991. Besides on the request of the petitioner No. 1, the respondent bank allowed 12.50 lacs further advance on 17.9.1993. the petitioners repaid only Rs. 5 lacs on 20.9.1993. On 2.12.1993 a further accumulation of Rs. 8.80 lacs was allowed and in that again the petitioner company passed a board resolution on 14.10.1992 whereunder the petitioner Nos. 2 and 3 were authorised to execute necessary loan documents. Consequently, on 15.10.1992, the petitioners executed a demand promissory note for a sum of Rs. 35,92,489.60. They also executed the acknowledgement of the debt receipt dated 15.10.1992. They failed to repay anything to liquidate the outstanding liability in their account. The petitioners had also executed acknowledgement of receipt dated 8.4.1996, inter alia, admitting their liability as on 31.12.1995 towards the respondent bank. The outstanding sum due was not paid by the petitioners. Legal notice was served, but of no avail.
8. On receipt of the notice of the application, the petitioners submitted their written statement. The petitioners stated that the respondent bank had not come to the Tribunal with clean hands. Filing of the application and also filing of criminal cases against the petitioners was by vested interest in order to malign the petitioners. The CBI had conducted a raid on the premises of the offices of the petitioners and has taken away almost every documents on record. Despite earnest request, the CBI had not returned those documents, relating to the transactions, statement of accounts and details of the various facilities. With the help of whatever little material was available with the petitioner, the respondent reserved their right of file appropriate reply as and when the documents were made available by the CBI. The present application filed by the respondent bank was gross abuse of the process of law. The document relied upon by the respondent bank to substantiate its claim are totally misconceived as they were not executed in the proper form. The representation concerning the averments made in the documents to the petitioner company at the time of their execution was totally different and contrary to what was now been alleged before the Tribunal. The respondent bank had put immense pressure upon the petitioner company and it was not in a position to bargain and it had to succumb to the terms and conditions imposed upon it. The property was not mortgaged. Sectioning of overdraft facilities clearly shows as to how established norms and practices were throw to the winds and the law was twisted to subserve the interest of the officers of the respondent. By its own admission, a sum of Rs. 67.90 lacs was granted on 2.6.1992 but the bank has not explained its liability or the head towards which the said amount was adjusted. The bank has miserably failed to keep a clean and regular account. The petitioners did everything to settle the dispute. The petitioner did not executed any debt receipt. Other averments made in the application were also denied.
9. The learned Tribunal after hearing the parties and also considering the documents placed on record held that the entries in the statement of accounts have not been disputed. The acknowledgement of debt and other agreement as mentioned bear the signatures of the petitioners. All these documents have substantiate the allegation of the respondent bank and controverter the contentions of the petitioners. There is no denial of the signing of the letter of acknowledgement of liability, thereforee, the allegations that the documents were executed under pressure or duress is after-thought. The petitioners could not have kept silent on these documents. The plea of the petitioners was, thereforee, bogus and sham. Holding that the respondent Bank has proved its claim he passed the order for recovery of money from the petitioner as aforesaid.
10. At the outset, it was pointed out by the counsel for the respondent bank that the order impugned in these two petitions were appealable before the Appellate Tribunal, thereforee, the writ jurisdiction of this court under Article 227 of the Constitution of India cannot be invoked to challenge the orders. The counsel for the petitioners has not disputed this fact. However, his submission is that at the time of filing of these two petitions, the Appellate Tribunal had not been constituted and it was not in existence forcing these petitioners to approach this court for quashing the orders in exercise of its jurisdiction under Article 227 of the Constitution. These two petitions Along with another petition were presented in November, 1999. They wee admitted by the court. The arguments in this case were heard on the request of the parties for early disposal of the petition. It is a well settled proposition of law that whenever an adequate and efficacious alternative remedy was available for redressing the grievance this court will decline to invoke its extraordinary discretionary jurisdiction under Article 226 and 227 of the Constitution of India to adjudicate upon the dispute. In the instant case, the alternative remedy by way of an appeal to the Appellate Tribunal is available. In ordinary circumstances, this court would have asked the petitioners to take recourse to the alternative remedy for challenging the order impugned in these cases. But about two years time has passed since this court had admitted these petitions. The Appellate Tribunal was not constituted and was not available to the petitioners for filing the appeal. It is stated that the Appellate Tribunal has been constituted not long back. Asking the petitioner now to go the Tribunal and file appeal against the orders of the Debt Recovery Tribunal, will be unjust. This court, thereforee, proceeds to deal with the case on merit.
11. The primary challenge to the order of the learned DRT by the petitioners in on two grounds. Firstly, it was stated that in a raid conducted by the CBI, the records of the petitioner company was seized and that it has not been returned back despite requests. thereforee, the petitioner company was handicapped in putting forth its full defense in its written statement submitted to the application filed by the respondent bank. This fact was mentioned in the reply filed in the two cases. The DRT, thereforee, ought not to have decided the defense put forth by the petitioners. The second submission of the petitioners is that they have not been allowed to cross-examine the witness of the petitioner bank who had sworn the affidavit filed in support of the case. Reference has been made to the provisions of Section 19 and 22 of the Recovery of Debts due to Bank & Financial Institutions Act, 1993 (in short 'Act') and Rule 12 of the Debt Recovery Tribunal (procedure) Rules, 1993 (in short the Rules) besides Regulations 21 and 23 framed there under. The counsel for the petitioners has urged that the Tribunal was duty bound to follow the principles of natural justice in deciding the matter and on the request of the petitioners it was obligatory on the part of the Tribunal to provide an opportunity of cross-examination of the witness of the respondent who had submitted the affidavit and the refusal of this opportunity had vitiated the order of the Tribunal.
12. The arguments advanced on behalf of the respondent bank, on the other hand, is that the defense raised by the petitioner to the claim of the respondent bank was sham and illusory. It was made with the sole object of prolonging the litigation and delay the payment. He submitted that holding a full trial in the case on the pleas which have been put forth by the petitioners would have defeated the very purpose for which the Act has been enacted. He submitted that this enactment came into being with a view to provide a suitable mechanism through which the dues to the bank and financial institutions could be realised without delay. In the instant case, the respondents have not denied the advancement of the loan and other facilities and their execution of the various documents as mentioned in the two applications by the respondent for securing the loan and the facilities. The defense of the petitioners was that they were compelled to make signatures on the loan papers because they were in need of the finances for saving their business. The petitioner s such did not deny their signatures and execution of the documents. Counsel further submitted that all the documents which were executed by the petitioners and on which the claim of the respondent bank was based were filed with the application. The acknowledgement of debt, the certified copies of the statement of accounts have also been filed. The petitioners had admitted signatures on the acknowledgement receipt. thereforee, the amount which was due from them was no more in dispute. The transaction itself was also admitted. it was contended that the petitioners had not disclosed as to what other documents and records were required by them for their defense because the copies of all these documents had already been supplied to them. The admission of signatures on all these documents, the statement of account and the signatures on the acknowledgement receipt have proved the claim of the respondent bank. The Tribunal, thereforee, on the application of the respondent Bank No. 1 was perfectly justified in passing the order.
13. The power of the Tribunal in passing of an order for recovery of the amount in part or in whole from the debtors of the bank in the proceedings filed under the Act was enacted is manifested in the preamble of the Act. The Act has been established for 'expeditious adjudication and recovery of debt due to the bank and financial institutions'. To achieve this purpose, Section 22 of the Act, has provided that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure. But it shall be guided by the principles of natural justice. This section does not debar the Tribunal from adopting certain rules of procedure provided in the CPC, but the Tribunal was to be guided mainly by the principles of natural justice. The Tribunal, as such, may device its own procedure of trial and disposal of the application/claim put before it so long as it is not vocative of established principles of natural justice. A reasonable opportunity of hearing has to be provided to the parties while deciding the claim made by the banks and financial institutions for recovery of their debts before the Tribunal. What is reasonable opportunity, of course, depend on the particulars of each case. The procedure provided is summary in nature. The Tribunal has been empowered to receive evidence on affidavit and issue summons to enforce the attendance of any person and examine him in court. The Tribunal can issue commission for examination of the witness or document and require discovery and production of the document etc., under Section 22 of the Act. Under Rule 12 Sub-rule (6) the Tribunal at any time, for sufficient reason may direct that any particular fact or facts may be proved by the affidavit or that any affidavit of the witness may be read on such conditions as it thinks reasonable. The proviso to this rule stated that if the defendant desired the production of a witness for cross-examination and that such witness can be produced, the Tribunal will not receive the evidence of the such witness on affidavit. Sub-rule (7) of Rule 12 has provided that wherever the defendant denies his liability to pay the claim made by the appellant, the Tribunal may act upon the affidavit of the applicant who is and who has on verification of record sworn the affidavit in respect of the contents of application and the documents as evidence.
14. The provisions of the Act and Rules made there under have fully empowered the Tribunal to follow a summary procedure and decide question raised before it on the basis of the affidavits and the documents placed on record bearing in mind the audi alterm partem rule. Rule 12 authorises the Tribunal for reason to be recorded to call a fact to be proved by filing an affidavit. The same rules gives right to the defendant to call the said witness for cross-examination. The provisions of the Act and the Rules even the practice regulations required the application filed by the bank and the financial institutions to be decided expeditiously, but at the same time have made sufficient safeguards for the parties to be not deprived of opportunity of proving their defense. However, the Tribunal has to bear in mind that a party while exercising the power given in proviso to Rule 12 has not a latent purpose of prolonging the case and delay the payment.
15. In the instant case, though it has been argued on behalf of the petitioners that the petitioner have not been given reasonable opportunity of hearing and proving their defense by evidence, yet despite cajoling from the opposite counsel, have failed to point out as to which documents seized by the CBI from the offices of the petitioner company were required in defense particularly after the respondent bank had placed on record the original agreements and other documents executed by the petitioners and certified copy of the statement of account which is admissible for evidence and the acknowledgement receipt of the debt bearing signatures of the petitioners. In the reply, as said above, the petitioners have not denied the execution of all these documents. Their defense is that they had to sign it because the bank was in a commanding position to pressurise them in signing those documents as a condition for advancing the loan a layman may be heard making this grumble about the document which bears his signatures. But a company like the petitioner, which had the legal assistance as well as the wherewithal to examine the legal implications of the documents can hardly be heard making this complaint. This petitioners have also not been able to explain as to what other representations were made by the respondent bank while obtaining the signatures of the petitioner on the document which were contrary to the recital made in these documents. It is not a case where to loan or credit facility was advanced and utilised. The petitioners have availed of the loan and the facilities advanced by the bank. They do not deny it. thereforee, their contentions regarding execution of the document and mis-representation of the respondent bank about them is nothing but a ruse for prolonging the proceedings and delay the payment of the dues to the bank. The defense is sham, bogus and illusory.
16. It is also pertinent to note that though the petitioners has argued that they have been denied the right to cross examine the witness, but they have not been able to point out as to which witness was desired to be cross-examined by them. It is also not stated that the court wanted any facts to be proved by the affidavit and the respondent wanted to cross examine that witness and court did not grant that opportunity. The respondent has also not been able to point out as to which other documents or record was required for their full and proper defense which was not already available on the record.
17. The counsel for the petitioners has not been able to point out any material placed on record by which scheme is formulated by BIFR regarding these debts. The defense raised as such has no foundation. It is to be remembered that these petitions are filed under Article 227 of the Constitution. It is an extraordinary discretionary jurisdiction of the Court. The power under this Article is to be exercised sparingly and only in appropriate cases for the purposes of keeping the subordinate courts and Tribunals within bounds of their authority. In exercising supervisory power the High Court does not act as an appellate court. High Court will refuse to issue any writ in the event it is found that substantial justice has been done to the parties. This is one of such case where the High Court should refuse to interfere with Tribunal's order.
18. Having regard to the above discussion I do not find any merit in the submission I do not find any merit in the submissions of the petitioners. There is no infirmity in the orders of the learned presiding officer of the Tribunal. The petitions are accordingly dismissed. In the circumstances of the case, the parties are left to bear their own costs.