Skip to content


Jaipur Drt Bar Association Vs. Union of India and Others - Court Judgment

SooperKanoon Citation
SubjectBanking
CourtRajasthan High Court
Decided On
Case NumberD.B. Civil Writ Petition (PIL) No. 1837 of 2000
Judge
Reported in2000(3)WLC384; 2001(2)WLN311
ActsRecovery of debts Dues to Banks and Financial Institution Act, 1993 - Sections 3, 8, 17-A(2), 18, 19, 24. 25, 30. 31 and 33; Constitution of India - Articles 156, 226 and 227; Multi Unit Co-operative Societies Act, 1942 - Sections 2(1); Income Tax Act, 1961 - Sections 127(1)
AppellantJaipur Drt Bar Association
RespondentUnion of India and Others
Advocates: Paras Kuhad,; N.K. Maloo,; G.K. Garg and;
Cases Referred(See V. Devaru vs. State of Mysore
Excerpt:
(a) recovery of debts due to banks & financial institutions act, 1993 - setions 17-a(2) & 31--transfer of cases--new d.r.t. established at chandigarh-- d.r.a.t. at bombay ordered for transfer of the cases from d.r.t. jaipur to d.r.t. chandigarh falling within jurisdiction of chandigarh--word 'court' used in section 31 of the act includes tribunal also--transfer of pending cases and trial by tribunal is automatic by operation of law and establishment of tribunal under the act, 1993--no notice required to be served upon the parties before such tranfer is ordered--held, interference in the order of d.r.a.t. is not justified.;(b) constitution of india, 1950 - article 226--public interest litigation--maintainability--group of advocates filed the petition--no public interest.....ordermadan, j.1. jaipur drt bar association (petitioner) through its secretary shri rajendra sharma advocate espousing the cause of advocates practising before the debt recovery tribunal (for short 'drt'), jaipur, has filed this writ petition as public interest litigation, seeking writ, order or direction to-(1) quash the office order dated 18th april, 2000 (annex.2) issued by the registrar, debts recovery appellate tribunal (for brevity 'drat'), bombay, including the direction issued by the chairperson of the drat to the presiding officer of the drt jaipur; (2) restrain the presiding officer of the drt jaipur for transferring the original & misc. applications and the execution proceedings pending before the drt jaipur to the drt chandigarh pursuant to the directions of the drat bombay or.....
Judgment:
ORDER

Madan, J.

1. Jaipur DRT Bar Association (petitioner) through its Secretary Shri Rajendra Sharma Advocate espousing the cause of Advocates practising before the Debt Recovery Tribunal (for short 'DRT'), Jaipur, has filed this writ petition as Public Interest Litigation, seeking writ, order or direction to-

(1) quash the office order dated 18th April, 2000 (Annex.2) issued by the Registrar, Debts Recovery Appellate Tribunal (for brevity 'DRAT'), Bombay, including the direction issued by the Chairperson of the DRAT to the Presiding Officer of the DRT Jaipur;

(2) restrain the Presiding Officer of the DRT Jaipur for transferring the Original & Misc. Applications and the Execution Proceedings pending before the DRT Jaipur to the DRT Chandigarh pursuant to the directions of the DRAT Bombay or office order dated 18th April, 2000 (Annex.2); and

(3) direct the Presiding Officer of the DRT Jaipur to dispose of the cases in accordance with law.

(2). An interim relief was also sought for staying the operation of the impugned order dated 18.4.2000 (Annex.2) of the Registrar, DRAT Bombay including directions issued by the Chairperson of the DRAT to the Presiding Officer of the DRT Jaipur. Interim relief in similar nature as prayed for in prayer clause (2) (supra) in writ petition was also sought,

(3). At admission stage, after hearing Shri Paras Kuhad learned counsel for the petitioner Association, this Court admitted the writ petition and issued notices on the stay petition also and further directed that in the meanwhile the operation of the impugned order passed by the DRAT transferring cases from the DRT Jaipur shall remain stayed and the DRT Jaipur shall proceed and deal with the cases as it had been dealing with them before passing of the impugned order of transfer of cases.

(4). Union of India through Secretary, Ministry of Law, Justice and CompanyAffairs New Delhi respondent No. 1 in writ petition is represented by Shri BhanwarBagri learned Standing Counsel. No reply to the petition has been filed by him.Respondent No.2 is the DRAT Bombay while respondent No.3 is the DRT Jaipur beingrepresented through its Registrars.

(5). During pendency of the petition, two applications seeking impleadment as party respondents to the writ petition were filed. One was moved on 25.7.2000 by Indian Banks Association, Mumbai for impleading it as respondent No. 4 & for vacating the stay order. Another application was moved on 3.8.2000 by Shri I.P. Singh (Advocate practising in the Punjab & Haryana High Court Chandigarh) for impleading him as party or intervener to this petition. Shri I.P. Singh has also filed reply to the writ petition in advance along with his application for impleadment. At the request of learned counsel for the parties the writ petition has been heard finally at admission stage itself.

(6). Shri Paras Kuhad learned counsel for the petitioner Association contended that this petition is directed only against the transfer of pending cases at DRT Jaipur under the directions of the Chairperson of the DRAT Bombay purporting to exercise its powers u/S. 17A of the Ordinance No 1 of 2000, whereas the Chairperson of the DRAT (respondent No.2) has no power to pass a blanket order transferring all pending original and misc. applications including executing applications pending before the DRT Jaipur to the DRT Chandigarh recently constituted for the areas of Himachal Pradesh, Punjab, Haryana and Chandigarh (Union Territory). Shri Kuhad contended that the powers vested in the Chairperson of the DRAT under Sec. 17A of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 (for brevity 'Act') are restricted to transfer the cases from one Tribunal (DRT) to another only a) upon applications of a party, or b) on his own motion and that apart, c) such power of transfer can only be exercised after notice to the parties to the proceedings and after hearing them. According to Shri Kuhad, under the impugned order (Annex.2) for transfer of cases from DRT Jaipur to Chandigarh, neither any person has moved the DRAT Bombay for such transfer of cases nor any notice has ever been issued to the parties of the cases being transferred to Chandigarh nor anybody has been heard before issuing directions to DRT Jaipur for transfer of cases pending thereat to newly constituted DRT at Chandigarh.

(7). Shri Kuhad also contended that once the DRAT at Delhi has been constituted, the DRAT at Mumbai has no jurisdiction to issue directions for transfer of pending cases from DRT Jaipur to Chandigarh in view of sub sec. (2) of Sec. 17A of the Act whichcontemplates that only the Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals (DRT) has such power or authority to consider applications for transfer or may pass an order on his own motion. Shri Kuhad then contended that Sec. 17 of the Act does not confer any power on the Tribunals to transfer cases, inasmuch as it contemplates that a Tribunal shall exercise, on and from the appointed date, jurisdiction, power and authority to entertain and decide applications from the Banks and Financial Institutions for recovery of debts due to such Banks and Institutions. Therefore, according to Shri Kuhad, the Tribunal (DRT) constituted at Chandigarh can consider only such applications filed before it from the appointed date which evidently means and implies that it has no power to consider to recall by transfer any case pending before the Tribunal prior to establishment of new Tribunal (DRT) at Chandigarh.

(8). Shri Kuhad further contended that in view of crystal position as it emerges for Sec. 3,8,17 and 19 read with 33 of the Act, cases pending before the DRT at Jaipur cannot be transferred in the manner in which the cases have been transferred pursuant to the directions issued by the DRAT Mumbai or as per impugned order dated 18.4.2000. Lastly Shri Kuhad contended that the directions issued by the Chairperson of DRAT Mumbai to the DRT Jaipur for transfer of pending cases to the DRT Chandigarh is arbitrary, without application of mind and jurisdiction, and against the principles of natural justice.

(9). Shri Kuhad in support of his contentions cited decisions in S.V. Cooperative Bank vs. Kasargode Panduranga (1), Ramchandra vs. Govind (2), Ajanta Industries vs. Central Board of Direct Taxes (3), Commissioner of Income Tax Banglore vs. Smt. R. Sharadamma (4), P. Narayana Rao vs. IT Commissioner (5).

(10). On the contrary Shri Bhanwar Bagri learned Standing Counsel for the Union of India (respondent No.1) vehemently contended that all the contentions canvassed by the learned counsel for the petitioner Association are totally misconceived keeping in view the provisions of the Act, 1993 as amended from time to time so also the preamble of the Act, itself, because the Act of 1993 has been enacted to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to Banks and financial institutions and for matters connected therewith or incidental thereto. Shri Bagri then contended that the impugned order (Annex.2) dated 18th April, 2000 has been issued in exercise of powers delegated to the Chairperson of an Appellate Authority u/S. 17A (2) of the Act, 1993 and by virtue thereof the Chairperson of DRAT Bombay directed the DRT Jaipur to transfer pending original & misc. applications including execution proceedings pertinent to area of jurisdiction of DRT, Chandigarh (as notified by the Government of India vide F.No. 31.1.99 DRT, dated 24.3.2000) to the Registrar DRT Chandigarh. Shri Bhanwar Bagri placed reliance upon the decisions in Malik Brothers vs. Narendra Dadhich (6) and Ramrakh Vyas vs. Union of India (7). Shri I.P. Singh Advocate, who is an applicant for impleading him as party or intervener, contended that he is a practising Advocate conducting the cases before the Punjab & Haryana High Court at Chandigarh but also before the DRT Jaipur on behalf of Punjab & Sind Bank as well as for the defendants inasmuch as he has been visiting Jaipur for conducting cases before the DRT 2 to 4 times every month regularly, and therefore, he, other advocates, Banks and Financial institutions so also the borrowers/defendants had been representing to the Government of India for establishment of DRT at Chandigarh for the States of Punjab, Haryana, Himachal Pradesh and Union Territory Chandigarh, whereupon the Union of India vide notification dated 24.3.2000 constituted the DRT at Chandigarh for having jurisdiction over the States and Union Territory named above. Shri I.P. Singh submitted that newly constituted DRT has started functioning at Chandigarh where new cases are being filed and conducted. According to Shri I.P. Singh, in view of aforesaid circumstances, he is an effected party to be impleaded as respondent No.4 to represent his cases so as to oppose this writ petition. Shri I.P.Singh then contended that this writ petition is not at all Public Interest Litigation, rather it can be described as personal interest litigation because transfer ofcases from Jaipur to Chandigarh by virtue of the impugned order would adversely effect upon professional career of the members of the petitioner Association. Shri I.P. Singh placed reliance upon the decisions in Ranji Thomas vs. Union of India (8), Bharatiya Homeopathy College vs. Students Council, H.M. College Jaipur (9), State Bank of Bikaner & Jaipur vs. M/s Ballabh Das & Co. (10), Industrial Credit & Investment Corp. vs. Grapco Industries (11), Anti Corruption & Social Welfare Organisation (12) and Prem Chand Gupta vs. Union of India (13).

(11). Shri C.K. Garg learned Senior Advocate appearing on behalf of applicant -Indian Banks Association Mumbai (for short IBA) contended that as a result of interim stay order, the Banking Industry as a whole has come to suffer, having an effect of retardation of recoveries inasmuch as the object with which the Act, 1993 Was enacted for speedy recovery of debts due to Banks & financial institutions is being defeated. The membership of applicant IBA comprises of all Public Sector Banks, Private Sector Banks, Foreign Banks functioning in India besides Co- operative Banks, spreading all over India, Shri Gars further contended that the Tribunals under the Act (DRT) were set up firstly at Jaipur and subsequently at Chandigarh etc., under the Notification (Annex.1), pursuant to which the impugned order (Annex.2) for transfer of pending cases was issued, only with a view to obviate difficulties being faced by the Banks and financial institutions for recovery of its debts which is equally more important to safeguard revenue in public interest.

(12). The principal contention advanced by the learned counsel appearing for the applicant IBA (intervener) was that the present writ petition has been filed by the Association of Advocates practising before DRT Jaipur not in public interest but the petitioner Association has its vested interests since it is not espousing cause of public interest but for their professional interest, and that apart, the petition does not reveal as to what public interest would serve by not transferring pending cases from Jaipur to Chandigarh. Shri Garg therefore contended that in all fairness public interest demands that interest of people will be much better served if decentralisation is allowed to become more effective and meaningful by transfer of pending cases from one DRT to another newly constituted Tribunal at Chandigarh. Shri Garg also contended that interest of people residing in the States for which new DRT under Notification (Annex.1) has been set up, including Banks and financial institution to whom debts are dues and thereby public revenue is at stake, will be better served if transfer of cases are allowed pursuant to the Notification (Annex.1) and impugned order (Annex.2). Shri Garg cited decision in M/s. Jai Shiva Cement (P) Ltd. vs. Allahabad Banks (14) decided on May 8, 2000 by the Supreme Court of India.

(13). As regards the controversy as to locus standi to the petitioner Association we first analyse as to what has been laid down in the decisions cited at the bar. In Anti Corruption & Social Welfare Organisation Punjab vs. State of Punjab (supra), the petitioner had filed a civil suit, which was dismissed as withdrawn by the civil court but no document was filed to show that the suit was withdrawn with permission of the court to file fresh proceedings on the same cause of action which was a technical bar in filing the petition. The Division Bench of the Punjab and Haryana High Court observed that if necessary facts show that the petition has been filed to vindicate the grievance of the public in general or to enforce the fundamental rights of the poor sections of the community, the public interest litigation cannot be invoked by a person or body of persons to satisfy his or its personal grudge and enmity and in the facts and circumstances, it held that the petitioners have no locus standi to file the petition under Article 226 of the Constitution of India.

(14). In Ram Rakh Vyas vs. Union of India (supra) the petitioner challenged the constitution of a permanent bench of the Rajasthan High Court at Jaipur. This Court held that the petition at the behest of an advocate challenging establishment of permanent Bench of High Court at Jaipur or certain other place has no locus standi to challenge the same as that would be contrary to larger public interest involved vis-a-visthe residents of Jaipur and the places adjoining to Jaipur for the purposes of jurisdiction of High Court Bench at Jaipur since their right to speedy justice would be jeopardied.

(15). In Bhartiya Homoeopathy College vs. Students Council, H.M. College, Jaipur (supra) on the question of locus standi in public interest litigation, students council challenged decision of Vice Chancellor permitting certain students to take certain examination which he is authorised to take under relevant Act, since the affidavit did not disclose as to whether council was authorised to file litigation, and if so, by whom, whether it has funds to indulge in litigation, the Apex Court observed that such organisations without disclosing any material regarding their nature and functions and fundings, should not be allowed lightly to undertake litigation in the name of public interest litigation.

(16). In Malik Brothers vs. Narendra Dadhich (supra) the petition as PIL was for quashing decision of the respondent Development authority to refer to Arbitration a dispute between it and the appellant highest bidder at a public auction of a plot of land so also for quashing the award of the competent Arbitrator. The Apex Court held that real purpose of the PIL petition if is the vindication of rule of law, facilitating affective access to justice of economically weaker classes and meaningful realisation of fundamental rights, the Court is duty bound not to entertain such a petition because after having adjudged real purpose of entertaining PIL petition, directions and commands issued in PIL are for betterment of society at large and not for benefiting any individual. In that case after having considered all the aspects of the matter, the Apex Court held that in fact the High Court had failed to advert to the parameters for entertaining PIL petitions and therefore committed serious error of law in invoking its discretionary jurisdiction under Article 226 at the behest of a person who had no public interest in the matter in question except to espouse his personal interest.

(17). In Ranji Thomas vs. Union of India (supra), on the question of maintainability of PIL petition for quashing resignations of Governors and Lt. Governors and restraining the President from accepting the involuntary and forced resignations of Governors or Lt. Governors, the Apex Court held that the petitioner cannot challenge an act which the party affected does not intend to challenge. Since none of the Governors or Lt. Governors having approached the Supreme Court or protesting their being asked to resign, the Apex Court held PIL petition at the behest of the petitioner not maintainable on these issues. However, the Apex Court held that public interest writ petition praying inter-alia for declaration that communication of the President seeking resignation of Governors and Lt. Governors was ultra vires to the Constitution since it raised an important public issue and involved interpretation of Article 156, hence the petitioner need not be denied locus for raising that issue. But the petitioner having failed to place sufficient material to provide a factual matrix for consideration of the petition, petition was dismissed as withdrawn.

(18). Thus viewed from the principles of law enunciated in the decisions (supra) on the aspect of locus to file PIL petition, in the case at hand, the petitioner Association which is espousing the cause of its' members practising before the DRT at Jaipur has merely stated in para 1 of this PIL petition that the Association has been carrying on its activities in the interest of the litigants and for taking various steps so that the litigants may get justice in accordance with law and it has been working for the benefit of practising Advocates as well as the litigants and hence it has filed this PIL petition in the interest of the public. The petitioner Association did not disclose either in the PIL petition or affidavit annexed thereto as to how and in what manner the Association was authorised to file litigation for espousing the cause of public at large or in its own interest and if so, by whom, and whether it has funds to indulge in such a litigation at hand. By this PIL petition the petitioner Association seeks to restrain transfer of original & Misc applications and the execution proceedings pending before the DRT Jaipur on establishment of newly constituted DRT at Chandigarh. If this matter is examined in alarger perspective, in fact, transfer of such cases would not only be in the public interest including for safeguarding the interest of Banks and other financial institutions for whose benefit the aforesaid notification has been introduced, but also to the interest of the litigants and parties if such cases are transferred on establishment of newly constituted DRT at Chandigarh.

(19). It is significant to observe in this connection that none of these litigants or parties to such cases including debtors and Banks or any of the financial institutions who can be affected persons, have approached this Court or protested over withdrawal of such cases by their transfer to DRT Chandigarh under the impugned order (Annex.2). In this view of the matter, this PIL petition at the behest of the petitioner Association is not at all maintainable on these issues. Since in our considered view no public interest will be served by withholding such transfers, while on the contrary the purpose of legislation would stand defeated if such transfers are not permitted.

(20). We are also of the view that since the petition raises an important public issue and involves interpretation of various sections including Sec. 17A and 31 of the Act, 1993 on the question of transfer of pending cases by virtue of issuance of Notification for establishment of newly constituted Tribunal (DRT), it will be necessary to examine the same in a larger perspective by giving such interpretation to the Notifications as would be beneficial to safeguard not only the interest of litigants involved therein but also that of banks and financial institutions for safeguarding the public revenue involved therein.

(21). Similarly, that being so, the applicant IBA (Banker's Association) whose member Banks are undisputably parties to the pending cases being transferred to newly constituted Tribunal at Chandigarh and who are not only much affected but also benefited by the transfer of their cases under the impugned order of the DRAT Bombay, hence the applicant IBA is a necessary party for being impleaded as party respondent to this PIL petition. However, applicant I.P. Singh, Advocate from Punjab & Haryana High Court at Chandigarh though has not disclosed particulars of cases in which he has been representing the litigants and parties to the cases being transferred under the impugned order, but on the analogy that the petitioner Association is not denied locus to raise the issue, Shri I.P. Singh is also permitted to intervene not as a party respondent but only as an intervener in this RIL petition to assist the Court on the important issue involving interpretation of provisions (supra) of the Act.

(22). Before dwelling upon the controversy at issue, we would tike to have a brief resume of the decisions cited at the bar such as, 'control', 'superintendence' and 'court' so also as to have the harmonious construction and also with a view to avoid any inconsistency and repugnancy which may arise.

(23). In S.V.C. Bank vs. K. Panduranga (supra) the Apex Court observed that the word 'Control' in Sec. 2(1) of the Multi Unit Co-operative Societies Act 1942 (Central Act) does not comprehend within itself the adjudication of a claim by a co-operative society against its member; that control is exercised by a superior authority in exercise of its supervisory power. Adjudication of dispute is a judicial or quasi judicial function and there is a clear distinction between jurisdiction to decide a dispute which is a judicial power and the exercise of control which is an administrative power and it will be wrong to treat the two as identical or to equate one with the other.

(24). In Ramchandra vs. Govind (supra), the Apex Court held that no universal rule can be laid down as to whether mandatory enactments shall be considered directory only or obligatory with an implied nullification for disobedience. It is the duty of Courts of Justice to try to get all the real intention of the legislature by carefully attending to the whole scope. The Apex Court also held that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of performance are necessarily forbidden, and this rule squarely applies where the real aim and object of the legislature would be plainly defeated ifthe command to do the thing in a particular manner did not imply a prohibition to do it in any other manner:

(25). In Anantha Industries vs. Central Board of Direct Taxes (supra) after giving an opportunity to the appellants for a proposed transfer of their cases 'for facility of investigation' from the Income Tax Officer at Nellore to an Income Tax Officer at Hyderabad, the Central Board passed an order u/S. 127(1) of the Income Tax Act, 1961 transferring the cases but since in the order served on the appellants no reasons were recorded or communicated, accordingly the Apex Court held that non-communication of the reasons in the order passed under Section 127(1) was a serious infirmity and the order was invalid. It was a case being covered u/S. 127 of the Income Tax Act which enjoins upon the Commissioner or the Central Board Power to transfer any case from one Income Tax Officer to another only after recording his reasons for doing so, whereas in the instant case the circumstances are quite different and distinguishable being covered u/S. 31 of the Act, 1993 for transfer of pending cases from one Tribunal (DRT Jaipur) to another newly constituted (DRT) at Chandigarh.

(26). In CIT Bangalore vs. R. Shardamma (supra) the Apex Court placing reliance upon the decision in Commissioner of Income Tax vs. Dhadi Sahu (15) endorsed its earlier view that a legislation which brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown and one of the modes by which such an intention shown is by making a provision for change over of proceedings from the court or the Tribunal where they are pending to the court or the Tribunal which under the new law, gets jurisdiction to try them.

(27). Shri Kuhad drew our attention to the meaning of word 'superintendence' described in the Law Lexicon at page 1937, which means the act of superintending, care, and oversight, for the purpose of direction, and with authority to direct. He placed reliance upon the decision of the Division Bench of Andhra Pradesh High Court in P. Narayana Rao vs. IT. Commissioner Hyderabad (supra). The Andhra Pradesh High Court observed that the word 'superintendence' is of very wide connotation and it would be undesirable, even if it were possible to map out the domain within which it is to operate, and it is to be rarely resorted to and should be invoked generally only where there is no other remedy available. It was a case where the jurisdiction of the Andhra Pradesh High Court under Articles 226 & 227 was circumscribed in some measure, by the location of Officers and authorities outside the territories of the Andhra State, though they pass orders affecting the citizens resident in the Andhra State and so the said High Court held that it is serious anomaly and requires serious and urgent consideration by the State and by the Union Government. Thus this decision does also not render any help to the petitioner Association in advancing its case and hence distinguishable.

(28). Our attention was also drawn to the definition of 'Superintendence' and 'Control' as so stated in Judicial Dictionary at page 1201. According to it, the word 'superintendence' impels administrative control enabling the authority enjoying such power to give directions to the subordinate to discharge its administrative duties and functionings in the manner indicated in the order. In State of Bihar vs. JAC Saldanha (16), the Apex Court observed as under:-

'Where the subordinate authority subject to such superintendence is discharging duties and functions of quasi judicial character under a statute the inhibition of abdication of such power can be invoked but where such subordinate authority is discharging administrative and executive functions obligations and duties, the power of superintendence would comprehend the authority to give directions to perform the duty in a certain manner, to refrain from performing one or the other duty, to direct any one else to perform that duty and no inhibition or limitation can be read in this power unless the sections conferring such power prescribes one.'

(29). Undisputably the word 'control' is synonymous with 'superintendence', 'management' or 'authority' to direct, restrict or regulate. The term 'control' is of a very wide connotation and amplitude and includes a large variety of powers which are incidental or consequential to achieve the powers vested in the authority concerned. The word 'control' includes disciplinary jurisdiction. 'Control' was vested in the High Court to effectuate a purpose viz. securing of the independence of the subordinate judiciary and unless it includes disciplinary control as well, the very object would be frustrated. It shows that the High Court is made the custodian of exercising its control over the subordinate Judiciary within its jurisdiction in view of term 'Superintendence' occurring in Article 227 of the Constitution of India. Hence the term 'Control', therefore, is not merely the power to arrange the day-to-day working of the Court but contemplates disciplinary jurisdiction over the Presiding Judge as well, as observed by Apex Court in : (1968)ILLJ270SC .

(30). As per aims and objects of the Act 1993 duly amended by the Amending Acts (28 of 1995) and (1 of 2000), since some Banks and financial institutions had been experiencing considerable difficulties in recovering loans and enforcement of securities charged with them because of the procedure prevalent at that time for recovery debts due to them resulting in blocking a significant portion of their funds in unproductive assets, the value of which deteriorates with the passage of time, an urgent need was felt to work out a suitable mechanism so as to realise the dues to the banks and financial institutions without delay. The Committee on the Financial System headed by Shri M.Narasimham so also the Committee under the Chairmanship of Shri T.Tiwari after having examined and considered all legal and other difficulties (supra) had suggested remedial measures including changes in law, besides setting up of Special Tribunals with special powers for adjudication of such matters by following a summary procedure for speedy recovery of dues of the banks and financial institutions. Keeping in view all these recommendations (supra) the Recovery of Debts Due to Ranks and Financial Institutions Bill was introduced in the Parliament. The Bill having been passed by both the Houses of Parliament received the assent of the President on 27th August, 1993 and it came on the statute book as the Act of 1993. According to its preamble, the Act of 1993 was to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to Banks and financial institutions and for matters connected therewith or incidental thereto.

(31). Sub-section (a) to Sec. 2 of the Act defines 'Appellate Tribunal' as established under sub-sec. (1) of Sec. 8. Sub-section (o) of Sec. 2 defines 'Tribunals' as established under Sub-sections (1) of Sec. 3. Chapter II of the Act deals with establishment of Tribunal and Appellate Tribunal. Sec. 3 provides for establishment of Tribunal. Its sub-section (I) empowers the Central Government to issue Notification for establishment of one or more Tribunals to be known as the Debt Recovery Tribunal, so as to exercise the jurisdiction, powers and authority conferred on such Tribunal by or under the Act. Its sub-section (2) provides that the Central Government shall also specify in the notification referred to in sub-sec. (1) the areas within which the Tribunal may exercise jurisdiction for entertaining and deciding the applications filed before it. Similar provisions are made for establishment of Appellate Tribunal under Section 8 of the Act.

(32). Chapter III of the Act deals with jurisdiction, powers and authority of Tribunals and covers Sec. 17, 17A and 18. Under Sec. 17(1), a Tribunal is empowered to exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such Banks and financial institutions. Under Sec. 17(2), Appellate Tribunal is vested with power to exercises, on and from appointed day, jurisdiction, powers and authority to entertain appeals against any order made or deemed to have been made by a Tribunal under the Act. Sec. 17A contemplates power of Chairperson of Appellate Tribunal. According to its sub-section (1), the Chairperson of an AppellateTribunal is empowered to exercise general power of superintendence and control over the Tribunals under his jurisdiction including the power of appraising the work and recording the annual confidential reports of the Presiding Officers, whereas its sub-sec. (2) contemplates that the Chairperson of an Appellate Tribunal having jurisdiction over the Tribunals may, on the application of any of the parties or on his own motion after notice to the parties and after them, transfer any case from one Tribunal for disposal to any other Tribunal. Sec. 18 envisages bar of jurisdiction and according to it, on and from the appointed day, no court or other authority shall have or be entitled to exercise any jurisdiction powers or authority (except the Supreme Court and a High Court exercising jurisdiction under Article 226 & 227 of the Constitution) in relation to the matters specified in Sec. 17.

(33). Chapter IV of the Act deals with procedure of Tribunals covering Sec. 19 to 24, whereas Chapter V covering Sec. 25 to 30 prescribes procedure for recovery of debts determined by Tribunals. Last Chapter VI of the Act contemplates miscellaneous provisions. Sec.31 thereof deals with transfer of pending cases. Sec. 31 reads as under:-

'31. Transfer of pending cases. - (1) Every suit or other proceedings pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal;

Provided that nothing in this sub-section shall apply to any appeal pending as aforesaid before any court.

(2) Where any suit or other proceedings stands transferred from any court to a Tribunal under Sub-section (1),-

(a) the court shall as soon as may be after such transfer, forward the records of such suit or other proceedings to the Tribunal; and

(b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Sec. 19 from the stage which was reached before such transfer or from any earlier stage as the Tribunal may deem fit.'

(34). A conjoint reading of Sec. 3, 17 and 18 leads to the irretrievable conclusion that from the appointed day the matters pending anywhere else and which are covered by provisions of the Act for purposes of moving original applications for realising debts, would stand transferred to the Tribunal as provided by Sec. 17 and the Tribunal (DRT) is the one duly established under the Act. That being so, Sec. 3 makes a provision in an explicit term for the establishment of one or more Tribunals by a Notification for being known as Debts Recovery Tribunal and to exercise jurisdiction, powers and authority conferred on such Tribunal by or under the Act. Moreover Sec. 18 makes a clear bar that on and from the appointed day no Court or other authority shall have or be entitled to exercise any jurisdiction, power or authority except the Supreme Court and the High Court exercising jurisdiction under Articles 226 and 227 of the Constitution in relation to matters specified in Sec. 17.

(35). After promulgation of the Act of 1993, the Central Government, in exercise of the powers conferred by Sec. 3 of the Act, established the DRT at Jaipur conferring the jurisdiction over the areas of Rajasthan, Himachal Pradesh, Haryana, Punjab & U.T. Chandigarh by Notification dated 30th August, 1994. Accordingly, the suits filed by the Banks before establishment of the DRT and pending in the Civil Court having jurisdiction of the areas of Rajasthan, Himachal Pradesh, Punjab, Haryana & UT Chandigarh, stood transferred to the DRT Jaipur on and from the date the Tribunal (DRT) was established by virtue of application of Sec. 31 of the Act. Similarly, by Notification dated7th April, 1998 undisputably, the Central Government established the DRT at Jabalpur conferring jurisdiction over the areas of States of Madhya Pradesh and Uttar Pradesh.

(36). The dispute has arisen when the Central Government established DRT at Chandigarh conferring jurisdiction over the areas of Himachal Pradesh, Punjab, Haryana & Chandigarh by Notification dated 21.3.2000 (Annex.1) with immediate effect. It is pertinent to mention here that this Notification as regards establishment of new DRT at Chandigarh has not been challenged elsewhere. Pursuant to Notification (Annex.1), the order dated 18.4.2000 (Annex.2) challenged in this petition was issued by the Registrar as per written orders of the Chairperson DRAT Bombay, according to which the aforesaid Chairperson in exercise of powers conferred by Sec. 17A (2) of Act of 1993 has directed the Presiding Officer DRT Jaipur to transfer pending original applications/misc. applications including execution proceedings pertinent to area of jurisdiction of DRT, Chandigarh (as notified by the Govt. vide F.No. 31/1/99 DRT, dt. 24.3.2000) to the Registrar DRT Chandigarh.

(37). A bare reading of the impugned office order (Annex.2) makes it explicitly clear that the Chairperson of the DRAT Bombay has directed transfer of cases by virtue of Notification dated 24.3.2000 upon establishment of newly constituted DRT at Chandigarh and though there is mention of exercise of powers delegated by Sec. 17A (2) of the Act but it does not construe that the authority delegated with powers under sub-sec. (2) of Sec. 17A of the Act will be required to have given notice on his own motion for the impugned transfer of cases on account of establishment of new Tribunal (DRT).

(38). Moreover, in similar circumstances, the DRT Jabalpur was having jurisdiction over the State of U.P. besides State of M.P. upon establishment of DRT after promulgation of the Act, 1993, but a separate DRT was established for the jurisdiction over the State of U.P. under Notification dated 31st March, 2000. In M/s Jai Shiva Cement Pvt. Lid's case (supra), suits for recovery of debts filed by the Barks against the Cement Co were transferred to Debts Recovery Tribunal set up at Jabalpur. However subsequently, a Debts Recovery Tribunal had since been set up at Allahabad to exercise jurisdiction within the area specified in the Notification dated 31st March, 2000, the Apex Court acceded to the prayer of the parties and ordered that the money suits which had been transferred by the Civil Courts to the DRT Jabalpur be withdrawn from that Tribunal and transferred for their disposal in accordance with law to the DRT Allahabad.

(39). Another instance is of the case of Prem Chand Gupta vs. Union of India (supra), wherein the D.B. of the Allahabad High Court observed an under:-

'The Debts Recovery Tribunal Jabalpur was conferred the jurisdiction in respect of the suits instituted in the various civil courts in the State of U.P. Now a Debts Recovery Tribunal has been constituted for the State of Uttar Pradesh with its seat at Allahabad. Learned counsel for the petitioners pointed out that Sri A.S. Chaudhary has taken over1 as Member of the said Tribunal at Allahabad and now all the suits which arc pending before the Debts Recovery Tribunal, Jabalpur are to stand transferred to the newly created Tribunal at Allahabad.'

(40). In S.B.B.J. vs. M/s Ballabh Das & Co. (supra), suit filed by Bank was pending before Civil Court and then the Debts Recovery Act 1993 was enacted and the Debts Recovery Tribunals were established and therefore Bank's request for transfer of the case to the Tribunal was accepted by the District Court. However, the High Court held that without first deciding the question as to whether the debts have become due and payable, the case cannot be transferred to the Tribunal. But the Apex Court held that the trial Court was justified in ordering the transferor the cases to the Debts Recovery Tribunal. The Apex Court also held as under: -

'As the suits were filed by the Bank before establishment of the Tribunal and were pending in the civil court when the Tribunals cameto be established under the Act. Sec. 31 became applicable to those suits and they shall have to be treated as transferred to the Tribunal on and from that date the Tribunal was established. Sec. 31 of the Act makes it clear that the transfer is automatic because of operation of law and, therefore, the bank was really not required to file applications. Those applications should have been really treated as applications for forwarding the records of the suits to the Tribunal.'

(41). As regards the question as to whether the word 'Court' used in Section 31 of the Act does include a 'Tribunal', Shri C.K. Garg learned Senior Counsel drew our attention to the Law Lexicon (page 440). To constitute a Court an essential condition is that the Court should have apart from having some of trappings of a judicial Tribunal, power to give a decision or a definite judgment which has finality and authoritativeness which are the essential tests of a judicial pronouncement (See Brajanandan Sinha vs. Jyoti Narain (18). A court of law also includes dealing with and adjudicating upon civil disputes by the operation of law in a judicial manner untroubled by ulterior consideration or matters of executive policy and observing certain definite rules and procedure which are either defined by statute or recognised by practice.

(42). As it stands well settled by a series of decisions, two fold criteria have been laid down to constitute the Tribunal a Court. Firstly the Tribunal or an authority would be a Court if it is given power to give a definitive judgment or a decision which has finality and authoritativeness that would bind the parties appearing before it so far as the rights litigated before it are concerned and secondly the appointment of the Tribunal or an authority as well as the source of its power must be judicial power of the State coming to it by the Statute itself and then only such Tribunal or the authority would be a Court.

(43), As regards harmonious construction in case of inconsistency and repugnancy, our attention was drawn to following observations of Gajendragadkar, J.:-

'The sub-sections must be read as parts of an integral whole and as being interdependent; an attempt should be made in construing them to reconcile them if it is reasonable possible to do so, and to avoid repugnance'. (See Madanlal Fakirchand vs . Shree Changdeo Sugar Mills : AIR1962SC1543 .'

(44). In this connection Venkatarama Aiyer, J. observed thus:-

'The rule of construction is well settled that when there are in an enactment two provisions which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. That is what is known as the rule of harmonious construction' (See V. Devaru vs. State of Mysore : [1958]1SCR895 '

(45). Thus it is for the courts to avoid any conflict occurring as a result of anenactment and, whenever it is possible to do so as to construe provisions which appearto be in conflict should be avoided and which are more beneficial to the general publicshould be interpreted in a manner so as to achieve the very purpose for which theenactment was introduced. The provisions of one section of a statute cannot be usedto defeat those of another unless it is impossible to effect reconciliation between them.It is settled law that a construction that reduces one of the provisions to a 'uselesslumber' or dead letter is not harmonious construction and to harmonise is not todestroy.

(46). Applying the principles of law enunciated and wrung out from authoritative decisions (supra) so also the aims and objects of the Act, 1993 discussed above, we have no option but to give harmonious construction to the provisions of the Act 1993 as to the transfer of pending cases upon establishment of new Tribunal and therefore, we are of the opinion that the word 'Court' used in Sec. 31 of the Act, 1993 doesinclude 'Tribunal' because 'Tribunal' under the Act is given power to give a definitive judgment or a decision and the appointment of the Tribunal so also the source of its power is being judicial power duly conferred by Sec. 17 besides other provisions of the Act, notwithstanding Sec. 17A (2). As observed above, since the impugned transfer of cases is directed admittedly by virtue of establishment of newly constituted DRT at Chandigarh conferring the jurisdiction of the areas and seizing it from erstwhile DRT Jaipur under the Notification (Annex.1) which has not at all been challenged atleast in this PIL petition, would not at all come within parameters of transfer of any case from one Tribunal to any other Tribunal on suo moto action of the authority conferred with power under sub section (2) of Sec. 17A of the Act requiring it to give notice before such transfer. In other words, in cases of such transfer impugned herein, on his own motion the Chairperson of the DRAT is not required to given notice before such transfer is ordered. That apart, transfer of pending cases is automatic because of operation of law and establishment of Tribunal under the Act, 1993. In this view of the matter, service of any notice for transfer of cases in the present circumstances was not necessary. Moreover, none of the litigants or parties to the suits or proceedings which are being transferred to DRT Chandigarh from DRT Jaipur under the impugned order (Annex.2) has come to challenge such transfer. Obviously because the transfer of pending cases by virtue of establishment of newly constituted DRT at Chandigarh was in the public welfare and for securing smooth functioning and efficiency to the Banking Industry so also the helpless borrowers and that being so, none would be affected. By virtue of establishment of newly constituted DRT, both the Banks and the debtors so also borrowing public would be benefitted by it, as it is situated almost in the middle of the three States and in close proximity to the parties as compared to the DRT at Jaipur, None of the contentions does have any merit, rather their contentions are fallacious based on misconception. Presiding Officer DRT Jaipur is directed to immediately transfer all pending cases to DRT Chandigarh of its jurisdiction under Notification (Annex.1).

(47). As a result of the above discussions, this writ petition is dismissed being devoid of any merit. No order as to costs. Stay order dated 1.5.2000 stands vacated.


Save Judgments// Add Notes // Store Search Result sets // Organize Client Files //