Kundan Rice and General Mills and anr. Vs. Union of India (Uoi) and ors. - Court Judgment

SooperKanoon Citationsooperkanoon.com/612322
SubjectBanking;Constitution
CourtPunjab and Haryana High Court
Decided OnSep-11-1996
Case NumberCivil Writ Petition No. 12901 of 1996
Judge Jawaharlal Gupta and; T.H.B. Chalapathi, JJ.
Reported in[1998]92CompCas895(P& H); (1997)115PLR279
ActsConstitution of India - Articles 2, 14, 17, 19(4), 39A, 50, 226, 227, 323A and 323B; Recovery of Debts due to Banks and Financial Institutions Act, 1993
AppellantKundan Rice and General Mills and anr.
RespondentUnion of India (Uoi) and ors.
Appellant Advocate O.P. Goyal, Sr. Adv. and; Ashwani Verma, Adv.
Respondent AdvocateNone
DispositionPetitions dismissed
Cases ReferredMaganlal Chhagganlal (P.) Ltd. v. Municipal Corporation of Greater Bombay
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....jawaharlal gupta, j.1. are the provisions of the recovery of debts due to banks and financial institutions act, 1993 (act no. 51 of 1993), ultra vires and unconstitutional this is the short question that arises for consideration in these two petitions. counsel for the petitioners have referred to the facts as averred in civil writ petition no. 12901 of 1996. these may be briefly noticed.2. on september 8, 1986, the bank of india (respondent no. 2) granted a cash credit limit of rs. 15 lakhs to the petitioners. on october 20, 1987, the limit was enhanced to rs. 25 lakhs. it was further enhanced to rs. 35 lakhs on october 21, 1988. the stocks, plant and machinery belonging to the petitioners were hypothecated with the second respondent-bank. in addition, agricultural land measuring about 70.....
Judgment:

Jawaharlal Gupta, J.

1. Are the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. 51 of 1993), ultra vires and unconstitutional This is the short question that arises for consideration in these two petitions. Counsel for the petitioners have referred to the facts as averred in Civil Writ Petition No. 12901 of 1996. These may be briefly noticed.

2. On September 8, 1986, the Bank of India (respondent No. 2) granted a cash credit limit of Rs. 15 lakhs to the petitioners. On October 20, 1987, the limit was enhanced to Rs. 25 lakhs. It was further enhanced to Rs. 35 lakhs on October 21, 1988. The stocks, plant and machinery belonging to the petitioners were hypothecated with the second respondent-bank. In addition, agricultural land measuring about 70 kanals was mortgaged.

3. Presumably, there was a default in repayment. On January 5, 1994, the respondent-bank filed a suit for recovery of Rs. 41,01,522 with future interest at the rate of 18.25 per cent. per annum with quarterly rests by sale of mortgaged properties and hypothecated goods against the petitioners. It also filed an application under Order 38, rule 5 of the Code of Civil Procedure for restraining the petitioners from alienating the property during the pendency of the suit. Appropriate orders in this behalf restraining the petitioners from alienating the above said properties were passed by the court. On December 19, 1994, the suit was transferred by the Additional Senior Subordinate Judge, Moga, to the Debt Recovery Tribunal, Jaipur. Thereafter, the petitioners have filed the present writ petition and prayed, inter alia, that Act No. 51 of 1993, be declared 'as ultra vires and an Act beyond the authority of law and in contravention of Article 323B of the Constitution of India'.

4. Arguments in this case were addressed by Mr. O. P. Goyal, senior advocate. These were adopted by Mr. Arun Jain, learned counsel for the petitioner in the connected case. Learned counsel submitted that the provisions of the Act are arbitrary and ultra vires. The Act provides for theconstitution of a Tribunal for the adjudication of disputes with regard to a matter which does not fall within Clause (2) of Article 323B. The jurisdiction of the civil court in respect of claims for Rs. 10 lakhs or more has been arbitrarily ousted, The independence of the judiciary being a basic feature of the Constitution, substitution of the civil court by the Tribunal erodes the independence of the judiciary and, thus, vitiates the provisions of the Act. A defendant cannot even seek adjustment, set-off or make a counter-claim. Learned counsel placed strong reliance on the decision of a Division Bench of the Delhi High Court in Delhi High Court Bar Association v. Union of India [1995] DLT 815 ; [1998] 92 Comp Cas 849.

5. The questions that arise for consideration are :

(i) Are the provisions of the Act ultra vires and unconstitutional

(ii) Does the Act erode the independence of the judiciary ?

(iii) Is a defendant debarred from claiming a set off or making a counter-claim

6. At the outset, the historical antecedents of the Act may be briefly noticed. A committee on financial system was set up by the Government of India under the chairmanship of Mr. M. Narasimham. This committee noticed that 'banks and financial institutions at present face considerable difficulties in recovering the dues from the clients and enforcement of security charged to them due to the delays in the legal processes, A significant portion of the funds of the banks and financial institutions is thus blocked in unproductive assets, the value of which keeps deteriorating with the passage of time. The question of speeding up the process of recovery was examined in great detail by a committee set up by the Government under the chairmanship of the late Shri Tiwari. The Tiwari Committee recommended, inter alia, the setting up of Special Tribunals which could expedite the recovery process'. Presumably, in pursuance of the observations of the committee and in view of the fact that huge amounts of public money were lying locked up in litigation, a Bill was introduced in Parliament 'to provide for the establishment of Tribunals and Appellate Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions'. During the pendency of the Bill, the President issued the Recovery of Debts Due to Banks and Financial Institutions Ordinance on June 24, 1993. Ultimately, the Act was promulgated.

7. The Act is divided into six Chapters. Chapter I, Sections 1 and 2, are preliminary in nature. These provide for the extent of, application of the Act and define various terms and expressions. Where the amount of the debt is less than Rs. 10 lakhs, the provisions of the Act do not apply. Chapter II--Sections 3 to 16--provide for the establishment of the Tribunal, Appellate Tribunal and matters ancillary thereto. Chapter III--Sections 17 and 18--delineate the jurisdiction, the powers and the authority of the Tribunal. It also provides for exclusion of the jurisdiction of courts except the Supreme Court and the High Court in relation to the matters specified in Section 17. Chapter IV--Sections 19 to 24--lay down the procedure that has to be followed by the Tribunal. Chapter V--Sections 25 to 30--provide for the recovery of debt as determined by the Tribunal. Chapter VI--Sections 31 to 37--contain miscellaneous provisions. It, inter alia, provides for the transfer of the pending cases to the Tribunals and the overriding effect of the Act. Section 36 confers power on the Central Government to make rules.

8. A perusal of the provisions of the Act shows that the Central Government has been empowered to establish Tribunals for the expeditious adjudication and recovery of debts due to banks and financial institutions. It can by notification establish one or more Tribunals and specify the area within which each of the Tribunals would exercise jurisdiction. Only a person who is or has been or is qualified to be a District Judge, can be appointed as the Presiding Officer of the Tribunal. He shall hold office for a term of five years or until he attains the age of 60 years, whichever is earlier. Similarly, the Central Government can establish one or more Appellate Tribunals and specify the areas of their jurisdiction. The qualifications for appointment as Presiding Officer of the Appellate Tribunal have been specified in Section 10. Provisions for providing staff of the Tribunals have also been made. A Presiding Officer of a Tribunal cannot be removed except on the ground of proved misbehaviour or incapacity after enquiry made by a judge of a High Court. In the case of the Presiding Officer of an Appellate Tribunal, the enquiry has to be made by a judge of the Supreme Court. The Act makes it incumbent on the Central Government to inform the Presiding Officer of the charges against him and to give him a reasonable opportunity of being heard in respect of those charges. Under Section 17, the Tribunal is empowered and authorised 'to entertain and decide applications from the banks and financial institutions for recovery of debts . . .' Similarly, the Appellate Tribunal has been vested with the jurisdiction and power to entertain and decide appeals. The jurisdiction of the civil courts exceptthe High Court and the Supreme Court has been excluded in respect of the matters regarding which the power of adjudication has been vested in the Tribunal. The application has to be filed before a Tribunal within the local limits of whose jurisdiction the defendant ordinarily resides or carries on business or works for gain or the cause of action wholly or in part arises. The Tribunal is required to issue summons requiring the defendant to show cause within 30 days of the service of the summons as to why the relief as prayed for should not be granted. The Tribunal can 'after giving the applicant and the defendant an opportunity of being heard, pass such orders on the application as it thinks fit to meet the ends of justice'. Thereafter, even procedure for recovery, etc., has also been laid down. The aggrieved party is entitled to file an appeal. There is a provision for deposit of 75 per cent. of the amount as determined by the Tribunal with the power to waive or reduce for a good reason. The Tribunal as well as the Appellate Tribunal have to follow the principles of natural justice. These have been vested with the powers of a civil court in the matter of summoning and enforcing the attendance of any person, requiring the discovery and production of documents. They can also receive evidence on affidavits, issue commissions for the examination of witnesses or documents, review the decisions or dismiss the application for default or decide the case ex parte. The modes of recovery of debts have also been laid down. The provisions of the Limitation Act apply to the applications to be submitted to the Tribunal.

9. It is thus clear that the Tribunal, as constituted under the Act, is not merely administrative. It is a part of the machinery for adjudication of disputes. It can be established regionally or locally. The procedure to be followed by the Tribunal is 'adversarial' and not 'inquisitorial'. The Presiding Officer is a person who has either held or is holding or is '' qualified to hold a high judicial office. He is trained in law. The procedure to be followed by the Tribunal is simple, clear and uncomplicated. It is intended to provide a simpler, speedier and cheaper remedy than the ordinary courts. The process should not be slow and costly. It is not 'formalistic'. It is not unduly 'conservative, rigid and technical'. The Tribunal is not bound by the strict rules of evidence or the provisions of the Code of Civil Procedure. Yet, the procedure is calculated to ensure a just and fair opportunity to the litigant. The hearing is open and judicial. The Tribunal can make final and legally enforceable decisions.

10. The Tribunal is, thus, constituted under a statute. It is invested with judicial functions. It has all the trappings of a court.

11. With this background, the questions as posed''above may be considered.

Reg. : (i) :

Mr. Goyal submitted that the provisions of the Act are ultra vires and unconstitutional. The challenge was two-fold. Firstly, learned counsel submitted that the provisions of the Act were arbitrary and violative of the provisions contained in Articles 14 and 39A of the Constitution. Secondly, a half-hearted attempt was made to contend that Parliament has no power to constitute a Tribunal as a substitute for a civil court except for the adjudication of disputes as laid down in Article 323B(2).

12. The Constitution contains a mandate that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. There are, however, definite limitations on the doctrine of equal protection. It does not have a universal application. It is not applicable when persons are differently placed. Different classes of persons with varying needs can be separately treated. When there is a conflict between the interest of a private individual and the public at large, a differential treatment has been accepted as being reasonable. To illustrate, in Manna Lal v. Collector of Jhalawar, : [1961]2SCR962 it was held, that (headnote) :

'The Government, even as a banker, can be legitimately put in a separate class. The dues of the Government of a State are the dues of the entire people of the State. This being the position, a law giving special facility for the recovery of such dues cannot, in any event, be said to offend article 14 of the Constitution'.

13. In Nav Rattanmal v. State of Rajasthan, : [1962]2SCR324 the provision of article 149 of the Limitation Act which prescribed a period of 60 years for suits by the Government, was challenged as being unconstitutional and violative of article 14. It was urged that there was no rational basis for treating the claim by the Government differently from that of private individuals in the matter of the time within which it could be enforced by suit. The challenge was negatived. It was held that the fact that (headnote) : 'in the case of the Government, if a claim becomes barred by limitation, the loss falls on the public, i.e., on the community in general and to the benefit of the private individual who derives advantage by the lapse of time, in itself, would appear to indicate a sufficient ground for differentiating between the claims of an individual and the claims of the community at large'. Similarly, in Builders Supply Corporation v. Union of India : [1965]56ITR91(SC) , itwas contended that the 'doctrine of the priority of tax dues might have been recognised by judicial decisions in India prior to 1950, there is no scope for continuing its operation after the Constitution came into force'. This contention was negatived. It was, inter aha, observed that (headnote):

'The basic justification for the claim for priority made by respondent No. 1 (Union of India) in the present case rests on the well-recognised principle that the State is entitled to raise money by taxation, because unless adequate revenue is received by the State, it would not be able to function as a sovereign Government at all... the State should be able to discharge its primary governmental functions and in order to be able to discharge such functions efficiently, it must be in possession of necessary funds, and this consideration emphasises the necessity and the wisdom of conceding to the State the right to claim priority in respect of its tax dues.'

14. Still later, in Maganlal Chhagganlal (P.) Ltd. v. Municipal Corporation of Greater Bombay : [1975]1SCR1 , summary procedure for eviction from premises was upheld by the apex court. In this case, the legality of the provisions of and the proceedings initiated under the Bombay Municipal Corporation Act and the Bombay Government Premises (Eviction) Act, 1955, were challenged as being violative of Article 14 of the Constitution. It was contended that 'as there are two procedures available to the Corporation and the State Government, one by way of a suit under the ordinary law and the other under either of the two Acts, which is harsher and more onerous than the procedure under the ordinary law, the latter is hit by Article 14 of the Constitution in the absence of any guidelines as to which procedure may be adopted'. It was observed that the statute itself (page 2022) : 'clearly lays down the purpose behind them, i.e., that premises belonging to the Corporation and the Government should be subject to speedy procedure in the matter of evicting unauthorised persons occupying them . . . with such an indication clearly given in the statutes one expects the officers concerned to avail themselves of the procedures prescribed by the Acts and not resort to the dilatory procedure of the ordinary civil court'. Their Lordships further observed as under (page 2023) :

'It is also necessary to point out that the procedures laid down by the two Acts now under consideration are not so harsh or onerous as to suggest that a discrimination would result if resort is made to the provisions of these two Acts in some cases and to the ordinary civil court in other cases. Even though the officers deciding these questions wouldbe administrative officers there is a provision in these Acts for giving notice to the party affected, to inform him of the grounds on which the order of eviction is proposed to be made, for the party affected to file a written statement and produce documents and be represented by lawyers. The provisions of the Civil Procedure Code regarding summoning and enforcing attendance of persons and examining them on oath, and requiring the discovery and production of documents are a valuable safeguard for the person affected. So is the provision for appeal to the principal judge of the city civil court in the city of Bombay, or to a District Judge in the districts who has got to deal with the matter as expeditiously as possible, also a sufficient safeguard as was recognised in Suraj Mall Mohta's case, : [1954]26ITR1(SC) . The main difference between the procedure before an ordinary civil court and the executive authorities under these two Acts is that in one case it will be decided by a judicial officer trained in law and it might also be that more than one appeal is available. As against that there is only one appeal available in the other but it is also open to the aggrieved party to resort to the High Court under the provisions of Article 226 and Article 227 of the Constitution. This is no less effective than the provision for a second appeal. On the whole, considering the object with which these special procedures were enacted by the Legislature we would not be prepared to hold that the difference between the two procedures is ,so unconscionable as to attract the vice of discrimination. After all, Article 14 does not demand a fanatical approach. We, therefore, hold that neither the provisions of Chapter V-A of the Bombay Municipal Corporation Act nor the provisions of the Bombay Government Premises (Eviction) Act, 1955, are hit by Article 14 of the Constitution'.

15. It was also observed that (page 2027) 'the speedy machinery for eviction of unauthorised occupants from municipal premises is, therefore, justified, in that it is in the interest of the public that speedy and expeditious recovery of municipal premises from unauthorised occupiers is made possible through the instrumentality of a speedier procedure, instead of the elaborate procedure by way of civil suit involving both expense and delay. Speedy justice is today, in view of the existing procedural skein of an ordinary suit, an almost impossible feat. There is, thus, a valid basis of differentiation between occupiers of municipal premises and those of other premises, and there is a rational relation and nexus between the basis of the classification and the object of the legislation. The constitutional validity of the impugned provisions in the two statutes cannot, in the circumstances, be assailed on the ground that they make unjustdiscrimination between occupiers of the Government or municipal premises and occupiers of other premises.'

16. The above pronouncements by different Constitution Benches of the Supreme Court clearly lay down that a differential treatment is permissible in cases where the interest of the general public is involved. Just as in cases of eviction from the premises, even in the matter of recovery of debts due to the banks and the financial institutions, a differential procedure before a Tribunal, should be permissible.

17. Admittedly, the provisions of the Act are calculated to provide a simpler and speedier remedy for recovery of debts as due from any person to a bank or financial institution. The public at large has an interest in the money due to the banks. It has to be utilised for the general good. It is in the larger interest of the society that the money is speedly recovered. Thus, the enactment providing for a speedier remedy is calculated to ensure speedy justice. It is aimed at avoiding the dilatory procedure of an ordinary civil suit. The provisions are not arbitrary. These are based on a valid classification. These are applicable to persons who owe an amount of not less than Rs. 10 lakhs to the bank or financial institution. Even this limitation is aimed at ensuring that the Tribunals are not flooded with applications for petty amounts and the volume of work does not increase to an unmanageable extent which may defeat the very purpose of the Act. The classification is well founded. It has a rationale. The provisions are just and fair. These are not arbitrary or unfair.

18. Another fact which may be mentioned here is that this petition had come up for hearing before us on September 3, 1996. By sheer co-incidence, on the same day, a write up had appeared in The Tribune under the caption 'Banks' accountability at low premium'. It was inter alia mentioned that the following seven banks had to recover the amounts as indicated against each :

BankAmount(Rs. in crores)

State Bank of India

3,180.00

Punjab National Bank

1,075.03

Bank of India

974.49

Canara Bank

943.39

Central Bank of India

594.98

Indian Bank

593.22

Punjab and Sind Bank

578.74

19. These are substantial amounts. However, these figures do not represent the total amount that is due to the various banks and the financial institutions. These may well be only the tip of the iceberg. If such substantial amounts of money are due to various banks and financial institutions, the need for ensuring speedy adjudication and recovery is imminent. The public at large has a definite interest in the matter. The statute is calculated to serve this interest.

20. Mr. Goyal also submitted that Parliament had no power to promulgate the Act as it does not relate to a dispute which may be covered by the provisions of Article 323B(2).

21. Articles 323A and 323B were inserted by the 42nd Amendment Act, 1976. By Article 323A, Parliament was authorised to legislate and provide for adjudication or trial of matters relating to public services by Administrative Tribunals. Article 323B made a similar provision in respect of disputes relating to taxation, foreign exchange, labour disputes, land reforms, elections, essential goods, offences and incidental matters. These two provisions were necessitated by the fact that the existing jurisdiction of the civil courts as well as of the High Courts under Article 226 of the Constitution was to be substituted. However, Clause (2) of Article 323B is not exhaustive regarding the matters for which Tribunals can be constituted. The plenary power of Parliament to legislate under the Constitution has not been curtailed. In fact, Parliament has the power to legislate not only in respect of various matters covered by List I but also in respect of any matter not enumerated in Lists II and III. Entry 43 empowers Parliament to legislate with regard to 'incorporation', 'regulation' and 'winding up' of trading corporations including banking, insurance and financial corporations. In any event, if the provisions of entry 43 are read along with those of entry 95 in List I and entry 11-A in List III, the provisions of the Act are clearly within the legislative competence of Parliament.

22. Consequently, the contention raised by learned counsel for the petitioners that the Act is arbitrary, ultra vires and unconstitutional, cannot be sustained. The first question is, accordingly, answered against the petitioners.

Reg. (ii) :

It was next contended that the Constitution envisages an independent judiciary. Article 38A aims at ensuring that the legal system promotes justice on the basis of equal opportunity. Article 50 directs the State totake steps to separate the judiciary from the executive in the public services of the State. However, under the impugned statute, the power to establish the Tribunals and to make appointments thereto has been reserved by Parliament in favour of the Central Government. The jurisdiction of the civil courts has been excluded. The Government has an interest in the financial institutions and the banks. In this situation, the persons appointed by the Central Government to preside over the Tribunals cannot be independent. This erodes the independence of the judiciary.

23. The contention cannot be accepted. It is true that the provisions of Articles 39A and 50 contained in Part IV of the Constitution embody the aims and objects of the State. These impose a duty on the State. It has to work towards the goal of promoting justice on the basis of equal opportunity and providing free legal aid to the weaker sections of the society. It has also to take steps to separate the judiciary from the executive in the public services. However, it cannot be said that constitution of a Tribunal to provide for expeditious adjudication of disputes relating to recovery of debts is not a step which would promote justice. In fact, the statute aims at recovering the dues in which public has a definite interest. When the funds are available, the State shall be in a better position to execute the projects and to help the weaker sections. The Act would clearly promote the objective enshrined in Article 39A. Equally, the suggestion that the provisions in the Act which authorise the Central Government to make appointments of the Presiding Officers of the Tribunals impinge upon the provisions of article 50 is wholly misconceived. There are innumerable statutes under which the appointment of Presiding Officers is made by the Government. To illustrate, under Section 7 of the Industrial Disputes Act, the Government can constitute one or more Labour Courts for the adjudication of industrial disputes. The appointment of the Presiding Officers has to be made by the Government. Similarly, under Section 7A, the Government can constitute tribunals and make appointments thereto. Under Section 7B, the Central Government can constitute one or more National Industrial Tribunals for the adjudication of industrial disputes. Under the provisions of Section 5 of the Monopolies and Restrictive Trade Practices Act, 1969, the Central Government is competent to establish a Commission and make appointments thereto. It is also competent to remove members from office. The provisions have also been made in the Act for appointment of the staff of the Commission. Under Section 65 of the Motor Vehicles Act, 1988, a State Government can constitute one or more Motor Accident Claims Tribunals for the purpose of adjudicating upon claims for compensation and make appointmentsthere to. Similar provisions exist in the Railway Claims Tribunal Act, 1987. Merely because the power of appointment has been vested in the Government, it cannot be said that the independence of the judiciary has been eroded or that the object of achieving separation of the judiciary from the executive has been defeated. Still further, the mere fact that the Presiding Officers shall be appointed by the Central Government cannot mean that they would be under its control or that they would not discharge their judicial obligations without fear or favour.

24. An institution is only as good as the men who man it. In the Act, the qualifications for appointment of the Presiding Officers have been duly laid down. The provisions provide sufficient guidelines. It has not even been suggested that persons lacking in ability or integrity have been appointed as the Presiding Officers. Nothing has been produced to show that any arbitrary orders have been passed. The fear expressed by the petitioners that the Presiding Officers having been appointed by the Government, they are likely to lean in its favour, is wholly baseless and unfounded. It cannot, consequently, be entertained.

25. It also deserves mention that against the order of the Tribunal, a provision for appeal to the Appellate Tribunal has been made. Still further, the orders passed by the Tribunal can be subjected to the scrutiny of the High Court under Articles 226 and 227 of the Constitution. These are, in the very nature of things, sufficient safeguards against the arbitrary exercise of the power by the Tribunal. It is true that in respect of debts amounting to Rs. 10 lakhs or more, the jurisdiction of the civil court has been ousted. This step has, however, been taken to curtail the delays of the ordinary civil courts. That is the object of the Act. It is not aimed at excluding a judicial trial. It does not in any way erode the independence of the judiciary. Surely, independence of the judiciary does not lie in enabling a citizen to delay the repayment of debts he owes. Nor is the independence of judiciary eroded merely because the Central Government has been given the power to make appointments.

26. In view of the above, the second question is also answered in the negative. It is held that the Act does not erode the independence of thejudiciary.

Reg. (iii) :

It was then contended that under the impugned statute, the banks or the financial institutions can file applications for recovery of debts. The Tribunal cannot adjudicate upon the plea of set off or adjustmentand the counter-claim as may be made by the defendant. Therefore, the Act makes an arbitrary provision in favour of banks.

27. Even though, on the pleadings in these cases, such a question does not arise in this case, yet counsel has been heard at length. Section 2(g) defines a 'debt' to mean 'any liability (inclusive of interest) which is alleged as due from any person ... in cash or otherwise . . . and legally recoverable on the date of the application'. Under Section 17, the Tribunal exercises the jurisdiction, power and authority to 'entertain and decide applications from the banks and financial institutions for recovery of debts' due to them. Section 19(4) requires the Tribunal to 'pass such orders on the application as it thinks fit to meet the ends of justice'. On a harmonious reading of these provisions, it is clear that the Tribunal has to determine the amount which is 'legally recoverable' from a person. It is required to pass such orders as would 'meet the ends of justice'. While deciding the matter, the Tribunal has to afford a due and reasonable opportunity to both the parties to prove their respective cases. In this situation, it cannot be said that a person who has taken a loan cannot claim that he has made certain payments which have not been accounted for or set off. Still further, he shall not be debarred from claiming that in fact, nothing is due to the bank or the financial institution and that if at all he has a counter-claim. In case, the Tribunal finds that there is evidence which proves that certain payments have been made, it shall be entitled to allow the claim of the respondent. A counter-claim is normally based on a separate cause of action. It is founded on a separate transaction. In case it is found that evidence is required to be recorded, the Tribunal may leave the person to seek his remedy in the ordinary civil court. However, if the claim is admitted, nothing should stop the Tribunal from declining the claim made by the bank. On a reading of the provisions of the Act, it appears that the Act having imposed the duty to determine the amount 'legally recoverable' from a person and to pass orders which meet the ends of justice, the claim made by the petitioners that the plea of set off or counter-claim cannot be raised by a person or accepted by the authority, is untenable.

28. Mr. Goyal placed strong reliance on the decision of a Division Bench of the Delhi High Court in Delhi High Court Bar Association's case [1995] DLT 815 ; [1998] 92 Comp Cas 849. He relied on this decision in favour of his contention regarding questions Nos. (ii) and (iii).

29. On a consideration of the judgment, it appears that the view taken by their Lordships is based on a very narrow construction of the provisionsof the statute. The conclusion recorded by the court that the statute erodes the independence of judiciary and that the debt is made recoverable as a tax or that the pleas of set off/counter-claim cannot be entertained, does not appear to be correct. Regretfully, though respectfully, a dissent has to be recorded.

30. Prof. Wade, in his treatise on Administrative Law has said that-

'Tribunals are subject to a law of evolution which fosters diversity of species. Each one is devised for the purpose of some particular statute and is, therefore, so to speak, tailor made.'

31. So is the present statute. It has just been promulgated. It is subject to the law of evolution. It is 'tailor-made' to meet the needs of the society. It is not ultra vires or unconstitutional. It does not erode the independence of the judiciary. It does not shut out the pleas available to a person. Consequently, its provisions cannot be struck down.

32. Accordingly, both the writ petitions are dismissed in limine.