TMI Blog2000 (9) TMI 973X X X X Extracts X X X X X X X X Extracts X X X X ..... ujata Manohar). The plaintiff took out execution application No. 20 of 1991 for recovery of the amount due under the decree. When the execution application was taken out, the prothonotary and senior master had some difficulty in dealing with the matter. There was some doubt raised as to whether such an execution application could be taken out in this court at all. The reason for the doubt is that by an order dated 3-9-1999 made by Rebello, J., in Chamber Summons No. 963 of 1998 in Execution Application No. 2 of 1993 in Hyderabad Civil Suit No. 149 of 1986 [ Bank of India v. Tin Pack Corpn. ], it has been held that the execution proceedings pending before the High Court were not required to be transferred to DRT, as execution would not fall within the definition of other proceedings used in section 31(1) of the Act. However, by an order dated 25-10-1999, Chandrashekhara Das, J., in Bank of Maharashtra v. Konkan Chemicals (P.) Ltd. [2000] 3 Comp. LJ 344 (Bom.) had held that the execution proceedings which were pending before this court prior to the establishment of the DRT need not be transferred to the DRT. Finally, there is also an order of Kapadia, J., dated 3-3-2000 in Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest) which is claimed as due from any person by a bank or a financial institution or by a consortium of banks or financial institutions during the course of any business activity undertaken by the bank or the financial institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured, or assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on; and legally recoverable on, the date of the application." 4.2 This amendment became necessary as judicial opinion was divided as to whether an amount due from any person to a bank or financial institution could be called a debt if it was legally not payable in the sense that it was a time barred debt or, for other reasons, it was not recoverable. The Supreme Court in its judgment in State Bank of Bikaner Jaipur v. Ballabh Das Co. [2000] 2 Comp. LJ 30 emphasised the definition as originally contained in section 2( g ) and overruled the view that unless the amounts claimed by the banks are determined or adjudicated by a competent forum, they cannot be said to be due. It was pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming into force of the Act to the DRT. The only saving is in respect of appeals which need not be transferred. Upon the Act coming into force, the court is required to transfer all records of the suit or other proceedings to the DRT and the DRT after receiving such records is entitled to proceed with the suit or other proceedings in the same manner as an application under section 19, from the stage which was reached before the transfer or from any other earlier stage as the DRT deems fit. 7. The Amending Ordinance has also made some changes in section 19 itself. Section 19, as now amended by Ordinance No. 1 of 2000, has an inbuilt provision for the defendants to claim set off, counter claims and make detailed provisions for interim orders, whether by way of injunction, stay or attachment, by way of appointment of receivers or entrusting property to the custody or management of the receiver or for removing it therefrom. There is also provision for appointment of commissioners. We are not really concerned with the various powers of the DRT under section 19 except that we may notice that upon an application being made under section 19(1), the DRT is required to give a notice to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, 2000, and has not yet been executed, then, the decree holder may apply to the Tribunal to pass an order for recovery of the amount. (2) On receipt of an application under sub-section (1), the Tribunal may issue a certificate of recovery to a Recovery Officer. (3) On receipt of a certificate under sub-section (2), the Recovery Officer shall proceed to recover the amount as if it was a certificate in respect of a debt recoverable under this Act." 10. These are some of the salient sections of the Act which are to be considered for answering the reference made to us and for a resolution of what has been perceived as a conflict in the judgment of the learned Single Judge referred to hereinbefore. 11. We may notice some of the judgments cited at the Bar. In Ballabh Das Co. s case ( supra ) the issue before the Supreme Court was whether the expression debt used in the Act could include within its purview a disputed amount which had not yet been adjudicated as due. By emphasising the definition of the expression debt in section 2( g ) , the Supreme Court held that as long as there is an allegation of some dues from the respondents which arose in the course of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or all these reasons, Rebello, J., took the view that proceedings in execution would not fall within the definition of other proceedings used in section 31 and as such, this court would have jurisdiction to try and decide the proceedings in execution already filed before the Act came into force. 13. Another learned Single Judge of this court, Das, J. in the judgment delivered on 25-10-1999, in Konkan Chemicals (P.) Ltd. s case ( supra ) took somewhat different views. Das, J. disagreed with the view of Rebello, J. by pointing out that the expression debt has been defined in section 2( g ) so as to apply to any liability allegedly due from any persons, even if payable under a decree or order of a civil court or otherwise and subsisting on and legally recoverable on the date of the application. After examining the provisions of the Act, the learned Judge was of the opinion that a decree holder, in order to execute a decree of the civil court, should first move the DRT by making an application under section 19 and obtain an order for issue of a certificate under sub-section (7) of section 19 to the Recovery Officer. But, the procedure laid down in section 19 did not indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases to appoint a receiver at the interim stage even before grant of certificate for recovery of debts. The learned Judge opined in the light of this amendment, the earlier lacuna in the Act is filled in . The learned Judge emphasised the words other proceedings had to be given due weight and, despite the unhappy phraseology used in section 31, after the amendment, what is really conveyed is that every suit or proceedings pending before any court before the date of establishment of DRT, which was based on a cause of action cognisable by the DRT after its establishment, shall stand transferred to the DRT automatically. Section 31(2)( b ) empowers the DRT to proceed with such suit or other proceeding from the stage which was reached before such transfer or from any earlier stage as the DRT may deem fit. The deletion of the words de novo by section 31 of the Amending Ordinance makes it clear that the Legislature has taken the step to avoid further delay by the proceedings starting de novo before the DRT on transfer and the DRT is required to continue from the stage reached before the civil court before the transfer or from any other stage as deemed fit. In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lties. Referring to sub-section (1) of section 31A, they submit that it would operate only when a decree or order has been passed by any court before commencement of the Ordinance No. 1 of 2000 which has not yet been executed. In such a case, the decree holder may apply to the Tribunal to pass an order for recovery of the amount. It is submitted that the expression not yet been executed could mean either that no step at all [has] been taken for execution, or that several steps have been taken, but the decretal amount has not yet been recovered. Consequently, it is urged that section 31A would apply only in a situation where the decree holder has not taken any steps at all. In other words, they contend that section 31A is enacted to take within its sweep a case where, after obtaining a decree the decree holder has not filed an execution application at all. Conversely, it is contended that once an application for execution has been filed, the situation would not be covered by sub-section (3) of section 31A. In our view, this contention is not sound. The execution of a decree means the culmination of the act of execution, namely, actual recovery of the decretal debt from the defenda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the civil court, then an application is to be made under section 31A and the DRT shall issue a certificate of recovery upon such a decree as if it was the claim adjudicated by it under section 19. The validity of the decree can be challenged at this stage only on the limited grounds of nullity or fraud. In this view of the matter which we take, there is no scope for the argument that the DRT would be sitting in appeal over the decree granted by this court when an application for a recovery certificate is made under section 31A. 18. In the circumstances, we are of the view that the judgment of Kapadia, J., in Suit No. 2784 of 1999 delivered on 3-3-2000, correctly lays down the position in law that after the coming into force of the Act, all proceedings, whether by way of suit, miscellaneous proceedings or execution proceedings, stand transferred to the DRT. We are also of the view that the amendments introduced in the parent Act by the Amending Ordinance 1 of 2000, take care of almost all objections against transfer of execution proceedings. Finally, section 31A which is now introduced by Amending Ordinance 1 of 2000, enables a decree holder where a claim has been adjudicated a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
