TMI Blog2001 (1) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, Bombay, after the coming into force of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, even in cases where the court receiver, High Court, was appointed as receiver in suits falling within the purview of section 17 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ? b. Whether, in such matters, Court Receiver, High Court, Bombay would continue to act as Court Receiver and, if so, from whom should the Court Receiver seek directions with regard to the discharge of his/her duties ? c. Necessary consequential directions with regard to how the Court Receiver, High Court, Bombay should proceed ?" 2. Broadly indicated, the facts of the Chamber Summons are as under : By an order made by this Court in Suit No. 954 of 1997, the Court receiver, the High Court was appointed as the Receiver in respect of a tea estate situated in Wynad, Kerala, sometime in the year 1987. Sometime in the year 1990, T.P. Murlidharan and Associates, a partnership firm, was appointed as an agent of the Court Receiver, the High Court, under an agreement of agency. On 19-10-1992, the agency agreement was termi- nated by the Court Receiver on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. This Chambers Summons was dismissed by the order of the learned Single Judge (R. J. Kochar, J.) dated 20-10-2000. 4. By another Chamber Summons No. 1202 of 2000, the plaintiff in the suit prayed that the Defendants be ordered and directed to act as agent of the court receiver in respect of the tea estate and sought certain directions against the Court Receiver. The learned Single Judge (R.J. Kochar, J.) made the Chambers Summons absolute in terms of prayers ( a ), ( b ) , and ( c ) and clarified that the agency agreement between the Court Receiver and the Defendants in the Suit would operate for a period of three months and after that till the sale of the tea estate by the Court Receiver. It was provided that the Defendants were at liberty to bid in the auction sale of the tea estate and purchase the same in accordance with the terms and conditions stipulated by the Court Receiver for sale of the property if they were successful in the bid. This Chambers Summons was also disposed of by the same order of the learned Single Judge dated 20-10-2000. 5. Though the learned Judge disposed of the three Chambers Summons, he raised an issue as to whether on and from the appoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court could certainly issue directions to the Court Receiver on the reports of the Court Receiver regarding management and protection of the assets which are custodia-legis. Consequently, the learned Judge (Kapadia J.) directed that in all pending matters the Court Receiver should obtain directions with regard to fixation and recovery of royalties, fixation of sale price, implementation of agency agreements already executed and so on, from this Court. The learned Judge took this view on the ground that the Court Receiver was required to manage properties of very large value and the debts recovery Tribunal as yet had no machinery which could effectively manage and monitor such large properties the value of which was about Rupees two thousand crores. 7. The judgment of Kapadia J., in ICICI Ltd. ( supra ) was the subject matter of another reference which was decided by the Division Bench (B. N. Srikrishna and Smt. Ranjana Desai, JJ.) dated 15-9-2000. The Division Bench by this judgment upheld the view of S.H. Kapadia, J., that after the coming into the force of RDB Act, 1993, all proceedings, whether by way of suit. Miscellaneous proceedings or execution proceedings stood t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power under articles 226 or 227 of the Constitution). This is the effect of sections 17 and 18 of the Act. 22. We hold that the provisions of sections 17 and 18 of the RDB Act are exclusive so far as the question of adjudication of the liability of the Defendant to the Appellant Bank is concerned." Again, with regard to the Tribunal's jurisdiction in execution, the Supreme Court says ( vide paragraphs 23 and 24) as under : 23. The provisions of section 34(1) clearly state that the RDB Act overrides other laws to the extent of 'inconsistency'. In our opinion, the prescription of an exclusive Tribunal both for adjudication and execution is a procedure clearly inconsistent with realisation of these debts in any other manner. 24. There is one more reason as to why it must be held that the jurisdiction of the Recovery Officer is exclusive. The Tiwari Committee which recommended the constitution of a Special Tribunal in 1981 for recovery of debts due to Banks and Financial Institutions stated in its Report that the exclusive jurisdiction of the Tribunal must relate not only in regard to the adjudication of the liability but also in regard to the execution proceedings. It st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re exempted by the proviso to sub-section (1) of section 31 of the RDB Act, 1993. 12. The next question that arises for our consideration is what happens to the Receivers who are already appointed before the suit or proceedings stood transferred to Debts Recovery Tribunal by operation of law. This question is easily answered in view of the judgment of the Supreme Court in Hiralal Patni's case ( supra ) that wherever a receiver was appointed pending a suit without his tenure being expressly defined, the Receiver would continue to act as a Receiver. Even with regard to execution proceedings, the Receiver would be subject to the directions of the Court. In our judgment, since the jurisdiction of this Court qua Civil Court with regard to matters falling within the province of RDB Act, 1993 has been taken away and vested in the Debts Recovery Tribunal, as from the cut off date the only forum which is competent to entertain suits or other proceedings would be the Debts Recovery Tribunal. This would be so even with regard to matters which stood transferred by operation of section 31 of the RDB Act, 1993. The only Court which could thereafter competently give directions to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending before this Court on the original side on 16-7-1999 and stood transferred to the Debts Recovery Tribunal by reason of section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, the Court Receiver, High Court, already appointed would continue to act as Court Receiver, but subject to the directions to be issued by the Debts Recovery Tribunal/Appellate Tribunal. ( c )The Court Receiver, High Court, Bombay being an employee of the High Court is subject to administrative control of the learned Chief Justice. We would recommend to the learned Chief Justice that the Court Receiver's services may be made available to the Debts Recovery Tribunal/Appellate Tribunal for a period of one year from today. During the aforesaid period, it would be open to the Tribunal/ Appellate Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, suo motu, or at the instance of any party to the Suit or other proceedings, to discharge the Court Receiver of the High Court and appoint any other fit person as the Receiver of the properties. ( d )The Court Receiver, High Court, Bombay, shall function as Court Receiver in respect of all matte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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