TMI Blog2004 (10) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... n required to affix court fee on their applications as per the provisions of rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 ("the 1993 Rules"). 2. The facts necessary for the decision of the points of law have been taken from CWP No. 9395 of 2004. The necessity of filing these petitions arose when after the decision in Mardia Chemicals Ltd. v. Union of India [2004] 4 SCC 311 1 , the secured creditor as defined under section 2( zd ) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("the 2002 Act") started issuing notices under sub-section (2) of section 13 of the 2002 Act calling upon the borrowers to discharge their liability and intimating them that in the event of their failure to do so, the secured creditors may take recourse to one or more of the measures detailed in sub-section (4) of section 13 for recovery of the debts and upon their failure to meet the demand initiate the steps enumerated in sub-section (4) of section 13 for enforcing their rights and recovering the amounts outstanding. After the receipt of these notices some of the petitioners had availed of the statutory remedy provided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the 1993 Rules, which have been framed under section 36 of the 1993 Act for requiring the parties to affix the court fee for seeking adjudication of applications/appeals under various sections of the 1993 Act and 2002 Act. With regard to the second objection, it was submitted that no material need be brought on the record to co-relate the expenditure incurred by the State to maintain the Tribunals and its supporting staff and the other facilities required by the Tribunal for providing speedy justice and the fee prescribed and the rates at which the court fee is chargeable on applications/appeals under the 1993 and 2002 Acts is on the same pattern as leviable under the Court Fees Act for any adjudication sought for before a civil court and, therefore, it calls for no interference. 4. We have heard the learned counsel for the parties and have perused the records. 5. The facts necessitating the filing of these writ petitions in this court are not in dispute. Various borrowers as defined in section 2( f ) of the 2002 Act had after the promulgation of the 2002 Act filed a number of writ petitions challenging the vires of the provisions of the Act, which were enact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for appreciating the rival conten-tions, it would be appropriate to refer to the relevant provisions of the 2002 Act. 6. Sections 13(2), (3) and (4) of the 2002 Act, which incorporates the procedure to be followed by a secured creditors for enforcing the security interest created in his favour without intervention of the court, reads as under:- " 13. Enforcement of security interest. (1)****** (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any instalment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing assets, then the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under sub-section (4). (3) The notice referred to in sub-section (2) shall give details of the amount payable by the borrower and the secured assets intended to be enforced by the secured creditor in the event of non-payment of secured debts by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Tribunal having jurisdiction in the matter. Section 17(2) of the 2002 Act, which has been struck down by the Apex Court, provided that the appeal would not be entertained unless 75 per cent of the amount claimed in the notice under sub-section (2) of section 13 is deposited with the Tribunal. Section 18 of the 2002 Act, which reads as under : " 18. Appeal to Appellate Tribunal. (1) Any person aggrieved, by any order made by the Debts Recovery Tribunal under section 17, may prefer an appeal to the Appellate Tribunal within thirty days from the date of receipt of the order of Debts Recovery Tribunal. (2) Save as otherwise provided in this Act, the Appellate Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder." enables a person aggrieved by any order passed by the Tribunal to prefer appeal under section 17 of the 2002 Act. 7. As already indicated, the petitioners feel that in view of the observations as contained in para 64 of Mardia Chemicals Ltd. s case ( supra ), this court should hold that the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are brought before a Court of law. Reference in this regard may be made to law laid down by the Privy Council in Rachappa Subrao Jadhav Desai v. Shidappa Venkatrao Jadhav Desai AIR 1918 PC 188, wherein it was held as under : "The Court Fees Act was passed not to arm a litigant with a weapon of technicality against his opponent, but to secure revenue for the benefit of the State. . . ." (p. 191) and by a Division Bench of the Calcutta High Court in Tarachand Ghanshyamdas v. State of West Bengal AIR 1955 Cal. 258, wherein it has been held as under : " 8. Court fees are the price levied by the State from persons litigating before it for the services rendered to them in connection with their causes. They are fees by which the State reimburses itself for the costs incurred by it in maintaining a judicial system. Such fees are levied under the sanction of statute in which the Legislature has laid down on what documents or transactions a fee shall be levied by the State and what its rates shall be. Thus, the Legislature, being minded to provide the State with finances to maintain the judicial system, has authorised the levy of a revenue in the shape of what may be called a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Debts Recovery Tribunal shall, as far as may be, dispose of the appeal in accordance with the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) and rules made thereunder." makes it clear that the Legislature had in its wisdom extended the provisions of the 1993 Act and the Rules made thereunder insofar as it relates to entertainment and disposal of the appeal to the proceedings under the 2002 Act also. The fact that section 18(2) of the 2002 Act is enacted in the same terms further supports our conclusion that the provisions of the 1993 Act and the Rules made thereunder were extended by legislative intent separately in these two provisions to appeal filed under sections 17 and 18 of the 2002 Act. In this view of the matter, while there is no doubt that the appropriate Government has, through notifi- cation Annexure P-3 merely reiterated this intention, a perusal of the notification makes it clear that the same merely highlights the various provisions of the 2002 Act and states that the provisions of rule 7 of the 1993 Rules would be applicable to proceedings under the said Act. While doing so, the notification banks upon the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the validity of the arguments that the court fee payable should be struck down as oppressive. In this regard, it would be suffice to say that the court fee payable under rule 7 of the 1993 Rules is in no way more than what has been prescribed under the Court Fees Act and in any way is charged more than what has been prescribed under the Act. It has also to be borne in mind that application under section 17 of the 2002 Act is being treated as an appeal and the court fee payable for maintaining the appeal under sections 17(1) and 18(1) of the 2002 Act would be payable as per Sr. No. 5 of table of sub-rule (2) of rule 7 of the 1993 Rules at the following scale:- "5. Appeals against orders of the Recovery Officer If the amount appealed against is : ( i )Less than Rs. 10 lakhs Rs. 12,000 ( ii )Rs. 10 lakhs or more but less than Rs. 30 lakhs Rs. 20,000 ( iii )Rs. 30 lakhs or more Rs. 30,000." The reason is obvious. The notice under section 13(4) of the 2002 Act in the absence of any challenge by the borrowers attains finality and section 17(1) of the 2002 Act gives a right to any person aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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