TMI Blog2007 (9) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... Recovery Appellate Tribunal. During the pendency of the proceedings before the Debts Recovery Appellate Tribunal, the Apex Court decided Greater Bombay Co-op. Bank Ltd v. United Yarn Tex, Pvt. Ltd. and Ors . AIR2007SC1584 , and Transcore v. Union of India and Anr. AIR2007SC712 . The Debts Recovery Appellate Tribunal, however, dismissed the petitioners' appeal on 20-7-2007 leaving to the petitioners liberty to argue before the Debts Recovery Tribunal the question of Bank's right to pursue parallel remedies. 3. The petitioners have, therefore, rushed to this Court challenging the constitutional validity of Notification dated 28-1-2003 issued in exercise of powers under Section 2(1)(c)(v) of the Securitisation Act and consequently the correctness of the judgment dated 20-7-2007 of the Debts Recovery Appellate Tribunal. 4. The challenge to the validity of the Securitisation Act before the Supreme Court was negatived on 8-4-2004. The Supreme Court struck down only Sub-section (2) of section 17 of the Securitisation Act as unconstitutional. The remedy of an appeal before the Debts Recovery Tribunal under Section 17 of the Securitisation Act is available to a defaulting d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is petition too has no force. 10. We have considered the contentions raised before us carefully. Apart from what has been held by the Division Bench of this Court sitting at Aurangabad, in Writ Petition No. 2672 of 2007, we would observe that the petitioners herein are confused about the terms Bank and Banking Company defined separately in Clauses (c) and (d) of Section 2(1) of the Securitisation Act and also Clauses (d) and (e) Section 2 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short, hereinafter referred to as the RDB Act ), which will show that the law docs not require that every Bank has to be a Banking Company though every Banking Company may be a Bank. 11. The definitions of Bank and Banking Company in Clauses (c) and (d) of Section 2(1) of the Securitisation Act, which are reproduced below, would bring out the distinction between the meaning of terms Bank and Banking Company . (c) bank means (i) a banking company; or (ii) a corresponding new bank; or (iii) the State Bank of India; or (iv) a subsidiary bank; or (v) such other hank which the Central Government may. By notification, specify for the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebt on the strength of secured asset. It has to be noted that the scheme emerging through the Securitisation Act has not come up as a Chapter added to the RBD Act, and scheme of the Securitisation Act cannot be narrowed down and limited by taking aid of the RDB Act. 16. The distinction in the expression used in Section 37 of the Securitisation Act and Sub-section (2) of Section 34 of the RDB Act, which has been underlined by the Division Bench of this Court at Aurangabad in Writ Petition No. 2672 of 2007 squarely debunks the arguments of the learned Advocate for the petitioners. These sections may be usefully reproduced for ready reference as under: Section 37 of the Securitization Act : Application of other laws not barred.--The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of the Companies Act, 1956 (1 of 1956), the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993) or any other law for the time being in force . (Emphasis supplied). Sub-section (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 72 of 2007 and we see no reason to take a different view. 20. The learned Advocate for the petitioner contended that insertion of a provision like the one in the Securitisation Act was beyond the legislative competence of the State Legislature. Since the State Legislature could not have provided such a remedy to Co-operative Banks covered under the Maharashtra Co-operative Societies Act, the Central Government too could not have created such a remedy. This contention as well has been duly considered by the Division Bench of this Court at Aurangabad in Writ Petition No. 2672 of 2007 and we would merely reproduce paras 31 to 34 of the said judgment to underscore our rejection of this contention. The said paras 31 to 34 read as under: 31. The submission is based on Schedule VII List I Entry 43 and Schedule VII List II Entry 32 of the Constitution, which read as under: Schedule 7 List 1. Union List 43. Incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies. Schedule 7 List 2. State List 32. Incorporation, regulation and winding up of corporations, other than those ..... X X X X Extracts X X X X X X X X Extracts X X X X
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