TMI Blog1996 (9) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... se of deciding the fore-said question, the facts which would be relevant for coming to a proper decision are enumerated below:-- By the introduction of the said Act of 1993 some of the suits which were filed in the civil Court or in the original side of this Court were transferred to the tribunal commonly known as debt recovery tribunal and in some of the cases applications under Section 19 of the said Act of 1993 have been made for recovery of money and for other declaration. In the plaint of some of the suits which have been subsequently transferred to Debt Recovery Tribunal, the bank has claimed declaration of charge over the asset and properties mentioned in the plaint, sale of the same and also, a decree under Order 34, Rule 4 of the Code of Civil Procedure. The Bank has also claimed to be the holder of equitable mortgage in respect of the Immovable properties as mentioned in the plaint. According to the petitioners who are the loanee, the suits that have been filed are mortgage suits relating to mortgage of Immovable property and also some moveables. Applications were filed by the loanees before the Bank Recovery Tribunal praying for return of the plaint on the ground tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id Act of 1993 clearly exempts the bar of jurisdiction in the case of High Courts while exercising power under Article 226 or 227 of the Constitution. Therefore, it can be safely said that even if an appeal lies against an order of the Bank Recovery Tribunal under the Act itself, in an appropriate case, the High Court still retains its jurisdiction to entertain a petition either under Article 226 or 227 of the Constitution which is moved against an order of the Bank Recovery Tribunal. It is now well settled principle of law that even if there is an alternative remedy in the Act to file an appeal against a particular order of any tribunal, it is still open to an aggrieved party to file an application under Article 226 or 227 of the Constitution against such an order of the Tribunal, if it is found that the order passed by the Tribunal is without jurisdiction or arbitrary or principle of natural justice has been denied. If any authority is required to be cited on this question I may safely refer to the decisions of the Supreme Court in the case of A. V. Venkateswaran, Collector of Customs, Bombay v. Ramchand Sobhraj Wadhwani , 1983ECR2151D(SC) and the case of Smt. Kuntash Gupta v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that any order that would be passed by the tribunal was appealable under Section 20 of the Act. In my view, considering the object and scheme of the Act and the relevant provisions of the Act it cannot be held that any order that would be passed by the tribunal would be appealable under Section 20 of the Act. It was rightly argued by Mr. Roychoudhury appearing on behalf of the petitioners, that the provision for appeal shall be applicable only in case a final order is passed by the tribunal. If we read the provisions in Chapter IV of the said Act of 1993 along with Sections 17 and 18 of the Act it would be evident that the word 'an order' used in Section 20 of the Act of 1993 relates to a final order passed by the tribunal in a proceeding under Section 19 of the Act of 1993. Chapter IV deals with procedure of tribunals and disposal of the applications filed before the tribunal. Section 19(4) of the said Act of 1993 contemplates final order to be passed on the application to the tribunal. Section 21 requires deposits of amount of debt due on filing an appeal. It clearly says that where an appeal is preferred by any person from whom the amount of debt is due to a ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal lies against any order passed by the tribunal the High Court in the exercise of the extraordinary jurisdiction under Article 226 or 227 of the Constitution can pass necessary orders or set aside any order passed by the Tribunal which is not final in nature if such orders were passed in relation to the matters specified in S. 17 of the Act. It is now well settled that interpretation of a particular provision of a statute should be such so as to make the provision workable and consistent with the object of the Act and purpose for which the Act has been enacted, (See AIR 1982 Cal 314, Ram Avatar v. Calcutta Corporation). Therefore on a proper construction of the word 'an order' as mentioned in S. 20 of the said Act of 1993 it seems that 'an order' means a final order passed by the Tribunal under S. 19 of the said Act of 1993. I am informed that the Appellate Tribunal constituted under the Act has been established in Bombay. Against an arbitrary interlocutory order passed by the Tribunal in Calcutta, if an appeal is to be preferred in Bombay a litigant has to travel to Bombay where the Appellate Tribunal has been established. If this is accepted, in my view, the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following a summary proceeding and through which dues to the banks and financial institutions would be realised without delay. I have already dealt with the different provisions of the Act and the scheme of the same. From a careful reading of the scheme and provisions of the Act there is no difficulty in coming to a conclusion that the plain literal interpretation of the statutory provision in S. 20 of the Act produces a manifestly unjust result which could never have been intended by the legislature. Therefore, it is open to the Court to modify and interpret the language used by the legislature so as to achieve the intention of the legislature and produce a rational constitution (See , Commr. of Income Tax, Bangalore v. J. Gutla, Yadagiri). In this view of the matter also I am of the firm opinion that the word 'an order' as used in S. 20 of the said Act of 1993 shall mean any final order passed by the Tribunal. 6. That being the position, I am unable to accept the preliminary objection raised by Mr. Mitra submitting that any order passed by the Tribunal is subject to filing an appeal under S. 20 of the said Act of 1993 and this Court under Art. 226 or 227 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or recovery of dues of the banks and financial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfil a long-felt need, but also will be an important step in the implementation of the report of Narasimham Committee. Whereas on September 30, 1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by the financial institutions were pending in various courts, recovery of debts involved more than ₹ 5,622 crores in dues of public sector banks and about ₹ 391 crores of dues of the financial institutions. The looking up of such huge amounts of public money in litigation prevents proper utilisation and re-cycling of the funds for the development of the country. The object of introducing of the said Act of 1993 will appear from the preamble of the Act which is as follows:-- Preamble:-- Act to provide for the establishment of tribunals of expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto. From the statement of object and reasons for which the Act has been enacted it would be clearly evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er any law for the time being in force in cash or otherwise whether skilled or unskilled, or whether payable under a decree of order of civil court or otherwise and subsisting on and legally recoverable on the date of the application. Chapter II deals with establishment of Tribunal and Appellate Tribunal. Section 3 deals with establishment of Tribunal. Section 4 of the said Act of 1993 deals with the composition of such Tribunal. Section 5 prescribes qualifications for appointment as Presiding Officer of the Tribunal. Section 6 prescribes the term of office of the Presiding Officer of the Tribunal. Section 7 deals with the staffs to be provided to the Recovery Officer of the Tribunal. Sections deals with the establishment of Appellate Tribunal. Sections 9 to 15 of the said Act of 1993 deal with composition of Appellate Tribunal, qualification for such appointment in the Appellate Tribunal and their term of office and also the staff of the Appellate Tribunal and salary and allowances to be paid to the Presiding Officer and the staffs and filling up of vacancies, resignation and removal of the Presiding Officer of the Appellate Tribunal. Section 16 of the said Act of 1993 bars the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior permission of the Tribunal. Section 19(7) of the said Act of 1993 gives power to the Presiding Officer to issue a certificate under his signature on the basis of the order of the Tribunal to the recovery officer for recovery of the amount of debt specified in the certificate. Section 19(8) however, directs the Tribunal to deal with the application filed under S. 19(1) of the Act of 1993 as expeditiously as possible, an endeavour shall be made by the Tribunal to dispose of the application finally within six months from the date of receipt of the application. As noted hereinabove, S. 20 confers power to the Appellate Tribunal to entertain an appeal against an order passed by the Tribunal. Section 21 however, says that no appeal shall be entertained by the Appellate Tribunal unless such person who is aggrieved by an order of the Tribunal shall deposit 75% of the amount of debt so due from him as determined by the Tribunal under S. 19 of the said Act of 1993. Proviso to S. 21 however, confers power on the Appellate Tribunal to waive or reduce the amount to be decided under this section, after recording reasons in writing. Section 22 of the said Act of 1993 prescribes the procedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t every suits or other proceedings pending before any court immediately before the date of establishment of a Tribunal under this Act being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal. Proviso to S. 31 however, says nothing in this said section shall apply to any appeal pending as aforesaid before any court. Sub-sec. (b) of S. 31(2) of the said Act of 1993 directs the Tribunal to deal with such suit or other proceedings in the same manner as in the case of an application made under S. 19 from the stage which was reached before such transfer or from any earlier stage or denovo as the Tribunal may deem fit. Section 34 of the said Act of 1993 provides the overriding effect on the said Act of 1993 notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. Section 36 of the said Act of 1993 confers powers on the Central Government to make rules. 10. It would be seen from the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sittings. In a similar situation under the Railway Claims Tribunal Act, 1987 which also provides the same provisions as made in the Act, the Supreme Court in the case of A. A. Hajamunjuddin v. Indian Railways, AIR1993SC361 has observed in paragraph 5 which are as follows : In other words after the appointed day the Claims Tribunal alone would have jurisdiction to entertain and try claims referred to in clauses (a) and (b) of sub-sec. (1) of S. 13 of the Act. Section 18 then sets out the procedure to be followed by the Claims Tribunal. Sub-section (1) of S. 18 states that the Claims Tribunal shall not be bound by the procedure laid down by the Code but shall be guided by the principles of natural justice and shall have powers to regulate its own procedure. It is true that sub-sec. (1) of S. 18 in term states that the Claims Tribunal shall not be bound by the procedure laid down by the Code but that does not mean that it is precluded from invoking the procedure laid down by the Code even if the ends of justice so require. The sub-section further states that the Tribunal shall have powers to regulate its own procedure and sub-sec. (3) of S. 18 enumerates the matters in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code which provides for disposal of a preliminary issue of law relating to jurisdiction before deciding the other issues raised in the pending proceeding. From a discussion made earlier, I have already held that S. 22 of the Act have not taken away the power of the Bank Tribunal to invoke the procedure laid down by the Courts if the ends of justice so require. Ordinarily therefore, it is difficult to hold that O.14, R. 2 of the Code of Civil Procedure cannot be applied by the Tribunal but on consideration of the statement of objects and reasons and the scheme of the Act of 1993 and the different provisions of the same as dealt with hereinabove I am unable to hold that the question of deciding a preliminary issue of law in accordance with the provision as contained in O.14, R. 2 of the Code of Civil Procedure in separation of other issues cannot arise at all so far as the Tribunal is concerned. From the statement of objects and reasons, the preamble and in different provisions and the scheme of the Act of 1993 it is clearly evident that the legislature has intended disposal of pending petition under S. 19 of the Act as early as possible and to achieve such purpose it is not desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays that the Tribunal shall deal with the application filed under S. 19 of the said Act of 1993 as expeditiously as possible, an endeavour must be made by it to dispose of the application under S. 19 of the said Act of 1993 finally within six months from the date of filing the application, can it not be said that in order to dispose of the application within the time specified under S. 19 of the said Act of 1993, the Tribunal is not entitled to decide an issue of jurisdiction as preliminary issue of law before deciding the other issues. Assuming that the Tribunal does possess such discretion to take up the jurisdiction point as a preliminary issue of law and decides against the bank holding that the Tribunal has no jurisdiction to decide the disputes raised in the proceeding under S. 19 of the said Act of 1993, and an appeal is preferred against such an order and finally such issue of law which was decided as a preliminary issue of law and that had gone against the bank or the financial institution is decided in favour of the bank by the Appellate Tribunal after a considerable period of time only course that would be open to the Appellate Tribunal is to remit the matter back to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Code of Civil Procedure before its amendment. It reads as follows:-- Where issues both of law and fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed thinks fit, postpone the settlement of the issue of fact until after the issues of law have been determined. 13. Before the amendment of O. 14, R. 2 of the Code of Civil Procedure it was a well settled rule that in appealable cases all issues arising in the suit ought to be ordinarily tried and decided. The reason for the introduction of this rule is to avoid piecemeal trial, protracted litigation and remand of the cases where the Appellate Court sets aside the decision of the trial Court on the preliminary issue upon which the trial Court has disposed of the suit. Rule 2 of O.14 of the Code of Civil Procedure before its amendment was an exception to the normal principle of trial. If the Court was of the opinion that the case or any part thereof could be disposed of on issue of law only, it was mandatory on the part of the Court to try such issue as preliminary issue and dispose of the suit or any part thereof as the case might be on such preliminary issue. From the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-rule (1) of Rule 2 of Order 14, of the Code of Civil Procedure has recognised the unamended rule that all the issues arising in the suit must be ordinarily tried notwithstanding that the case can be disposed of on a preliminary issue. Sub-rule (2) of Rule 2 of Order XIV of the Code of Civil Procedure provides a limited exception to the ordinary rule of trial. In sub-rule (2) of Rule 2 of Order 14 of the Code of Civil Procedure the incorporation of the word 'may', in my view, has again some special significance. It is my firm opinion that by the incorporation of the word 'may' instead of 'shall' as was previously in the Order 14, Rule 2 of the Code of Civil Procedure before its amendment the intention of the legislature was to make this sub-rule as discretionary and not mandatory. Therefore, under sub-rule (2) of Rule 2 of Order 14 of the Code even where both issues of law and fact arise in the same suit and if the Court is of the opinion that the case or any part thereof may be disposed of on an issue of law only it may try that issue first. A comparative reading of the aforesaid provision as it existed prior to the amendment and after the amendment woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be said to Have a discretion to decide a preliminary issue of law in separation of other issues raised in the proceeding but in view of the object and the scheme of the Act it has been rightly held by the Tribunal that there is no question to use such discretion and accordingly it has been rightly decided that the issue regarding jurisdiction shall be decided along with the other issues raised in the proceeding Therefore, I am unable to agree with Mr. Roychoudhury that since the jurisdiction point raised an issue of law which can be decided under Order 14, Rule 2 of the Code of Civil Procedure such issue must be decided by the Tribunal before taking up other issues of law and fact. Before parting with this question, it is my duty to consider a single Bench decision of this court in the case of Jitendra Kr. Khan v. The Presiding Officer, Debts Recovery Tribunal, West Bengal (1996) 1 Cal LJ 179. In paragraph 6 at page 181 of the aforesaid single Bench decision, the learned single Judge has recorded the concession made by the learned lawyer for the opposite parties. It is as follows:-- Mr. Sen, in his usual fairness does not dispute that proposition of law as putforth by Mr. M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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