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TMI Blog1995 (3) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... on dated 5 July, 1994 issued by the Central Government in the Ministry of Finance, Department of Economic Affairs, Banking Division, whereby, under S. 3 of the Act, Debts Recovery Tribunal, with the areas of jurisdiction as Delhi was established. It is alleged that the appointment of the third respondent is an exercise of fraud on the powers conferred on the Central Government under the Act. 2. This petition was filed on 22 July, 1994 and when it came up for admission, notice was issued to the respondents to show cause as to why rule nisi not be issued, and at the same time the operation of the Act in its applicability to Union Territory of Delhi was stayed by passing the following order on 25 July, 1994 :-- "CM. No. 5739/94 : Notice for 4 August, 1994. Mr. Luthra submits that the impugned Act, namely, The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, is invalid. He says the Act is discriminatory in nature and that there is no provision for filing of counter-claims or set off before the Tribunal constituted under the Act, and further that while the High Court tries the suits of the value of Rs. 5 lakhs to Rs. 10 lakhs and the District Courts up to Rs. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of time. The Committee on the Financial System headed by Shri M. Narasimham has considered the setting up of the Special Tribunals with special powers for adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sector reforms. An urgent need was, Therefore, felt to work out a suitable mechanism through which the dues to the banks and financial institutions could be realised without delay. In 1981 a Committee under the Chairmanship of Shri T. Tiwari had examined the legal and other difficulties faced by banks and financial institutions and suggested remedial measures including changes in law. The Tiwari Committee had also suggested setting up of Special Tribunals for recovery of dues of the banks and financial institutions by following a summary procedure. The setting up of Special Tribunals will not only fulfill a long-felt need, but also will be an important step in the implementation of the Report of Narasimham Committee. Whereas on 30th September, 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee said that "these suggestions for legislative measures are not exhaustive. We would recommend that the legal implications with reference to each of our recommendations wilt need to be examined and detailed legislative steps identified by the Government in consultation with the Law Ministry." The criticism leveled by the petitioners has been that in a matter like this, the Law Commission which has been constituted by the Government resolution, should have been consulted and its report obtained for establishment of the Tribunals and their jurisdiction as envisaged by the Act. Reference was made to 120th Report of the Law Commission relating to the "Manpower Planning in Judiciary" and also to 115th Report on establishing "Tax Courts" in the country. It was submitted that delay occurring in suits in Civil Courts could not be a ground for establishment of Tribunals inasmuch as the Law Commission reported that there was paucity of judges and that the total Judge strength was grossly inadequate for India. This factor, it was submitted, was not taken into account while enacting the Act. On the 115th Report of the Law Commission, the argument was that if the Commission could go into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Act shall not apply where the amount of debt due to 3ny bank or financial institution or to a consortium of banks or financial institutions is less than ten lakhs rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify." 7. Section 2 of the Act defines certain words used in the Act and some of these definitions are as under :-- XX XX XX (d) "bank" means- (i) a banking company; (ii) a corresponding new bank; (iii) State Bank of India; (iv) a subsidiary bank; or (v) a Regional Rural Bank; (e) "banking company" shall have the meaning assigned to it in Cl. (c) of S. 5 of the Banking Regulation Act, 1949 (10 of 1949). (f) "corresponding new bank" shall have the meaning assigned to it in Cl. (da) of S. 5 of the Banking Regulation Act, 1949 (10 of 1949); (g) "debt" means any liability (inclusive of interest) which is alleged 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 institutions or the consortium under any law for the time being in force, in cash o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l may exercise jurisdiction for entertaining and deciding the applications filed before it. Under Section 4, the Presiding Officer of the Tribunal is to be appointed by the Central Government. Under Section 5, a person shall not be qualified for appointment as the Presiding Officer of a Tribunal unless he is, or has been, or is qualified to be, a District Judge. Under Section 6, the Presiding Officer shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of sixty years, whichever is earlier. Under Section 7, the Tribunal shall be provided with a Recovery Officer by the Central Government and such other officers and employees as the Central Government may think fit. The Recovery Officer and all the staff shall discharge their functions under the general superintendence of the Presiding Officer. Their salaries and allowances and other conditions of service shall be such as may be prescribed by the Central Government. Sections 8, 9 and 10 deal with establishment of Appellate Tribunal and composition of Appellate Tribunal and qualifications for appointment as Presiding Officer of the Appellate Tribunal. Under Section 11, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers and authority of Tribunals. Sections 17 and 18 under this Chapter may be reproduced as under :-- "17. Jurisdiction, powers and authority of Tribunals. -- (1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions. (2) An Appellate Tribunal shall exercise, on and for the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act." "18. Bar of jurisdiction. -- On and from the appointed day, no court or other authority shall have, nor be entitled to exercise, any jurisdiction, powers or authority (except the Supreme Court, and a High Court exercising jurisdiction under Arts. 226 and 227 of the Constitution) in relation to the matters specified in Section 17." 12. Chapter IV prescribes procedure of Tribunals. An application by a bank or financial institution is to be filed in the form prescribed. It shall bear such fee as may be prescribed. No fee is, however, payable where the cases are tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in writing, waive or reduce the amount to be deposited under this section. 15. Section 22 provides for procedure and powers of the Tribunal and Appellate Tribunal. They are not bound by the procedure made by the Code of Civil Procedure but shall be guided by the principles of natural justice, and subject to the provisions of the Act and the Rules shall have powers to regulate their own procedure, including the place at which they shall have their sittings. 16. Section 24 provides that provisions of the Limitation Act, 1963, shall as far as may be, apply to an application made to a Tribunal. 17. Then, Chapter V deals with recovery of debt determined by Tribunal and Section 25 falling under this chapter prescribes modes of recovery of debts which are (1) attachment and sale of the movable or immovable property of the defendant; (2) arrest of the defendant and his detention in prison; and (3) appointing a receiver for the management of the moveable or immovable properties of the defendant. 18. Section 26 bars the defendant to raise any dispute before the Recovery Officer about the correctness of the amount specified in the certificate and bars the Recovery Officer to entertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re such transfer or from any earlier stage or de novo as the Tribunal may deem fit." Under Section 31 aforesaid, while every suit or other proceeding pending before court shall stand transferred to the Tribunal, no appeal pending before any court shall, however, be deemed to have been transferred to the Appellate Tribunal established under the Act. The Act, however, does not provide if the provisions of Section 21 of the Act would also be applicable to the suit or other proceedings transferred to the Tribunal under Section 31 of the Act. Though the right of appeal is statutory right, but it is vested right when suit or proceeding was instituted in the court though there is no such condition regarding deposit of the amount of the debt if held to be due on filing the appeal by the judgment debtor. 24. Under Section 34, the Act is to have overriding effect, and is as under:-- "34. Act to have overriding effect. -- (1) Save as otherwise provided in sub-section (2), the provisions of this Act shall have effect not with standing 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, coupons, drafts, bills of lading, railway receipts, warrants, debentures, certificates, scripts and other instruments, and securities whether transferable or negotiable or not; the granting and issuing of letters of credit,traveller's cheques and circular notes; the buying, selling and dealing in bullion and specie, the buying and selling of foreign exchange including foreign bank notes; the acquiring, holding, issuing on commission, underwriting and dealing in stock, funds, shares, debentures, debenture stock, bonds obligations, securities and investments of all kinds; the purchasing and selling of bonds, scrips or other forms of securities on behalf of constituents on others, the negotiating of loans and advances; the receiving of all kinds of bonds, scrips or valuables on deposits or for safe custody or otherwise; the providing of safe deposit vaults; the collecting and transmitting of money and securities; (b) acting as agents for any Government or local authority or any other person or persons, carrying on of agency business of any description including the clearing and forwarding of goods, giving of receipts and discharges and otherwise acting as an attorney on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wful for a banking company to engage." 28. Examination of provisions of the Act would show that while a bank can file an application for recovery of the debt due to it, if the respondent has any claim against the bank he must necessarily go to the civil court. There is no provision under the Act or the Rules for a person to raise any counter claim. It cannot be said that counter-claim can be raised as a part of natural justice. Perhaps not. Mr. Chandrasekharan, learned Additional Solicitor General, said that counterclaim or any other defense raised will bar the claim of the bank. Admittedly, Therefore, counter-claim, if valid, cannot be decreed by the Tribunal and the claimant per force has to go to the civil court, and by that time he may be faced with the law of limitation. Tribunal cannot invent a new procedure to adjudicate upon the counter-claim merely for the purpose of defense on the ground that such a procedure is contemplated by the principles of natural justice. 29. A banking company not only does the business of banking, but carries on business of varied nature as mentioned in sub-section (1) of Section 6 of the Banking Regulation Act. As an example, it may do the busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consignment to Delhi. The third defendant informs the bank that the goods are lying undelivered at its U.P. border office, and the third defendant makes a claim against the bank for Rs. 'Y' on account of transportation charges, demurrage/storage charges. The transporter also raises its counter-claim against defendants 1 and 2. Various defenses are raised by defendants 1 and 2 denying their liability to the bank, issues are framed, evidence led and after examination of the whole case the court comes to the conclusion that defendants 1 and 2 are not liable, and that the claim of the third defendant, the transporter, is justified against the bank. The court will in that case decree the counter-claim in favor of the transporter and against the bank. If such a suit on an application by the bank is tried before the Tribunal, the bank may lose the case on various defenses raised by the defendants but the Tribunal would not be able to decree the counter-claim of the transporter. 30. In C.W.P. No. 3277/94, which has also been heard along with C.W.P. No. 3050/94 filed by the Delhi High Court Bar Association, the petitioner has said that he had, in the course of its business act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17, the Debts Recovery Tribunal shall exercise the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions which, as per sub-section (4) of Section 1, could only be of the amount of rupees ten lakhs and above. Thus, the Delhi High Court though having supervisory jurisdiction and jurisdiction under Art. 227, and also jurisdiction under Art. 226 of the Constitution to issue writs, orders or directions to the Debts Recovery Tribunal can try suits only between the value of rupees five to rupees ten lakhs, and above that the suits can be tried only by an authority which is of the rank of the District Judge. Then the District Judge can try suits between the value of rupees one lakh and rupees five lakhs whereas a Tribunal of equal rank can try suits of the value of rupees ten lakhs and above. We cannot read down sub-section (4) of Section 1 to mean that the Debts Recovery Tribunal will be competent to try suits only between the value of rupees one lakh and rupees five lakhs. The Act is bad in so far as it places the Tribunal on a higher pedestal than the High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs; (j) any matter incidental to any of the matters specified in sub-clauses (a) to (i). (3) A law made under clause (i) may - (a) provide for the establishment of a hierarchy of tribunals; (b) specify the jurisdiction, powers (including the power to punish for contempt) and authority which may be exercised by each of the said tribunals; (c) provide for the procedure (including provisions as to limitation and rules of evidence) to be followed by the said tribunals; (d) exclude the jurisdiction of all courts except the jurisdiction of the Supreme Court under Art. 136 with respect to all or any of the matters falling within the jurisdiction of the said tribunals; (e) provide for the transfer to each such tribunal of any cases pending before any court or any other authority immediately before the establishment of such tribunal as would have been within the jurisdiction of such tribunal if the causes of action on which such suits or proceedings are based had arisen after such establishment; (f) contain such supplemental, incidental and consequential provisions (including provisions as to fees) as the appropriate Legislature may deem necessary for the effective functioni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which constituted tribunals, was void. Then the submission was that the Constitution contemplates four tier system of courts, i.e., (1) the Supreme Court (Articles 124-146), (2) High Court of a State (Articles 264-231), (3) District, and (4) Subordinate Courts (Articles 233-237). It was submitted that a Constitution of Tribunal does not fit under the scheme of the Constitution. 35. Entry 11-A in List III (Concurrent List) was inserted by the Constitution (Forty-second Amendment) Act, 1976, and it is as under :-- "11-A. Administration of justice; constitution and organisation of all courts, except the Supreme Court and High Courts." Before this Constitution (Amendment) Act, this entry was in List II--State List (entry No. 3) which had been deleted from there. 36. Argument of Mr. Lekhi was twofold : (1) that this Entry 11-A in Concurrent List or residuary Entry 97 in List 1 does not confer any power on the Parliament to constitute a tribunal outside Part XIVA of the Constitution, and (2) the administration of justice cannot be administered by tribunal. Mr. Lekhi referred to the Constitution (Seventy-fifth Amendment) Act, 1993. which received the assent of the President on Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, assessment, collection and enforcement of any tax. The expression 'appropriate Legislature', in relation to any matter, means Parliament or State Legislature competent to make laws with respect to such matters in accordance with Part XI. The law enacted under this provision may provide for the establishment of a hierarchy of Tribunals and exclude the jurisdiction of all courts except the Supreme Court under Art. 136 of the Constitution. Under entry 82 in List I of the VII Schedule, Parliament is empowered to make a law in relation to taxes on income other than agricultural income whereas under entry 95 of the same list, Parliament can enact a law relating to jurisdiction and powers of all courts, except the Supreme Court, with respect to any of the matters set out in the said list. The provisions of both these Articles 323A and 323B shall have effect notwithstanding anything in any other provision of the Constitution or in any other lay for the time being in force. Both the Articles leave it to the Legislature to provide for the procedure to be followed by the Tribunals established under the said provisions. While the jurisdiction of all courts, which would include the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Law Commission undertake an intensive and extensive study of various Tribunals functioning in the country. That exercise is on. Before a final decision on the setting of an all-India Tribunal for Direct Taxes is taken, the report of the Law Commission should be awaited." He concluded by saying :-- "While we all are and should be concerned about the mounting arrears, the remedy may not be to divest the High Courts of work which is essentially judicial in character and convert the Supreme Court into a virtual first appellate Court and clog its dockets with petty disputes. This has the effect of diluting both the institutions. In the name of decentralisation of litigation the High Courts are slowly being deprived of causes which can be rightly described as wholly judicial, thereby diminishing its importance and depriving the public of a wholly independent adjudicator machinery. While the enthusiasm of the bureaucracy to nibble at the judicial cake is understandable, the members of the profession must ensure that the dignity and status of judicial institutions are not diluted. Public confidence is the only bed-rock on which the judicial edifice stands and if that is eroded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing for excluding the jurisdiction of all courts including the High Court except the jurisdiction of the Supreme Court (sub-clause (d) of clause (3) of Article 323B). Where the Constitution does not want Parliament to exercise any such discretion, Parliament can make laws which will not exclude the jurisdiction of the High Court. In the present case, the jurisdiction of the High Court under Arts. 226 and 227 has been kept intact. List II of the 7th Schedule has not been violated. Entries exist in List I and List III which make the impugned Act valid. 39. Reference was made to decision of the Supreme Court in Ram Krishna Dalmia v. Shri Justice S. R. Tendolkar, MANU/SC/0024/1958 : [1959]1SCR279 . It was submitted that there is always a presumption of the constitutionality of the legislation. In Union of India v. Harbhajan Singh Dhillon, MANU/SC/0062/1971 : [1972]83ITR582(SC), the court examined the extent of residuary power of Parliament to legislate under Entry 97 of List I and said that the three lists demarcated legislative field between Parliament and State and did not confer any power. Then reference was also made to another decision of the Supreme Court in State of Karna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) from out of the Amalgamated Tamil Nadu shares of the Post-War Services Re-construction Fund and the Special Fund for Reconstruction and Rehabilitation of Ex-servicemen, together with interest on such loans and advances, and all sums due to the Corporations mentioned in cl. (i) and (ii) may be recovered in the same manner as arrears of land revenue under the provisions of this Act." Challenge to the validity of section was on two counts: (1) lack of legislative competence in the Legislative Assembly, and (2) that the section was vocative of Art. 14 of the Constitution. Before the Supreme Court, however, the parties confined their arguments only to the question of legislative competence. The court referred to Entry 11-A in List III of the Seventh Schedule of the Constitution and said that the plain language of the entry gave very wide powers to the State Legislature to enact laws relating to "administration of justice" and "constitution and organisation of all courts". Reference was made to Constitutional Bench decision of the Supreme Court in State of Bombay v. Narothamdas Jethabai, MANU/SC/0011/1950 : [1951]2SCR51, which interpreted Entries 1 and 2 of List II of the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is a revenue court. It is in that context, Therefore, the court held that power of a revenue court by inserting S. 52-A for recovery of sums due to Tamil Nadu Agro-Industries Corporation Limited, etc., could be enhanced and that the section was valid under Entry 11-A, List III, Schedule 7 to the Constitution. The court also referred to Entry 30 of List III of Seventh Schedule to the Constitution which is in the following terms :-- "Money lending and Money-lenders; relief of agricultural indebtedness." Then the court held as under :-- "There is no doubt that S. 52-A of the Act has been brought on the statute book with a view to expedite recovery of the loans advanced by the Corporations. The legislation is directly related to Entry 30, List II. We, Therefore, hold that S. 52-A of the Act is constitutionally valid and the Tamil Nadu Legislature had legislative competence to enact the same." 43. In Associated Cement Companies Ltd. v. P. N. Sharma, MANU/SC/0215/1964 : (1965)ILLJ433SC, the principal point of law which arose before the court was if the State of Punjab exercising its appellate jurisdiction under the Punjab Welfare Officers Recruitment and Conditions of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of adjudicating upon special matters and disputes between parties. It is really not possible or even expedient to attempt to describe exhaustively the features which are common to the tribunals and the Courts, and features which are distinct and separate. The basic and the fundamental feature which is common to both the Courts and the tribunals is that they discharge judicial functions and exercise judicial powers which inherently vest in a sovereign State." 44. We are of the opinion Mr. Chandra-sekharan is right in his submission that Arts. 323A or 323B is no bar in Constituting a tribunal outside those two Articles. Article 323B applies where the Constitution gives discretion to the Parliament to legislate on a matter excluding the jurisdiction even of the High Court. Otherwise, Parliament has jurisdiction to create tribunals in matters outside cl.(2) of Art. 323B. It cannot be said that tribunals cannot administer justice and that they fall outside the term "administration of justice" as contained in Entry 11-A of the Concurrent List. In Kedarnath Gupta v. Nagindra Narayan Sinha MANU/BH/0038/1954 : AIR 1954 Pat 97, the expression "administration of justice" came up for consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the Constitution. It was asserted by the petitioners that the Act erodes independence of judiciary and is invalid. In the appointment of Presiding Officers of the Tribunal and the Appellate Tribunal there is no role of the High Court. The High Court also does not exercise any judicial control under Art. 235 of the Constitution though the Tribunal had been conferred powers of a civil court. Mr. Arvind Kumar, learned counsel for the petitioner in CWP No. 3277/94, said that all this was an antithesis of the independence of judiciary which was the basic structure of the Constitution. He said there was no purpose in enacting this law, as O. xxxvII of the Code of Civil Procedure provides for summary procedure in suits upon bills of exchange, hands and promissory notes and also where the plaintiff has only to recover a debt with or without interest arising of a written contract. He also said that the provisions of the Act were, also against O. XXXIV of the Code which deals with suits relating to mortgages of immovable property. He also objected to the condition of pre-deposit for filing an appeal when no guidelines had been laid and said it was left to the arbitrary discretion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ol of the Central/State Government. Indirectly, thus, it will be the Central Government which will be main litigant before the Tribunal and the list is sought to be decided by a Presiding Officer under the control of the Central Government. The provisions of the Act do not show that the Presiding Officer can be independent person. Respondents cannot have faith in such a Tribunal that it will dispense justice .There is no provision for transfer of a case from one Tribunal to another. Though Section 15 provides for removal of the Presiding Officer after enquiry is made by a Judge of the High Court or the Supreme Court, as the case may be, but it will be left to the Central Government to initiate any enquiry against any Presiding Officer. For all intents and purposes the Presiding Officers of the Tribunal or the Appellate Tribunal would appear to be the employees of the Central Government and under its jurisdiction. 47. As noted above, independence of judiciary is one of the basic tenets and a fundamental requirement of our Constitution. Any inroad into independence of judiciary is frowned upon by the Courts. The Constitution of a Tribunal under the Act is a negation of the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal cannot adjudicate upon the claim of set off, adjustment or counterclaim made by the respondent. Assume a case where counter-claim or adjustment is proved and the amounts become due to the respondent and in that case the Tribunal cannot give a judgment in favor of the respondent. According to Mr. Chandrasekharan, learned Additional Solicitor General, the claim of adjustment, set off or counter-claim would be good as a defense to knock down the claim of the bank. But then to what effect? If the Tribunal cannot award the counter-claim or other amounts found due to the respondent it certainly cannot adjudicate upon that, which would mean that all such defenses would be barred. Similarly, on analogy, if the respondent as a plaintiff files this suit in the civil court claiming any amount from the bank, the bank in that case may also not be in a position to raise the plea of adjustment, set off or counter-claim on account of any debt due to it from the plaintiff. We have also not been able to understand the dichotomy that cases of the value of Rs. 10 lakhs and above can be tried only by the Tribunal and those less than that amount by the subordinate judiciary (in Delhi the Suit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e banks. The provisions of the Act for recovery of the debt found due may perhaps run counter to the observations of the Supreme Court in Jolly George Varghese's case MANU/SC/0014/1980 : [1980]2SCR913 . 50. Civil Courts which are directly under the control and superintendence of the High Court trying bank suits, the suits of creditor and debtor relationship, have been deprived of their jurisdiction and the jurisdiction conferred on a Tribunal which is against the theme of the Constitution and independence of judiciary which, as noted above, is a basic feature of the Constitution. It is rightly said that the Act erodes independence of judiciary. It is a case where jurisdiction of a Civil Court has been truncated and it has been deprived of existing jurisdiction. It is a different matter if in a law enacted by Parliament jurisdiction is conferred on the civil court, but when the existing jurisdiction is taken away and conferred on a Tribunal having only trappings of a Court, it certainly affects the independence of judiciary. We cannot visualise a situation where a Court is continuously deprived of its ordinary jurisdiction and the same is conferred on the tribunals under the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (a) with respect to officer appointed to the Delhi Judicial Service at the time of its initial constitution, service rendered by them in the cadre to which they belonged at the time of the initial recruitment to that service which was counted for determining the seniority under Rule 11 of the Delhi Judicial Service Rules, shall also be counted." Article 233 of the Constitution is as under:-- "(1) Appointments of persons to be, and the posting and promotion of, District Judges in any State shall be made by the Governor of the State in consultation with the High Court exercising jurisdiction in relation to such State. (2) A person not already in the service of the Union or of the State shall only be eligible to be appointed a District Judge if he has been for not less than seven years an advocate or a pleader and is recommended by the High Court for appointment." 52. Leaving aside the Delhi Higher Judicial Service Rules for the time being, under clause (2) of Article 233 of the Constitution, a person shall only be eligible to be appointed as District Judge (1) if he has been for not less than seven years an advocate, and (2) is recommended by the High Court for appointment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd and Misc. Provisions Act, 1952 which is the final authority in the country in respect of disputes arising under the Act in matters referred to under the said Section. 1 was again acting in a quasi-judicial capacity while functioning as the Central Government." Respondent No. 3 has further stated that he appeared in cases involving civil laws and banking laws during the period he was practicing in the Gwalior Bench of the Madhya Pradesh High Court and the District Courts. However, no particulars of any one case have been stated. 54. Respondents 1 and 2 have also filed the supplementary affidavit justifying the validity of the appointment of the third respondent. 55. Mr. Chandrasekharan said that the Act was applicable to whole of India and the Parliament had only to see Article 253 of the Constitution to find out that the qualifications fixed for Tribunal fulfilled that for District Judge as provided under the Constitution. He said that "qualified" to he appointed, would be same thing as, "eligible" to be appointed. He referred in detail to the affidavit filed by the third respondent as well as the counter-affidavit of the Union of India. It was submitted that the mere fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1984 : AIR1984Cal7, where it had been held that separate meanings could not be attributed to the word 'Advocate' under Article 33 (2) of the Constitution on the one hand and Art. 124(3)(b) and Art. 217(2)(b), on the other. Decision of the Supreme Court in Prof. Chandra Prakash Agarwal v. Chaturbhuj Das Parikh, MANU/SC/0053/1969 : [1970]3SCR354, was also referred to show that the distinction, if any, between the words "an advocate" in Article 233(2) of the Constitution and the words "an advocate of a High Court" in Article 217(2)(b) had no significance in any event after the coming into force of the Advocates Act, 1961, as by virtue of S. 16 of that Act there were now only two classes of persons entitled to practice namely, Senior Advocate and other Advocates. Mr. Chandrasekharan, thus, said that public prosecutor was also an advocate for the purpose of Art. 233(2) of the Constitution and, Therefore, qualified to be appointed as a District Judge inasmuch as he continued to be on the rolls of the Bar Council with which he had been registered. He said mere fact that an advocate for any period was appointed as a public prosecutor did not detract in any manner from his status as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are prescribed in Art. 124 and that of a High Court in Art. 217. Then, under cl. (3) of Art. 124, a person shall not be qualified for appointment as a Judge of the Supreme Court unless he is a citizen of India and -- (a) has been for at least five years a Judge of a High Court or of two or more such Courts in succession; or (b) has been for at least ten years an advocate of a High Court or of two or more such Courts in succession; or (c) is, in the opinion of the President, a distinguished jurist. Under clause (2) of Art. 124, a Judge of the Supreme Court has to be appointed by the President after consultation with such of the Judges of the Supreme Court and of the High Courts as the President may deem necessary for the purpose. Under clause (2) of Art. 217, a person shall not be qualified for appointment as a Judge of a High Court unless he is a citizen of India and -- (a) has for at least ten years held a judicial office in the territory of, India; or (b) has for at least ten years been an advocate of a High Court or of two or more such Courts in succession. Then under cl. (1) of Art. 217, every Judge of a High Court shall be appointed by the President after consultation with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons received by the court and after interviewing them to recommend suitable candidates for appointment to the Higher Judicial Service to the Governor through the Court. Then under Rule 19, the Governor was to make appointments to the service. The court noted that it was clear from the Rules that the High Court was practically reduced to the position of a transmitting authority of the lists of suitable candidates for appointment prepared by the Selection Committee and that the only discretion left to the High Court was to refuse to recommend for appointment all or some of the persons included in the lists sent to it by the Selection Committee, and that the High Court could not scrutinise the other applications which were screened by the Selection Committee and also could not recommend for appointment persons not found in the lists. The court said that under clause (2) of Art. 233 the Governor could only appoint advocates recommended by the High Court to the said service, but under the Rules the High Court could either endorse the recommendations of the Committee or create a deadlock, and that, Therefore, the relevant rules clearly contravened the constitutional mandates of Art. 233 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1973]1SCR515, when the court was examining the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, which has S. 15 providing barring of jurisdiction of courts in respect of eviction of any person who is in unauthorised occupation of any public premises. The court, Therefore, said that the vice of Art. 14 which was found by the Court in the decision of Northern India Caterers Private Ltd., MANU/SC/0283/1967 : [1967]3SCR399, no longer appeared in the 1971 Act. However, in Maganlal Chhagganlat (P) Ltd. v. Municipal Corporation of Greater Bombay, MANU/SC/0052/1974 : [1975]1SCR1, the Supreme Court overruled its decision in Northern India Caterers Pvt. Ltd., MANU/SC/0283/1967 : [1967]3SCR399 . After referring to its earlier decisions, the Court examined the argument based on availability of two procedures, one more onerous and harsher than the other, and Therefore, discriminatory. The Court summarised as under (At p. 2022 of AIR):-- "Where a statute providing for a more drastic procedure different from the ordinary procedure covers the whole field covered by the ordinary procedure, as in Anwar Ali Sarkar's case, MANU/SC/0033/1952 : 1952CriLJ510 and Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution; and that respondent No. 3 does not fulfill the qualification to be appointed as Presiding Officer of the Tribunal. The notification dated 5 July 1994 issued under Section 3 of the Act, Constituting Debts Recovery Tribunal with the areas of jurisdiction as Delhi, is quashed. 60. It was suggested to us that we could mould the relief and give direction to the Central Government to amend the Act and/or frame Rules in accordance with the mandate of the Constitution and then uphold the validity of the Act, but we do not think we should adopt such a course as it is no concern of the Court to suggest modalities. 61. Having held the Act to be unconstitutional, it becomes necessary for us to give directions as to the applications pending before the Debts Recovery Tribunal. As list of cases pending before the Debts Recovery Tribunal established under notification dated 5 July, 1994 was filed before us in these proceedings. All these cases shall stand transferred to the original side of this Court and shall be deemed to have been instituted on the dates these were filed before the Debts Recovery Tribunal. The applicants, who would now become plaintiffs, would pay Court fee within fou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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