Punjab National Bank Vs. O.C. Krishnan & Ors.
EmailAppeal: Civil Appeal No. 5287 of 2001
(Arising out of SLP (C) No. 164 of 2001)
(From the Judgment and Order dated 6.6.2000 of the Calcutta High Court in CO No. 1305/97)
(Arising out of SLP (C) No. 164 of 2001)
(From the Judgment and Order dated 6.6.2000 of the Calcutta High Court in CO No. 1305/97)
Petitioner: Punjab National Bank
Respondent: O.C. Krishnan & Ors.
Apeal: Civil Appeal No. 5287 of 2001
(Arising out of SLP (C) No. 164 of 2001)
(From the Judgment and Order dated 6.6.2000 of the Calcutta High Court in CO No. 1305/97)
(Arising out of SLP (C) No. 164 of 2001)
(From the Judgment and Order dated 6.6.2000 of the Calcutta High Court in CO No. 1305/97)
Judges: B.N. KIRPAL & N. SANTOSH HEGDE, JJ.
Date of Judgment: Aug 13, 2001
Appearances:
Mr. Dhruv Mehta, Ms. Shobha, Ms. Anu Mehta, Mr. Saptrishi Ghosh and Mr. S.K. Mehta, Advocates for the Appellant.
Mr. V.J. Francis, Advocate for the Respondents.
Head Note:
DEBTS RECOVERY
Recovery of Debts due to Banks and Financial Institutions Act, 1993
Section 20 – Recovery of debts due to Bank – Challenge to the order of Recovery Tribunal through writ – Jurisdiction of High Court – Mortgaged properties belonging to respondents located in Chennai – Recovery Tribunal, Calcutta ordering sale of the mortgaged property – Writ filed in Calcutta High Court challenging the order of the Tribunal – High Court holding that the Tribunal at Calcutta had no jurisdiction to order sale of the property situated at Chennai – Whether High Court justified in holding so. Held, since Section 20 of the Debt Recovery Act provided for an appeal from the decision of the Tribunal that fast tract procedure cannot be allowed to be derailed either by filing writ under Articles 226 and 227 or by civil suit, High Court, therefore, erred in entertaining the writ petition. Order of High Court set aside.
Held:
The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act. (Para 6)
JUDGEMENT:
ORDER
1. Special leave granted.
2. In the instant case, a suit was filed by the appellant for recovery of money from the principal debtor as well as the guarantors. The suit was transferred to the Debts Recovery Tribunal and thereafter on 17th May, 1996 decree was passed by the Debts Recovery Tribunal, Calcutta.
3. The said suit was decreed for a sum of Rs. 12,09, 175.39 against the principal debtor as well as against the guarantors, along with interest thereon, and it was further directed that the Recovery Officer shall first proceed to realise the amount on the sale of hypothecated plant and machinery and mortgaged property belonging to respondents 5 and 4 respectively and thereafter proceed to the realise the balance, if any, in accordance with law. Pursuant thereto, certificate was issued and recovery proceedings started.
4. The respondent who was a guarantor and whose property was stated to have been mortgaged filed a petition under Article 227 before the High Court at Calcutta. The High Court allowed the petition by observing that as the mortgaged property was situated in Chennai the Debts Recovery Tribunal had no territorial jurisdiction in respect thereto and it could not have directed sale of mortgaged property. It, accordingly, held that the Bank would be at liberty to proceed against defendant no. 4, respondent herein, in appropriate forum for recovery of debts by sale of mortgaged property. Hence this appeal.
5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short “the Act”). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for a alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate forum.
6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.
7. For the aforesaid reasons, this appeal is allowed and the impugned order of the Calcutta High Court in CO No. 1305/1997 is set aside.
1. Special leave granted.
2. In the instant case, a suit was filed by the appellant for recovery of money from the principal debtor as well as the guarantors. The suit was transferred to the Debts Recovery Tribunal and thereafter on 17th May, 1996 decree was passed by the Debts Recovery Tribunal, Calcutta.
3. The said suit was decreed for a sum of Rs. 12,09, 175.39 against the principal debtor as well as against the guarantors, along with interest thereon, and it was further directed that the Recovery Officer shall first proceed to realise the amount on the sale of hypothecated plant and machinery and mortgaged property belonging to respondents 5 and 4 respectively and thereafter proceed to the realise the balance, if any, in accordance with law. Pursuant thereto, certificate was issued and recovery proceedings started.
4. The respondent who was a guarantor and whose property was stated to have been mortgaged filed a petition under Article 227 before the High Court at Calcutta. The High Court allowed the petition by observing that as the mortgaged property was situated in Chennai the Debts Recovery Tribunal had no territorial jurisdiction in respect thereto and it could not have directed sale of mortgaged property. It, accordingly, held that the Bank would be at liberty to proceed against defendant no. 4, respondent herein, in appropriate forum for recovery of debts by sale of mortgaged property. Hence this appeal.
5. In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable under Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short “the Act”). The High Court ought not to have exercised its jurisdiction under Article 227 in view of the provision for a alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate forum.
6. The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There is hierarchy of appeal provided in the Act, namely, filing of an appeal under Section 20 and this fast track procedure cannot be allowed to be derailed either by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a provision under an Act cannot expressly oust the jurisdiction of the court under Articles 226 and 227 of the Constitution, nevertheless when there is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have directed the respondent to take recourse to the appeal mechanism provided by the Act.
7. For the aforesaid reasons, this appeal is allowed and the impugned order of the Calcutta High Court in CO No. 1305/1997 is set aside.
