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2019 (1) TMI 1372 - BOMBAY HIGH COURTRefund of security deposit - whether in view of the facts of the case, claim for refund of security deposit (given against the licensed premises) by the Bank in the proceedings before the Debt Recovery Tribunal under the provisions of the Recovery of the Debts Due to Banks and Financial Institutions Act, 1993, can be said to be a “debt” due and recoverable by the Bank from the respondents, under Section 19 of the said Act? Held that:- It is settled law that the definition clause must be read in the context of subject matter and scheme of the Act and consistently with the objects and other provisions of the Act. It is well settled that, words of a statute when there is a doubt about their meaning, are to be understood in the sense in which they best harmonise with the subject of enactment and the object which the Legislature has in view Their meaning is not much found in strictly grammatical language - the expression “debt” is to be assigned meaning and understood in reference to the object and subject matter of scheme of the Act and further it is to be interpreted consistently with the objects and other provisions of the Act. Undisputedly, the Recovery Act was enacted primarily for the reasons that, the Banks and financial institutions should be able to recover their dues without unnecessary delay, so as to avoid any adverse consequences in relation to the public funds. The Statement of Objects and Reasons of this Act clearly state that Banks and financial institutions were experiencing considerable difficulties in recovering loans and enforcements of securities charged with them. The then existing procedure for recovery of dues of the Bank and the financial institutions blocked significant portion of their funds in un-productive assets, the value of which deteriorated with the passage of time. The Act provided for the establishment of Tribunals and Appellate Tribunals and modes for expeditious recovery of dues to the Banks and financial institutions. The expeditious recovery; Providing provisions for taking such measures which would prevent wastage of securities available with the Bank and enforcement of such securities is the object of the Act. Thus, whole object of the said Act is to recover debts by enforcing available security by a mechanism provided under the Act - If the petitioner’s contention is upheld, it may not attain the object of the said act. This, may also, enlarge the jurisdiction of the Tribunal. The Apex Court in the case of Axis Bank v. SBS Organics (P.) Ltd. [2016 (4) TMI 917 - SUPREME COURT] while dealing with the provisions of the SARFAESI Act has held that the Act was intended to facilitate easy and faster recovery of loans advanced by banks and financial institutions and thus the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was introduced for a special and speedier mechanism for the recovery. The unpaid security deposit is not a “debt” within the meaning of Section 2(g) of the said Act and therefore the proceedings instituted under Section 17 of the said Act by the Bank for recovery of the said amount were not maintainable - Petition dismissed.
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