2000 (8) TMI 974 - SC - Companies Law

Transfer of pending cases - Held that - Appeal allowed. The aforesaid section 31A is clearly applicable in the present case. The decree was passed by a Court before the commencement of the Amendment Act and the same has not yet been executed. At least after the amendment, it is only the Tribunal which would have the jurisdiction of entertaining the application for execution of the decree inasmuch as the amount due for which the decree was sought to be executed is over ₹ 10 lakhs. We are also unable to agree with the High Court that because the original decree which was passed was for a principal sum of ₹ 6,19,250 the Tribunal would get no jurisdiction. It is to be seen that the decree was for a sum of ₹ 6,19,250 plus interest at the rate of 16 per cent per annum from the date of filing of the suit till the recovery of money. As and when the amount due to the bank under the decree became more than ₹ 10 lakhs and an application for execution was filed, it could only be entertained by the Tribunal and not by the Civil Court. It is clear that in view of the provisions of section 34 of the Act, the provisions of Order 21, rule 10 of the Code of Civil Procedure would have no application.

Summary

Issues:
Transfer of execution proceedings to Debts Recovery Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis:
The appellant filed a suit for recovery in the Civil Court, which was decreed with interest. Subsequently, an execution application was filed seeking the recovery of the principal amount and interest. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 came into force, establishing a Tribunal with jurisdiction over such matters. The appellant applied to transfer the execution proceedings to the Debts Recovery Tribunal, which was initially allowed by the Civil Court but challenged by the respondents in a revision petition to the High Court.

The High Court held that the execution proceedings could not be transferred, stating that only the Civil Court that passed the decree could execute it. However, the Supreme Court, after analyzing the Act and relevant provisions, including a previous judgment, concluded that the execution application, being a pending proceeding in a Civil Court when the Act came into force, was liable to be transferred to the Tribunal. The Act defined 'debt' to include liabilities due to banks under a decree, giving exclusive jurisdiction to the Tribunals for such matters.

The Supreme Court disagreed with the High Court's interpretation, emphasizing that the Act allowed for the transfer of not only suits but also proceedings like execution applications to the Tribunal. Additionally, an amendment to the Act introduced section 31A, empowering the Tribunal to issue certificates for recovery in cases of decrees not yet executed. The Court clarified that the Tribunal had jurisdiction over execution applications involving amounts exceeding a specified limit, regardless of the original principal sum of the decree.

Therefore, the Supreme Court allowed the appeal, setting aside the High Court's judgment and ordering costs to be paid throughout.