1999 (8) TMI 857 - HC - Companies Law

Summary

Issues Involved:
1. Jurisdiction of the Civil Court to set aside an ex parte decree under Order 9, Rule 13 of the Civil Procedure Code, 1908, in light of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
2. Transfer of pending cases to the Tribunal constituted under the Act.
3. Interpretation of the term "proceeding" under the Act.
4. Procedural aspects for handling applications after the establishment of the Tribunal.

Detailed Analysis:

1. Jurisdiction of the Civil Court:
The primary issue was whether the civil court retained jurisdiction to consider an application under Order 9, Rule 13 of the Civil Procedure Code, 1908, to set aside an ex parte decree, despite the establishment of Tribunals under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The court concluded that the jurisdiction of the civil court is completely taken away in matters where the claim exceeds Rs. 10 lakhs, and such cases are transferred to the Tribunal. The Act's provisions, particularly Sections 17, 18, and 31, emphasize that the Tribunal has exclusive jurisdiction over such matters.

2. Transfer of Pending Cases:
Section 31 of the Act mandates that any suit or proceeding pending before any court, which would fall under the Tribunal's jurisdiction if initiated after its establishment, must be transferred to the Tribunal. This includes applications to set aside ex parte decrees. The court noted that the term "proceeding" is not defined in the Act but is interpreted broadly to include applications under Order 9, Rule 13 of the Civil Procedure Code, 1908.

3. Interpretation of "Proceeding":
The term "proceeding" under Section 31 of the Act was interpreted to have a wide connotation, encompassing any judicial step related to the recovery of debts due to financial institutions. This includes not just original suits but also interlocutory applications and steps subsequent to the passing of a decree. The court referenced the Delhi High Court's interpretation in Risk Capital & Technology Finance Corpn. Ltd. v. Harnath Singh Bapna, which supported a broad interpretation of "proceeding" to include applications under Order 9, Rule 13.

4. Procedural Aspects:
The court highlighted the proper procedure for handling applications after the establishment of the Tribunal. Applications should be received by the civil court and then forwarded to the Tribunal with appropriate endorsements and notices to avoid delays. This procedure ensures that the Tribunal can entertain and dispose of such applications in accordance with the law. The court referenced the Kerala High Court's decision in Devaki v. Chandrika, which outlined a similar procedure for transferring applications to the Family Court after its establishment.

Conclusion:
The court confirmed the lower court's decision that it lacked jurisdiction to entertain the application under Order 9, Rule 13 of the Civil Procedure Code, 1908, and correctly directed the transfer of the application to the Tribunal. The civil revision petition was dismissed, affirming that the Tribunal constituted under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, has exclusive jurisdiction over such matters.