2000 (11) TMI 1141 - SC - Companies Law

Whether the order passed by the civil court dated 20-9-1994, subsequent to the passing of the Act on 24-6-1993 but before the establishment of the Tribunal on 30-11-1994 was within the jurisdiction of the civil court? Held that - The impugned order in the present case was passed by the civil court on 20-9-1994 prior to the establishment of the Tribunal on 30-11-1994. Therefore, the learned single Judge as well as the Division Bench were wrong in thinking that the order of the Tribunal civil court ? was without jurisdiction. It will also be noticed that section 31 of Act deals with the transfer of pending cases. According to section 31(2)(b), the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceedings, so far as may be, in the same manner as in the case of an application made under section 19 from the stage which was reached before such transfer or from any earlier stage or de novo as the Tribunal may deem fit. Therefore, now that the suit has been transferred to the Tribunal, it will be for the appellant to seek appropriate reliefs before the Tribunal. If the appellant wants any modification or vacation of the interim order passed by the civil court on 20-9-1994, it can move the Tribunal.

Issues:
1. Jurisdiction of civil court post the establishment of the Tribunal under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
2. Interpretation of the term "appointed day" in relation to the Tribunal's establishment.
3. Transfer of pending cases to the Tribunal under the Act.

Analysis:
1. The appellant challenged the order of the civil court dated 20-9-1994, arguing that it was passed after the Act came into force on 24-6-1993, thus lacking jurisdiction. However, the Supreme Court clarified that the relevant date for jurisdiction under Section 18 of the Act is the establishment of the Tribunal, not the passing of the Act. As the Tribunal was established on 30-11-1994, the civil court's order on 20-9-1994 was within its jurisdiction, contrary to the lower court's findings. The appellant was advised to seek remedies before the Tribunal regarding the disputed order.

2. The definition of "appointed day" in Section 2(c) of the Act was crucial in determining jurisdiction. It was highlighted that the "appointed day" in relation to the Tribunal refers to the date of its establishment, which in this case was 30-11-1994. The Supreme Court emphasized that the Tribunal's establishment date, not the Act's passing date, is relevant for jurisdictional matters under the Act. This clarification aimed to address the misconception regarding the significance of the "appointed day" in legal proceedings post the Act's enactment.

3. Section 31 of the Act addresses the transfer of pending cases to the Tribunal. It was noted that under Section 31(2)(b), the Tribunal has the authority to deal with transferred cases in a manner similar to handling applications under section 19. The Supreme Court directed the appellant to pursue appropriate relief before the Tribunal regarding the civil court's interim order dated 20-9-1994. The transfer of the suit to the Tribunal enabled the appellant to address any concerns or seek modifications related to the previous court order through the Tribunal's proceedings.

In conclusion, the Supreme Court disposed of the appeals, emphasizing the importance of understanding the Act's provisions, particularly regarding jurisdiction post the Tribunal's establishment, and the process of transferring cases for adjudication. The judgment clarified the legal interpretation of the term "appointed day" and provided guidance on seeking remedies before the Tribunal in cases involving disputes under the Act.

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