2002 (4) TMI 801 - HC - Companies Law

Issues Involved:
1. Jurisdiction of the Debt Recovery Tribunal (DRT) versus the High Court for execution of a foreign decree.
2. Definition and scope of 'debt' under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.
3. Applicability of Section 44A of the Code of Civil Procedure (CPC) for execution of foreign decrees.
4. Powers and procedural differences between DRT and Civil Courts.
5. Conflict between special laws and general laws.

Detailed Analysis:

1. Jurisdiction of the Debt Recovery Tribunal (DRT) versus the High Court for execution of a foreign decree:
The primary issue was whether the decree obtained by the plaintiff, Bank of India, could be executed under Section 44A of the Code of Civil Procedure, 1908, or if it must be executed in accordance with the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The court noted that the execution application was initially filed before the constitution of the DRT, but with the establishment of the DRT, the jurisdiction to entertain and decide applications for recovery of debts due to banks shifted to the DRT as per Section 17 of the Act.

2. Definition and scope of 'debt' under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993:
The court examined whether the amount claimed by the Bank of India under a decree from a foreign court constituted a 'debt' under Section 2(g) of the Act. It was argued that the claim under a foreign decree does not fall within the definition of 'debt'. However, the court clarified that Section 44A of the CPC treats a decree from a superior court of a reciprocating territory as if it were passed by a District Court in India, thus making it a 'debt' as per the Act.

3. Applicability of Section 44A of the Code of Civil Procedure (CPC) for execution of foreign decrees:
The court held that Section 44A allows a foreign decree to be executed in India as if it had been passed by a District Court, thereby integrating it into the Indian legal framework for execution purposes. The court referred to precedents, including the principle stated by Lord Asquith and adopted by the Supreme Court of India, that a legal fiction must be given full effect for all purposes.

4. Powers and procedural differences between DRT and Civil Courts:
The judgment discussed the procedural powers of the DRT under Section 22 of the Act, which are not bound by the CPC but guided by principles of natural justice. The court emphasized that the DRT has extensive powers, including those of a civil court, and can entertain objections to the execution of a foreign decree on grounds enumerated in Section 13 of the CPC.

5. Conflict between special laws and general laws:
The court addressed the contention that Section 44A of the CPC, being a special law for execution of foreign decrees, should prevail over the general provisions of the Act. The court rejected this argument, stating that both the CPC and the Act are special laws, and the later enactment (the Act) must prevail in case of conflict. The court cited the Supreme Court's decision in Solidaire India Ltd. v. Fairgrowth Financial Services Ltd., which held that the later special law prevails over the earlier one.

Conclusion:
The court concluded that the execution of a foreign decree where the decree holder is a bank or financial institution must be entertained by the DRT under the provisions of the Act. The DRT is empowered to exercise all the powers of a District Court under the CPC while considering an application under Section 44A. Consequently, the execution application must be transferred to the DRT. The Chamber Summons was dismissed, and the prayer for a stay of the order was rejected.

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