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2006 (12) TMI 479 - SC - Companies LawWhether in exercise of inherent jurisdiction of this Court, execution petition could be transferred to the Debt Recovery Tribunal, Chandigarh, as prayed for by the decree-holder? Held that - The literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says this is a pencil , then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean. In the present case, we are clearly of the opinion that the literal rule applies, and the other rules have no application to interpreting Section 31, since the language of Section 31 is plain and clear, and cannot be said to be ambiguous or resulting in some absurdity. In view of the above, we are clearly of the opinion that the recovery in question is time-barred and it is hereby quashed. The impugned order of the High Court is set aside. The appeals are accordingly allowed.
Issues Involved:
1. Jurisdiction of the High Court to transfer execution proceedings to the Debt Recovery Tribunal (DRT). 2. Applicability of the Limitation Act to the execution proceedings. 3. Inherent powers of the Court to transfer proceedings. 4. Interpretation of Section 31 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act). 5. Conflict between the Companies Act and the RDB Act. 6. Equity considerations versus legal provisions. Detailed Analysis: 1. Jurisdiction of the High Court to Transfer Execution Proceedings to the DRT: The High Court transferred the execution proceedings to the Debt Recovery Tribunal (DRT), Chandigarh, based on inherent powers, despite acknowledging it had no jurisdiction under the RDB Act. The Supreme Court held that the High Court's order was beyond the scope of Section 31 of the RDB Act, which only allows transfer of suits or proceedings pending before a court immediately before the establishment of the Tribunal. Since the third Execution Petition was filed after the establishment of the Tribunal, the transfer was deemed illegal and without jurisdiction. 2. Applicability of the Limitation Act to the Execution Proceedings: Under Article 136 of the Limitation Act, 1963, the period for applying for execution of any decree is 12 years from the date when the decree becomes enforceable. The final decree in this case was passed on 15.1.1987, making the limitation period expire on 15.1.1999. The Supreme Court noted that the debt became time-barred after 15.1.1999, as the third Execution Petition was filed on 11.1.1999, just before the expiration of the limitation period. 3. Inherent Powers of the Court to Transfer Proceedings: The High Court relied on its inherent powers to transfer the execution proceedings to the DRT. However, the Supreme Court held that there are no inherent powers of the Court to transfer proceedings to the Tribunal beyond the provisions of Section 31 of the RDB Act. The Court emphasized that inherent powers cannot be invoked to achieve ends of justice if such exercise conflicts with express statutory provisions. 4. Interpretation of Section 31 of the RDB Act: Section 31 of the RDB Act states that only suits or proceedings pending before a court immediately before the establishment of the Tribunal shall stand transferred to the Tribunal. The Supreme Court interpreted this provision literally, stating that since the third Execution Petition was filed after the Tribunal's establishment, it could not be transferred under Section 31. The Court rejected the argument for a purposive interpretation to allow the Bank to recover its dues, emphasizing that the language of Section 31 is clear and unambiguous. 5. Conflict Between the Companies Act and the RDB Act: The Supreme Court referenced the decision in Allahabad Bank vs. Canara Bank & Anr., which held that the RDB Act, being a special statute, overrides the Companies Act, a general statute. The Court reiterated that the provisions of the RDB Act have exclusive jurisdiction over debt recovery, including execution proceedings, and that no leave of the Company Court is necessary under Section 446 of the Companies Act for initiating or continuing proceedings under the RDB Act. 6. Equity Considerations Versus Legal Provisions: While acknowledging that equity favored the respondent-Bank, the Supreme Court emphasized that legal provisions must prevail over equitable considerations. The Court cited several precedents asserting that when there is a conflict between law and equity, the law must prevail. The Court criticized the Bank for its delay in filing execution petitions, which ultimately led to the debt becoming time-barred. Conclusion: The Supreme Court quashed the recovery as time-barred and set aside the High Court's order transferring the execution proceedings to the DRT. The appeals were allowed, emphasizing strict adherence to statutory provisions and the limitation period, irrespective of equitable considerations.
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