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2016 (10) TMI 1347 - HC - Indian LawsMaintainability of petition - availability of alternative efficacious remedy available by way of preferring appeal before the Debts Recovery Appellate Tribunal - It is submitted that to avoid payment of Court Fees of statutory appeal writ is filed - requirement to comply with the Stamp Act - whether the learned Tribunal has any jurisdiction to issue directions with respect to the loan documents and the Assignment Agreement namely directing the Registry to send the copy of the loan documents available in the case record to the Collector of Stamp Gujarat and to send the copy of the Assignment Agreement to the Chief Controlling Revenue Authority Gandhinagar and directing the Collector of Stamp Gujarat to call upon the original documents and directing the Chief Controlling Revenue Authority to call upon the original Assignment Agreement dated 28.03.2014 from ARCIL for further process? HELD THAT - Identical question came to be considered by the Hon ble Supreme Court in the case of CHILAKURI GANGULAPPA VERSUS REVENUE DIVISIONAL OFFICER MADANPALLE AND ORS. 2001 (3) TMI 1069 - SUPREME COURT . In the said decision the Hon ble Supreme Court has observed and held that the Court has powers to admit the document in evidence if the party producing the same would pay the stamp duty together with a penalty amounting to ten times the deficiency of the stamp duty. It is further observed that when the Court chooses to admit the document on compliance of such condition the Court need forward only a copy of the document to the Collector together with the amount collected from the party for taking adjudicatory steps. But if the party refuses to pay the amount aforesaid the Collector has no other option except to impound the document and forward the same to the Collector and on receipt of the document through either of the said avenues the collector has to adjudicate on the question of the deficiency of the stamp duty - In the present case none of the procedure as required to be followed under the provisions of the Stamp Act more particularly contemplated under Sections 33 34 37 and 39 has been followed. In the present case original of neither the loan documents nor the Assignment Agreement dated 28.03.2014 are on record. Considering the provisions of the Stamp Act reproduced production of the original documents are prerequisite - Under the circumstances directions issued by the learned Tribunal to the Stamp Authorities to impound the instruments and adjudicate the stamp duty thereon are wholly without jurisdiction. The learned Tribunal has no jurisdiction whatsoever to issue such directions to the Collector of Stamp Gujarat and the Chief Controlling Revenue Authority. Considering the facts of the case on hand and the manner in which the learned Tribunal has dismissed the original application at this stage on the aforesaid grounds i.e. on the ground that the loan documents as well as the Assignment Agreement dated 28.03.2014 are insufficiently stamped and therefore not admissible in evidence and that too without following any procedure as required under the provisions of the Stamp Act impugned orders dismissing the original applications on the aforesaid grounds are wholly without jurisdiction and cannot be sustained - this is a fit case to exercise powers under Articles 226/227 of the Constitution of India. Locus of AIRCL to maintain the original application for recovery of its dues - whether in the facts and circumstances of the case the learned Tribunal is justified in dismissing the original application on the ground that as the Assignment Agreement dated 28.03.2014 is in favour of the ARCILASTIV Trust and in favour of the ARCIL as a Trustee of the aforesaid Trust? - HELD THAT - When there are serious contentious issues with respect to locus of ARCIL to maintain / continue to maintain the suit before the learned Tribunal for recovery of the dues under the Assignment Agreement dated 28.03.2014 visavis under the Securitization Act as well as RDB Act the learned Tribunal has materially erred in dismissing the original applications on the aforesaid ground and that too at this stage and the learned Tribunal ought to have permitted the parties to raise the aforesaid issues at appropriate stage of trial and the learned Tribunal ought to have considered the aforesaid issues at appropriate stage but not at this stage and ought not to have dismissed the applications at the threshold - the impugned orders passed by the learned Tribunal dismissing the original applications on the aforesaid ground at this stage cannot be sustained and the same deserves to be quashed and set aside. This is a fit case to exercise powers under Articles 226/227 of the Constitution of India and the present petitions are not required to be dismissed on the ground of availability of alternative statutory remedy by way of appeal before the learned Debts Recovery Appellate Tribunal more particularly when the issues involved in the petitions are questions of law - Application allowed.
Issues Involved:
1. Maintainability and enforceability of the Assignment Deed. 2. Jurisdiction of the Tribunal to issue directions regarding loan documents and Assignment Agreement. 3. Admissibility of insufficiently stamped documents in evidence. 4. Locus of ARCIL to maintain the original application for recovery of dues. 5. Availability of alternative remedy by way of appeal. Detailed Analysis: 1. Maintainability and Enforceability of the Assignment Deed: The Tribunal dismissed the original applications on the grounds that the Assignment Agreement executed by the State Bank of India in favor of ARCIL was insufficiently stamped and thus not admissible in evidence, losing its enforceability. Additionally, it was held that the Assignment Agreement was not enforceable under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDB Act) because ARCIL, acting as a Trustee, could not file or conduct an application before the Tribunal for recovery of dues. 2. Jurisdiction of the Tribunal to Issue Directions Regarding Loan Documents and Assignment Agreement: The Tribunal directed the Registry to send copies of the loan documents and the Assignment Agreement to the Collector of Stamp, Gujarat, and the Chief Controlling Revenue Authority, Gandhinagar, for further process. This direction was deemed wholly without jurisdiction. The High Court emphasized that the original documents were not produced on record, and the Tribunal's directions were contrary to the provisions of the Gujarat Stamp Act, 1958, particularly Sections 33, 34, 37, and 39. 3. Admissibility of Insufficiently Stamped Documents in Evidence: The Tribunal's dismissal of the original applications on the grounds that the loan documents and the Assignment Agreement were insufficiently stamped was found to be without jurisdiction. The High Court noted that the Tribunal did not follow the proper procedure under the Stamp Act, which requires impounding the document and sending it to the Collector for adjudication. The Tribunal's action of dismissing the applications first and then issuing directions to the Stamp Authorities was deemed incorrect and contrary to law. 4. Locus of ARCIL to Maintain the Original Application for Recovery of Dues: The Tribunal dismissed the applications on the grounds that ARCIL, acting as a Trustee of ARCILASTIV Trust, had no locus to maintain the original applications. The High Court found that this issue involved contentious questions of law and facts that should be considered at an appropriate stage of the trial, not summarily dismissed at the threshold. The High Court referred to the Division Bench decision of the Bombay High Court in the case of Alpha and Omega Diagnostics India Ltd., which supported the view that a securitization company or reconstruction company could proceed with recovery under the RDB Act. 5. Availability of Alternative Remedy by Way of Appeal: The respondents argued that the petitions should be rejected on the grounds of alternative remedy, as an appeal could be filed before the Debts Recovery Appellate Tribunal. However, the High Court decided to exercise its powers under Articles 226/227 of the Constitution of India, considering that the impugned orders were found to be wholly without jurisdiction and involved questions of law. Conclusion: The High Court quashed and set aside the impugned judgment and order dated 10.06.2016 passed by the Tribunal in Original Application No.154/2012 and 180/2012. The original applications were ordered to be restored on the file of the Tribunal for decision in accordance with law and on merits. The High Court clarified that all contentions and defenses available to the parties were kept open for consideration by the Tribunal.
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