2018 (9) TMI 2134 - HC - Indian Laws

Jurisdiction - quasi judicial order - Suo moto proceedings, initiated against the petitioner by the Chairman of the Debt Recovery Tribunal - interdicting the continuance of the disciplinary proceedings. It is the contention of the petitioner that, where a compromise is entered into, between litigating parties, it is a contract between them, and a court has only to see that the same is lawful. Whether in the facts of the present case, the Tribunal had erred in holding that the Articles of Charge were not sustainable since they were based on quasi-judicial orders passed by the respondent in his capacity as CIT (Appeals)? HELD THAT - There is no allegation, against the petitioner, of corrupt motives, ulterior considerations, or mala fides. The error, on the part of the petitioner, as the respondent perceives the petitioner to have committed, is only in allowing the matter to be compromised, between the Bank and the debtors, at a figure which was much less that the actual debt which, it is sought to be alleged, might have been liquidated, had the compromise not taken place. In other words, it is the commercial expediency of the decision of the petitioner, which is being sought to be called into question, in the disciplinary proceedings pending against him. To borrow the words used in the charge-sheet (whatever they may mean), what was alleged against the petitioner was incapacity to function as a Presiding Officer in a befitting manner . In what more befitting manner, placed in the circumstances in which he was, the petitioner could have acted, the charge-sheet does not, significantly, condescend to disclose. De hors the correctness, judicially examined, of the decision of the petitioner to compromise the matter by allowing the joint application filed by the Bank and the debtors, the said decision, not being alleged to be tainted by any ulterior motives, could not have legitimately constituted the basis for initiating disciplinary proceedings against the petitioner. Even of the sole ground, therefore, the proceedings would be liable to be quashed in their entirety. On merits, too, however, the proceedings against the petitioner are, on the face of it, thoroughly misconceived. It is clear, from the authorities relied upon by the petitioner, of this court, that the petitioner had, when faced with the application of the Bank, and the proposal for compromise, signed by all parties, no option but to settle the disputes in terms thereof. It was not open for the petitioner to go behind the said compromise and start dissecting the compromise by examining its commercial expediency or otherwise. Any such attempt, on the part of the petitioner, would have amounted, in fact, to exceeding his authority, and the jurisdiction vested in him by law. It is ironical, therefore, that, for proceeding in the manner sanctified by authorities of this court, the petitioner has been visited with the presently impugned disciplinary proceedings, which deserve, therefore, to be eviscerated even at this juncture, without subjecting the petitioner to the ignominy of having to further negotiate the distasteful course thereof. The impugned memorandum/chargesheet dated 28th March, 2018, issued to the petitioner, as also all proceedings that follow thereupon, are held to be unsustainable on facts as well as in law and, consequently, quashed and set aside - Petition allowed.

Summary

Issues involved:
1. Whether the disciplinary proceedings against the petitioner were justified.
2. Whether the judicial officer acted within his authority in confirming the settlement/compromise.
3. The applicability of protection under Section 33 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Detailed Analysis:

1. Whether the disciplinary proceedings against the petitioner were justified:
The court observed that the initiation of disciplinary proceedings against the petitioner, a judicial officer, for confirming a settlement between the Punjab National Bank (PNB) and two borrower firms, was unwarranted. The court emphasized that judicial officers must be allowed to function without fear of disciplinary actions unless there is evidence of corrupt motives, ulterior considerations, or mala fides. The court noted that the petitioner’s actions were based on affidavits from the Bank, which confirmed the settlement and the closure of the Recovery Certificates (RCs). The court highlighted that the proceedings against the petitioner were based on a complaint by an advocate and suo moto cognizance by the Chairman of the Debt Recovery Appellate Tribunal (DRAT). The court found that the charges against the petitioner did not disclose any misconduct and were based solely on his judicial decision, which was in accordance with the law and the Bank’s recovery policy.

2. Whether the judicial officer acted within his authority in confirming the settlement/compromise:
The court analyzed the relevant sections of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, particularly Sections 19(22), 26, and 33. Section 19(22) empowers the Presiding Officer of the DRT to issue a certificate for recovery of the debt, while Section 26(2) allows the Presiding Officer to withdraw the certificate. Section 33 provides protection for actions taken in good faith. The court found that the petitioner acted within his authority in confirming the settlement/compromise between the Bank and the debtors. The affidavits submitted by the Bank supported the petitioner’s decision, stating that the compromise was in accordance with the Bank’s recovery policy and was approved by the Circle Officer. The court noted that the petitioner’s decision was not influenced by any ulterior motives and was made in good faith.

3. The applicability of protection under Section 33 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993:
The court held that the petitioner was protected under Section 33 of the Act, which shields judicial officers from legal proceedings for actions taken in good faith. The court emphasized that there was no allegation of lack of good faith, moral turpitude, or corruption against the petitioner. The court reiterated that judicial officers must be allowed to perform their duties without fear of disciplinary actions, provided they act in good faith and without ulterior motives. The court concluded that the disciplinary proceedings against the petitioner were unsustainable and quashed them.

Conclusion:
The court quashed the disciplinary proceedings against the petitioner, holding that they were unjustified and based solely on his judicial decision, which was in accordance with the law and the Bank’s recovery policy. The court emphasized the importance of allowing judicial officers to function without fear of disciplinary actions, provided they act in good faith and without ulterior motives. The court also highlighted the protection provided to judicial officers under Section 33 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.