1999 (5) TMI 635 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of three orders (Nos. 22 dated 2-5-95, 24, and 25 dated 8-5-95) passed by the Debts Recovery Tribunal.
2. Jurisdiction of the Tribunal under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993.
3. Request for stay of the Debt Recovery proceeding till the disposal of the criminal case.
4. Maintainability of applications under Article 227 of the Constitution despite the existence of an alternative remedy by way of appeal.
5. Allegations of fraud and their impact on the jurisdiction and proceedings of the Tribunal.
6. Refusal to grant adjournment by the Tribunal.
7. Review of the Tribunal's order dated 20-2-95.

Issue-wise Detailed Analysis:

1. Legality of Three Orders by the Tribunal:
The petitioner challenged the legality of three orders passed by the Debts Recovery Tribunal in a proceeding under Section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Tribunal had rejected the petitioner's applications for stay of proceedings and for review of an earlier order. The Tribunal also refused to grant adjournments requested by the petitioner.

2. Jurisdiction of the Tribunal:
The Tribunal's jurisdiction under Section 19 of the Act was questioned by the petitioner on the grounds that the alleged claim arose out of fraudulent actions and did not constitute a "debt" as defined in Section 2(g) of the Act. The Court held that the application filed by the bank was indeed for the recovery of a debt and fell within the jurisdiction of the Tribunal. The Tribunal is not bound by the Civil Procedure Code but is guided by the principles of natural justice as per Section 22 of the Act.

3. Request for Stay of Debt Recovery Proceedings:
The petitioner sought a stay of the Debt Recovery proceedings until the disposal of a criminal case initiated against him. The Tribunal rejected this request, and the Court upheld the Tribunal's decision, stating that the pendency of the criminal case did not affect the proceedings before the Tribunal. The Court referenced the Supreme Court's decision in M.S. Sheriff v. State of Madras, which emphasized that criminal matters should be given precedence but did not find it applicable to stay the Tribunal's proceedings in this case.

4. Maintainability of Applications under Article 227:
The bank's counsel argued that the applications under Article 227 were not maintainable due to the availability of an alternative remedy by way of appeal under Section 20 of the Act. The Court overruled this preliminary objection, stating that even if an alternative remedy exists, an application under Article 227 is maintainable if the Tribunal's order is without jurisdiction, arbitrary, or violates principles of natural justice.

5. Allegations of Fraud:
The bank alleged that the petitioner had committed fraud by presenting forged documents to obtain a loan. The Court held that the allegations of fraud did not oust the Tribunal's jurisdiction to entertain the application under Section 19. The Tribunal was competent to adjudicate the matter based on the demand promissory note, which was not alleged to be forged.

6. Refusal to Grant Adjournment:
The petitioner requested adjournments on multiple grounds, including the intention to move the High Court against an order and the physical unfitness of his senior advocate. The Tribunal rejected these requests, and the Court found no fault in the Tribunal's decision, noting that the petitioner had not demonstrated a valid reason for the adjournments.

7. Review of Tribunal's Order Dated 20-2-95:
The petitioner sought a review of the Tribunal's order dated 20-2-95, alleging errors and the discovery of new evidence. The Court found the review application to be frivolous and motivated by a desire to delay the proceedings. The petitioner failed to specify the new and important matters that warranted a review.

Conclusion:
The Court dismissed the applications under Article 227, finding no justification to interfere with the Tribunal's orders. The petitioner was directed to proceed with the application under Section 19 of the Act, and the Tribunal was instructed to expedite the proceedings. The applications were dismissed with costs assessed at 200 Gms.