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TMI Blog2003 (3) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... he bank s claim was allowed with interest at the rate of 18 per cent per annum from October 27, 1998 till realization. The bank was also held entitled to its costs. The decree was for an amount of more than Rs. 11 lakhs. On August 28, 2000 the bank filed a petition, viz., O.A. No. 258 of 2000 before the Debts Recovery Tribunal, Eranakulam, for the recovery of the amount. After more than six months, on March 23, 2001, the appellant filed an Interlocutory Application No. 1391 of 2001 before the Sub-Court, Thrissur under Order 9, Rule 13, CPC. He prayed that the ex parte decree be set aside. On October 22, 2001 the trial Court dismissed the application. It held that in view of the provisions of sections 18, 22( g ) and 31 of the Act, it had no jurisdiction to entertain the application. On February 7, 2002 the appellant filed the present appeal. The matter was posted before a Division Bench. On August 13, 2002 the case was referred to a Full Bench. Thus, the matter has been placed before this Bench. 3. Ms. Seemanthini, learned counsel for the appellant contended that the Debts Recovery Tribunal was established for the State of Kerala on November 4, 1996. The suit was filed almo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that huge amounts of public money were lying locked up in litigation, a Bill was introduced in the Parliament "to provide for the establishment of Tribunals and Appellate Tribunals for expeditious adjudication and recovery of debts due to Banks and Financial Institutions". During the pendency of the Bill, the President issued the "Recovery of Debts Due to Banks and Financial Institutions Ordinance" on June 24, 1993. Ultimately, the Act was promulgated. Certain amendments have also been made. 6. The Act is divided into six chapters. Chapter I, sections 1 and 2, are preliminary in nature. These, provide for the extent of application of the Act and define various terms and expressions. Where the amount of debt is less than Rs. 10 lakhs, the provisions of the Act do not apply. Chapter II, sections 3 to 16 provide for the establishment of the Tribunal, Appellate Tribunal and matters ancillary thereto. Chapter III, sections 17 and 18, delineate the jurisdiction, the powers and the authority of the Tribunal. It also provides for exclusion of jurisdiction of Courts except the Supreme Court and the High Court in relation to the matters specified in section 17. Chapter IV, secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, if good reason is shown the Tribunal has the power to reduce the amount. The Tribunal as well as the Appellate Tribunal have to follow the principles of natural justice. These have been vested with powers of a Civil Court in the matter of summoning and enforcing the attendance of any person, or the discovery and production of documents. They can also receive evidence on affidavits, issue commissions for the examination of witnesses or documents, review the decisions or dismiss the application for default or decide the case ex parte . The mode of recovery of debts has also been laid down. Provisions of the Limitation Act apply to the applications to be submitted to the Tribunal. 9. It is, thus, clear that the Tribunal as constituted under the Act is not merely administrative. It is a part of the machinery for adjudication of disputes. It can be established regionally or locally. The procedure to be followed by the Tribunal is adversary and not inquisitorial . The Presiding Officer is a person who has either held or is holding or is qualified to hold a high judicial office. He is trained in law. The procedure to be followed by the Tribunal is simple, clear and unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... background that the question as posed above has to be considered. 13. The Act was promulgated on August 27, 1993. However, it is the admitted position that the Tribunal for the State of Kerala was constituted on November 4, 1996. Thus, for the purpose of the present case, November 4, 1996 shall be the appointed day as contemplated under section 2( c ) of the Act. Under section 2( g ) debt has been defined to include interest. Debt is the amount "due from any person.... payable under a decree or order of any civil court... subsisting.... and legally recoverable on the date of application". By virtue of section 17, "the Tribunal alone has the jurisdiction for recovery of debts...". Thus, it is clear that even the amount due under a decree ex parte or otherwise, passed by the Civil Court is a debt due to the financial institution including a bank. Still further, under section 19, an application to recover any debt from any person can be filed before the Tribunal. The claim may be based on an agreement or a decree. 14. Ms. Seemanthini contended that the application for setting aside the ex parte decree could not be filed before the Tribunal. The suit had been insti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention is that even in cases where the Civil Court has already taken seisin of the case, it cannot proceed any further. The matter has to be transferred to the Tribunal. 18. Ms. Seemanthini contended that section 31 postulates three conditions. Firstly, the suit or proceeding should be pending before the estab- ishment of the Tribunal. Secondly, the cause of action on which the suit or proceeding is based should be in respect of an amount exceeding Rs. 10 lakhs. Thirdly, an application for the setting aside of an ex parte decree under Order 9, Rule 13 is not a suit. On these premises, she submitted that the applications could not have been filed before the Tribunal. 19. The contention is apparently attractive. However, section 31 has to be read in the context of the other provisions. As already noticed, under section 17, the jurisdiction has been conferred exclusively on the Tribunal. Section 18 ousts the right of the Civil Court to try any matter relating to the recovery of an amount of Rs. 10 lakhs or more. Thus, it cannot be said that once the Civil Court has passed the decree, the subsequent proceedings also shall be within its jurisdiction. This would not be in confo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard". It can pass an order "on the application as it thinks fit to meet the ends of justice". Still further, under section 19(22), the Presiding Officer can "issue a certificate under his signature... to the Recovery Officer for recovery of the amount of debt specified in the certificate". Thus, the provision embodies a simple but complete and comprehensive procedure that covers everything from the beginning to the end. Then the aggrieved party has a right to file an appeal against the order under section 20. In our view, even in a case where the decree has been passed by the Civil Court for an amount of Rs. 10 lakhs or more, the appeal shall lie before the Appellate Tribunal. However, deposit as contemplated under section 21 has to be made before the appeal can be entertained. It is in view of this position that the Bank appears to have actually filed the O.A. No. 258 of 2000 before the Tribunal at Ernakulam. The action of the Bank was in strict conformity with the provisions of the Act. It is not shown to be contrary to any provision of the statute. Thus, the contention as raised by the learned counsel for the appellant is rejected. 24. Ms. Seemanthini contended that the decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C. 109. Lord Asquith had observed as follows: "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequence and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it ... The Statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs." 27. The above dictum contains a salutary principle. It enables the Court to do justice. 28. In this context, it also deserves mention that since the application under section 19 has to be decided by the Tribunal after giving an opportunity to the appellant in accordance with the principles of natural justice, the whole exercise of filing the application for setting aside the ex parte decree or the present appeal seems to be wholly futile. It is the admitted position that the loan was taken. It was not suggested that the payment had been made. Thus, the money is due from him. In any case, he can raise all the pleas before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, there was an inadvertent omission. Is it so? 32. It is undoubtedly correct that there can be obvious oversights in the drafting of a Statute. In such cases, the Courts cannot be helpless. Maxwell on "The Interpretation of Statutes" (Twelfth edition) at page 230 says thus: "Just as the Court will occasionally fill omissions, so it will sometimes-contrary to the general principle that effect must be given to every word in a statute - read a section and while doing so ignore certain words." Again at page 231, it was said : "Sometimes, where the sense of a statute demands it or where there has been an obvious mistake in drafting, a Court will be prepared to substitute another word or phrase for that which actually appears in the next of the Act." 33. Thus, it is clear that whenever the Court finds it necessary, it can omit to read or even substitute certain words. Should it be done in the present case? In view of the clear words in the Act, it does not appear that there is any obvious oversight or mistake. The provision merely provides a fiction. The Parliament could have introduced it. The words must be given their true and natural meaning. 34 . What is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Civil Court. Thus, the application for setting aside an ex parte decree passed even before the constitution of the Tribunal, the application was liable to be transferred to the Tribunal. 36. In the context of these decisions, it deserves notice that the Debt Recovery Act is a special law. Section 34 gives it an overriding effect. Thus, there is a complete and comprehensive mechanism. This being the factual position, its provisions must be given full effect and cannot be narrowly construed. 37. There is another aspect of the matter. The principle of generalis specialibus non derogant was explained in the Vera Cruz s case 1884 (10) Appeal Cases 59 at page 68, it was observed as under : "Now if anything be certain it is this that where there are general words in a later Act capable of reasonable and sensible application without extending to subjects specially dealt with by earlier legislation, you are not to hold that earlier and special legislation indirectly repealed, altered, or derogated from merely by force of such general words, without any indication of a particular intention to do so." [Emphasis supplied] 38. In the present case, the Legislature h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, that of civil court, now stands replaced by a Banking Tribunal in respect of the debts due to the bank. When in the Constitution articles 323A and 323B contemplate establishment of a Tribunal and that does not erode the independents of the judiciary, there is no reason to presume that the Banking Tribunals and the Appellate Tribunals so constituted would not be independent, or that justice would be denied to the defendants or that the independents of the judiciary would stand eroded." (p. 1490) [Emphasis supplied] Again in paragraph 26, it was observed as under: "26. With the establishment of the Tribunals, section 31 provides for the transfer of pending cases from civil courts to the Tribunal. We do not find such a provision being in any way bad in law. Once a Debt Recovery Tribunal has been established, and the jurisdiction of Courts barred by section 18 of the Act, it would be only logical that any matter pending in the civil court should stand transferred to the Tribunal. This is what happened when the Central Administrative Tribunal was established. All cases pending in the High Courts stood transferred. Now that exclusive jurisdiction is vested in the Banking T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the transfer is automatic because of the operation of law and, therefore, the bank was really not required to file applications". In Bhanu Construction Co. (P.) Ltd. v. Andhra Bank [2001] 1 SCC 347, the appellant had entered into a contract with the National Thermal Power Corporation. The said Corporation had terminated the contract and encashed the bank guarantee of Rs. 2.34 crores on December 4, 1987. The bank had filed a suit on August 27, 1993 seeking recovery of an amount of Rs. 19 crores. An application was also filed with the prayer that a direction be given that the deposit made by the Thermal Corporation shall be payable to the Bank. On September 20, 1994 the Civil Court gave a direction that the Power Grid Corporation of India shall not pay any money to the Company until further orders from the Civil Court. This Order was challenged by the appellant through a petition under Article 226 of the Constitution before the High Court. It was allowed by the High Court on the ground that "the abovesaid suit was instituted on 27th August, 1993, and the impugned order of the Civil Court which was passed on 20th September, 1994, subsequent to the passing of the Act, i.e. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " (p. 349) A perusal of the above observations shows that even though the order had been passed by the Civil Court before the appointed day, the jurisdiction of the Tribunal to deal with the matter was sustained. 41. The issue regarding the maintainability of an application under Order 9, Rule 13 was also considered by a learned Single Judge of the Patna High Court in Ram Laxman Glass (P.) Ltd. v. State of Bihar AIR 2000 Pat. 210 it was observed as under : "In the scheme of the Act, creation of the jurisdiction to try the suits and transfer thereof, to the Tribunal is total, subject to the exception of pending appeals. The main matter shall automatically stand transferred by operation of law along with all the steps taken in that direction on the appointed day. After all the applications for setting aside the ex parte judgment is an adjunct to the main matter and has no separate existence de hors the same. There is yet another aspect of the matter. In view of the nature and scope of section 31(2)( b ) of the Act discussed in this judgment, if the civil court is allowed to retain jurisdiction over an application vide order 9, rule 13, the provisions of section 31(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s entitled to entertain and try the suit for recovery of Rs. 8,61,530 with interest as filed by the Bank. ( ii )The 1993 Act is a special statute. It overrides the provisions of the general law. Thus, after the establishment of the Tribunal for the State of Kerala on November 4, 1996, the Civil Court is not entitled to entertain a suit or any other proceeding relating to the recovery of a debt of Rs. 10 lakhs or more by a Bank. By virtue of section 18, the jurisdiction of the civil court has been completely ousted. ( iii )An application under Order 9, Rule 13 as filed by the appellant on March 23, 2001 could not have been entertained by the Civil Court. Thus, it should have been returned to the applicant (the present appellant) for presentation to the competent forum, viz. the Tribunal. ( iv )In view of our finding that the civil court had no jurisdiction in the matter, its order dismissing the application is also liable to be set aside. Resultantly, we quash the order. It is further directed that the application shall be returned to the appellant for presentation to the Tribunal. ( v )Since the Civil Court has been replaced by the Tribunal and in view of the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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