9911796707
TMI Blog2004 (8) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... on a sum of ₹ 1000 lacs were advanced to the petitioner herein. An additional loan of around ₹ 2500 lacs was also advanced by UTI to the petitioner herein against privately placed debentures. 3. By virtue of the said UTI Act of 2002, the said entity Unit Trust of India stood dissolved and bifurcated in two separate entities viz., Administrator of the specified undertaking of the Unit Trust of India and UTI Trustee Company. Section 18 of the said Act is the subject matter of interpretation in the present proceedings. 4. Pursuant to the said UTI Act, 2002 coming into force the newly constituted entities being respondent No. 1 and 2 herein, filed an Original Application before the Debt Recovery Tribunal for the recoveries of the dues which were lent in advance by the erstwhile entity UTI. 5. In the said application it has been contended that the petitioner herein committed defaults of the common loan agreement particularly the terms of Schedule V thereto under which the said amount was repayable in 32 quarterly instalments by the petitioner to the erstwhile entity UTI and now to respondent Nos. 1 and 2 as successor in title thereto. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation by specified company or Administrator in place of Trust ---- In every Act, rule, regulation or notification in force on the appointed day for the words Unit Trust of India , wherever they occur, the words, brackets and figures specified company referred to in the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 or Administrator of the specified undertaking of the Unit Trust of India referred to in the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 , as the case may, shall be substituted. Section 2(h)(i) and (ii) of the said DRT Act reads as under:- 2(h) financial institution means-- (i) a public financial institution within the meaning of Section 4A of Companies Act, 1956 (1 of 1956); (ii) such other institution as the Central Government may, having regard to its business activity and the area of its operation in India by notification specify; Section 19(1) of the DRT Act reads as under: 19. Application to the Tribunal.-(1) Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel appearing for the petitioner raised before us basically three fold submissions. Firstly, he has contended that the respondent Nos. 1 and 2 are not the financial institutions within the meaning of provisions of Section 19 of the DRT Act and, therefore, the application by respondent Nos. 1 and 2 for recovery of their dues even if they are entitled to as successor in title and interest of the original entity UTI, cannot be maintained before the Debt Recovery Tribunal but ought to be recovered by filing a civil suit in a civil court. Secondly, he submitted that in any event no notification has been issued by the Central Government notifying the respondent Nos. 1 and 2 as financial institutions and, therefore, also it cannot be treated as a financial institution for the purpose of Section 19 of the said DRT Act. The third contention raised by the learned counsel for the petitioner is to be effect that the provisions of Section 18 of the UTI Act, 2002 do not automatically alter the provisions of other Act unless there is a separate amendment to the said separate statute or a notification is issued giving effect to such amendment in the said separate statute. Mr. Tulzapurkar, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No. 1 and 2 as duly constituted new undertaking as successor-in-title. In our view, such an interpretation would make the said Section 18 totally nugatory. It is because it was open for the Parliament to enact a separate legislation by way of an amendment under every Act and substitute the name of the Unit Trust of India with that of the respondent Nos. 1 and 2. However, the Parliament has chosen to provide a sweeping amendment to every Act by incorporating Section 18 under the said UTI Act, 2002. It is not for us to determine in writ jurisdiction under Article 226 of the Constitution of India the manner and mode in which the Parliament must exercise its law making power while enacting a statute or amendment thereto. According to us, the true and correct interpretation and effect of the said Section 18 is that it amends every legislation, rule, regulation and notification enacted either by the Parliament or issued by the Central Government in the exercise of the powers conferred under the respective Act. 13. The Companies Act 1 of 1956 is one of such statute which is also enacted by the Parliament. By virtue of provisions of Section 18 of the said UTI Act of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave taken that Sub-clause (1) of Sub-section (1) of Section 4A of the Companies Act 1 of 1956 stood amended by substituting the name of Unit Trust of India with that of Respondent Nos. 1 and 2 herein, we are of the opinion that the said respondent being specifically specified as a financial institution under the said Sub-section (1), the question of issuing notification under Sub-section (2) of Section 4A cannot and does not arise. Sub-section (2) gives a power to the Central Government to declare any entity as financial institutions which are not specified under Sub-section (1) of Section 4A of the Companies Act 1 of 1956, and therefore, in the present case, the Sub-section (2) of Section 4A has no application whatsoever. We thus reject the submission of the learned counsel for the petitioner in that behalf. 16. Mr. Aney, the learned counsel for the petitioner has thereafter relied upon a judgment of the Division Bench of this Court in the case of Krishna Eilament Ltd. v. Industrial Development Bank of India and Ors. reported in 2004 (2) Bombay Cases Reporter, 16, particularly paragraph 24 of the said judgment and contended that the respondent Nos. 1 and 2 even if they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is definition. It was therefore rightly emphasised on behalf of the respondent No. 1 that under Section 6(h) of Banking Regulation Act undertaking and executing trusts and Section 6(1) thereof undertaking and administration of estates as executor, trustees or otherwise is a permissible business for the banking companies. Thus if a bank is collecting rents as a trustee of if it is an executor under a Will and it would be collecting the amount due to the estate, such claims would also come under the definition of a debt . 17. In our view the said judgment has no application to the facts of the present case. In the said judgment Industrial Development Bank of India was admittedly a public financial institution and thee was no dispute as to the status of the IDBI as the financial institution. The dispute in the said case was that when the IDBI is performing a mere role of the debenture trustee holders whether it will be right to assign a role of financial institution when the application is made by it only as debenture trustees and whether such an application would lie under the provisions of Section 19 of the said DRT Act 1993. The claim by the Debenture Trustee holders is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
