A. Vivekanandam vs Bank of Madura Ltd.

P. Sathasivam, J.—Aggrieved by the common order dated 26-6-2001 made in LA. No. 492 of 2001 and LA. Nos. 2135 and 2136 of

2000 in T.A. No. 1665 of 1997 on the file of the Debts Recovery Tribunal, Chennai-second defendant-A. Vivekanandam has filed the above

revisions under Article 227 of the Constitution of India.

Bank of Madura Ltd. first respondent herein initially filed a suit for recovery of money in O.S. No. 321 of 1995 on the file of the Subordinate

Judge, Salem against the defendants/petitioner and respondent Nos. 2 and 3 herein. After the constitution of the Debts Recovery Tribunal at

Chennai, the said suit has been transferred to the Tribunal where it was re-numbered as I.A. No. 1665 of 1997. By order dated 30-11-1999, the

Debts Recovery Tribunal passed an order declaring that the applicant-bank is entitled to a recovery certificate for a sum of Rs. 10,45,643.35 with

future interest at 12 per cent per annum; simple interest from the date of plaint till date of realisation with costs. Against the said order, respondent

Nos. 2 and 3 herein/defendants 1 and 3 filed LA. No. 2135 of 2000 to condone delay in filing a petition to set aside the ex parte order dated 30-

11-1999 and LA. No. 2136 of 2000 to set aside the ex parte order passed in T.A. No. 1665 of 1997 dated 30-11-1999. The said applications

were resisted by the Bank of Madura by filing a counter statement. By a common order dated 26-6-2001, the Debts Recovery Tribunal, after a

careful perusal of the earlier order dated 30-11-1999, came to the conclusion that inasmuch as the Tribunal (Debts Recovery Tribunal) has given a

decision on merits after considering the facts and documents, their remedy is to file an appeal before the Debts Recovery Appellate Tribunal, and

rejected both the applications being devoid of merits. However, in order to render substantial justice and to give opportunity to the defendants to

contest the suit on merits, the Tribunal directed the defendants to pay 50 per cent of the decretal amount within one month. The Tribunal has also

made it clear therein that on furnishing a proof of the said payment, they shall be at liberty to file their reply statement and shall be permitted to

contest the case on merits. The Tribunal further ordered that in such a situation, their I.A. deemed to be allowed, and in case they fail to make

payment within the stipulated period to the applicant-bank, their I.A. shall stand dismissed after the stipulated period. Against the said order, the

second defendant alone has filed the present revisions before this Court.

Heard Mr. N. Damodaran, the learned counsel for the petitioner and Mr. P.L. Narayanan, the learned counsel for the first respondent-bank.

Though the learned counsel for the petitioner has argued the merits of the order of the Debts Recovery Tribunal which is under challenge, in

view of the objection of the learned counsel for the first respondent regarding the maintainability of the revisions, I shall consider the said question

at the foremost. There is no dispute that the impugned common order has been passed by the Debts Recovery Tribunal in applications filed by the

defendants. Section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 speaks about appeal to the Tribunal:

Appeal to the Appellate Tribunal.--(1) Save as provided in Sub-section (2), any person aggrieved by an order made, or deemed to have

been made, by a Tribunal under this Act, may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter.

(2) No appeal shall lie to the Appellate Tribunal from an order made by a Tribunal with the consent of the parties.

(3) Every appeal under Sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order made, or

deemed to have been made, by the Tribunal is received by him and it shall be in such form and be accompanied by such fee as may be prescribed :

Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of forty five days if it is satisfied that there was

sufficient cause for not filing it, within that period.

(4) On receipt of an appeal under Sub-section (1), the Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard,

pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Tribunal.

(6) The appeal filed before the Appellate Tribunal under Sub-section (1) shall be dealt with by it as expeditiously as possible and endeavour shall

be made by it to dispose of the appeal finally withir/six months from the date of receipt of the appeal.

By pointing out Sub-section (1) of Section 20 of the Act, Mr. P.L. Narayanan, the learned counsel for the respondent-bank, contended that the

proper remedy for the petitioners is to file an appeal to the Tribunal and that the present revisions under Article 227 of the Constitution of India are

not maintainable. On the other hand, Mr. N. Damodaran, the learned counsel for the petitioner, by pointing out Rule 8 (2) of the Debts Recovery

Appellate Tribunal (Procedure) Rules, 1994 and also by referring the fact that there is no reference regarding court-fee for the orders passed in the

interlocutory applications, contended that Section 20 is not applicable and that the only remedy is by way of revision to this Court under Article

227 of the Constitution of India. A reading of Sub-section (1) of Section 20 makes it clear that except any order made by a Tribunal with the

consent of the parties, any person aggrieved by an order of the Debts Recovery Tribunal has to prefer an appeal to the Tribunal having jurisdiction.

Subsection (3) provides limitation for filing appeal before the Tribunal. Proviso to Sub-section (3) enables the Tribunal to appeal even after the

expiry of the said period of 45 days, if it is satisfied that there was sufficient cause for not filing it within that period. Sub-sections (4) and (5) refer

the procedure to be followed, whereas Sub-section (6) fixes time-limit to dispose of the appeal expeditiously not later than six months from the

date of receipt of the appeal. The fee payable on the memorandum of appeal has been provided in Rule 8. Sub-rule (2) of rule 8 provides the

amount of fee payable in respect of appeal u/s 20. It is true that there is no reference about interlocutory applications and orders made thereunder.

However, the Debts Recovery Appellate Tribunal (Procedure) Rules, 1994 prescribe required fee for applications. Sub-rule (2) of Rule 7 speaks

about various applications and the amount of fee payable. The table appended to Sub-rule (2) shows that fee of Rs. 10 is to be paid for each

application in interlocutory order. Even though there is no corresponding provision made in the Debts Recovery Appellate Tribunal (Procedure)

Rules, 1994, as rightly contended by the learned counsel for the respondent-bank, the same fee as paid before the Debts Recovery Tribunal is to

be paid while filing appeal against the orders passed in interlocutory application. In the light of the specific language used in Sub-section (1) of

Section 20, I am of the view that the petitioner has effective statutory remedy by way of appeal to the Debts Recovery Appellate Tribunal. Without

availing such remedy, the petitioner cannot be permitted to avail of the constitutional remedy provided under Article 227 of the Constitution of

India. In this regard, it is relevant to refer a recent judgment of the Supreme Court, in Punjab National Bank v. O.C Krishnan [2001] (3) C.T.C.

In that case, a suit was filed by the appellant for recovery of money from the principal debtor as well as the guarantors. The suit was

transferred to the Debts Recovery Tribunal and thereafter on 17-5-1996, a decree was passed by the Debts Recovery Tribunal, Culcatta. A

certificate was also issued to recover the amount. The respondent who was a guarantor and whose property was stated to have mortgaged filed a

petition under Article 227 before the High Court at Calcutta. The High Court allowed the petition by observing that as the mortgaged property was

situated in Chennai, the Debts Recovery Tribunal had no territorial jurisdiction in respect thereto and it could not have directed sale of mortgaged

property. It, accordingly, held that the bank would be at liberty to proceed against Defendant No. 4, respondent therein, in appropriate forum for

recovery of debts by sale of mortgaged property. In that circumstance, the Punjab National Bank has filed an appeal before the Supreme Court.

After considering the rival contentions and in the light of the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993

and the Rules made thereunder as well as the jurisdiction of the High Courts under articles 226 and 227 of the Constitution of India, Their

Lordships have held :

In our opinion, the order which was passed by the Tribunal directing sale of mortgaged property was appealable u/s 20 of the Recovery of

Debts Due to Banks and Financial Institutions Act, 1993 (''the Act''). The High Court ought not to have exercised its jurisdiction under Article 227

in view of the provision for alternative remedy contained in the Act. We do not propose to go into the correctness of the decision of the High

Court and whether the order passed by the Tribunal was correct or not has to be decided before an appropriate forum.

The Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. There

is hierarchy of appeal provided in the Act, namely, filing of an appeal u/s 20 and this fast track procedure cannot be allowed to be derailed either

by taking recourse to proceedings under Articles 226 and 227 of the Constitution or by filing a civil suit, which is expressly barred. Even though a

provision under an Act cannot expressly oust the jurisdiction of the Court under Articles 226 and 227 of the Constitution, nevertheless when there

is an alternative remedy available judicial prudence demands that the court refrains from exercising its jurisdiction under the said constitutional

provisions. This was a case where the High Court should not have entertained the petition under Article 227 of the Constitution and should have

directed the respondent to take recourse to the appeal mechanism provided by the Act.

The said decision of the Supreme Court is directly on the point and, as stated earlier, the proper remedy for the petitioner is to avail of the remedy

as provided u/s 20.

In The Industrial Credit and Investment Corporation of India Ltd. Vs. Grapco Industries Ltd. and Others, , the Hon''ble Supreme Court has

held that the High Court can interfere with interim orders of the Courts and Tribunals while exercising jurisdiction under Article 227 of the

Constitution if the order is made without jurisdiction. However, the order under challenge is not an interim order, nor the Debts Recovery Tribunal

has no jurisdiction to pass such order. The learned counsel for the petitioner relied on a Division Bench decision of this Court in Pattammal M.

Alias Murugayee v. R. Velan Jagannathan [1988] 2 LW 509. The said decision is cited to the effect that the Tribunal is not justified in passing an

ex parte order. We are not concerned with the merits of the order under challenge. It is open to the petitioner to rely upon this decision either

before the Tribunal or before the Appellate Tribunal to support his case.

In the light of what is stated above, particularly in the light of the language used in Sub-section (1) of Section 20, against an order of the

Tribunal, the aggrieved party may prefer appeal to the Tribunal having jurisdiction. Since the impugned common order is an order passed by the

Debts Recovery Tribunal, and if the petitioner is aggrieved by the said order, the proper remedy for him is to prefer an appeal to the Appellate

Tribunal as provided under the statute. When such remedy is available under the statute, I am of the view that the petitioner is not entitled to move

before this Court to avail the constitutional remedy under Article 227 of the Constitution of India. As observed by the Hon''ble Supreme Court, the

Act has been enacted with a view to provide a special procedure for recovery of debts due to the banks and the financial institutions. Section 20

enables the aggrieved person to file an appeal and this fast track procedure cannot be allowed to be derailed by taking recourse to proceedings

under Articles 226 and 227. Though there is no express bar in the Act regarding the exercise of jurisdiction under Articles 226 and 227, when

there is an effective alternative remedy available in the Act, judicial prudence demands that the Court should refrain from exercising its jurisdiction

under the constitutional provision, namely, Article 227. On this ground, both the civil revision petitions arc liable to be dismissed; accordingly

dismissed. No costs. Inasmuch as the Debts Recovery Tribunal itself has shown concessions to the defendants, the petitioner herein/second

defendant has granted two weeks'' time from today to avail the said concessions as stated in para 6 of its order or else file an appeal before the

Appellate Tribunal as per Section 20. It is made clear that if the petitioner avails the appellate remedy, the time taken by him in prosecuting the

above revisions before this Court shall be excluded for the purpose of limitation.

Connected C.M.P. No. 11689 of 2001 is dismissed.