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Judgment
R. S. Kulhari, Chairperson
The present appeal has been preferred under section 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "The RDDBFI Act) against the order dated 13.12.2011 passed by the Tribuanl below in execution application filed for issuance of the recovery certificate.
The essential facts in brief are, that the respondent-Bank granted credit facility to the appellant no. 1 through its proprietor-appellant no. 2. The appellant no. 3 stood as guarantor to the loan and executed mortgage agreement and the guarantee deed. The borrowers committed default in repayment of the loan, hence the Bank filed a Civil Suit before the Civil Judge, Allahabad for recovery of Rs. 8,77,882/- showing the appellants as defendants No. 1 to 3. The suit was decreed in favour of the Bank vide judgment dated 29.10.2009 and a decree was issued for an amount of Rs. 8,77,882.65 along with interest of Rs. 6,76,327.93 and cost of Rs. 66282/, total amounting to Rs. 16,20,492.58.
Since the suit for recovery was less than Rs. 10.00 lacs in 2005, hence the same was filed before the Civil Judge, but the decretal amount exceeded to Rs. 10.00 lacs, therefore, an application was filed before the DRT, Allahabad for issuance of the recovery certificate in accordance with the judgment and decree passed by the Civil Court. The appellants-defendants appeared before the Tribunal below, but thereafter, abstained, hence they were proceeded ex-parte and the impugned order for recovery certificate was passed. Accordingly, the recovery certificate was issued and the recovery proceedings were initiated against the appellants.
The appellants approached before the Hon'ble High Court by filing the writ petition No. 1372/2015, which was disposed on 20.04.2015 directing the appellants to deposit the amount in a phased manner and subject to such deposit, the recovery proceedings were ordered to be remained in abeyance, failing which to proceed further. However, the amount was not deposited as per the direction of the Hon'ble High Court and the present appeal has been filed on 15.09.2015 challenging the order of the DRT.
After deciding the issue of limitation and pre-deposit, the matter was heard on merits.
The learned counsel for the appellants submitted that the Tribunal below has wrongly invoked the provisions of section 31(A) of the RDDBFI Act, which were applicable only in the cases decided prior to commencement of the RDDBFI Act, but had not been executed. In the present case, the suit was filed in the year 2005 after commencement of the Act, therefore, the execution proceedings should have been filed before the concerned Civil Court and thereafter, it was to be transferred as per the provisions of section 38 and 39 of the CPC. The Tribunal below has erred in directly entertaining the application of the Bank.
The second limb of the arguments was that the Civil Court directed to pay the interest @ 13.50% per annum with quarterly rests, whereas the Tribunal below has allowed the pendentelite and future interest with monthly rests. Furthermore, the civil court has not passed any decree to the effect that the Bank is entitled to recover the amount by selling the mortgaged property and the mortgage was not so declared, but the Presiding Officer, DRT has directed to sell the property belonging to the appellant no. 3. Thus, this observation was beyond the findings of the judgment and decree passed by the Civil Court.
On the other hand, the learned counsel for the respondent-Bank contended that the total debt due to Bank had exceeded to Rs. 10.00 lacs after adding the future and pendentelite interest. Hence the jurisdiction of Civil Court was barred and the decree was executable only before the DRT. The provisions of CPC are not applicable in the proceedings pending before the DRT, therefore, the application was rightly entertained by the Tribuanl below. In support of the contention, the learned counsel has relied upon a judgment passed by the Hon'ble Supreme Court in Punjab National Bank Vs. Chajju Ram and others, AIR 2000 Supreme Court 2671.
With regard to application of interest with monthly rest, the learned counsel fairly concedes that it ought to have been at the quarterly rests as decreed by the Civil Court on the basis of contract. However, on the issue of mortgage, he submitted that the defendant no. 3 had mortgaged the house in the capacity of guarantor, which is her personal property, therefore, the Bank is otherwise entitled to sell the property for recovery of the dues from the appellant no. 3, who is jointly and severally liable to pay.
I have considered the rival contentions of the learned counsels for the parties and perused the record.
There is no dispute on the facts that the RDDBFI Act came into force in the year 1993 and the civil suit was filed in the year 2005 before the Civil Court for recovery of the amount less than Rs. 10.00 lacs on the date of filing of the suit. Thus, the present case is apparently not covered under section 31 or 31(A) of the RDDBFI Act, but admittedly, the total decretal amount came to be Rs. 16.00 lacs and odd as per the decree of the Civil Court, therefore, the jurisdiction of the Civil Court was debarred in view of sections 18 & 34 of the RDDBFI Act. Hence the application filed by the Bank for issuance of recovery certificate was to be entertained by the DRT. The provisions of bar of jurisdiction and overriding effect of the RDDBFI Act are to be read with the provisions of sections 31 and 31-A of the RDDBFI Act. As soon as the amount of debt due to Bank or F.I. becomes Rs. 10.00 lacs or exceeding to Rs. 10.00 lacs, the Civil Court is debarred from exercising the jurisdiction over such matter and it is only the concerned DRT to entertain the proceedings from that stage.
Although, the matter before the Hon'ble Supreme Court in Punjab National Bank Vs. Chajju Ram (Supra) was pertaining to section 31 and 31(A) of the Act, but the principle in that judgment has been laid down as under:-
"9..................As and when the amount due to the bank under the decree became more than Rs. 10 lakhs and an application for execution was filed, it could only be entertained by the Tribunal and not by the Civil Court. It is clear that in view of the provisions of Section 34 of the Act, the provisions of Order 21 Rule 10 C.P.C. would have no application".
The above proposition is clearly applicable to the matters, which are entertained by the Civil Court after commencement of the Act, but the total decretal amount comes under the pecuniary jurisdiction of the DRT after decree is passed by the Civil Court. The provision of transfer of execution as provided under section 39 of the CPC is not applicable in such proceedings. That provision is applicable only when the judgment debtor is residing under the jurisdiction of other court or the property is located under such jurisdiction, but cannot be transferred on account of the pecuniary jurisdiction and that provision is with regard to the territorial jurisdiction for execution purpose and convenience. Even otherwise, the provisions of the CPC are applicable on the proceedings of the DRT Act to a limited extent only as provided under section 22 of the RDDBFI Act. Thus, the Tribunal below has rightly entertained the application filed by the Bank for issuance of the recovery certificate.
Now coming to the second part of the arguments, it is settled proposition of law that the executing court cannot travel beyond the decree and the decree is required to be prepared strictly in accordance with the finding recorded in the judgment. In the instant case, the Civil Court allowed the Bank to recover the interest @ 13.50% per annum with quarterly rests. The Tribuanl below while deciding the application has directed the interest to be charged with monthly rests w.e.f. 01.02.2010. This finding is apparently beyond the scope of decree and is liable to be modified, as it should have been "with quarterly rests".
In so far as the issue of mortgage of the property is concerned, although there was pleading of the Bank to this effect, but the learned Civil Court had decreed the amount as if it was a money suit and has not recorded any finding with regard to the mortgage of the property much less to say that it was recoverable by sale of the said property. Thus, the decree passed in furtherance of the judgment was not a composite decree including the mortgage. Hence the Tribunal below was required to issue the recovery certificate in accordance with the decree of the Civil Court and not as per the mortgage deed. If the Bank was having any grievance with regard to the mortgaged property, it should have filed the modification application before the Civil Court or should have challenged it before the appellate authority. But now the judgment and decree of the Civil Court had attained finality, therefore, the recovery certificate was to be issued without mentioning the factum of mortgaged property. Thus, the finding that "the applicant-Bank will be entitled to sell the mortgaged property i.e. 5/5, Id Gah, Ram Bagh, Allahabad", has been recorded beyond the finding of the judgment and decree, which is liable to be set aside.
However, it is made clear that the said property belongs to the appellant no. 3, who is guarantor to the loan and is held jointly and severally liable to pay the dues, therefore, the Bank is entitled to recover the dues treating this property to be personal immovable property of the defendant no. 3 and is free to file such application before the Recovery Officer.
In view of the above, the appeal is partly allowed in the manner that the Bank is entitled to charge the interest @ 13.50% per annum with quarterly rests for pendentelite and future period till realization and the finding as recorded "the applicant-Bank will be entitled to sell the mortgaged property i.e. 5/5, Id Gah, Ram Bagh, Allahabad" stands deleted. The Tribunal below is directed to modify the recovery certificate accordingly. The parties shall bear their own costs.
A copy of this judgment be forwarded to the parties as well as to the DRT concerned and be also uploaded on the e-DRT portal.