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Judgment
S.N.H. Zaidi, J
This appeal impugns the judgment and order dated 27.11.2003 passed by the learned Presiding Officer of DRT, Jaipur, allowing O.A. No. 230/2002 filed by the respondent Bank for the recovery of Rs. 16,32,634/- from the appellants, respondent Nos. 2 and 3 and one Birda Singh Rawat, the predecessor of respondents 1/4 to 7/4, along with pendente lite and future interest @ 10% per annum from the date of application, i.e., 29.10.2002, till the date of realization. It appears that appellant No. 2, being the proprietor of appellant No. 1, took term loan, demand loan and cash credit facility from the respondent Bank for the poultry farming business and respondent Nos. 2, 3 and said Birda Singh Rawat stood guarantors to the said loans and mortgaged their properties with the Bank. Appellant No. 2 also mortgaged her share in an agricultural land. Although certain payments were made to the Bank, yet, as per respondent Bank, an amount of Rs. 16,32,634/- remained outstanding, for the recovery of which the respondent - Bank filed an application (O.A. No. 230/2002) under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short 'the RDDB & FI Act') before the learned DRT against the borrower/guarantors/mortgagors. The learned DRT allowed the O.A. and issued Recovery Certificate for the claim amount along with pendente lite and future interest, as mentioned above, and costs of the proceedings. Feeling aggrieved with the said order, the appellants have filed this appeal.
I have heard Mr. Muneesh Malhotra, learned Counsel for the appellants and Mr. Jai Mohan, learned Counsel for the respondent Bank and have perused the records.
Though the impugned order has been challenged on various counts, but Mr. Malhotra did not press any of those grounds and disputed the order only on the ground of lack of jurisdiction of the DRT in entertaining the O.A. and making the impugned order under the RDDB & Fl Act.
The jurisdiction of the DRT was neither challenged by the defendants/ appellants before it nor did the DRT consider it in the impugned order. Mr. Malhotra, however, relying upon the observations of the Hon'ble Supreme Court made in the case of Kiran Singh and Others v. Chaman Paswan and Others, : AIR 1954 SC 340, argued that in any proceedings an order passed without jurisdiction is a nullity and since appeal is continuation of proceedings, therefore, its invalidity can be challenged in appeal. The Apex Court in Para 6 of the judgment passed in the said case has observed that:
It is fundamental principle that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings....
Mr. Jai Mohan, learned Counsel for the respondent did not pick up a conflict with this aspect and in the light of the above proposition of law I am of the considered view that there is no legal hurdle in considering this question at the stage of appeal.
Mr. Malhotra has contended that the loans in question were agricultural loans, as it were taken for poultry farming business and the appellant was an agriculturist qua the said loans. He further submitted that the State of Rajasthan had enacted the Rajasthan Agricultural Credit Operations (Removal of Difficulties) Act, 1974 (for short the 'Rajasthan Act'), to facilitate a liquid flow of credit by commercial Banks to the agriculturists and as Section 13 of the said Act provides mechanism for the recovery of dues of a Bank and gives it an overriding effect by virtue of being a non obstante clause, the Bank should have proceeded against the appellants in accordance with the said section for the recovery of its dues and the jurisdiction of the DRT is barred under the RDDB&F1 Act for the recovery of such loans. Mr. Malhotra pointed out that this Tribunal in a similar matter (Appeal No. 27/2000 - M/s. Inderjit Poultry Farm & Ors. v. State Bank of Patiala, decided on 10.2.2010) relating to loan taken for poultry fanning business and dealing with the Haryana Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1973 (for short 'the Haryana Act'), which has similar provisions for the recovery of Bank dues under Section 8, has held that the DRT had no jurisdiction in such matters.
Mr. Jai Mohan, though admitting that the loans in question were agricultural credits given by the Bank but stressing that the DRT has full jurisdiction in the matter under the RDDB&FI Act, contended that Sub-section (3) of Section 13 of the Rajasthan Act expressly provides that the said section does not debar a Bank from recovering its dues under any other law, whereas, the Haryana Act does not have such a provision in its Section 8 and as such the findings of this Tribunal in Appeal No. 27/2000 (supra) has no application in the present matter.
Before considering the merits of the rival contentions of the parties, it would be appropriate to have a look at the relevant provisions of the Rajasthan Act, the Haryana Act and the RDDB&FI Act.
Clause (a) of Section 2 of the Rajasthan Act defines "Agriculture and agricultural purpose" and includes poultry farming and other activities generally carried on by the poultry farmers, within its definition, whereas, Clause (b) defines "Agriculturist". The said clauses read as under:
(a) 'agriculture and agricultural purpose' shall include making land fit for cultivation, cultivation of land, improvement of land including development of sources of irrigation, soil conservation and land development measures, raising and harvesting of crops, horticulture, forestry, planting and forming and cattle breeding, dairy farming, seed fanning, pisciculture, apiculture, sericulture, piggery, poultry farming and such other activities as are generally carried on by agriculturists, dairy farmers, cattle breeders, poultry farmers, landless labourers, rural artisans and other categories of persons engaged in similar activities including marketing of agricultural products, their storage and transport and the acquisition of implements and machinery in connection with any such activity;
(b) 'Agriculturist' means a person who is engaged in agriculture;" 11. Section 13 of the aforesaid Act provides for the mechanism for recovery of Bank's dues and says that:
Recovery of dues of a Bank through a prescribed authority.-(1) Notwithstanding anything contained in any law for the time being in force, an official of the State Government notified by the State Government as the prescribed authority for the purpose of this section may, on the application of a Bank, make an order on or any agriculturist or his heir or legal representative or his guarantor, directing the payment of any sum due to the Bank on account of financial assistance availed of by the agriculturist, by the sale of any land or interest therein or any other immovable property, upon which the payment of such money is charged or mortgaged or any other property in his possession:
Provided that no order shall be made by the prescribed authority under this sub-section for the sale of any land or any interest therein or any other immovable property upon which the payment of money is charged or mortgaged or any other property in his possession, as the case may be, unless the agriculturist or the heir or legal representative or his guarantor of the agriculturist, as the case may be, has been given an opportunity of being heard and has been served with a notice by the prescribed authority calling upon him to pay the amount due and default has been made in payment thereof for three months after the determination of liabilities by such authority.
(2) Every order passed by the prescribed authority in term of Sub-section (1) shall be deemed to be a decree of a civil Court and shall be executed by him in the same manner as a decree of such Court.
Explanation-For the purpose of exercising powers conferred by this sub-section, the prescribed authority shall be deemed to be a civil Court.
(3) Nothing in this section shall debar a Bank from seeking to enforce its rights in any other manner under any other law for the time being in force.
Similarly, Clauses (a) and (b) of the Haryana Act define the terms "Agriculture and agricultural purpose" and "Agriculturist" and include poultry farming in the definition of agriculture. Section 8 thereof provides for the recovery of dues of Bank as under:
Recovery of dues of Bank through prescribed authority-(1) An official of the State Government notified by the State Government as the prescribed authority for the purpose of this section may, on the application of a Bank, make an order against any agriculturist or his heir or legal representative, directing the payment of any sum due to the Bank on account of financial assistance availed of by the agriculturist by the sale of any land or any interest therein upon when the payment of such money is charged or mortgaged:
Provided that no order shall be made by the prescribed authority under this section for the sale of any and or any interest therein or any other immovable property upon which the payment of money is charged or mortgaged unless the agriculturist or the heir or legal representative of the agriculturist as the case may be; has been served with a notice by the prescribed authority calling upon him to pay the amounts due. (2) Every order passed by the prescribed authority under Sub-section (1) shall be deemed to be a decree of a civil Court and shall be executed in the same manner as a decree of such Court.
The RDDB & FI Act in its Section 19 deals with the procedure for the recovery of debts by Bank or financial institution, and provides for making an application to that effect to the DRT and Section 34 thereof provides for giving overriding effect to the provisions of the Act over the other laws. The said Section 34 says that:
Act to have overriding effect-(1) Save as provided under Sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.
(2) The provisions of this Act or the rules made thereunder shall be in addition to, and not in derogation of, the Industrial Finance Corporation Act, 1948(15of 1948), the State Financial Corporations Act, 1951 (63 of 1951), the Unit Trust of India Act, 1963 (52 of 1963), the Industrial Reconstruction Bank of India Act, 1984 (62 of 1984), the Sick Industrial Companies (Special Provisions Act, 1985 (1 of 1986) and the Small Industries Development Bank of India Act, 1986 (39 of 1989).
The poultry farming is indisputably an act of agriculture and as the appellant was engaged in the business of poultry farming, she was an agriculturist in view of the definitions quoted above. Now, I advert to the question whether a loan taken by an agriculturist can be recovered under the RDDB & FI Act, a Central legislation, in view of the fact that a mechanism for the recovery of such loans is provided in the Rajasthan Act, a State legislation, and in the event of inconsistency in both the enactments in respect thereof, which of them shall have the overriding effect.
In the case of Central Bank of India v. State of Kerala and Others, : I (2009) BC 705 (SC) : II (2009) SLT 247 : (2009) 4 SCC 94, the Hon'ble Supreme Court, while considering the question whether by virtue of non obstante clauses contained in Section 34(1) of the RDDB&FI Act, which has been referred to by the Apex Court as the "DRT Act" and Section 35 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the Securitisation Act'), two Central legislations, will have primacy overall these State legislations, namely, the Bombay Sales Tax Act, 1959 (for short 'the Bombay Act') and the Kerala General Sales Tax Act, 1963 (for short 'the Kerala Act'), has observed in Paras 25, 92 and 116 of the judgment that:
The legislative field of Parliament and the State Legislatures has been specified in Article 246. In terms of Clause (1) of Article 246. Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule. Under Clause (2) Parliament and subject to Clause (1), the Legislature of any State also have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. Subject to Clauses (1) and (2), the Legislature of a State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule. It is thus evident that Parliament has exclusive power to legislate with respect to any of the matters enumerated in List I and State Legislatures enjoy similar power with respect to any of the matters enumerated in List II. The combined effect of the different clauses of Article 246 is that in respect of any matter falling within List I, Parliament has exclusive power of legislation, whereas the State Legislature has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule and with respect to the matters enumerated in List III, both Parliament and the State Legislature have power to make laws.
An analysis of the above noted provisions makes it clear that the primary object of the DRT Act was to facilitate creation of special machinery for speedy recovery of the dues of Banks and financial institutions. This is the reason why the DRT Act not only provides for establishment of the Tribunals and the Appellate Tribunals with the jurisdiction, powers and authority to make summary adjudication of applications made by Banks or financial institutions and specifies the modes of recovery of the amount determined by the Tribunal or the Appellate Tribunal but also bars the jurisdiction of all Courts except the Supreme Court and the High Courts in relation to the matters specified in Section 17. The Tribunals and appellate Tribunals have also been freed from the shackles of procedure contained in the Code of Civil Procedure. To put it differently, the DRT Act has not only brought into existence special procedural mechanism for speedy recovery of the dues of Banks and financial institutions, but also made provision for ensuring that defaulting borrowers are not able to invoke the jurisdiction of civil Courts for frustrating the proceedings initiated by the Banks and financial institutions
The non obstante clauses contained in Section 34(1) of the DRT Act and Section 35 of the Securitisation Act give overriding effect to the provisions of those Acts only if there is anything inconsistent contained in any other law or instrument having effect by virtue of any other law. In other words, if there is no provision in the other enactments which are inconsistent with the DRT Act or the Securitisation Act, the provisions contained in those Acts cannot override other legislations....
Indisputably, the RDDB & FI Act has been enacted by the Parliament under Entry 45 in List I (Union List) of the Seventh Schedule of the Constitution and the Rajasthan Act has been enacted by the State Legislature under Entry 30 in List II (State List) of the said Schedule. Entry 45 relates to "Banking" whereas Entry 30 relates to "money-lending and money-lenders; relief of agricultural indebtedness". As procedural mechanism in both Central and State enactments for the recovery of Bank's dues are entirely different and the provisions of the Rajasthan Act are inconsistent with the RDDB & FI Act, therefore, in the light of the observation of the Apex Court in Central Bank of India v. State of Kerala (supra), the non-obstante clause in Section 34(1) of the RDDB & FI Act would given overriding effect to the provisions of the RDDB & FI Act over the Rajasthan Act and thus the respondent Bank was fully competent to file the O.A. before the learned DRT for the recovery of its outstanding dues even if the said dues were related to an agricultural loan.
Moreover, Sub-section (3) of Section 13 of the Rajasthan Act also permits the Bank to recover its dues under any other law and does not in any manner debar the Bank from seeking its remedy for the recovery of its dues under other laws. This contention of the appellants' Counsel has no legs to stand that the Bank can take recourse for the recovery of its dues only under those laws which were in force at the time when the Rajasthan Act came into force, and not under those laws which came into existence subsequently.
In view of the above discussion, I am of the considered view that the Bank had lawfully acted in proceeding against the appellant before the DRT under the RDDB&FI Act for the recovery of its outstanding dues and the learned DRT had rightly exercised its jurisdiction in entertaining the O.A. and making the impugned order which is not suffering with any jurisdictional defect. Since no other ground qua impugned order has been pressed by the learned Counsel for the appellant, therefore, this appeal is liable to be dismissed being devoid of any force.
The appeal is, accordingly, dismissed without any order as to costs. Copy of this order be furnished to the parties as per law and one copy be sent to the learned DRT forthwith.