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Judgment
Ranjit Singh, J
The application filed by the defendants in OA No. 70 of 2011 was to seek transfer of the Recovery Certificate from the Recovery Officer of the DRT-II at Delhi to the Recovery Officer, DRT, Lucknow on the ground that the mortgaged property was situated within the jurisdiction of the DRT, Lucknow. This prayer, made by the appellants by invoking the provisions under Section 19(25) of the RDDBFI Act, has been declined by the Tribunal below. Aggrieved against the same, the appellants have filed the present appeal.
In support of its plea for transfer, the appellants have placed heavy reliance on the Full Bench judgment of the Hon'ble High Court of Delhi in the case of Amish Jain and Another v. ICICI Bank Ltd., 2012 (119) AIC 631 (Del). The Court in this case has observed that the application under Section 17(1) of the SARFAESI Act would be maintainable before the Tribunal where the property against which action is taken is situated.
The Tribunal below, however, opted to rely upon two decisions of two different High Courts i.e. High Court of Gujarat and Bombay which have examined and spoken on the issue specifically in regard to the scope of Section 19(23) of the RDDBFI Act. The Tribunal below has preferred to follow the decisions of Gujarat and Bombay High Courts by observing that the Hon'ble High Court of Delhi in Amish Jain's case (supra) has primarily dealt with the issue of jurisdiction to entertain an application under Section 17(1) of the SARFAESI Act and has not dealt with the scope of Section 19(23) of RDDBFI Act. Accordingly, the Tribunal below has followed the dicta of law as would emerge from the judgments rendered by the Hon'ble High Court of Gujarat in the case of Bank of Baroda v. Balbir Kaur Paul & 11 Others, AIR 2010 Gujarat 124 and decision of Bombay High Court in Writ Petition No. 5554 of 2012 reported in I (2013) BC 502 (DB) (Bom.) Tushar P. Shah v. IARC and Others.
Notice in this appeal was issued on 22nd January, 2015 while granting liberty to the Recovery Officer to proceed with the recovery proceedings. The appellants however did not collect notices to serve the respondents. None had appeared for the appellant. Fresh notice was issued for 28th April, 2015. None appeared for the appellant even on this adjourned date. The appellant had even not taken any action to collect notices. Thus, the respondents, except for respondent Nos. 1 to 3, remained unserved. Keeping in view the default on the part of the appellants to collect notices and continued non-appearance of their Counsel the appeal was dismissed for non-prosecution on April 28, 2015
An application (IA No. 459 of 2015) has now been filed for recall of this order and for restoring the appeal to its original position. When this application came for hearing, the Counsel was given opportunity to make submissions on merits as pure question of law arises for consideration in this appeal. The Counsel was found not ready to make submission. On request of the Counsel, the case was adjourned to today for arguments. Since the appeal is being heard on merit, the order dated 28th April, 2015 dismissing the appeal for non-prosecution is recalled for and the appeal stands restored.
The Counsel for the appellants would rely upon the observations made by the Full Bench of Delhi High Court in the case of Amish Jain (supra) to make good his point to seek transfer of this Recovery Certificate from Delhi to Lucknow The Counsel has mainly relied on the observations recorded in Paras 12, 13 and 14 of the judgment in Amish Jain's case (supra)
The Full Bench in this case has observed that the Division Bench fell in error in assuming that the debt/money recovery proceedings to be initiated by the Bank under DRT Act are equivalent to legal proceedings subject whereof is a mortgaged property within the meaning of Section 16 of the Code of Civil Procedure. As per the Court, the proceedings referred to in Section 19(1) of the RDDBFI Act are merely proceedings for recovery of debt and not for enforcement of mortgage. It is observed that even prior to coming into force of the RDDBFI Act, the Bank, even if was a mortgagee, was not mandatorily required to enforce the mortgage which under Section 16 of the CPC could be done only within the territorial jurisdiction of the Court where the mortgaged property was situated. The Bank was free to institute a suit only for recovery of money and territorial jurisdiction whereof was governed by Section 20 of the Code of Civil Procedure containing the same principles as given in Section 19(1) of the RDDBFI Act. The Court has further observed that the proceedings before the Recovery Tribunal are for recovery of debt culminating in the Recovery Certificate. This has been equated to money decree passed by the Civil Court. On this basis, the Court has held that just like a money decree of a Civil Court, can be transferred for execution to another Court where the assets of the judgment-debtor from which the recovery is to be effected are situated outside the local limits of the jurisdiction of the Tribunal which had issued certificate, the Tribunal dealing with the Recovery Certificate is required to send a copy of the certificate for execution to the Tribunal within whose jurisdiction the property is situated The Court has referred to Section 25 of the RDDBFI Act providing modes of recovery of the debts specified in the certificate including by attachment, and sale of property.
These observations apparently are made to emphasize the nature of the proceedings initiated before the Recovery Tribunal. The Court has equated the recovery proceedings under the RDDBFI Act with the suit for recovery of money before the Civil Court and not a suit which is for enforcement of mortgage. The observations relied upon by the Counsel, thus, are made in this context to highlight the nature of the proceedings. The issue of transfer of Recovery Certificate was neither under consideration before the Court in this case nor apparently seems to have been decided by the Court in any manner. Primarily the issue which arose before the Court was regarding the territorial jurisdiction to entertain application in the light of the provisions contained in the SARFAESI Act, etc.
On the other hand, this issue has specifically been dealt with by Gujarat High Court in the case of Balbir Kumar Paul (supra). In this case, the debtor had raised objection before the Recovery Officer that he had no jurisdiction to deal with the property it being situated beyond his territorial jurisdiction. The Recovery Officer rejected the said objection and the matter in this regard was challenged before the High Court. The Single Judge in its decision held that the Recovery Officer had no territorial jurisdiction to execute the decree qua the property which was situated outside his jurisdiction. This order passed by the Single Judge was challenged before the Division Bench. The Division Bench, after considering different provisions of the RDDBFI Act has held that the provisions contained in the said Act are vitally different in respect of execution of decree. Noticing the provision of Section 29 of the Act it is observed that this section provides that the provisions of Second and Third Schedules of Income Tax, would, as far as possible, apply. The Court has also held that the word 'may' used in Section 19(23) would show that the provision is not mandatory. Accepting that the ordinary language used in the said Section does not frustrate the provision or the object sought to be achieved, the Court has held that rather insisting on any requirement of Section being mandatory would lead to further delay in execution of a decree.
The Court has then compared the provisions of Section 19(23) of the RDDBFI Act and Section 38 of the CPC. Referring to Section 39, CPC which regulates the transfer of decrees, the Court has emphasized Sub-section (4) of the said section, which is a bar for the Court to execute a decree against any person or property outside the local limits of jurisdiction. It is noticed that there is no such provision made under the RDDBFI Act, which is a significant difference The provisions contained in CPC therefore may not be relevant for consideration. The relevant reasoning in this regard may need a notice, which are as under:
"Bearing in mind the above principles of statutory interpretation, and also objects for which the said Act was enacted, we find it difficult to hold that the term 'may' used in Sub-section (23) of Section 19 should be read as 'shall' or that the provision for forwarding the recovery certificate to another Tribunal within whose jurisdiction the property may be situated as mandatory and not enabling. Accepting the ordinary language used in the said section does not frustrate the said provision of the object sought to be achieved. On the contrary insisting on treating such a requirement as mandatory would lead to further delay in execution of a decree which may have been passed by the Tribunal long back.
In comparison to the said provision contained in Sub-section (23) of Section 19 of the said Act, Section 38 of the Code of Civil Procedure provides that a decree may be executed either by the Court which passed it or by the Court to which it is sent for execution. Section 39 of the Code of Civil Procedure pertains to transfer of a decree. Sub-section (1) of Section 39 of the Code of Civil Procedure provides inter alia that the Court which passed a decree may on the application of the decree holder send it for execution to another Court of competent jurisdiction, if any of the conditions laid down therein is specified. One of the conditions is that if the decree directs the sale or delivery of the immovable property situated outside the local limits of the jurisdiction of the Court which passed it. We are conscious that here has been put beyond any controversy by providing in Sub-section (4) of Section 39 that:
Section 39(4)--Nothing in this section shall be deemed to authorize the Court which passed a decree to outside the local limits of its jurisdiction.
In the said Act, there is no such provision as found in Sub-section (4) of Section 39 of the Code of Civil Procedure. In view of this significant difference, reliance on the language in Sections 38 and 39 of the Code of Civil Procedure or various rules under Order 23 thereof would not further the case of the original petitioner. Decision in case of Mohit Bhargava, AIR 2007 SC 1717 (supra) was rendered in view of the provisions of Code of Civil Procedure. It was in this background that the Apex Court observed that the decree could be executed by the Court which passed the decree so long as it is confined to the assets within its own jurisdiction or as authorized by Order 21 Rule 3 or Order 21 Rule 48 of the Code."
The Division Bench of Gujarat High Court had expressed the view noted above after making detailed reference to the various provisions of the RDDBFI Act and other relevant statutes like II and III Schedules of the Income Tax Act. The Court has also taken note of the statement of objects and reasons for which enactments like RDDBFI Act has been enacted keeping in view the objective of the Acts which was to provide for expeditious recovery of the debt due to the Bank. Reference is also made to Sub-section (23) of Section 19 of the RDDBFI Act to observe that unless term 'may' used in the section is read as 'shall' to hold such requirement to be mandatory in nature, the case of the petitioner before the Court must fail. After making reference to various decisions like Sudhir and Others v. State of M.P., I (2001) SLT 859 : 1 (2001) CCR 186 (SC) : (2001) 2 SCC 688; State of U.P. v. Manbodhan Lal Srivastava, 1957 (SLT Soft) 61 : AIR 1957 SC 912 & State of Uttar Pradesh and Others v. Babu Ram Upadhya, 1960 (SLT Soft) 85 : AIR 1961 SC 751, the Court has interpreted the word 'may' used in this section not to be mandatory and that it could not be read as 'shall'. The High Court has also drawn distinction between the provisions of Section 19(23) of the RDDBFI Act and the bar provided in the form of Section 39(4), CPC. The Court, thus, has set aside the judgment passed by the Single Judge while upholding the view expressed by the Tribunal.
The Bombay High Court in the case of Tushar P. Shah (supra) has also considered a similar question where the submission before the Court was that the provisions of Section 19(23) of the RDDBFI Act is almost analogous to the provisions of Section 39 of the Civil Procedure Code. Plea accordingly was that since there was no impediment, the Recovery Tribunal should have applied the provisions of Section 39 of the Code and the Recovery Certificate ought to have been transferred to DRT, Ahmedabad in view of the provisions of Section 39 of the Code since the property was situated within jurisdiction of DRT, Ahmedabad.
The Counsel for the respondent before the High Court, however, had submitted that the provisions of Section 19 (23) of the RDDBFI Act are directory and discretion is with the Presiding Officer who has issued the Recovery Certificate to get it executed from his own recovery officer or he can send the copy of the Recovery Certificate to the other Tribunal for execution within whose jurisdiction the property is situated The Counsel further submitted that the provisions of Section 39 (4) of the Civil Procedure Code is a specific provision which stipulates that if the property is situated beyond the jurisdiction of the Court which has passed the decree, it had no power to execute the same. The submission was that Section 19(23) of the RDDBFI Act was self contained statute which stipulated procedure for execution of the Recovery Certificate where the property to be dealt with under the Recovery Certificate is situated beyond the jurisdiction of the DRT which has issued the Recovery Certificate. In support, the Counsel had relied upon the judgment rendered by Gujarat High Court in the case of Balbir Kumar Paul (supra)
The High Court, after noticing the question which fell for consideration before the Tribunal below, has held that no doubt it is true that Section 19(23) of the RDDBFI Act and Section 38 of the Civil Procedure Code provides that a decree may be executed either by the Court which has passed it or by the Court to which it is sent for execution. The Court has then gone on to notice that Section 39 of the Code lays down a condition under which such decree can be so sent Section 39(1) of the CPC also uses word 'may' while leaving discretion with the Court for sending a decreed for execution to another Court of competent jurisdiction but then has taken note of the provisions of Sub-section (4) of Section 39 of the Code, already reproduced above.
The Court has, thus, observed that Sub-section (4) of Section 39 of the Code makes it implicitly clear that the Court which had passed a decree in respect of the property situated outside the local limits of its jurisdiction does not have power to execute the same in relation to such property. Accordingly, the Bombay High Court has concurred with the view expressed by Gujarat High Court after taking notice of the relevant part of the law laid down by the Gujarat High Court which is already noticed and reproduced above.
Besides relying upon the judgment in the case of Amish Jain (supra), the Counsel for the appellant has also placed before me a judgment of the Full Bench of Allahabad High Court in the case of Vijay Singh & Ors. v. State of U.P. & Others, 2005 (2) AWC 1191. This judgment is pressed into service by the Counsel in regard to the principle of interpretation of statute. It is observed that no construction is permissible which may render the provision meaningless and otiose. As per the Counsel, if the interpretation of Gujarat as well as Bombay High Courts in regard to Section 19(23) is accepted, the provisions will become meaningless and otiose and therefore such interpretation would not be permissible.
The Full Bench in the case of Vijay Singh (supra) was considering the provisions of the recruitment rules or employment selection and age limit for Sub-Inspectors of Police and other subordinate services. While considering these Rules, the Court has expressed itself on the rules of interpretation. It is observed that the rules of interpretation require that the statute should be constructed in the manner that it carries objective of the statute considering text and context thereof. No construction is permissible which may render the provision meaningless and otiose. I have not been able to appreciate the line of submission pursued by the Counsel for the appellants in this regard. The provisions of Section 19(23) of the RDDBFI Act are clear and provide that where the Tribunal which has issued Recovery Certificate is satisfied that the property is situated within the local limits of two or more Tribunals then it may send copies of the Recovery Certificate for execution to such other Tribunals where the property is situated. How interpretation of word 'may' to be discretionary and not mandatory would render this provision meaningless really cannot be made out. From the discussion above and the law as noticed above, it would clearly emerge that the Hon'ble High Courts of Gujarat and Bombay in the case of Balbir Kumar Paul and Tushar P. Shah (supra) have specifically dealt with Section 19(23) whereas this issue has not been considered in the context of scope of this section by the Full Bench of Delhi High Court in the case of Amish Jain (supra). The clear distinction between the procedure for recovery pursuant to decree and Recovery Certificate can be made out. It is bar under Section 39(4), CPC which would require a decree to be transferred to the Court where the property is situated whereas there is no such bar under the provisions of the RDDBFI Act. Special provisions provided under the RDDBFI Act therefore must prevail which is also vital for speedy recovery. The provisions of Section 19(23) being directory and discretionary, thus, cannot be pressed into service to seek transfer of the Recovery Certificate to the Tribunal where the property is situated being not a mandate of the statute Respectfully following the view expressed by the Hon'ble High Courts of Gujarat as well as Bombay, I am inclined to dismiss the present appeal.
The appeal is accordingly dismissed.