AI Structured Summary
Not yet generated for this judgment
Judgment
S.N.H. Zaidi, J
This appeal impugns the order dated 21.2.2011 of the Presiding Officer of DRT-I, Delhi whereby Appeal No. 3/2011 filed against the order of the Recovery Officer (RO) in T.R.C. No. 42/2009 has been ordered to be returned to the appellants with the liberty to file it before the DRT Allahabad, as the Recovery Certificate (RC) was issued by the said DRT, which has the jurisdiction with regard to the relief in the matter. The facts giving rise to this appeal, in brief, are that respondent No. 1, Dena Bank, had advanced a term loan of Rs. 47.20 lacs to respondent No. 2, M/s. Hygienic Foods Pvt. Ltd., with the appellants as its Directors, to set up a project for the manufacture of potato chips at its factory at village Manthana, Chaubeypur, Tahsil Bilhaur, District Kanpur Dehat (U.P.) and as a security for the repayment of the loan, movable assets were hypothecated and immovable properties, being land Khasra Nos. 25 and 26 measuring 6 Bighas 11 Biswas, situated in village Sandila, Tehsil Bilhaur, District Kanpur Dehat were mortgaged in favour of the Bank by deposit of title deed with it and the appellants and another stood as guarantors for the repayment of the said loan. As the borrower company could not repay the loan, the Bank filed a mortgage suit (Suit No. 198/92) in the Court of Civil Judge, Kanpur Dehat under Order 34, CPC for the recovery of the outstanding amount of Rs. 73,85,526.65 along with interest against the borrower company, mortgagors and guarantors, arraying them as defendant Nos. 1 to 6. The said suit was decreed vide order dated 25.9.1995 for the recovery of the claimed amount together with pendent lite and future interest @ 23.75% per annum and cost of Rs. 5,60,126.52 against the said defendants and a preliminary decree dated 6.10.1995 was accordingly drawn.
Since the preliminary decree remained unsatisfied, the Bank filed an application dated 17.3.1998 before the said Court for passing the final decree. During the pendency of the Original Suit (No. 198/92) before the Civil Judge, the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the RDDBFI Act) came into force. As a DRT having jurisdiction within the area of U.P. was established at Jabalpur, the case for the preparation of final decree was, accordingly, transferred to the DRT, Jabalpur in April, 1998. However, since a DRT was later established at Allahabad with jurisdiction within the area of U.P., the said case was transferred from DRT, Jabalpur to DRT, Allahabad, which was ultimately withdrawn by the Bank on 1.8.2007. The Bank, thereafter, filed an application under Section 31A of the RDDBFI Act for issuing the RC in accordance with the preliminary decree dated 6.10.1995 passed by the Civil Judge, Kanpur Dehat. The said application was allowed by the DRT Allahabad and an RC for the recovery of Rs. 21,68,88,343.67 along with cost and interest was issued on 13.5.2008.
The CH Bank then filed an application for transfer of the RC to DRT Delhi, which was allowed on 22.7.2009 and RC No. 81/2008 was transferred to DRT-I Delhi. On receiving the RC from Allahabad, the PO of DRT-I Delhi endorsed the same to the RO for proceeding in accordance with law. The said RC was registered as T.R.C. No. 42/2009.
CD Nos. 2 to 5 of the RC (the appellants herein), thereafter, besides filing an application under Order 9 Rule 13, CPC before the DRT for setting aside the decree dated 25.9.1995 also filed an application before the RO on 5.7.2010 for dismissing the proceedings of the RC on the ground of being without jurisdiction. The RO, however, observing that he could not go beyond the mandate issued by the PO through RC, dismissed that application, vide order dated 27.12.2010. Feeling aggrieved with that order, the applicants filed Appeal No. 3/2011, under Section 30 of the RDDBFI Act, before DRT-I, Delhi, which has ordered its return by the order impugned dated 21.2.2011, as mentioned above. This appeal has been filed against the said order.
I have heard Mr. Hashmat Nabi, the learned Counsel appearing for the appellants, Mr. Jos Chiramel, the learned Counsel for the first respondent Bank and Mr. U.N. Singh, the learned Counsel for the Official Liquidator, as the borrower company is under liquidation.
Mr. Nabi pointed out that the application seeking dismissal of the recovery proceedings was filed before the RO by the appellants mainly on the ground that the Civil Court at Kanpur Dehat had ceased to have jurisdiction in the matter by virtue of Section 18 of the RDDBFI Act after the establishment of the DRT at Delhi on 5.7.1994 and as such the decree dated 6.10.1995 passed by it was without jurisdiction and a nullity. He contended that the RC issued on the basis of the said decree was, therefore, bad in law and could not be proceeded with and the RC proceedings were liable to be dismissed, but the RO failed to apply his mind to the merits of the matter and dismissed that application. He further contended that the learned lower appellate Tribunal had also failed to exercise its powers as regards to the maintainability of the recovery proceedings and did not consider the plea qua the jurisdiction of the Civil Court of Kanpur Dehat.
The above contention of the appellants' Counsel does not appear to have any force because the suit before the Civil Judge, Kanpur Dehat was filed by the respondent Bank under Order 34 of the CPC for the recovery of the outstanding amount by the sale of the mortgaged property and as per Clause (c) of Section 16, CPC a suit for the sale of mortgaged property is to be instituted in the Court within the local limits of whose jurisdiction the property situates and since the mortgaged land Khasra Nos. 25 and 26 was situated in village Sandila, Tehsil Bilhaur of District Kanpur Dehat, therefore, the mortgage suit was correctly filed before the competent Civil Court at Kanpur Dehat in 1992. Section 18 of the RDDBFI Act, which bars the jurisdiction of other Courts, provides as under:
Bar of jurisdiction--On and from the appointed day, no Court or other authority shall have, or be entitled to exercise any jurisdiction, power or authority (except the Supreme Court, and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution) in relation to the matters specified under Section 17.
A perusal of the above provision would show that the exercise of jurisdiction of other Courts would be barred on and from the appointed day which, as per definition in Clause (c) of Section 2 of the RDDBFI Act in relation to a Tribunal, would mean the date on which such Tribunal is established under Sub-section (1) of Section 3 of the Act. The DRT having jurisdiction within the area of the State of Uttar Pradesh was established at Jabalpur, vide Notification No. G.S.R. 181(E) dated 7.4.1998, which is reproduced as under:
In exercise of the powers conferred by Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), the Central Government hereby establishes the Debts Recovery Tribunal at the place mentioned in Column (2) of the Table below, to exercise jurisdiction within the areas specified in the corresponding entry in column (3) of the said Table:
As there is nothing on record which could show that any DRT having jurisdiction within the area of the State of Uttar Pradesh was established during the pendency of the mortgage suit (No. 198/92) before the Civil Judge, Kanpur Dehat or until 25.9.1995, when it was finally decided by the said Court, therefore, it is sufficiently established that the said Civil Court at Kanpur Dehat had not ceased the jurisdiction in the said suit under Section 18 of the RDDBFI Act and the decree passed by it was not without jurisdiction or a nullity. Thus, the factum of the establishment of the DRT at Delhi in 1994 has no relevance qua the suit pending at Kanpur Dehat.
It is pertinent to note that the application dated 17.3.1998 filed by the Bank before the Civil Court at Kanpur Dehat for the preparation of the final decree was transferred in April, 1998 to the DRT Jabalpur under Section 31 of the RDDBFI Act and on subsequent establishment of the DRT at Allahabad, vide Notification No. G.S.R. 274(E) dated 31.3.2000, the said case was transferred from Jabalpur to the DRT, Allahabad, which was ultimately withdrawn by the Bank on 1.8.2007. It would also be appropriate to mention here that the application filed by the Bank under Section 31A of the RDDBFI Act for issuing the RC in accordance with the preliminary decree dated 6.10.1995 was allowed by the DRT, Allahabad and an RC was issued on 13.5.2008, which was transferred to DRT-I, Delhi, vide order dated 22.7.2009, on the application (M.A. No. 6/2009) filed by the CH Bank.
So far as the validity of the transfer of RC from Allahabad to DRT-I, Delhi is concerned, a perusal of the order dated 22.7.2009 of the DRT, Allahabad would show that the said order was made only on the basis of the submission of the Bank that the mortgaged properties belonged to Delhi. This submission was, however, factually incorrect as the mortgaged properties were situated in village Sandila, Tehsil Bilhaur of District Kanpur Dehat and since those properties were not situated in Dalhi, therefore, the aforesaid transfer order dated 22.7.2009 was not in accordance with the facts and bad in law. The RO of DRT-I, Delhi, therefore, could not exercise the jurisdiction qua the mortgaged properties in pursuance of the said RC on the strength of the said order. A perusal of the order dated 27.12.2010 of the RO, however, shows that he had not dealt with the question relating to the jurisdiction of the Civil Court of Kanpur Dehat or to the legality of the decree passed by it and dismissed the application of the appellants with the observation that since the RC dated 13.5.2008 issued by the DRT, Allahabad was received through transfer in DRT-I, Delhi and was assigned to him, therefore, he could not go behind the mandate of the RC. The lower appellate Tribunal has also not considered those pleas in the appeal filed against the said order and observing that he had no jurisdiction to give any finding with regard to the order of the PO of DRT, Allahabad, who had issued the RC, directed the appeal to be returned for filing it before the said DRT. In my opinion, since the RC was wrongly transferred to the DRT at Delhi on the mistaken belief that the mortgaged properties were situated in Delhi, therefore, neither the RO nor the PO of DRT-I, Delhi had the jurisdiction qua the said RC on the basis of the aforesaid transfer order. The RC received from the DRT, Allahabad is, therefore, required to be sent back to it for proceeding in accordance with law and the application filed by the appellants under Order 9 Rule 13, CPC for setting aside the decree of the Civil Judge, Kanpur Dehat is not maintainable before DRT-I, Delhi.
Mr. Nabi also contended that the DRT. Allahabad had committed error in issuing the RC under Section 31A of the RDDBFI Act as the notices issued qua the application filed for that by the Bank were not sufficiently served upon the appellants as it were sent at the Delhi address despite the fact that the Bank knew that the appellants were residing at Noida and had sent letters to them at their Noida address. The question relating to the legality of the order of DRT Allahabad, in my opinion, can be considered by the competent forum and not by this Tribunal which has no jurisdiction qua the orders of DRT Allahabad. The judicial authorities relied upon by Mr. Nabi, being on different facts and circumstances, have no application in the present matter. In view of the above discussion, the RC (T.R.C. No. 42/2009) be sent back to the DRT, Allahabad for proceeding in accordance with law. The PO, DRT-I, Delhi is directed to transfer back the RC to the DRT, Allahabad. The CD appellants may approach the appropriate forum for the redressal of their grievance as per law. The appeal is disposed of accordingly with the above directions. Parties to bear their own cost of the appeal.
Copy of this order be furnished to the parties as per law and be sent to the DRT concerned.