Important Point
The Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its power is to observe the principles of natural justice.

Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993-Sections 3, 17, 18, 19, 22 and 24-Constitution of India 1950-Articles 226 and 227-Appellants filed application under Section 19 of the Act claiming over rupees thirty-six and a half crore against respondents 1 and 2-Tribunal granted order of injunction restraining respondents from transferring or alienating properties hypothecated to appellant-Appointed special officer for making inventory of assets and properties hypothecated and mortgaged by respondents in favour of appellant-Respondent moved High Court for setting aside order of Tribunal-High Court holding Tribunal had no jurisdiction to grant ex parte orders under the Act-SLP to Supreme Court-High Court not correct in holding that Tribunal under the Act has no power to grant ex parte order of injunction or stay-Instead of merely setting aside order High Court could have remanded matter to Tribunal-Object with which Tribunal passed ex parte order now lost-Impugned judgment of High Court setting aside order of Tribunal not interferred with-Tribunal to pass interim order if matter still pending.
       Held : Principles on which an interim order can be granted are well settled. Sub-section (a) of Section 19 requires that application for recovery of debt itself is to be disposed of finally within a period of six months from the date of receipt of the application. That also shows the urgency to decide is an interim order of injunction or stay granted ex parte is to be continued or not. In our view, the High Court was not correct in holding that a Tribunal under the Act has no power to grant an ex parte order of injunction or stay. (Para 12)
       Instead of merely setting aside the order, High Court could have remanded the matter to the Tribunal to take a decision expeditiously while, at the same time, continuing the interim order, in modified form or otherwise, since the circumstances of the case certainly so warranted. At this point of time, we do not know the stage of proceedings before the Tribunal. We do not know if there is any interim order passed by the Tribunal after the High Court stayed the operation of the ex parte order dated May 15, 1997. The object with which the Tribunal passed the ex parte order appears now to have been lost. We may not, therefore, interfere with the impugned judgment of the High Court setting aside the order dated May 15, 1997 of the Tribunal. But that is only because of passage of time and without our knowing the stage of proceedings before the Tribunal on the application filed by the ICICI under Section 19(1) of the Act. It will, however, be open to the Tribunal to pass an interim order on the plea of the ICICI if the matter is still pending before it. (Para 14)

Judgment

D.P. Wadhwa, J.-Leave granted.

Question of law that arises for consideration in these appeals is : if the Debts Recovery Tribunal constituted under Section 3(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short, the ‘Act’) has jurisdiction to grant ad interim ex parte order of injunction or stay against the defendant on an application filed by the bank or financial institution for recovery of debt as defined under clause (g) of Section 2 of the Act. Tribunal under clause (o) of Section of the Act means the Tribunal established under sub-section (1) of Section 3 of the Act. These appeals are from the judgments of the Calcutta High Court given on petitions filed under Article 227 of the Constitution holding that the Tribunal has no jurisdiction to grant ex parte orders under the Act. It is further held on merit as well that the Tribunal was wrong in granting an ex parte order of injunction.

2. When we see Preamble to the Act, it provides for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewith or incidental thereto. Under Section 17 of the Act a Tribunal shall exercise jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions. There is also a provision for establishment of Appellate Tribunal. Under Section 18 of the Act, no court or other authority shall have, or be entitled to exercise, any jurisdiction, powers or authority in relation to the matters specified in Section 17 of the Act. This bar of jurisdiction, however, does not apply to the Supreme Court or to a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution. It is not necessary for us to consider as to how a Tribunal and Appellate Tribunal are established and their qualifications.

3. Chapter IV of the Act provides for the procedure of Tribunals. Section 19, which is relevant for our purpose, is as under:

“19. Application to the Tribunal.-(1) Where a Bank or a Financial Institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction,-

(a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business, or personally works for gain; or

(2) Every application under sub-section (1) shall be in such form and be accompanied by such documents or other evidence and any such documents or other evidence and by such fee for filing the application as may be prescribed :

Provided that the fee may be prescribed having regard to the amount of debt to be recovered :

Provided further that nothing contained in this sub-section relating to fee shall apply to cases transferred to the Tribunal under sub-section (1), of Section 31.

(3) On receipt of the application under sub-section (1), the Tribunal shall issue summons requiring the defendant to show cause within thirty days of the service of summons as to why the relief prayed for should not be granted.

(4) The Tribunal may, after, giving the applicant and the defendant an opportunity of being heard, pass such orders on the application as it thinks fit to meet the ends of justice.

(5) The Tribunal shall send a copy of every order passed by it to the applicant and the defendant.

(6) The Tribunal may make an interim order (whether by way of injunction or stay) against the defendant to debar him from transferring. alienating or otherwise dealing with, or disposing of, any property and asse

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1999 Supreme(SC) 665

Important PointThe Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its power is to observe the principles of natural justice.

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Important Point
The Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its power is to observe the principles of natural justice.