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2006 Supreme(SC) 1250
SUPREME COURT OF INDIA
S. B. Sinha & Markandey Katju
Raghunath Rai Bareja and another-PETITIONER
VERSUS
Punjab National Bank and others-RESPONDENT
Appeal (civil) 5634 of 2006
(Arising out of Special Leave Petition(Civil) Nos. 22058-22059/2005)
DATE OF JUDGMENT: 06/12/2006
The court affirmed that the literal rule of interpretation applies to unambiguous statutory provisions. Specifically, Section 31 of the RDB Act only allows transfer of cases pending at the Tribunal's establishment, and statutory limitation periods cannot be overridden by equity or party consent.
Headnote:(A) Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 17, 18, 24 and 31 - Limitation Act, 1963 - Article 136 - Companies Act, 1956 - Section 446 - Transfer of execution proceedings to Tribunal - Only proceedings pending immediately before the date of establishment of Tribunal stand transferred under Section 31 - No inherent power of Court to transfer proceedings de hors Section 31 - Consent of parties cannot confer jurisdiction - Debt recovery claim filed after expiration of 12-year limitation period is time-barred - Statutory provisions prevail over equitable considerations.
(B) Interpretation of Statutes - Literal Rule - Foremost rule of construction - To be applied when language is plain and unambiguous - Purposive interpretation or mischief rule applicable only if words are ambiguous or lead to absurdity - Court cannot legislate under the garb of interpretation - Literal rule must be followed even if it results in hardship or inconvenience.
(C) Law and Equity - Conflict between law and equity - Law prevails over equity - Equity can supplement but not supplant or override written or settled law.
Facts of the case:
A final decree for recovery was passed against a company in winding up on 15.1.1987. The limitation period for filing an execution application under Article 136 of the Limitation Act, 1963, expired on 15.1.1999. After several previous execution petitions were dismissed, a third execution petition was filed on 11.1.1999. The High Court subsequently transferred this petition to the Debt Recovery Tribunal in 2005, exercising its inherent powers and citing the consent of the parties.
Findings of Court:
The High Court lacked jurisdiction to transfer the execution petition because the Tribunal had been established in 1993, while the petition in question was filed in 1999, placing it outside the scope of Section 31 of the RDB Act. Further, the claim became time-barred after 15.1.1999 per the Limitation Act.
Issues: Whether the High Court could transfer execution proceedings to the Tribunal using inherent powers or Section 31 of the RDB Act when the proceedings were initiated after the Tribunal's establishment, and whether the recovery claim was barred by limitation.
Ratio Decidendi: The court held that Section 31 of the RDB Act specifically limits the transfer of proceedings to those pending immediately before the establishment of the Tribunal. Inherent powers cannot be invoked to override express statutory provisions. When the language of a statute is plain and unambiguous, the literal rule of interpretation must be applied, and any resulting hardship cannot be cured by equitable considerations or the consent of parties, as these cannot confer jurisdiction where it is statutorily absent.
Result: Impugned order of the High Court set aside, appeals allowed and recovery quashed.
Legal Category Hierarchy
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practice and procedure
- limitation
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jurisdiction
- debt recovery tribunal
- inherent powers
- execution of decrees
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banking and finance
- recovery of debts
JUDGMENT:
MARKANDEY KATJU, J.
Leave granted.
This appeal has been filed against the impugned judgment and order dated 26.5.2005 of the Punjab & Haryana High Court in Execution Petition No. 1-L of 1999 by which the execution proceeding was transferred to the Debt Recovery Tribunal, Chandigarh (hereinafter referred to as the Tribunal), for being disposed of in accordance with law.
Heard learned counsel for the parties and perused the record.
The facts of the case are that on a Company Petition No. 57 of 1983 M/s. S.P. Nagrath & Co. vs. M/s. Bareja Knipping Fasteners Ltd., the High Court vide order dated 23.10.1983 ordered winding up of the Company and an Official Liquidator was appointed who took over possession of the properties of the Company.
The respondent-Bank filed a Suit (Company Petition No. 46 of 1984) for recovery of Rs. 14,53,577/- with pendente lite and future interest.
A preliminary decree for recovery of Rs. 19,07,800/- with future interest @ 12% per annum was passed by the High Court in favour of the decree-holder Bank, the respondent herein, on 2.12.1985 in Company Petition No. 46 of 1984.
Ultimately, a decree was passed in favour of the Bank on 15.1.1987 in Company Application No. 115 of 1986.
The aforesaid final decree dated 15.1.1987 stated as under:
"It is hereby ordered and decreed that the mortgaged/pledged/hypothecated properties in the aforesaid preliminary decree mentioned or sufficient part thereof be sold, and that for the purpose of such sale the plaintiff/petitioner shall produce before the Court or such officer as appointed, all documents in his possession or power relating to the mortgage properties.
And it is hereby ordered and decreed that the money realized by such sale shall be paid in the Court and shall be duly applied (after deduction therefrom of expenses of the sale) in the payment of the amount payable to the plaintiff/petitioner under aforesaid preliminary decree and under any further orders that may have been passed in this petition and in payment of any amount which the Court may have adjudged due to the plaintiff/petitioner for such costs of the petition including costs of this application and such costs, charges and expenses as may be payable under Rule 10 together with such subsequent interest as may be payable under Rule 11 of Order XXXIV of the first Schedule to Code of Civil Procedure, 1908 and that the balance, if any, shall be paid to the defendants/respondents or other persons entitled to receive the same."
Under Article 136 to the Schedule of the Limitation Act, 1963 the period for applying for execution of any decree is 12 years from the date when the decree becomes enforceable. Since in the present case the final decree was passed and became enforceable on 15.1.1987, the period of limitation for filing an execution application expired on 15.1.1999.
In the present case, the Bank filed three Execution Petitions. The first one, being Execution Petition No. 14-L of 1987, was dismissed on 8.11.1990 by the following order:
"No list of the property sought to be attached has been filed. This application is dismissed. The petitioner may, however, file a fresh execution application in accordance with law."
It appears that a second Execution Petition thereafter was filed in 1994 being Execution Petition No. 3-L of 1994 by which the decree holder bank sought attachment and sale of properties which did not belong to the judgment debtors. After contest by the objectors, this second Execution Petition was dismissed by a Learned Single Judge of the High Court on 18.8.1994 holding that the decree passed against the Company cannot be satisfied by attachment and sale of properties belonging to other Companies, as these other Companies are different and distinct juristic personalities with different set of shareholders.
Thereafter on 4.9.1998, the respondent-bank filed another Company Petition No. 236 of 1998 under Section 446 of the Companies Act, 1956 read with Rule 117 of the Companies (Court) Ru
