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2001 Supreme(AP) 1166

Andhra Pradesh High Court
Judges : BILAL NAZKI, ELIPE DHARMA RAO
Debts Recovery Tribunal, Advocates Association of A.P. - Appellant
Versus
Debts Recovery Tribunal, Karnataka and A.P., Bangalore - Respondent
Decided On : 10-05-01

Headnote:

Banks and Financial Institutions Act, 1993 - Section 22 (1) - Rule 50 (b) – Bank -Jurisdiction - Recovery of Debts - Recovery of dues - Writ petition has been filed by an Advocates Association and it is submitted that association was formed to promote brotherhood among legal fraternity and to take up activities relating to common problems of Advocates - Central Government was authorised to issue notification to establish Debts Recovery Tribunals to adjudicate claims of the Banks - Government was also empowered to specify the areas over which such Tribunals may exercise their jurisdiction - Central Government by a notification constituted Debts Recovery Tribunals was constituted at Bangalore which had jurisdiction to try the debts recovery matters for State of Andhra Pradesh and it started functioning – Held, Counsel for petitioners have not been able to show us any judgment although reference has been made to many judgments which are not relevant for purpose of this case - Out of many judgments referred, one judgment needs to be mentioned that - This was a case in which there was an agreement between advocate and client this agreement had a stipulation that client would give a share in subject matter of litigation in the event of success - Bombay High Court was of view that this was misconduct - Fixation of fee by Banks for payment to lawyers uniformly would not in any way be termed as an agreement between the client and advocate for sharing fruits of litigation - As such do not find that even this judgment would come to rescue of petitioners - Writ petition dismissed (Para 6)

BILAL NAZKI, J.

( 1 ) THIS writ petition has been filed by an Advocates Association and it is submitted that the association was formed to promote brotherhood among legal fraternity and to take up activities relating to common problems of Advocates. It has been stated that the Banks and financial institutions were filing suits in Civil Courts for recovery of their dues in respect of loans and other facilities provided by them to the borrowe Rs. The Government of India having felt the need, created separate Tribunals for adjudication of matters relating to Bank recoveries. The Recovery of Debts due to the Banks and Financial Institutions Act (51 of 1993) was promulgated by Parliament which came into force on 24/06/1993. The Central Government was authorised to issue notification to establish Debts Recovery Tribunals to adjudicate the claims of the Banks. The Government was also empowered to specify the areas over which such Tribunals may exercise their jurisdiction. The Central Government by a notification constituted Debts Recovery Tribunals on 30/11/1994. A Debts Recovery Tribunal was constituted at Bangalore which had the jurisdiction to try the debts recovery matters for the State of Andhra Pradesh and Kamataka and it started functioning at Bangalore from 30/11/1994. The claims of Banks worth Rs. 1 0. 00 lakhs and above were sent to the Tribunals. All the pending suits valued at Rs. 10. 00 lakhs and above pending before the Courts in the State of Andhra Pradesh were transferred to the said Tribunal. According to the petitioners, the Advocates appearing for Banks and Financial institutions in Civil Courts were being paid Advocate fees- in the A. P. Advocates Fee Rules, 1990 prescribed by the High Court of Andhra Pradesh. According to the petitioners, the Banks also issued circulars for payment of fee for Advocates appearing in Civil Courts in accordance with A. P. Advocates Fees Rules, 1990. The Managements of the Public Sector Banks, however, started issuing circulars to their branches prescribing a different fee structure for cases before the Debts Recovery Tribunals without having regard to the fee structure prescribed by the High Court of Andhra Pradesh and Karnataka. The General Manager (Operations) of the State Bank of India, Hyderabad issued a circular on 18/08/1995 prescribing the fee structure. Rs. 12,000. 00 was fixed as fee for debts upto Rs. 10. 00 lakhs and Rs. 500. 00was to be paid for each Rs. 1. 00 lakh or part thereof subject to maximum of Rs. 30,000. 00. The Circular also prescribed the mode of payment. 25% of the fee had to be paid at the time of filing of application before the Debts Recovery Tribunal, 25% was payable after obtaining recovery certificate from the Tribunal, 25% was to be paid at the time of initiation of proceedings and the balance of 25% would become due on termination of proceedings before the Recovery Officer after full payment by the debtor. In case of compromises, only half of the fee prescribed was payable. The grievance of the Association is that the fee prescribed by Local Head Office of State Bank of India was much less than the fee payable under the Advocates Fee Rules prescribed by the High Court. It is submitted that the Advocates had to bear their own expenses for going to Bangalore for any number of times for the purpose of the case. They were not being paid even TA/da. It is submitted that other Banks have also issued circulars on the lines of the circular issued by the State Bank of India. This circular and the circulars issued by the other Banks on similar lines have been challenged in this writ petition. It is further stated that the Tribunal framed Regulations under Section 22 (1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, Rule 50 (b) of the Regulations stipulated as follows:"rule 50 (b); Advocates fee to be included in the costs awarded by the Tribunal to a party in any proceedings before it shall be as prevailing in the respective Stat







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