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Bombay High Court
S. Oka Abhay
KISHOR K.MEHTA -Appeallant
Versus
HDFC BANK -RESPONDENTS
Insolvency Petition 81 Of 2005
Decided On: 09/04/2007
Presidency Towns Insolvency Act, 1909 - Section 9(2) - Maharashtra Co-operative Societies Act, 1960, Section 91 - Award - Made by Co-operative Court - Issuance of insolvency notices - Co-operative Court is not a Court - Award made by Co-operative Court cannot be a basis for issuance of insolvency notice - Award neither a decree nor an order within meaning of Section 9(2) of Insolvency Act. - The question is whether an award made or an order passed by the Co-operative Court is a "Decree" or "Order" within the meaning of Section 9(2) of P.I. Act. The question is whether a Co-operative Court is a Court as understood by sub-sections (2) and (14) of Section 2 of the Code. In so far as Co-operative Court is concerned, though the nomenclature Court has been used, the said Court cannot be a Court as understood by the provision of the said Code in view of Sections 3 and 5 of the said Code read with the provisions of 1869 and 1948 enactments referred to above. The Co-operative Court may have the trappings of ’a Court’ but is not a Court as understood in the said Code. Therefore, the award made by a Co-operative Court cannot be the basis on which insolvency notice can be issued. The award is neither a decree or an order within the meaning of Section 9(2) of the P.I. Act.
Presidency Towns Insolvency Act, 1909 - Section 9(2) - Multi-State Co-operative Societies Act, 2002, Section 84 - Arbitral award - Issuance of insolvency notice on basis of award - Award of arbitrator neither a decree nor an order within meaning of appellants 9(2) of Insolvency Act - On basis of arbitration award, insolvency notice cannot be issued. - It will be also necessary to refer to Chapter XI of the Multi-State Co-operative Societies Act. The said Chapter provides for a mode to execute every decision and order made under Section 39, Section 40, Section 83 or Section 99 or Section 101 of the Multi-State Co-operative Societies Act. Section 96 grants power to the arbitrator to attach a property before passing an award. Thus, there is no specific provision under the Multi-State Co-operative Societies Act which makes an award executable under the said Act as if it is a decree of Civil Court and therefore so far as execution is concerned the same will be governed by the Arbitration Act. There is no appeal provided against the said award in the Multi-State Co-operative Societies Act. There is one distinction between the provisions of the Multi- State Co-operative Societies Act and the Arbitration Act. Under the Arbitration Act choice of the arbitrators is with the parties except where Section 11 is invoked in which case the Hon’ble the Chief Justice or his nominee can appoint the arbitrator. However, under the Multi-State Co-operative Societies Act the arbitrator is always appointed by the Central Registrar. However, fact remains that the adjudication is not necessarily by a trained Judge or by a lawyer. The arbitrator appointed under Section 84 cannot be said to be vested with the State’s inherent judicial powers. There- fore, in case of an award by arbitrator appointed under Section 84 of the Multi-State Co-operative Societies Act, the law laid down in the case of Paramjeet Singh Patheja (supra) will squarely apply. The award of the arbitrator cannot be a decree or an order within the meaning of sub-section (2) of Section 9 of the P.I. Act.
Presidency Towns Insolvency Act, 1909 - Section 9(2) - Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Section 27 - Issuance of recovery certificate - By D.R.T. - Issuance of insolvency notices - Tribunal constituted under D.R.T. Act is not a Civil Court - Recovery certificate issued by D.R.T. neither order nor a decree within meaning of Section 9(2) of Insolvency Act - Insolvency notices cannot be issued. - The Tribunal constituted under the Debt Recovery Tribunal Act is a Tribunal and it is not a Civil Court governed by the said Code. As indicated earlier, though the Tribunal has the trappings of a Court but it will not become Court as understood under the said Code. In view of sub-section (2) of Section 5 of the said Code, the Tribunal will not even become a Revenue Court. Thus, the said Tribunal cannot be a Court as understood by the said Code. Therefore, the order or recovery certificate issued by the Debt Recovery Tribunal is neither an order nor a decree within the meaning of Section 9(2) of the P.I. Act.
( 1 ) BY this order I am deciding the following questions which have arisen for consideration:
(i) Whether the decision of this Court in the case of (Re: Deepak Cochharvs. Indusind Bank Ltd.), 2006 (3) Bom. C. R. (O. S.)520 is no longer a good law in view of the decision of the Apex Court in the case of (Paramjeet Singh Patheja Vs. ICDS ltd),2007 (4) Bom. C. R. (S. C. J447:2006 DGLS 780: 2006 (11) SCALE 459 : J. T. 2006 (10) S. C. 41 : A. I. R. 2007 S. C. 168? (ii) Whether an insolvency notice under sub-section (2) of section 9 of the Presidency Towns insolvency Act, 1909 (for short P. I. Act) can be issued on the basis of a recovery certificate issued under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the R. D. B. Act)? (iii) Whether an insolvency notice under subsection (2) of section 9 of the P. I. Act can be issued on the basis of an Award made by a co-operative Court under section 91 of the maharashtra Co-operative Societies Act, 1960 (for short the Co-operative Societies Act)? (iv) Whether an insolvency notice under section 2 of section 9 of the P. I. Act can be taken out on the basis of a recovery certificate issued under section 101 of the Co-operative Societies Act? (v) Whether an insolvency notice under sub-section (2) of section 9 of the P. I. Act can be issued on the basis of an Award of the arbitrator in a dispute under section 84 of the Multi-State Co-operative Societies Act, 2002 (hereinafter referred to as the Multi-State Societies Act)?
( 2 ) SEVERAL matters were fixed before this court involving the aforesaid issues. Therefore, I permitted the Counsel appearing for the various parties in various proceedings to address me on the aforesaid questions. I have accordingly heard submissions of the Counsel appearing for the parties on 7th August, 2007 and 21st August, 2007.
( 3 ) IN Notice of Motion No. 40 of 2007 in insolvency Notice No. 226 of 2006, the learned Senior Counsel Mr. D Vetre appearing for the judgment debtor has made detailed submissions. He relied upon the decision of the apex Court in the case of Paramjeet Singh Patheja (supra ). He invited my attention to the submissions made before the Apex Court and in particular in clause Nos. (i), (j) and (k) of paragraph No. 14 of the said decision. He submitted that the recovery certificate issued by the Debt recovery Tribunal is neither a decree nor an order within the meaning of sub-section (2)of section 9 of the P. I. Act. He submitted that in Paragraph No. 27 of the said decision the apex Court has held that the provisions of the P. I. Act have to be construed strictly. He, therefore, submitted that the view taken by this Court in the case of Deepak Cochharthat restrictive meaning cannot be given to the words "decree" or "order" is no longer a good law. He submitted that the view taken by the learned Single Judge that provisions of sub-section (2) of section 9 of the P. I. Act must be given widest possible interpretation is not correct in view of the decision of the apex Court in the case of Paramjeet Singh patheja (supra ). He submitted that the test laid down by the Apex Court in the aforesaid decision is that the "decree" or "order" contemplated by sub-section (2) of section 9 must be of a Court. He submitted that the Apex court has held that the "decree" or "order" contemplated by sub-section (2) of section 9 must be of a Civil Court under the Code of civil Procedure, 1908 (hereinafter referred to as "the said Code" ). He submitted that another test laid down by the Apex Court is that the proceeding in which "decree" or "order" is passed must be initiated on the basis of a plaint. He submitted that the proceedings before a Debt Recovery Tribunal are not initiated on the basis of the plaint. He submitted that the Apex Court has held that the words "decree" and "order" used in the section are as understood under the said code. He submitted that the Apex Court has held that the Bomb
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