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2012 Supreme(Bom) 1547

High Court of Judicature at Bombay
D.D. SINHA & V.K. TAHILRAMANI
Tushar P. Shah
Versus
International Asset Reconstruction Co. P. Ltd. & Others
WRIT PETITION NO. 5554 OF 2012 WITH CIVIL APPLICATION NO. 1602 OF 2012
Decided on : 16-08-2012

Advocates appeared:
For the Petitioner:S.C. Naidu with Jay Choksi i/b. L.R. Castelino, Advocates.
For the Respondents:R1, B.S. Colabawala with Nikhil Rajani i/b. V. Deshpande & Co., Advocates.

Headnote:Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 19(23) and 22 - Civil Procedure Code, 1908, Section 39(1)(c) - Execution proceedings.

       Since Tribunal is not bound by procedure prescribed in CPC hence term "may" used in Section 19(23) of Act, cannot be read as "shall". - Term ’may’ used in sub-section (23) of Section 19 of the RDDB & FI Act should be read as "shall" suffers from lack of merit in view of the legislative intent and objective to be achieved by RDDB & FI Act. The Act has been introduced to provide speedy remedy for recovery of debts.

       The Legislature, therefore, in its wisdom thought it expedient to provide special remedy for recovery of debts. The prime object of the establishment of Debts Recovery Tribunal is to provide expeditious adjudication of recovery of debts due to banks and financial institutions, therefore, Section 22 of the RDDB & FI Act has clothed the Tribunal with the power to regulate its own procedure guided by the principles of natural justice and is not bound by the procedure laid down by the Code of Civil Procedure. Hence DRT, Mumbai who has issued recovery certificate can get it executed from his own recovery officer or he can send the copy of certificate to the other DRT, Ahmadabad, for execution within whose jurisdiction the property is situated. [AIR 2010 Guj 124 - Followed].

Judgment :-

D.D. Sinha, J.

1. Heard the learned counsel for the petitioner and the learned counsel for the respondent no. 1.

2. Counsel for the petitioner has submitted that the petitioner is one of the director and guarantor of the respondent no. 2. Respondent no. 1 is a Securitization Company duly registered and incorporated under the Companies Act, 1956 and assignee of the original applicant, Bank of Baroda, Chandravarkar Branch, Matunga, Mumbai. Respondent No. 3 is a company incorporated under the Companies Act, 1956 and a principal borrower of the respondent no.1. Respondent no.4 and respondent no. 5 are guarantors of respondent no. 2.

3. Counsel for the petitioner has submitted that the Bank of Baroda, the lender bank of the respondent no. 2, has filed a suit before this Court being Suit No. 5568 of 1998, during the pendency of the suit The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB & FI Act) came into force and therefore the suit was transferred to the Debt Recovery Tribunal (DRT) and numbered as Original Application No. 1661 of 1999. The said Original Application was finally heard and decided by the DRT by issuing recovery certificate dated 7.2.2003. In pursuance thereof proceedings have been initiated being Recovery Proceedings No. 42 of 2003.

4. It is contended that Certificate Debtor Nos. 3 and 4 have taken out an application interalia praying for modifying the recovery certificate so as to order the petitioner to contribute his part of the share, accordingly the DRT modified the recovery certificate on 21.5.2004.

5. Counsel for the petitioner has contended that the petitioner could not participate in the recovery proceedings, however, in the month of February 2006 the petitioner came to know about the sale of the immovable property situated at Mumbai and Vapi. Petitioner filed an application to set aside the sale. The Recovery Officer after hearing all the parties set aside the sale vide order dated 16.10.2006. The said order of the Recovery Officer was challenged by the petitioner as well as the purchaser before the DRT-II Mumbai. DRT-II Mumbai dismissed the proceedings initiated by the petitioner and allowed the appeal filed by the purchaser vide common judgment delivered on 22.4.2010. The petitioner being aggrieved by the same, challenged the order dated 22.4.2010 passed by the DRT-II Mumbai before Debt Recovery Appellate Tribunal Mumbai (DRAT Mumbai), which is pending for hearing and final disposal.

6. Counsel for the petitioner has submitted that while the appeal filed by the petitioner was pending before DRAT Mumbai, the respondent no.1 being the assignee initiated attachment of immovable property identified by the respondent no.1 for valuation and sale of the identified property in which the petitioner has actively participated. It is contended that at the time of fixing the sale programme, the Recovery Officer DRT-II Mumbai informed the respondent no.1 that in view of the administrative directions given by the Presiding officer DRT-II Mumbai the recovery certificate cannot be executed and is required to be transferred to DRT Ahmedabad since the immovable property is situated at Vapi which is within the jurisdiction of DRT Ahmedabad.

7. It is contended that the respondent no.1 moved DRT-II Mumbai for urgent directions. DRT-II Mumbai vide order dated 9.2.2012 has held that the Recovery Officer DRT-II Mumbai will execute the recovery certificate in Recovery Proceedings No. 42 of 2003 and shall proceed against the property situated in Vapi, State of Gujarat, in accordance with law to recover the amount indicated in the recovery certificate. The petitioner being aggrieved by the order dated 9.2.2012 passed by the DRT-II Mumbai filed an appeal under Section 20 of the RDDB & FI Act before the DRAT Mumbai bearing Misc. Appeal No. 55 of 2012. The appeal was dismissed by the DRAT Mumbai on 1.5.2012. The petitioner being aggrieved by the said order filed the present writ petition.

8. Coun




















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