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PATNA HIGH COURT
Rajeev Ranjan Prasad, J.
Bank of Baroda through the Chief Manager – Petitioner
versus
Union of India through Debt Recovery Tribunal and Ors. – Respondents
Civil Writ Jurisdiction Case No.10241 of 2016
Decided on 25.10.2019
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 – Section 19(1) – – Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 – Section 13(10) – Recovery of debt – Both Acts though complementary to each other, are independent in operation and though object of both Acts are same, they operate in their own laid down procedure independently – Application under sub-section (10) of Section 13 of SARFAESI Act of 2002 may be filed by a secured creditor only when Original Application is not pending before Tribunal – If Bank had already preferred an Original Application for determination of its dues and issuance of a certificate of recovery and during pendency of Original Application, since Bank had proceeded with SARFAESI action and had recovered Rs. 83.30 lacs Bank had rightly filed amendment application to amend its claim under Original Application, no fault may be found on part of Bank in pursuing its remedy – Bank had filed an application under Section 19 of Act of 1993, at this stage application of – Bank could not have been thrown out by Presiding Officer of Tribunal merely by referring to sub-section (10) of Section 13 of SARFAESI Act of 2002 – Presiding Officer of Tribunal has taken a completely erroneous view of matter – Impugned judgment – passed by Tribunal set aside and OA – restored.
Result: Petition allowed.
Certainly. Based on the provided legal document, here are the key points:
The Recovery of Debts Due to Banks and Financial Institutions Act, 1993, and the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, are independent in their operation, despite having similar objectives (!) (!) (!) .
Both Acts are complete codes in themselves and operate through their own procedures without overriding each other, even though they are complementary (!) (!) (!) .
An application under sub-section (10) of Section 13 of the SARFAESI Act can only be filed when there is no pending Original Application before the Tribunal. If an Original Application is pending, and the bank proceeds with SARFAESI action and recovers part of the dues, it may amend its claim under the Original Application; this does not invalidate the application (!) (!) .
The Tribunal's view that the Act of 2002 overrides the Act of 1993 is incorrect. Both Acts can be pursued simultaneously or sequentially, and the remedies are complementary, not mutually exclusive (!) (!) (!) .
The recovery proceedings under the SARFAESI Act do not preclude the bank from initiating or continuing proceedings under the Debt Recovery Tribunal Act, especially when the sale of secured assets does not fully satisfy the dues (!) (!) .
The remedy under the Act of 1993 involves a judicial adjudication process where the claim is determined based on evidence, and a certificate of recovery is issued after following proper procedures (!) .
The presiding officer of the Tribunal erred in dismissing the application under the Act of 1993 on the ground that SARFAESI action had already been taken and recovery made, as the application could still be maintained and amended during the pendency of proceedings (!) (!) .
The Court set aside the Tribunal's order and restored the original application, emphasizing that both statutes operate independently and that the bank's actions under SARFAESI do not bar proceedings under the DRT Act (!) .
The Court clarified that the remedies under both Acts are intended to provide quick and effective recovery of debts, and there is no legal bar to pursuing them concurrently or sequentially (!) (!) .
The Court directed the Tribunal to proceed with the original application according to law, ensuring that the bank's right to recover dues is preserved (!) .
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ORDER (ORAL)
Rajeev Ranjan Prasad, J.—Heard learned Senior Counsel for the Bank assisted by learned Advocate on record and learned counsel representing respondents no. 2 and 3. Respondents no. 4 to 9 have been though served by ordinary process and the service report is available on the record, they have chosen not to appear before this Court. Learned counsel for the petitioner submits that before the Debts Recovery Tribunal, Patna also they have not put their appearance.
2. The petitioner Bank is aggrieved by and dissatisfied with the order dated 19.05.2016 passed by learned Presiding Officer, Debts Recovery Tribunal, Patna (hereinafter referred to as ‘the Tribunal’) in OA 239 of 2014.
3. By the impugned judgment and order, learned Presiding Officer of the Tribunal has held that the Original Application preferred by the Bank under Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the ‘Act of 1993’) is not sustainable and is liable to be dismissed. In paragraph ‘21’ of the judgment the learned Presiding Officer of the Tribunal has held as under:-
“21. It is pertinent to mention here that both the Acts operate within the same scheme, but the DRT Act is a general Act, whereas the NPA Action (SARFAESI Act) is the special Act. It is well settled that the Special Act will prevail over the General act.”
4. Having said so, after taking note of the fact that the petitioner Bank has recovered a sum of Rs. 83.30 lacs by taking action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereinafter referred to as the ‘SARFAESI Act of 2002’ or the ‘NPA Act’) the Presiding Officer has taken a view that after realization of Rs. 83.30 lacs by taking SARFAESI action now the Bank can proceed under Section 13(10) of the SARFAESI Act of 2002’ and the Original Application is not maintainable.
5. Learned Senior Counsel for the petitioner Bank submits that the learned Presiding Officer has passed the impugned judgment and order on a complete misconception of law and by ignoring the judicial pronouncements on the subject. Learned Senior Counsel further submits that the Tribunal has not even looked into the Hon’ble Division Bench judgment of this Court in the case of State Bank of India through the Deputy General Manager/Authorised Officer vs. M/s Purnea Cold Storage and Anr. reported in 2013(4) PLJR 753 in which the Hon’ble Division Bench had upturned the judgment of the learned Single Judge and held that the application under the Act of 1993 as well as the SARFAESI action under the SARFAESI Act of 2002 can go together. It is submitted that in paragraph ‘16’ of the impugned judgment the learned Presiding Officer of the Tribunal has in fact taken note of the views which were expressed by the learned Single Judge and were not of the Hon’ble Division Bench of this Court, thereafter, he has committed an error in taking the final view of the matter holding that the Original Application is liable to be dismissed.
6. Learned Senior Counsel further submits that on a bare perusal of the Act of 1993 it would appear that under Section 19 of the Act of 1993 the ‘DRT’ acts as an adjudicatory body whereunder claim of the Bank is determined on the basis of evidences brought on record and a certificate of recovery is issued for the determined amount after following the established procedure under various sub-sections of section 19. It is submitted that no doubt, the Act of 1993 and the NPA Action under SARFAESI Act 2002 both have similar object of recovery of public money but they operate within their own spheres and it has been held that both the Acts are complete code unto themselves. It is submitted that so far as the application under Section 13(10) of the SARFAESI Act, 2002, which the Presiding Officer of the Tribunal has referred to, is concerned, under the SARFAESI Act of 2002 a provision has been made that “where dues of the secured
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