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High Court Of Calcutta
BIJITENDRA MOHAN MITRA
HINDUSTAN LAMINATORS PVT.LTD. - Appellant
Versus
CENTRAL BANK OF INDIA - Respondent
C. O. 1082 Of 1996
Decided On : 04/24/1998
DEBT RECOVERY TRIBUNAL - JURISDICTION - MORTGAGE - The Debt Recovery Tribunal has the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The definition of 'debt' under Section 2(g) of the Act includes any liability (inclusive of interest) which is alleged as due from any person by a Bank or Financial Institution or by a consortium of Banks or Financial Institutions during the course of any business activity undertaken by the Bank or the Financial Institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise and subsisting on, and legally recoverable on the date of the application.
Fact of the Case:
The petitioners in various petitions under Article 227 of the Constitution of India challenged the jurisdiction of the Debt Recovery Tribunal to entertain prayers for mortgage in a substantive petition under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. 51 of 1993). The petitioners contended that the statutory authority being the Debt Recovery Tribunal is divested of any authority and/or jurisdiction to entertain matters with other prayers or reliefs apart from debt as modulated therein.
Finding of the Court:
The Court held that the Debt Recovery Tribunal has the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the Act. The Court observed that the definition of 'debt' under Section 2(g) of the Act includes any liability (inclusive of interest) which is alleged as due from any person by a Bank or Financial Institution or by a consortium of Banks or Financial Institutions during the course of any business activity undertaken by the Bank or the Financial Institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise and subsisting on, and legally recoverable on the date of the application. The Court further observed that the term 'mortgage' has been defined in Section 58 of the Transfer of Property Act, 1882 and as per definition a mortgage is transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan and existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Issues: 1. Whether the Debt Recovery Tribunal has the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993? 2. Whether the definition of 'debt' under Section 2(g) of the Act includes any liability (inclusive of interest) which is alleged as due from any person by a Bank or Financial Institution or by a consortium of Banks or Financial Institutions during the course of any business activity undertaken by the Bank or the Financial Institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise and subsisting on, and legally recoverable on the date of the application?
Ratio Decidendi: The Court held that the Debt Recovery Tribunal has the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the Act. The Court observed that the definition of 'debt' under Section 2(g) of the Act includes any liability (inclusive of interest) which is alleged as due from any person by a Bank or Financial Institution or by a consortium of Banks or Financial Institutions during the course of any business activity undertaken by the Bank or the Financial Institution or the consortium under any law for the time being in force, in cash or otherwise, whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise and subsisting on, and legally recoverable on the date of the application. The Court further observed that the term 'mortgage' has been defined in Section 58 of the Transfer of Property Act, 1882 and as per definition a mortgage is transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan and existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Final Decision: The Court allowed the petitions and held that the Debt Recovery Tribunal has the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the Act.
( 1 ) THE common point of controversy which requires the considered scrutiny of this Court and the petitioners in all the pending petitions under Article 227 of the Constitution of India have joined in chorus in contending that the statutory forum created under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (Act No. 51 of 1993) does not have the jurisdiction to entertain prayers for mortgage in a substantive petition under Section 19 of the said Act. The Debt Recovery Tribunal as 1 constituted under Section 3 of the connected Act is conferred with jurisdiction in terms of Section 19 to entertain and decide applications of the Banks and the Financial Institutions. The said Tribunal is authorised to have assumed jurisdiction from the appointed day when the connected Act has come into force with regard to initiation of any proceeding for recovery of debts due to Banks and Financial Institutions and the said proceeding is required to be initiated in terms of the provisions under Section 19 of the Act. All applications which have been filed on or after the appointed day as mentioned in the Act, the Tribunal is conferred with jurisdiction to entertain list within the limited sphere and it has also been conferred with powers and jurisdiction to proceed with any pending proceeding before any Court before the establishment of a Tribunal under the Act after transfer of pending cases in terms of Section 31 of the Act. The challenge looms large on the score on a common ground that the statutory authority being the Debt Recovery Tribunal is divested of any authority and/or jurisdiction to entertain matters with other prayers or reliefs apart from debt as modulated therein. There is further relief by way of mortgage in the shape of the secured debts even relating to immovable property where hypothecation has been made with regard to those immovable property either by way of deposit of title deeds or by the other methods which this Court will dilate in detail at a later stage when it will deal with the question of mortgage in extenso as contemplated under the TRANSFER OF PROPERTY ACT, 1882.
( 2 ) ). This Court has taken long pains and has consumed enormous time to set on its process of thinking on motion to decide the ticklish question of controversy touching on the question of legal niceties where reference was made in abundance from the provisions of the TRANSFER OF PROPERTY ACT, 1882 as well as from the Code of Civil Procedure. This Court is also not unaware of some of the decisions of the other High Courts who are stated to have delivered judgment touching on the said question but in view of the marathon arguments offered by series of illustrious lawyers appearing on behalf of the petitioners in different petition under Article 227 of the Constitution of India and it has the occasion to hear at length even the arguments advanced by the learned Additional Solicitor General as well as by Sri Hirak Mitter and other eminent Lawyers appearing on behalf of the Banks and the Financial Institutions. This Court before plunging itself into the domain of controversy likes to have an initial look about the salient provisions of the concerned Act, namely. The Recovery of Debts Due to Banks and Financial Institutions Act, 1993. At the outset it will like to have a first look at the salient provisions of the Act and it will first make reference to Section 17 of the said Act. Section 17 as engrafted bespeaks of the conferment of power and jurisdiction on the Tribunal to entertain petitions, if filed at the instance of the Bank and Financial Institutions against the private loanees and if it is for recovery of sum beyond a certain ceiling. The entire lis has to be initiated and the same is to be commenced by filing of an application under Section 19 of the Act. It is necessary to make a reference to the germane implication of relevant expressions contained in Section 17 itself and after sc
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