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High Court Of Calcutta
Bijitendra Mohan Mitra
GRAPCO INDUSTRIES LTD. - Appellant
Versus
INDUSTRIAL CREDIT INVESTMENT CORPORATION OF INDIA LTD. - Respondent
Of
Decided On : 01/06/1998
DEBT RECOVERY TRIBUNAL - AD INTERIM ORDERS - JURISDICTION - INTERPRETATION OF STATUTE - SECTION 19 OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - RULES 4, 10 OF THE DEBT RECOVERY TRIBUNAL (PROCEDURE) RULES, 1993 - PRINCIPLE OF NATURAL JUSTICE - BALANCE OF CONVENIENCE AND INCONVENIENCE - SECTION 22 OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - SECTION 14 OF THE CONSUMER PROTECTION ACT, 1986 - SECTION 238 OF THE COMPANIES ACT, 1956 - SECTION 39, RULES 2A, 6, 8, 10 OF THE CODE OF CIVIL PROCEDURE, 1908 - SECTION 136 OF THE CONSTITUTION OF INDIA - POWERS OF THE DEBT RECOVERY TRIBUNAL - SCOPE OF AD INTERIM ORDERS - CONDITIONS FOR GRANT OF AD INTERIM INJUNCTION - JURISDICTION OF THE DEBT RECOVERY TRIBUNAL TO PASS AD INTERIM ORDERS - APPLICABILITY OF THE PRINCIPLE OF NATURAL JUSTICE - INTERPRETATION OF SECTION 19(4), 19(6) OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - DISTINCTION BETWEEN INTERIM ORDERS AND AD INTERIM ORDERS - CONSTRUCTION OF SECTION 22 OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993 - SCOPE OF JUDICIAL REVIEW - JUDICIAL SUPERVISION - EXERCISE OF JURISDICTION BY THE DEBT RECOVERY TRIBUNAL.
Fact of the Case:
Several revisional applications were filed under Article 227 of the Constitution of India challenging the impugned orders passed by the Debt Recovery Tribunal, Calcutta. The main issue in these applications was whether the Debt Recovery Tribunal had the jurisdiction to pass ad interim orders, particularly ex parte ad interim injunctions, under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (the Act) and the Debt Recovery Tribunal (Procedure) Rules, 1993 (the Rules).
Finding of the Court:
The Court held that the Debt Recovery Tribunal did not have the jurisdiction to pass ad interim orders, including ex parte ad interim injunctions, under the Act and the Rules. The Court interpreted Section 19 of the Act and Rule 4 of the Rules and found that the Tribunal was only empowered to pass interim orders, which were defined as orders passed during the pendency of an application under Section 19(1) of the Act, and that ad interim orders were not included in the definition of interim orders. The Court also held that the principle of natural justice required that parties be given an opportunity to be heard before an order was passed against them, and that the Tribunal had failed to comply with this principle by passing ex parte ad interim injunctions without giving the respondents an opportunity to be heard.
Issues: 1. Whether the Debt Recovery Tribunal had the jurisdiction to pass ad interim orders, including ex parte ad interim injunctions, under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the Debt Recovery Tribunal (Procedure) Rules, 1993? 2. Whether the principle of natural justice required that parties be given an opportunity to be heard before an order was passed against them?
Ratio Decidendi: 1. The Court interpreted Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and Rule 4 of the Debt Recovery Tribunal (Procedure) Rules, 1993, and found that the Tribunal was only empowered to pass interim orders, which were defined as orders passed during the pendency of an application under Section 19(1) of the Act, and that ad interim orders were not included in the definition of interim orders. 2. The Court held that the principle of natural justice required that parties be given an opportunity to be heard before an order was passed against them, and that the Tribunal had failed to comply with this principle by passing ex parte ad interim injunctions without giving the respondents an opportunity to be heard.
Final Decision: The Court allowed all the revisional applications and set aside the impugned orders passed by the Debt Recovery Tribunal.
( 1 ) IN all these abovenoted revisional applications under Article 227 of the Constitution of India the impugned orders under challenges are in nature of ad-interim orders passed by the Debt Recovery Tribunal. The said revisional applications are numbered as five separate applications and before dealing with them serially this Court will consider the common questions of law and jurisdiction involved in the said proceedings.
( 2 ) THE common question which permeates the crux of the central range of controversy along with series of other pending revisional applications is centered-round on resolution of a question raised which has an element of commonality in character as to how far Debt Recovery Tribunal is competent and is authorised to pass under a self-contained statute know as The Recovery of Debts Due to Banks and Financial institutions Act, 1993 (Act No. 51 of 1993) which has been contended by the learned Counsels appearing on behalf of series of the petitioners and attention of this Court has been drawn to different dimensions focussed in order to substantiate their contention that the Debt Recovery Tribunal has neither any authority nor they are conferred by any blessing of the statute to pass such ad-interim orders. It has been contended by way of echo in a cohesive manner by all the petitioners that it has no vestige of jurisdiction by the same tribunal to pass ad-interim orders. The said contentions have been controverted by the Counsels appearing on behalf of the respondents Financial Institutions by joining issues to the propositions canvassed before this Court. This Court has carefully considered the contentions and counter-contentions of the respective parties at length and there has been some delay caused because of change of determination of this Court and because of the intervention of Annual Vacation. This Court has tried to carefully assess the respective contentions of the contentious propositions canvassed by the contesting parties. Before dealing with elaborate contentions raised by the learned Counsels 1 on behalf of the petitioners separately, this Court tends to take up the common pleas of the submissions made by the learned Counsels for the petitioners. Before dilating in details about the specific contentions raised by different Lawyers on behalf of the petitioners, this Court tends to deal on the substantive substance of their arguments. At the very outset it is salient to refer to the gist of the arguments and contentions made by the respective Counsels on behalf of the petitioners. Attention of this Court has been repeatedly drawn to the provision of Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the Act) wherein it has been stipulated in Sub-section (2) of Section 19 that every application under Sub-section (1) shall be in such form as may be prescribed. The Rules known as Debt Recovery Tribunal (Procedure) Rules, 1993 have come into force on the date of the publication in the official gazette and in terms of Rule 10 thereof it has been envisaged that an original application under Section 19 (1) shall not seek relief or reliefs based on more than a single cause of action in one single application unless the reliefs prayed for are consequential to one another. The procedure for final application and of its presentation in form has been prescribed in terms of Rule 4 of the said Rules. In terms of the said Rule, form has been prescribed in the said Rules with different clauses as detailed therein. Column 6 of the said form formulated under Rule 4 contemplates filling up of the reliefs sought for in the main application under Section 19 (1) of the Act itself. Column 7 of the said form envisages interim order pending final decision on the application issuance of interim orders which are asked for what are being prayed for. It is necessary in this context to refer back to Section 19 itself and attention of t
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