2010 Supreme(Guj) 437

2011 (1) GCD 793 (Guj)
Hon’ble Mr. Justice Rajesh H. Shukla
Kotak Mahindra Bank Ltd.
Versus
Balaram Cements Limited
Civil Application No. 14195 of 20101—Decided on 30/12/2010

Point in Issue :
Whether in the facts of the case defendant is entitled to maintain recovery proceeding on assignment of debt to it nullifying the operation of other statutes.

Headnote:Head Note :

       Securitisation and Reconstruction of Financial Assets and Enforcement and Security Interest Act, 2002 — Sections 13(d), 13(9), 13(2), 13(4) Proviso to Sections 13(4)(b) and 33 — Recovery of Debts due to Banks and Financial Institution Act, 1993 — Sections 34 and 35 — Registration Act, 1908 (Central Act 16 of 1908) — Sections 17 and 49 — Civil Procedure Code, 1908 (Central Act 5 of 1908) — Order VII, II(d) — Transfer of Properties Act and Bombay Stamp Act — Assignment of debt — Permitted under Banking Regulation Act and guidelines of RBI — Not operative nullifying the operation of other statutes applicable — In the facts of the case, therefore, merely because assignment is permissible would not be sufficient to vacate the interim relief.

       Held :

       Permitting the sale and purchase of NPA by such permission under the Banking Regulation Act or the guidelines of the RBI cannot be construed as nullifying the operation of other statutes like the Transfer of Properties Act or the Registration Act or the Bombay Stamp Act. If the submission made by learned Counsel, Mr. Pahwa is to be accepted that he would step into shoes of assignor and he may proceed to recover the debt under the Securitisation Act would amount to giving the total go bye to the statutory provisions of the Transfer of Property Act and Registration Act as well as Bombay Stamp Act. In fact, under the financial policy allowing the assignment of debt under the Banking Regulation Act or the guidelines is one thing but it would require compliance of other provisions of law or the statute subject to which only right or claim could be exercised. Even in case of assignor, the lender bank while claiming any such right in the immovable property of the debtor, the procedure is required to be followed before affecting the rights and, therefore, merely because such guidelines have been issued or the assignment of debt has been permitted by the R.B.I., it cannot be a ground of overriding or ignoring the statutory provisions of law for conveying the right, title or interest in the immovable property and if that is permitted or even this submission canvassed by the learned Counsel, Mr. Pahwa is accepted, it would amount to giving such guidelines or such a permission for assignment of debt and overriding effect over the basic statutory provisions like Transfer of Properties Act or the Registration Act, which can never be the intention of the legislature even while enacting the special statute like Securitisation Act or D.R.T. Act to speed up or expedite the recovery proceedings. The object of the enactment of Securitisation Act is to recovery of the debt, which is one of the object and which may be sought to be achieved but it cannot be construed in such a manner that it negates or nullify the statutory provisions of other laws like Transfer of Properties Act. [Para 21]

       In fact, by such assignment of debt, which is permissible, by which the banks inter se may be permitted to assigne the debt by such deed of assignment but subsequently for the purpose of recovery or claiming any right in the property, which is offered as a security the compliance with other statutory provisions like Transfer of Properties Act or the Registration Act has to be made. It is in this background, when the submission made by the learned Counsel, Mr. Pahwa is considered even though the jurisdiction of the civil court is barred, the present Second Appeal raising very substantial questions of law with regard to the applicability of the special statute like Securitisation Act and also raising other important questions of law as discussed above with regard to the assignment of debt vis-a-vis the applicability of other provisions of Transfer of Properties Act or Registration Act or the Stamp Act subject to which further steps could be taken will have to be considered. Therefore, after by-parte hearing, when the interim relief has been granted in the Second Appeal, this Civil Application for modification based only on the judgment of the Hon’ble Apex Court, by which, the assignment of debt is made permissible by itself would not be sufficient to vacate the interim relief. Therefore, the present Civil Application cannot be allowed and deserves to be allowed. [Para 21]

       Law Laid Down :

       Permitting the sale and purchase of NPA under Banking Regulation Act and the guidelines of RBI cannot be construed as nullifying the operation of other statutes applicable.