IMPORTANT POINTS
If any dispute is raised with respect to a debts, as defined by the RDB Act, namely, which is more than Rs.10 lakhs, an adjudication on it can only be done by the DRT under the RDB Act and not by the District Collector under the RR Act. Obviously, therefore, the provisions of Section 34(2) of the RR Act would stand in conflict with the afore provisions of the RDB Act and resultantly, cannot be availed of by the Banks. The case of the SARFAESI Act stands on a different pedestal because this is a special Act, brought in subsequent to the RDB Act intended to provide a special mechanism, whereby the Banks can recover debts through the methods specified therein and under the adjudicatory processes that are well defined through its provisions. Thus, even assuming that, in an abstract manner, one views the RR Act to be a mere mechanism for recovery, it would still be of no avail to Banks and Financial Institutions because such recovery, as long as it entails a component of adjudication, would certainly have to yield to the provisions of Sections 17, 18, 19 & 34 of the RDB Act.

These cases, though presenting varied facts and nuances, are nevertheless concatenated by a common prayer: in all of them are impugned the action taken by various Banks for recovery of amounts over Rs.10 lakhs (Rupees One Million), allegedly due from the petitioners, under the provisions of the Revenue Recovery Act (hereinafter referred to as the “RR Act” for ease).

2. While the petitioners in these cases, who are all admittedly borrowers and guarantors of loans of more than Rs.10 lakhs availed from the respondent-Banks, assert that on account of the specific provisions under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, now rechristened as Recovery of Debts and Bankruptcy Act, 1993 (hereinafter referred to as the “RDB Act” for short), no requisition for recovery of such amounts can be made by the Banks under the provisions of the RR Act; the Banks on the contrary, maintain that their option to recover amounts from the borrowers/guarantors, through the various channels/methods legally available to them, including under RR Act, is implicit and therefore, that even if other remedies under other statutes are available, they are still at liberty to make a requisition to the Competent Authorities under the RR Act, provided the loans are once that fall within the umbra of Section 71 of the said Act.

3. I have heard Sri.Varghese C.Kuriakose, Sri.S.Easwaran, Sri.V.K.Peermohamed Khan and Sri.M.A.Augustine, the learned counsel appearing for the petitioners in the various writ petitions and Sri.A.S.P.Kurup, Sri.Gopalakrishnan Nair, Sri.M.Gopikrishnan Nambiar, Sri.V.B Harinarayan and Sri.Pauly Mathew Muricken, the learned Standing Counsel for the respondent-Banks.

4. Sri.S.Easwaran, the learned counsel appearing for the petitioners in some of these matters, opened his submissions by showing me that under Section 17 of the RDB Act, only the Tribunal constituted under it, namely, the Debts Recovery Tribunal (hereinafter referred to as “DRT” for short) shall have the jurisdiction to entertain and decide applications from Banks and Financial Institutions for recovery of debts due to them. He then took me to Section 18 of the said Act, to assert that from the appointed day, no Court or Authority shall have any power, jurisdiction or authority, except the Supreme Court and the High Courts, in relation to matters specified under Section 17 of the RDB Act. He asserts that a conjoint reading of these provisions, reinforced by the rigour of Section 34 (2) of the said Act, which mandates that the RDB Act will have an overriding effect notwithstanding anything inconsistent therewith contained in any law for the time being in force, renders it incontestable that only the DRT can decide upon matters as are specified in Section 17 of the RDB Act. After saying so, Sri.S.Easwaran, read to me Section 2 (g) of the RDB Act, which defines debt in the following manner;

“'debt' means any liability (inclusive of interest) which is claimed as due from any person by a bank or a 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 assigned, or whether payable under a decree or order of any civil court or any arbitration award or otherwise or under a mortgage and subsisting on, and legally recoverable on, the date of the application.”

5. He then shows, from Section 1 (4) of the RDB Act, that the provisions of the said Act apply when the debt is more than Rs.10 lakhs or such other figure as the Central Government may notify. He then, points out that there has been an amendment to this provision, as per which, the figure has been enhanced to Rs.20 lakhs, but that the said amendment has been stayed by the High Court of Rajasthan. He then asserts that notwithstanding this, the position in these cases would no