Ext.P4 notification enhancing DRT's pecuniary limit to Rs.20 lakhs supersedes previous restrictions on debt recovery actions below this threshold.

JUDGMENT :

The above writ petition is filed with following prayers:

“i. Declare that the pecuniary jurisdiction of DRT under the Recovery of Debts and Bankruptcy Act, 1993 being enhanced to Rs.20 lakhs and above, the bar of jurisdiction under 18 of the said Act do not apply to recovery actions initiated under The Kerala Revenue Recovery Act, 1968, by the Banks and Financial Institutions for recovery of debts due to it where the amounts sought to be recovered are below Rs.20 lakhs;

ii. Issue a writ of Certiorari or such other appropriate writ or order calling for the records leading to Ext-P1 and quash Ext-P1;

iii. Issue a writ of Mandamus or such other appropriate writ or order commanding the 2nd Respondent to issue fresh/modified circular in respect of requisition made by banks and financial institutions for recovery of money under the Kerala Revenue Recovery Act, 1968 taking into account the declarations given under relief No.1 above forthwith or within a time limit prescribed by this Hon’ble Court;

iv. Direct the respondents 2 and 3 to proceed with Ext-P2 requisition made by the petitioner bank and to recover the amounts due under it from the defaulters without any further delay;

v. Dispense with the English translation of Malayalam documents produced in this writ petition.

vi. Grant such other reliefs as are deemed fit and proper;

vii. Grant the cost of this writ petition.” (sic)

2. The petitioner in this case is the “Federal Bank Limited”, a Banking Company within the meaning of the Companies Act, 2013 and functioning as a Banking Company with its registered office at Alwaye and having its branches at various places including a Loan Collection and Recovery Department at Thrissur District in Kerala. The petitioner is represented by its Vice President and Divisional Head of the Loan Collection and Recovery Department, Thrissur. The petitioner is aggrieved by Ext.P1 Circular issued by the District Collector, Thrissur District directing the revenue officials not to initiate revenue recovery proceedings for loans wherein the amounts defaulted is above Rs.10 lakhs. According to the petitioner, the aforesaid circular is issued on a miscomprehension of the law laid down by this Court in Ext.P3 judgment. The short point raised by the petitioner is that, after Exhibit P4 notification issued by the Central Government invoking the powers under sub-section (4) of Section 1 of The Recovery of Debts and Bankruptcy Act, 1993 (for short ‘the Act 1993’), the power of the Debt Recovery Tribunal to entertain an application is only when the amount is more than Rs.20 lakhs and upto Rs.20 lakhs the bank is entitled to recover the same under Revenue Recovery Act.

3. Heard Adv.Mohan Jacob George for the petitioner bank and the Government Pleader for the respondents.

4. The counsel for the petitioner submitted that Ext.P1 judgment was delivered when there was a stay order from the Rajasthan High Court with respect to the notification issued under Section 1(4) of the Act, 1993. The counsel submitted that now the Rajasthan High Court has already disposed of the above case upholding the validity of the notification by which the Act, 1993 will apply only to debts which are more than Rs.20 lakhs. Therefore, it is submitted that Ext.P1 circular issued by the 2nd respondent is unsustainable. The Government Pleader submitted that, based on Ext.P3 judgment, Ext.P1 circular was issued.

5. This Court considered the contentions of the petitioner and the Government Pleader. Admittedly, Ext.P1 circular was issued based on the directions in Ext.P3 judgment. A perusal of paragraph 5 in Ext.P3 judgment would show that this Court proceeded to pass such an order because of the fact that Ext.P4 notification was stayed by the Rajasthan High Court. As per Ext.P4 notification, issued by the Government of India in exercise of the powers conferred under sub section (4) of Section 1 to the Act, 1993, it is declared that the act shall not apply where the amount of debts due to any ban