Only the Bank or financial institution can file application before tribunal.

This revision is filed under Art.227 of the Constitution of India. An application was filed before the Debts Recovery Tribunal, Chennai, by South Indian Bank Ltd. against five respondents. The 1st respondent is a private limited company. Respondents 3 and 5 are man and wife and respondents 2 and 4 are their sons. For the purpose of giving financial assistance to the company, the 3rd respondent in the O.A., along with respondents 2, 4 and 5 executed mortgages for securing the loan. When default was committed, the application was filed before the Debts Recovery Tribunal, for recovery of an amount of nearly Rs.66 lakhs, with future interest and costs. The said original application is pending consideration before the said Tribunal. While so, an application was also filed by the revision petitioners herein who are the younger children of respondents 4 and 6 herein that the mortgage executed by their father is not for necessity or consideration and the same is without taking into consideration the benefit of the family. According to them, the property offered as security is a joint family property and the mortgage is not binding on them, and their shares are not liable to be proceeded with. They wanted to get themselves impleaded in the original application and to have their rights adjudicated in the case. By the impugned order, the Tribunal rejected it, which is challenged in this revision under Art.227 of the Constitution.

2. The Tribunal held that the petitioners are not necessary parties, and their father was competent to mortgage the property. It also found that all the adult members of the family jointly executed the document in favour of the Bank, and therefore, even without them the original application could be proceeded with.

3. When the matter came up for admission, I ordered notice of motion and granted an order of interim stay. After the counsel for the Bank entered appearance, the matter was heard. In the various grounds in the revision it is contended that even to contend that the loan is not for the benefit of the family or that is for illegal purposes, the minors are necessary parties. The father has acted against the interest of the minors, and there is no necessity for borrowing the huge sum for the purpose of business, which is not a family business, and the father has neglected to safeguard their interest. The question whether the loan was contracted for necessity or not would arise during the trial of the original application and without impleading them the finding that the father who is the kartha is competent to execute the documents is wrong.

4. Learned counsel for the 1st respondent/Bank supported the order of the Tribunal and he prayed for dismissal of the revision.

5. After having considered the rival contentions, I feel that the petitioners’ contention cannot be accepted. The reasons for the said conclusion are hereunder. Admittedly the petitioners are not parties to the original application before the Debts Recovery Tribunal. The preamble of the Recovery Of Debts Due to Banks and Financial Institutions Act, 1993 (in short ‘Act’), says that “An Act to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions and for matters connected therewim or incidental thereto”. The Act was passed pursuant to the recommendations of a High Level Committee. The reasons for establishment of Debts Recovery Tribunal are stated thus:

“Banks and Financial Institutions at present, face considerable difficulties in recovering the dues from the clients and enforcement of security charged to them due to the delays in legal processes. A significant portion of the funds of the Banks and Financial Institutions is thus blocked unproductive assets, the values of which keep deteriorating with the passage of time. Banks also incur substantial amounts of expenditure by way of legal charges which add to their overheads. The question of speeding up