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2004 Supreme(P&H) 1171

PUNJAB & HARYANA HIGH COURT
Amar Dutt and Rajive Bhalla JJ.
Atma Jain Hosiery Emporium
Versus
Union Of India
Decided On : OCTOBER 13, 2004

Headnote:

Court Fee - Debts Recovery Tribunal - 2002 Act, Section 13(2)(3) and (4) - The judgment discusses the interpretation and application of Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 in relation to court fee requirements for appeals under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The court examines the validity of the court fee demanded by the Tribunal and the extension of Rule 7 of the 1993 Rules to appeals under the 2002 Act. It also addresses the arguments related to the oppressiveness of the court fee and its nexus to the expenses incurred by the Tribunal for adjudication of applications under the Act.

Fact of the Case:

The judgment disposes of multiple writ petitions challenging the view taken by the Registrar, Debts Recovery Tribunal on objection applications filed by the petitioners, which required them to affix court fee on their applications as per the provisions of Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993. The petitions arose after the decision in Mardia Chemicals Ltd. v. Union of India, where secured creditors started issuing notices under Section 13 of the 2002 Act to recover debts. The petitioners objected to the court fee requirement, citing the decision in Mardia Chemicals case and the oppressiveness of the court fee.

Finding of the Court:

The court rejected the petitioners' arguments regarding the unconstitutionality of the court fee requirement and the extension of Rule 7 of the 1993 Rules to appeals under the 2002 Act. It upheld the validity of the court fee demanded by the Tribunal and emphasized the applicability of the provisions of the 1993 Act and the Rules to the proceedings under the 2002 Act. The court also addressed the argument related to the oppressiveness of the court fee, concluding that it was in line with the Court Fees Act and necessary for maintaining the adjudicatory facilities provided by the State.

Issues: The issues involved the validity of the court fee demanded by the Tribunal, the extension of Rule 7 of the 1993 Rules to appeals under the 2002 Act, and the oppressiveness of the court fee in relation to the expenses incurred by the Tribunal for adjudication of applications under the Act.

Ratio Decidendi: The court held that the court fee demanded by the Tribunal was valid and in line with the provisions of the 1993 Act and the Rules. It also emphasized the applicability of the provisions of the 1993 Act and the Rules to the proceedings under the 2002 Act. Additionally, the court concluded that the court fee was not oppressive and was necessary for maintaining the adjudicatory facilities provided by the State.

Final Decision: All the petitions were dismissed, and the parties were left to bear their own costs.

Judgment

Amar Dutt, J.

1. This judgment will dispose of C.W.P. Nos. 9395, 11155, 11774, 12032, 12123, 12157, 12451, 12508, 12558, 12571,12572, 12590, 12654, 12661, 12699, 12739, 12771, 12773, 12824, 12943, 12947, 13156, 13218, 13744, 13926, 13996, 14014, 14033, 14220, 14701, 14730, 14779, 14797, 15016, 15104, 15125, 15337, 15338, 15507, 15532 and 15563 of 2004, as common questions of law arid fact arise in these writ petitions to challenge the view which is being taken by the Registrar, Debts Recovery Tribunal (hereinafter referred to as "the Tribunal") on objection applications filed by them by which the petitioners have been required to affix court fee on their applications as per the provisions of Rule 7 of the Debts Recovery Tribunal (Procedure) Rules, 1993 (hereinafter referred to as "the 1993 Rules").

2. The facts necessary for the decision of the points of law have been taken from C.W.P. No. 9395 of 2004. The necessity of filing these petitions arose when after the decision in Mardia Chemicals Ltd. and Ors. v. Union of India and Ors., (2004-3)138 P.L.R. 271 (S.C.) : (2004)4 S.C.C. 311, the secured creditor as defined under Section 2(zd) of the Securitisation and Reconstruction of Financial Assets ,and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "the 2002 Act") started issuing notices under sub section (2) of Section 13 of the 2002 Act calling upon the borrowers to discharge their liability and intimating them that in the event of their failure to do so, the secured creditors may take recourse to one or more of the measures detailed in sub section (4) of Section 13 of the 2002 Act for recovery of the debts and upon their failure to meet the demand initiate the steps enumerated in sub-section (4) of Section 13 of the 2002 Act for enforcing their rights and recovering the amounts outstanding. After the receipt of these notices some of the petitioners had availed of the statutory remedy provided in Section 17(1) of the 2002 Act and filed appeals. The Registrar of the Tribunal has asked the petitioners to affix a court fee of Rs. 21,000/- before the appeal could be entertained. The grouse of the petitioners as spelt out in the pleadings inter alia are:-

a) that in view of the decision of the Supreme Court in Mardia Chemicals case (supra) in which their Lordships of the Supreme Court have struck down as unconstitutional the provisions of Section 17(2) of the 2002 Act, which required the appellant to deposit 75 per cent of the amount that he had been called upon to pay by the secured creditors, no court fee could be demanded by the Tribunal as a condition precedent for entertaining the appeal as the aforesaid provision too would have to meet the same fate for the reasons indicated in the judgment.

b) That Anncxure P-3, the notification, which has been issued during the pendency of the Special Leave Petition, cannot stand judicial scrutiny in view of the fact that: (i) the same is an attempt on the part of the State to circumvent the legal position as had been clarified by the Supreme Court; and

(ii) their being no provision under the 2002 Act unlike Section 36(c) and (d) of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "the 1993 Act), which authorises the appropriate government to make rules regarding affixation of court fee on an application moved under Section 17(1) of the 2002 Act.

In view of this, according to the petitioners, the interpretation, which is being put by the Registrar of the Tribunal cannot withstand judicial scrutiny and has to be set aside.

Apart from this, it has been submitted on behalf of the petitioners that the court fee that is required to be paid on an application under Section 17(1) of the 2002 Act is oppressive and has no nexus for the expenses that are being incurred to maintain the services that are being rendered by the Tribunal for adjudication of the applications under the Act and, therefore, the same cannot be sust



























































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