Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Scope of Section 19(25) of the RDDB Act - Limited powers of the Tribunal, requiring it to function within statutory parameters and not exercise inherent or equitable jurisdiction beyond the scope ["Navashila Agro Private Limited VS Debts Recovery Appellate Tribunal, Chennai - Madras"]. The Supreme Court has emphasized that the Tribunal's powers under Section 19(25) are confined to what is expressly provided, and it cannot exercise powers outside those limits ["m/s matha pharma vs the state bank of india - Kerala"].
Application and Limitations - Section 19(25) confers limited powers on the Tribunal, primarily to pass orders within the framework of the Act. The Tribunal must operate within the boundaries set by the statute, and exercising equitable jurisdiction under this section is generally not permissible unless explicitly authorized ["m/s matha pharma vs the state bank of india - Kerala"].
Jurisdictional Scope - Section 19(25) does not extend to broader equitable or inherent powers; instead, it is confined to the specific powers enumerated in the Act. The Supreme Court has clarified that the Tribunal's authority under this section is circumscribed by the statutory provisions and cannot be extended to exercise general equitable jurisdiction ["Navashila Agro Private Limited VS Debts Recovery Appellate Tribunal, Chennai - Madras"].
Judicial Interpretation - Courts have consistently held that Section 19(25) limits the Tribunal's powers, and any exercise of jurisdiction beyond what is explicitly provided would be ultra vires. The scope is therefore confined to the statutory framework, and the Tribunal must function within these boundaries ["m/s matha pharma vs the state bank of india - Kerala"].
Analysis and Conclusion:Section 19(25) of the RDDB Act restricts the powers of the Tribunal to those expressly conferred by the statute. It does not grant inherent or equitable jurisdiction, and the Tribunal must operate within the statutory parameters. The Supreme Court has reaffirmed that the scope of Section 19(25) is limited, and exercising powers beyond those specified would be beyond its jurisdiction. Thus, the section's scope is confined to the specific powers enumerated in the Act, and any exercise of authority outside this scope is invalid ["Ritesh Oil Mills P. Ltd. VS Dena Bank - Gujarat"] ["m/s matha pharma vs the state bank of india - Kerala"].
In the complex world of debt recovery in India, banks and financial institutions often navigate specialized laws to reclaim dues efficiently. One critical provision is Section 19(25) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB Act). But what exactly is the scope of Section 19(25) of the RDDB Act? This blog post breaks it down, drawing from legal provisions and judicial insights to help you grasp its implications.
Whether you're a lender pursuing recovery or a borrower facing proceedings, understanding this section can clarify jurisdictional shifts and procedural efficiencies. Note: This is general information based on legal sources and not specific legal advice. Consult a qualified lawyer for your situation.
Section 19(25) provides a specific procedural mechanism for the transfer of pending suits or proceedings to the Debt Recovery Tribunal (DRT). It ensures expeditious and specialized adjudication of recovery matters by the Tribunal. Allahabad Bank VS Canara Bank - 2000 3 Supreme 205
The provision states explicitly: Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal. Allahabad Bank VS Canara Bank - 2000 3 Supreme 205
This aligns with the RDDB Act's overarching goal: enabling banks and financial institutions to recover debts speedily, free from usual court impediments. IDBI BANK LIMITED vs ESSLON SYNTHETICS LTD. AND ORS.-5857_2014) IDBI BANK LIMITED vs ESSLON SYNTHETICS LTD. AND ORS.
The RDDB Act was enacted to address delays in debt recovery through civil courts. Section 19(25) supports this by transferring relevant pending matters to DRTs, promoting expert handling of bank-related recoveries. Swetha Exports rep. by its Prop. Dr. B. Srinivasa Rao VS Bank of India - 2017 0 Supreme(AP) 408
It complements Sections 17 and 18, which grant DRTs exclusive jurisdiction over recovery applications. By consolidating proceedings, it ensures speedy disposal and reduces forum-shopping. Allahabad Bank VS Canara Bank - 2000 3 Supreme 205
Judicial interpretations emphasize efficiency: The RDDB & FI Act was, therefore, intended to enable banks and financial institutions to recover their debts in a speedy manner... IDBI BANK LIMITED vs ESSLON SYNTHETICS LTD. AND ORS.-5857_2014)
The scope is narrowly tailored:- Temporal Limit: Only suits pending immediately before DRT establishment qualify.- Substantive Limit: Cause of action must relate to debt recovery within DRT jurisdiction (debts due to banks/financial institutions exceeding specified thresholds).- Automatic Effect: Transfer happens by operation of law—no separate application needed.
For example, if a suit for recovery of bank dues was filed in a civil court before a DRT was set up in that jurisdiction, it transfers automatically if it meets the criteria. Allahabad Bank VS Canara Bank - 2000 3 Supreme 205
Section 19 overall governs applications to DRTs. Sub-section (1) outlines jurisdiction based on defendant's residence, business, or cause of action location. GSL (India) Ltd. VS Asset Reconstruction Co. (India) Ltd. - 2015 Supreme(Bom) 2326
Courts have clarified that DRT jurisdiction for related matters (e.g., under SARFAESI Act Section 17) follows principles in Section 19(1), not CPC Section 16. The jurisdiction of the DRT for entertaining a Securitization Application under section 17 of the SARFAESI Act is to be determined on the basis of the principles enshrined in section 19(1) of the RDDB Act. GSL (India) Ltd. VS Asset Reconstruction Co. (India) Ltd. - 2015 Supreme(Bom) 2326
One ruling directly addresses Section 19(25): It limits the Tribunal's functioning within the provision's ambit, ensuring transfers align with jurisdictional bounds. Navashila Ago Pvt Ltd vs The Debts Recovery Appellate Tribunal
Not all proceedings transfer:- Post-Establishment Suits: New filings after DRT setup go directly to the Tribunal or appropriate forum—no transfer.- Non-Qualifying Causes: Proceedings outside DRT jurisdiction (e.g., non-debt recovery matters) remain in courts.- De Novo Proceedings: Fresh suits initiated later are excluded. Allahabad Bank VS Canara Bank - 2000 3 Supreme 205
Additionally, limitation periods for RDDB recoveries follow the Limitation Act, not Income Tax Rules like 68B. Rule 68B of the Income Tax Act does not apply to recovery proceedings under the RDDB Act; the limitation period for such recoveries is governed by the Limitation Act. Geevarghese P. John, Son Of Late P. P. John VS Federal Bank Ltd. , Nedumbassery Branch, Represented By Chief Manager, Asset Recovery Branch, Marine Drive, Ernakulam - 2024 Supreme(Ker) 1631
Section 19(25) operates alongside modern remedies like the SARFAESI Act, 2002. Banks can pursue parallel actions under RDDB and SARFAESI without electing one. SARFAESI Act is treated as an additional remedy which is not inconsistent with RDDB Act. Swetha Exports rep. by its Prop: Dr. B. Srinivasa Rao VS Bank of IndiaSwetha Exports rep. by its Prop: Dr. B. Srinivasa Rao VS Bank of India
Permission to withdraw a Section 19(1) application for SARFAESI action doesn't bar refiling under RDDB later if needed. This flexibility enhances recovery options without jurisdictional conflicts.
In execution contexts, stays by superior courts halt Recovery Officers, underscoring procedural safeguards even post-transfer. Sarang Avinash Kamtekar VS Alpha Organic - 2022 Supreme(Bom) 1354
Courts and parties should ensure compliance to avoid delays. Swetha Exports rep. by its Prop. Dr. B. Srinivasa Rao VS Bank of India - 2017 0 Supreme(AP) 408
Understanding Section 19(25) empowers better navigation of India's debt recovery landscape. For tailored guidance, seek professional legal counsel.
References:- Allahabad Bank VS Canara Bank - 2000 3 Supreme 205: Core definition of transfer mechanism.- Swetha Exports rep. by its Prop. Dr. B. Srinivasa Rao VS Bank of India - 2017 0 Supreme(AP) 408: Purpose of expediting proceedings.- Geevarghese P. John, Son Of Late P. P. John VS Federal Bank Ltd. , Nedumbassery Branch, Represented By Chief Manager, Asset Recovery Branch, Marine Drive, Ernakulam - 2024 Supreme(Ker) 1631, Sarang Avinash Kamtekar VS Alpha Organic - 2022 Supreme(Bom) 1354, Navashila Ago Pvt Ltd vs The Debts Recovery Appellate Tribunal, IDBI BANK LIMITED vs ESSLON SYNTHETICS LTD. AND ORS.-5857_2014), IDBI BANK LIMITED vs ESSLON SYNTHETICS LTD. AND ORS., Swetha Exports rep. by its Prop: Dr. B. Srinivasa Rao VS Bank of India, Swetha Exports rep. by its Prop: Dr. B. Srinivasa Rao VS Bank of India, GSL (India) Ltd. VS Asset Reconstruction Co. (India) Ltd. - 2015 Supreme(Bom) 2326
#RDDBAct, #DebtRecovery, #DRT
Constitution of India, 1950 - Articles 226 and 227 - Guardians and Wards Act, - Section 19(5) - Income Tax ... of Sections 25 to 28 of the RDDB Act. ... Chapter V of the RDDB pertains to recovery of debt determined by Tribunal. Section 25 contained therein pertains to modes of recovery of debts which reads as under:-- ... "25. ... 30 of the RDDB Act. ... 30 of the RDDB ....
Sub-section (20) of Section 19 of the RDDB Act provides for the issuance of a final order, after adjudication of the application. ... Sub-section (21) of Section 19 of the RDDB Act provides for the issuance of a copy of the final order and the recovery certificate. ... 15.1 In this context, sub-sections (20), (21), and (22) of Section 19 of the RDDB #HL_S....
Sub-section (20) of Section 19 of the RDDB Act provides for the issuance of a final order, after adjudication of the application. Sub-section (21) of Section 19 of the RDDB Act provides for the issuance of a copy of the final order and the recovery certificate. ... However, these decisions clearly take the view that the provisions of the Limitation Act would apply to the proceedings under #HL_STAR....
powers and it is limpid that Section 19[25] confers limited powers. ... The Hon'ble Supreme Court of India, in the decision reported in 2013 (15) SCC 341 [cited supra], in paragraph No.33, had considered the scope and ambit of Section 19[25] of the RDDB Act and held that the Tribunal is required to function within the statutory parameters and it does not have any inherent ... the powers under Section 19#H....
& FI act' for short) was dismissed as being barred by time and as being beyond the scope of Section 30 of the RDDB & FI act. ... It further held that the question regarding legality of the certificate does not fall within the scope of appeal as provided for under RDDB & FI act and therefore, in the appeal the said question cannot be gone into. according to DRT, the scope of the appeal is limited by Sections 25 to 2....
jurisdiction under Section 19[25] of the RDDB Act on the part of ... and ambit of Section 19[25] of the RDDB Act and held that the Tribunal is required to function within invited the attention of this Court to the judgment rendered by p style="position:absolute;white-space:pre
The RDDB & FI Act was, therefore, intended to enable banks and financial institutions to recover their debts in a speedy manner, free from all the usual impediments that arise in recovery proceedings.Section 17 of the RDDB & FI Act gives ... On 06.01.2000, IDBI filed an application before the Debt Recovery Tribunal, Delhi (“DRT”) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993(“RDDB#HL....
The RDDB & FI Act was, therefore, intended to enable banks and financial institutions to recover their debts in a speedy manner, free from all the usual impediments that arise in recovery proceedings.Section 17 of the RDDB & FI Act gives ... On 06.01.2000, IDBI filed an application before the Debt Recovery Tribunal, Delhi (“DRT”) under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993(“RDDB#HL....
19—Recovery of debt—Permission being granted by DRT to withdraw application made under Section 19(1) of RDDB Act and to take action ... under SARFAESI Act, would enable bank/financial institution, if need be, to invoke jurisdiction of DRT under Section 19(1) of RDDB ... Act, later—It is only when Bank/financial institution has made an application under Section 19(1) of RDDB Act, without having taken ... the balance amount, by instituting proceedings again under #HL_ST....
19—Recovery of debt—Permission being granted by DRT to withdraw application made under Section 19(1) of RDDB Act and to take action ... under SARFAESI Act, would enable bank/financial institution, if need be, to invoke jurisdiction of DRT under Section 19(1) of RDDB ... Act, later—It is only when Bank/financial institution has made an application under Section 19(1) of RDDB Act, without having taken ... the balance amount, by instituting proceedings again under #HL_ST....
Permission of the DRT, to withdraw the application filed by it earlier under the RDDB Act, can be sought by the bank or financial institution for the purpose of taking action under the SARFAESI Act, if it had not taken any such action earlier under the SARFAESI Act. However the first proviso to Section 19(1) of the RDDB Act was inserted, by Section 20 of Act 30 of 2004, with retrospective effect from 11.11.2004 i.e., from a date more than two years after the SARFAESI Act came into force on 21.06.2002. The first proviso to Section 19(1) of the RDDB Act is an enabling provision, and ....
Where a bank or a financial institution has to recover any debt from any person, it may make an application to the Tribunal within the local limits of whose jurisdiction,— (a) the defendant, or each of the defendants where there are more than one, at the time of making the application, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of making the application, actually and voluntarily resides or carries on business, or personally works for gain; or (c) the cause of action, wholly o....
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