GEMINI ARTS PVT LTD Vs. INDIAN BANK

JUDGEMENT

(1.) ALL these writ petitions arise out of proceedings initiated against the writ petitioners under the provisions of the Recovery of debts Due to Banks and Financial Institutions Act, 1993 (Act 51 of 1993) (hereinafter called "the Act" ). In Writ Petition No. 15892 of 1997 the validity of the provisions of the Act has been challenged, with the prayer for declaration that the provisions of the Act are void and ultra vires the constitution of India and beyond the Legislative competence of the Legislature. In all the other writ petitions, the prayer is for the issue of writ of certiorari questioning the interim orders passed by the Tribunal created under the Act. The interim orders relate to various types of reliefs such as appointment of garnishee, appointment of advocate Commissioner, and orders of interim injunction restraining the parties from either operating the shares of the respective company or to deal with the assets and properties belonging to the company etc.

(2.) THE validity of the Act was challenged before several high Courts and the Delhi High Court has held "that the Act was unconstitutional" vide its judgment in Civil Writ Petition No. 3050 of 1994, dated 10. 3. 1995. As against the said judgment and other similar cases, special Leave Petitions have been filed before the Supreme Court. Interim orders have been passed by the Supreme Court in those proceedings and as on date, the following order as extracted below is the latest prevailing order issued by the Supreme Court governing the Special Leave Petitions pertinent to the validity of the Act, as passed by the Court in its Order dated 18. 3. 1996. "interim order dated November, 27,1995 passed by this Court is modified and it is directed that notwithstanding any stay order passed in any of the writ petitions sought to be transferred the Debt Recovery tribunals established under the Recovery of Debts Due to Boards and Financial Institutions act, 1993 shall resume their functions. THE transfer petition shall be listed after 8 weeks after the service of the notice is effected".

(3.) AS regards whether the appellate remedy under Section 20 of the Act would apply to interim orders passed by the Tribunal, on a plain reading of Section 20 of the Act, as extracted above, I am inclined to hold that the provision is all pervasive and there is absolutely no indication to assume or to import any restricted meaning to the expression "by an order made, or deemed to have been made, by a Tribunal under this Act" learned counsel for the petitioners relied on a judgment of the Calcutta High Court reported in M/s Pratap Ch. Dey v. Allahabad Bank, A. I. R. 1997 Cal. 96, which is a decision rendered in the context of the very provision under consideration. With due respect, I am unable to agree with the view expressed by the learned Judge of the Calcutta High Court that Section 20 of the Act shall be applicable only to final orders and not interlocutory orders. The only tangible reason given by the learned Judge in paragraph No. 5 of the judgment in which be deals with the said issue, is based on the requirement of deposit of the amount of debt due on filing the appeal as contemplated under Section 21 of the Act. Section 21 of the Act states that an appeal shall not be entertained unless the appellant "has deposited with the Appellate Tribunal 75 per cent of the amount debt so due from him as determined by the Tribunal under Section 19. " therefore, according to the learned Judge, an order which has not determined the amount of debt, cannot be a subject matter of any appeal before the Appellate tribunal. The said reasoning completely overlooks that the requirement under section 21 would apply only to orders where the debt is "determined" by the Tribunal and not to other types of orders. If the Legislature was inclined to restrict the scope of the appeal before the Appellate Tribunal, it would have said so, under Section 20 of the Act itself to the effect that any person aggrieved by an order determining the amount of debt as due from him may prefer an appeal. But Section 20 of the Act is contemplated as against "an order made, or deemed to have been made by a Tribunal under the Act". There is no justification to give a restricted meaning to the said expression. It is not as though the Tribunal is entitled to pass only a final order under section 19 of the Act. Section 19 (6) of the Act empowers the Tribunal to pass interim orders and there is no reason to exclude such interim orders from the scope of Section 20 of the Act. Therefore, the requirement to deposit the "determined" amount while filing the appeal would arise only in appeal against final orders and not in other appeals against orders under section 19 (6) of the Act. A perusal of the latter part of paragraph No. 5 of the judgment in which the learned Judge has dealt with the issue also, shows that the learned Judge was carried away by the fact that even otherwise under section 18 of the Act, the jurisdiction of the High Court under Articles 226 and 227 of the Constitution of India was kept in tact. I am afraid that the said reasoning cannot lead to the interpretation or inference that the interlocutory orders are not appealable. Therefore, I am of the view that the interlocutory orders are also appealable under Section 20 of the Act.