DEBTS RECOVERY TRIBUNAL ADVOCATES ASSOCIATION OF ANDHRA PRADESH Vs. DEBTS RECOVERY TRIBUNAL KARNATAKA AND ANDHRA PRADESH BANGALORE

JUDGEMENT

(1.) This writ petition has been filed by an Advocates' Association and it is submitted that the association was formed to promote brotherhood among legal fraternity and to take up activities relating to common problems of Advocates. It has been stated that the Banks and financial institutions were filing suits in Civil Courts for recovery of their dues in respect of loans and other facilities provided by them to the borrowe Rs. The Government of India having felt the need, created separate Tribunals for adjudication of matters relating to Bank recoveries. The Recovery of Debts due to the Banks and Financial Institutions Act (51 of 1993) was promulgated by Parliament which came into force on 24/06/1993. The Central Government was authorised to issue notification to establish Debts Recovery Tribunals to adjudicate the claims of the Banks. The Government was also empowered to specify the areas over which such Tribunals may exercise their jurisdiction. The Central Government by a notification constituted Debts Recovery Tribunals on 30/11/1994. A Debts Recovery Tribunal was constituted at Bangalore which had the jurisdiction to try the debts recovery matters for the State of Andhra Pradesh and Kamataka and it started functioning at Bangalore from 30/11/1994. The claims of Banks worth Rs. 1 0.00 lakhs and above were sent to the Tribunals. All the pending suits valued at Rs. 10.00 lakhs and above pending before the Courts in the State of Andhra Pradesh were transferred to the said Tribunal. According to the petitioners, the Advocates appearing for Banks and Financial institutions in Civil Courts were being paid Advocate fees- in the A.P. Advocates Fee Rules, 1990 prescribed by the High Court of Andhra Pradesh. According to the petitioners, the Banks also issued circulars for payment of fee for Advocates appearing in Civil Courts in accordance with A.P. Advocates Fees Rules, 1990. The Managements of the Public Sector Banks, however, started issuing circulars to their branches prescribing a different fee structure for cases before the Debts Recovery Tribunals without having regard to the fee structure prescribed by the High Court of Andhra Pradesh and Karnataka. The General Manager (Operations) of the State Bank of India, Hyderabad issued a circular on 18/08/1995 prescribing the fee structure. Rs. 12,000.00 was fixed as fee for debts upto Rs. 10.00 lakhs and Rs. 500.00was to be paid for each Rs. 1.00 lakh or part thereof subject to maximum of Rs. 30,000.00. The Circular also prescribed the mode of payment. 25% of the fee had to be paid at the time of filing of application before the Debts Recovery Tribunal, 25% was payable after obtaining recovery certificate from the Tribunal, 25% was to be paid at the time of initiation of proceedings and the balance of 25% would become due on termination of proceedings before the Recovery Officer after full payment by the debtor. In case of compromises, only half of the fee prescribed was payable. The grievance of the Association is that the fee prescribed by Local Head Office of State Bank of India was much less than the fee payable under the Advocates Fee Rules prescribed by the High Court. It is submitted that the Advocates had to bear their own expenses for going to Bangalore for any number of times for the purpose of the case. They were not being paid even TA/DA. It is submitted that other Banks have also issued circulars on the lines of the circular issued by the State Bank of India. This circular and the circulars issued by the other Banks on similar lines have been challenged in this writ petition. It is further stated that the Tribunal framed Regulations under Section 22(1) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993, Rule 50(b) of the Regulations stipulated as follows:

(2.) The ground of attack on these circulars is that, it is the exclusive jurisdiction of the High Court under Article 227 of the Constitution of India to fix the fee payable to the Advocates representing before the Courts and Tribunals. It is further stated that, Section 34(1A) of the Advocates Act, 1962 and Section 27 of the Legal Practitioners Act also prescribe that the fee payable to the Advocates shall be governed by the Rules framed by the High Court. The High Court having framed the rules being A.P. Advocates fee Rules, 1990 and the Tribunal having accepted to adopt the fee rules framed by High Courts of A.P. and Karnataka, the respondents have no power to fix the fee structure.

(3.) Now, the question before this Court is, whether it is prerogative of the litigants to negotiate and fix the fee with regard to the matters pending in the Court with their Counsel, or, the High Court has any power to fix such fee. Reference is made by the learned Counsel for the petitioners to Article 227 of the Constitution of India and also to the A.P. Advocates fee Rules, 1990. On the other hand, the respondent Bank has submitted that it is the prerogative of the respondents as a litigant to fix the fee and it is always open for the Counsels either to accept the fee and the brief or to refuse the brief on the fee offered.