GANGA NARAYAN MISHRA Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THE menace and difficulty in recovery of loan and enforcement of securities, charged with the banks and financial institutions came to the notice of the law makers. It was felt that the existing procedure for recovery of debts due to banks and Financial institutions has blocked a significant portion of their funds in unproductive assets. On a survey it was found that on 30-9-1990 more than fifteen lakhs of cases filed by the public sector banks and about 304 cases filed by financial institutions were pending in various Courts in which recovery of more than Rs. 5622 crores in dues of public sector banks and about Rs. 391 crores of dues of the financial institutions were involved. Law makers thought that the locking of such a huge public amount in litigation prevents proper utilisation and recycling of the funds for the development of the country. In order to provide adjudication and recovery of debts due to the banks and financial institutions, Parliament enacted the Recovery of Debts due to Bank and Financial Institutions Act, 1993 (hereinafter referred to as the Act ).

(2.) WHILE going through the scheme of the Act one finds that the provision of the Act shall not apply where the amount of debt due is less than Rupees Ten Lakhs and the Central Government has been given the power under Section 1 (4) of the Act to fix such other amount, being not less than Rupees One Lakh. Section 3 of the Act provides for establishment of one or more Tribunals by the Central Government to be known as the Debts Recovery Tribunal to exercise the jurisdiction, powers and authority conferred on it under the Act. Qualification prescribed for appointment as Presiding Officer of the Debts Recovery Tribunal (hereinafter referred to as the Tribunal) is that the person is or has been or is qualified to be a District Judge. Section 8 of the Act provides for establishment of Appellate Tribunal. Qualification for appointment as Presiding Officer of the Appellate Tribunal is that the person is or has been or is qualified to be a Judge of a High Court or has been a member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or has held office as the Presiding Officer of a Tribunal for at least three years. Section 17 provides for jurisdiction, powers and authority of Tribunals whereas Section 20 provides for appeal to the Appellate Tribunal by any person aggrieved by an order made, or deemed to have been made, by a Tribunal under the Act. Section 21 mandates deposit of seventy five per cent of the amount of debt as determined by the Tribunal before the appeal is entertained by the Appellate Tribunal. However, proviso to the aforesaid section confers power on the Appellate Tribunal to waive or reduce the amount to be deposited under this section, for reasons to be recorded in writing. Section 18 bars the jurisdiction of every Court, except the Supreme Court and the High Court in relation to the matters over which the Tribunal or the Appellate Tribunal has jurisdiction, power and authority specified in Section 17 of the Act.

(3.) STATE Bank of India preferred an application impleading the petitioner herein for recovery of a sum of Rs. 10,87,493. 90 under Section 19 of the Act. The Tribunal by order dated 2-11-1999 held that the Bank is entitled to recover a sum of Rs. 10,87,493. 90 from the defendants severely and jointly. Without filing any appeal before the Appellate Tribunal one of the defendants has preferred this writ petition under Articles 226 and 227 of the Constitution of India and prays for quashing off the order dated 1-11-1999 whereby the defence of defendants 2 to 5 has been closed and the case was reserved for judgment. It may be stated that defendant No. 2 is the petitioner herein. Further prayer made by the petitioner is to quash the final order passed by the Tribunal dated 2-11-1999 whereby the Tribunal has adjudicated the dues of the bank outstanding against the defendants.