Dismissed

S & S Industries & Enterprises v. Idbi Bank Ltd.

Madras HC7 Nov 2017WP/28327/2017

Case brief

AI extract

What is this about?

Borrower challenged DRB-II Chennai's refusal to accept a fresh proof affidavit and delayed written statement, requesting strict CPC compliance. The High Court dismissed the writ, holding the prior affidavit and documents had already been evaluated and the compulsion for a fresh affidavit was not warranted.

What did the court decide?

The writ petition was dismissed; the prayer for compelling a fresh proof affidavit was rejected.

S & S Industries & Enterprises Vs Idbi Bank Ltd. — Cheque Dishonour | Madras HC (2017)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 07.11.2017

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CORAM:

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THE HON'BLE MR.JUSTICE S.MANIKUMAR AND THE HON'BLE MR.JUSTICE R.SURESH KUMAR

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W.P.No.28327 of 2017

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and WMP No.30432 of 2017

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S&S Industries and Enterprises Limited, Aarthi Chambers - II Floor, 189, Anna Salai, Chennai - 600 006

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Now at 204, SIDCO AIEMA Tower, First Main Road, Ambattur Industrial Estate, Chennai - 600 058, Rep. by Deputy General Manager, Mr.S.Ramasamy. ... Petitioner vs. 1. IDBI Bank Limited, P.M.Towers, 37 Greams Road, Chennai - 600 006, Rep. by its Vice President

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The Presiding Officer, Debts Recovery Tribunal - II, 770-A, Anna Salai - 4th Floor, Chennai - 600 002. ... Respondents

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WRIT Petition filed under Article 226 of the Constitution of India, praying for the issuance of a writ of Mandamus, directing the 2nd respondent Hon'ble Debt Recovery Tribunal No.II, Chennai to instruct the 1st respondent to file fresh poof affidavit and give the petitioner herein adequate opportunity to file counter proof affidavit and to strictly follow the provisions of the Code of Civil Procedure, 1908 and that of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, while adjudicating the original application No.266 of 2007.

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For Petitioner : Mr.B.Natarajan

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ORDER

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On 12.09.2016, M/s.S&S Industries & Enterprises Limited, writ petitioner herein has availed loan of Rs.3,38,50,000/- Fund

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https://hcservices.ecourts.gov.in/hcservices/

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Based and Non Fund Based Working Capital Credit Limits from IDBI Bank limited, Chennai by executing security documents. Properties have been mortgaged. As there was default in repayment, IDBI Bank Limited, Chennai has filed O.A.No.1100 of 1999 on the file of the Debts Recovery Tribunal, Chennai against M/s.S&S Industries & Enterprises Limited and seven others, for the following relief.

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(a) Directing the 1st defendant to pay the applicant aggregate sum of Rs.2,90,22,062.77p (made up of the sum of Rs.1,11,02,062.77p) under the Cash Credit Account and a sum of Rs.1,79,20,000/- under the Working Capital Demand Loan Account, together with itnerest thereon at the rate of 17.85 P.A with quarterly rests, from this date until payment in full and the Applicant's costs of this Application by proceeding against the 1st defendant personally.

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(b) An order is passed for sale of the hypothecated Scheduled IV Goods and the net proceeds of such sale be allowed to be appropriated amongst itself and the defendants 3 to 6 & 8 in proportion to the amounts due by the 1st Defendant to the Applicant and Defendants 3 to 6 & 8.

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(c) An order be passed for realisation by sale or otherwise of all the hypothecated Book Debts of the 1st defendant and the proceeds of the said realisation be allowed to be appropriated amongst the Applicant and Defendants 3 to 6 & 8 in proportion to the amounts due by the 1st Defendant to the Applicant (as claimed herein).

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(d) An order be passed for sale of the mortgaged Scheduled I Property, mortgaged Scheduled II Property and mortgaged Scheduled III Property, subject to the first mortgage in favour of Defendants 2 to 7 and dividing the proceeds amongst the Applicant and Defendants 3 to 6 & 8 in proportion to the amounts due to each.

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(e) directing the 1st defendant to pay the applicant's costs of this application; and

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(f) An order be passed for issue of a Recovery Certificate in respect of all the prayers (a) to (e) above"

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(2) Scheduled properties mentioned in O.A.No.1100 of 1999, are extracted hereunder

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SCHEDULED I IMMOVABLE PROPERTY

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All those pieces and parcels of land measuring 9.37 acres situate at village Thirumullaivasal, Sirkali Taluk, Tanjore District in the State of Tamil Nadu comprised in the following R.S.Nos.--

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Ares

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Sl	R.S.N		Acres	Cent
.	o.			s
1	736/1	..	2	87
2	736/2	..	2	62
3	736/3	..	1	52
4	736/5	..	2	36
	Total		9	37

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SCHEDULED II IMMOVABLE PROPERTY

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All that piece and parcel of Land measuring 19.02 acres together with a Building situate at No.41, Rathanallur Village, Sirkali Taluk, Nagai Qaitha Millath District.

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SCHEDULED III IMMOVABLE PROPERTY

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All those piece and parcels of the Land admeasuring 18 acres and 47 cents situated at Mangadu Village, Arcot Taluk, North Arcot District - Ambedkar District, Tamil Nadu, bearing the following Survey Numbers and the extents mentioned against them.

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396/1 .. 0 30
398/2 .. 0 30
399/1 .. 0 30
398/2) 399/1) .. 0 15
399/1 .. 0 30
398/2 .. 0 30
399/1 .. 0 30
399/2A .. 0 93
399/2C .. 0 58
397/2 .. 0 15 397/3 .. 0 7-1/2 398/1 .. 0 22 Total 18 47 SCHEDULED IV GOODS
First charge by way of Hypothecation (1) on the
whole of the 1st Defendant's present and future stocks
of raw materials, goods in process of manufacture and
all finished or manufactured goods and articles,
together with all stores, components and spares which
now belong to or may hereafter from time to time during the continuance of the said security belong to the 1st
Defendant and which are or shall or may be brought into, stores or be in upon or about the 1st defendant's factory, godowns and/or other premises in its (i Shrimp Farm at No.41, Radhanallur Village, Sirkali Taluk, Tamil
Nadu 609 113,(2) Shrimp Hatchery a Thoduval Village, Sirkali Taluk, Tamil Nadu 609 113, (3) Enviro Tech
Division at T.S.C.Arcade, 175, Arcot Road,
Valasarawakkam, Madra 600 087, (4) Edible Oil Refinery of Mangadu Village, Arcot Taluk, Tamil Nadu 632 503, (5)
Solvent Extraction Unit at No.49, Mangadu Village, Arcot
Taluk, Tamil Nadu 632 503 and (6) Mineral Water Plants
at (a) 40 Mangadu Village, Arcot, Tamil Nadu 632 503 (B) LBS Marg, Vikhroli (W), Bombay 400 083, and (C) 8-1-390,
Tolichowki, Hyderbad 500 008, or wherever else the same
may be situated, stored or lying or being (including any
such raw materials, articles of goods, stores, spares,
components and other movable property in course of
transit or delivery to the 1st Defendant) and (II) all
the 1st defendant's present and future book debts
outstanding moneys, receivables, claims, bills, rights to an in movable property and movable assets.

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Material on record discloses that O.A.No.1100 of 1999 filed before Debts Recovery Tribunal, Chennai has been transferred and renumbered as O.A.No.266 of 2007 on the file of Debts Recovery Tribunal-II, Chennai.

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Bank has filed proof affidavit on 03.01.2015, and in support of the claim, documents viz., Ex.A1 to A17, were sought to be marked. Details of the documents, stated in proof affidavit dated 03.01.2015, are as hereunder.

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Ex.A1 - Delegation of power.

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Ex.A2 - Banking Arrangement letter dated 26.08.1996 of Rs.270 Lakhs by the applicant Bank to the defendants

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Ex.A3 - Demand Promissory Note dated 12.09.1996

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Ex.A4 - Demand Promissory Note Delivery Letter dated 12.09.1996

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Ex.A5 - Loan Agreement dated 12.09.1996

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Ex.A6 - Deed of Hypothecation dated 12.09.1996

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Ex.A7 - Form 8 & Form 13

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Ex.A8 - Interse Pari Passu letter dated 18.11.1996

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Ex.A9 - Inter se agreement dated 28.02.1997

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Ex.A10 - Joint Deed of Hypothecation dated

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28.02.1997

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Ex.A11 - Working Capital Consortium dated

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28.02.1997

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Ex.A12 - Deed of Hypothecation dated 10.08.1998

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Ex.A13 - Legal Notice dated 08.06.1999

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Ex.A14 - Bankers Books Evidence Act

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Ex.A15 - BIFR Order dated 05.01.2012

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Ex.A16 - AAIFR Order dated 19.10.2009

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Ex.A17 - Statement of Accounts

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Record of proceedings of Debts Recovery Tribunal-II, Chennai furnished in the typed set of papers filed to the instant writ petition, are extracted hereunder.

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"O.A.No.266 of 2007.

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13.10.2014: Counsel for both sides present. Written statement of defendants as last chance by 05.11.2014.

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O.A.No.266 of 2007.

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05.11.2014: Counsel for applicant bank and counsel for D2 and D7 present. Today the case is posted as last chance for reply statement. Reply statement not filed and set exparte. Exparte proof affidavit by 24.11.2014.

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O.A.No.266 of 2007.

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06.01.2015: Counsel for applicant bank present. Filed exparte PA along with original / copies of documents

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Exhibits A1 to A16. Call on 6.2.15, for verification of PA.

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O.A.No.266 of 2007.

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11.03.2015: Counsel for applicant bank and representing counsel for D7 present. Rectified the defects in the PA. The matter is placed before the Hon'ble PO for marking of PA documents. Call on 8.4.15.

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O.A.No.266 of 2007.

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08.04.2015: Counsel for Applicant present. Ex.A1 to A16 marked. Heard. Orders reserved.

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O.A.No.266 of 2007.

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03.06.2015: Orders pronounced vide separate sheets. OA is allowed.

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O.A.No.266 of 2007.

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14.07.2015: No representation for applicant bank. Counsel for defendants present. Notice served counter and hearing in MA.122/15 by 10.08.2015.

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O.A.No.266 of 2007.

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10.08.2015: Both sides present. Counter in MA.122/15 by 25.08.2015 as last chance.

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O.A.No.266 of 2007.

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25.08.2015: Both sides present. In MA.122/15, counter filed in the Registry. Enquiry by 18.09.2015.

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O.A.No.266 of 2007.

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18.09.2015: Counsel for both sides present. At the request of both sides call on 06.10.2015 for enquiry in MA 122/15.

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O.A.No.266 of 2007.

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06.10.2015: Both sides present. At request of petitioner's counsel in MA 122/15, call on 13.10.2015 for enquiry.

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O.A.No.266 of 2007.

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13.10.2015: Counsel for both sides present. At the request of counsel for respondent in MA No.122/15 enquiry by 02.11.2015.

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O.A.No.266 of 2007.

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02.11.2015: Counsel for both sides present. Passed over and called again. Heard both sides in MA No.122/15. Reserved for orders.

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O.A.No.266 of 2007.

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17.11.2015: Orders pronounced vide separate sheets. MA.122/15 allowed. OA is restored. Appeal is pending before BIFR. OA need not be listed till the disposal of Appeal before BIFR.

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O.A.No.266 of 2007.

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05.01.2017: Counsel for applicant present. Notice to respondent in Memo Sr.11840/16 by 30.01.2017.

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OA.Nos.265 & 266 of 2007

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02.03.2017: Counsel for applicant bank present. Fresh notice to defendants by 05.04.2017.

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OA.Nos.265 & 266 of 2007

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05.04.2017: Both sides present. CPA by 02.05.2017.

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OA.Nos.265 & 266 of 2007

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02.05.2017: The representing counsel for applicant bank and counsel for defendants present. The applicant bank is directed to serve copy of proof affidavit to the counsel for defendants. CPA as last chance by 07.06.2017.

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O.A.No.266/07

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07.06.2017: Counsel for both sides present. Today the case is posted as last chance for filing ÇPA'. The counsel for defendants submitted that copy of proof affidavit has not been served. The applicant bank is directed to serve copy of same to the counsel for defendants. CPA by 27.06.2017.

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OA.Nos.265 & 266 of 2007

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27.06.2017: Both sides present. Applicant counsel produced proof of service of PA copy served to the defendants. Hence, CPA as las chance by 10.07.2017.

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OA.No.266 of 2007

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10.07.2017: Counsel for applicant bank and defendant in person present. The counsel for applicant bank submitted that they have filed an IA for substituting the assignee. Registry is directed to verify and report the same. Call on 31.07.2017 for report.

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OA.No.266 of 2007

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Counsel for both sides present. Passed over and called again. The applicant bank is directed to furnish copy of OA and proof affidavit to the counsel for defendants. Written statement by 23.08.2017.

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OA.No.266 of 2007

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23.08.2017: Counsel for both sides present. Written statement as last chance by 20.09.2017.

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OA.No.266 of 2007

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20.09.2017: Both sides present. Written statement filed. CPA by 03.10.2017.

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OA.No.266 of 2007

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03.10.2017: Counsel for both sides present. Applicant is hereby directed to furnish copy of proof affidavit to defendants. CPA, by 17.10.2017 as last chance."

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In the instant writ petition, petitioner/borrower has sought for a mandamus, directing the Debts Recovery Tribunal-II, Chennai to instruct, IDBI Bank Limited, Chennai, 1st respondent, to file fresh proof affidavit and to give the petitioner adequate opportunity to file counter proof affidavit and to strictly follow the provisions of Code of Civil Procedure, 1908 and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, while adjudicating O.A.No.266 of 2007.

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In the supporting affidavit, petitioner has submitted that though no fresh proof affidavit has been served, the tribunal closed counter proof affidavit to be filed by the writ petitioner and posted the matter for arguments on 08.11.2017.

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Based on the record of proceedings of Debts Recovery Tribunal-II, Chennai in O.A.No.266 of 2007, Mr.B.Natarajan, learned counsel for the petitioner submitted that no sooner the exparte order made in O.A.No.266 of 2007, by the tribunal was set aside, the entire proceedings is restored date back to the date of institution of O.A.No.266 of 2007 and that, only after filing of the written statement, the tribunal can entertain filing of proof affidavit by the bank / applicant and in such circumstances, directions of the Debts Recovery Tribunal-II, Chennai to serve a copy of the proof affidavit already filed is erroneous and contrary to the provisions of the Code of Civil Procedure, 1908 and Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It is also the submission of the learned counsel for the petitioner that without giving adequate opportunity, writ petitioner has been denied opportunity of filing counter proof affidavit.

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Heard the learned counsel for the petitioner and perused the materials available on record.

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In exercise of the powers conferred under sub sections (1) and (2) of the Recovery of Debts Due to Banks and Financial Institutions Ordinance, 1993, Debts Recovery Tribunal (Procedure) Rules, 1993, have been framed.

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Rule 12 of the Debts Recovery Tribunal (Procedure) Rules, 1993, reads thus:

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Filing of reply and other documents by the defendant

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(1) The defendant may file two complete sets containing the reply to the application along with documents in a paper book form with the registry within one month of the service of the notice of the filing of the application on him.

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(2) The defendant shall also endorse one copy of the reply along with documents as mentioned in sub-rule

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(1) to the applicant.

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(3) The Tribunal may, in its discretion on application by the respondent, allow the filing of reply referred to in sub-rule (1), after the expiry of the period referred to therein.

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(4) If the defendant fails to file the reply under sub-rule (1) or on the date fixed for hearing of the application, the Tribunal may proceed forthwith to pass an order on the application as it thinks fit.

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(5) Where a defendant makes an admission of the full or part of the amount of debt due to a bank or financial institution, the Tribunal shall order such defendant to pay the amount, to the extent of the admission, by the applicant within a period of one month from the date of such order failing which the Tribunal may issue a certificate in accordance with section 19 of the Act to the extent of amount of debt due admitted by the defendant.]

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(6) The Tribunal may at any time for sufficient reason order that any particular fact or facts shall be proved by affidavit, or that the affidavit of any witness shall be read at the hearing, on such conditions as the Tribunal thinks reasonable:

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PROVIDED that after filing of the affidavits by the respective parties where it appears to the Tribunal that either the applicant or the defendant desires the production of a witness for cross examination and that such witness can be produced and it is necessary to do so, the Tribunal shall for sufficient reasons to be recorded, order the witness to be present for cross examination, and in the event of the witness not appearing for cross examination, then, the affidavit shall not be taken into evidence and further that no oral evidence other than that given in this proviso will be permitted.]

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(7) If the defendant denies his liability to pay the claim made by the applicant, the Tribunal may act upon the affidavit of the applicant who is acquainted with the facts of the case or who has on verification

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of the record sworn the affidavit in respect of the contents of application and the documents as evidence.

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(8) Provisions contained in section 4 of the Banker's Books Evidence Act, 1891 (18 of 1891) shall apply to a certified copy of an entry in a banker's book furnished along with the application filed under sub-section (1) of section 19 by the applicant. "

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Filing of written statement and documents by the defendant and by the applicant, a reply to the written statement, procedure thereof, is set out in Rule 12 of the Debts Recovery Tribunal (Procedure) Rules 1993.

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Record of proceedings in O.A.No.266 of 2007 shows that on 15.11.2014, before Debts Recovery Tribunal-II, Chennai, learned counsel for the bank and learned counsel for Defendants 2 and 7, were present. As 05.11.2014 was stated to be the last date for filing written statement and taking note of the fact that such statement was not filed, defendants therein were set exparte. For filing exparte proof affidavit, Debts Recovery Tribunal-II, Chennai, has posted O.A.No.266 of 2007 on 24.11.2014.

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Record of proceedings further states that on 06.01.2015, counsel for the bank was present. Exparte proof affidavit along with original / copies of documents Ex.A1 to A16, stated supra, have been filed. For verification of the proof affidavit, matter has been directed to be called on 06.02.2015.

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Thereafter, on 08.04.2015, Ex.A1 to A16 have been marked. After hearing the learned counsel for the bank, orders have been reserved. On 03.06.2015, OA has been allowed. Subsequently, writ petitioner is stated to have filed MA No.122 of 2015 to set aside the exparte order made in OA.No.266 of 2007 dated 03.06.2015. On 17.11.2015. M.A.No.122 of 2015 has been ordered and consequently, O.A.No.266 of 2007, has been restored.

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Record of proceedings shows that on 02.05.2017, Presiding Officer, Debts Recovery Tribunal-II, Chennai has directed the bank to serve a copy of proof affidavit, to the learned counsel for the defendants. Tribunal has directed the matter to be listed on 07.06.2017 for filing counter proof affidavit.

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On 07.06.2017 submission has been made by the learned counsel for the defendants that, copy of proof affidavit has not been served.

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Though before this Court Mr.B.Natarajan, learned counsel for the writ petitioner / borrower, contended that no sooner the exparte order made in O.A.No.266 of 2007 dated 03.06.2015, has

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been set aside, it is obligatory on the part of the bank to file fresh proof affidavit, from the record of proceedings dated 07.06.2017, nothing is discerned that there was any prayer to file a fresh proof affidavit.

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Proceedings indicate that the learned counsel for the defendant / writ petitioner had only brought to the notice of the tribunal that copy of the proof affidavit has not been served. Taking note of the said submission, vide proceedings dated 07.06.2017, bank has been directed to serve a copy of proof affidavit to the learned counsel for the defendants and for filing counter proof affidavit OA No.266 of 2007, has been adjourned to 27.06.2017, on which date, representation has been made by the learned counsel for the bank that copy of the proof affidavit has been served on the defendants and the proof of service has also been produced. Recording that service has been effected, Debts Recovery Tribunal-II, Chennai has posted the matter on 10.07.2017 for filing counter proof affidavit. On 10.07.2017, learned counsel for the bank is stated to have submitted that IA has been filed for substituting the assignee, hence, Registry was directed to verify and report.

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Though representation has been made that as early as on 27.06.2017 that copy of the proof affidavit has been served to the defendants and record of proceedings dated 27.06.2016 also indicates that though the learned counsel for the bank produced proof of service, yet on 10.07.2017, Debts Recovery Tribunal-II, Chennai has once again directed the bank to furnish copy of the OA and proof affidavit to the learned counsel for defendants and posted the matter for filing written statement on 23.08.2017, on which date, time for filing written statement has been extended to 20.09.2017.

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On 20.09.2017, the written statement has been filed. Tribunal has directed filing of counter proof affidavit by 03.10.2017. Once again, bank has been directed to furnish copy of the proof affidavit to defendants for filing counter proof affidavit and tribunal has posted the matter on 08.11.2017, as last chance.

¶143

From the above, it could be deduced that on the basis of the proof affidavit, dated 06.01.2015, setting out the details, Ex.A1 to A16, have been marked as early as on 08.04.2015 and exparte orders in O.A.No.266 of 2007, have been passed on 03.06.2015. Evidence has already been adduced by the bank. As per sub Rule 1 of Rule 12 of Debts Recovery Tribunal (Procedure) Rules, 1993, the defendant may, within a period of 30 days from the date of service of summons file two complete sets of written statement alongwith documents, if any, in a paper book.

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As per sub Rule 3 of Rule 12, if the defendant fails to file the written statement of the defendant including reply for such counter claim under sub rule 1 within a period of 30 days, the Presiding Officer, in special circumstances, recorded in writing, extent the period by such further period not exceeding 15 days.

¶146

In the case on hand, defendant had not filed any written statement and therefore, the tribunal in terms of sub Rule 7 to rule

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12 had proceeded to pass an order on the application and accordingly, taking note of the proof affidavit dated 03.01.2015 filed on 06.01.2015, alongwith original / copies of documents, Exs.A1 to A16, marked the same on 08.04.2015, allowed OA.No.266 of 2007 on 03.06.2015. As per the proviso to Sub rule 9 to rule 12 of the Debts Recovery Tribunal (Procedure) Rules, 1993 provided that after filing of the affidavits by the respective parties where it appears to the tribunal that either the applicant or the defendant desires production of witness for cross examination and that such witness can be produced and it is necessary to do so, the tribunal shall for sufficient reasons to be recorded, order the witness to be present to cross examine and in the event of the witness not appearing for cross examination then, the affidavit shall not be taken into evidence and further that no oral evidence other than that given in this proviso will be permitted.

¶148

From the material on record it could be deduced that evidence has been adduced by filing proof affidavit dated 06.01.2015 and on restoration of OA No.266 of 20075, the defendant has not chosen to file written statement immediately, to seek for production of witness for cross examination. On the other hand, when O.A.No.266 of 2007 came up for further hearing on 07.06.2017, submitted that copy of the proof affidavit has not been served and taking note of the same, the tribunal has directed the bank to serve the same to learned counsel for the defendant, and on 27.06.2017 proof of service has been produced.

¶149

No sooner the OA is restored, it is the duty of the defendant to file written statement within a period of 30 days from the date of service of the filing of the Original Application. Debts Recovery Tribunal (Procedure) Rules 1993, do not contemplate filing of the fresh proof affidavit. Proof affidavit, is filed only if any particular fact or facts required to be proved by an affidavit and that the affidavit of the witness shall be read at the time of hearing such applications, as the tribunal thinks reasonable. In the case on hand, proof affidavit has been filed and documents were marked as early as on 08.04.2015. Had the defendant, sought for

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production of a witness for cross examination, the tribunal for sufficient reasons to be recorded, would have ordered such witness to be present for cross examination, which defendant, had failed to do so. Even going through the record of proceedings enclosed in the typed set of papers there is nothing on record to substantiate that the petitioner sought for a fresh proof affidavit to be filed, which in our opinion is

¶152

not required, in the light of sub Rule 9 of rule 12 of Debts Recovery Tribunal (Procedure) Rules, 1993.

¶153

Averments made in the supporting affidavit to the writ petition that despite the specific plea of the petitioner's counsel to file fresh proof affidavit the tribunal directed only copy of the proof affidavit to be served, is not substantiated, in the record of proceedings. Record of proceedings shows that on 07.06.2017, the tribunal has directed filing of counter proof affidavit. Again on 20.09.2017 time has been extended to 03.10.2017. For not filing counter proof affidavit, the tribunal has closed the evidence and posted the matter for arguments on 08.11.2017.

¶154

From the material on record, it could be deduced that OA.No.1100 of 1999, has been filed in the year 1999 for recovery of Rs.3,38,50,000/-. In view of the proceedings pending before SICA matter was not heard. On 17.11.2015, exparte order has been set aside. Writ petitioner has chosen to file written statement only on 20.09.2017. From the above it can be inferred that matter has been delayed.

¶155

Hon'ble Supreme Court in T.P.Vishnu Kumar Vs. Canara Bank, P.N.Road, Tiruppur and Others reported in 2013 (10) SCC 652, at paragraph Nos.10 & 11, held as follows:

¶156

"10. Powers of the High Court under Article 226 cannot be invoked in the matter of recovery of dues under the Act, unless there is any statutory violation resulting in prejudice to the party or where such proceedings or action is wholly arbitrary, unreasonable and unfair. When the Act itself provides for a mechanism, by an appeal under Section 20 of the Act, in our view, the High Court is not justified in invoking jurisdiction under Article 226 of the Constitution of India to examine that the rejection of the applications by the Tribunal was correct or not. The petitioner and the contesting respondents have no case that either the Bank or the Tribunal had violated any statutory provisions by rejecting their applications.

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¶158

A writ petition was preferred against the rejection of applications and the same were entertained by the learned Single Judge and decided on merits and which in our view is impermissible while exercising its jurisdiction under Article 226 of the Constitution. If the correctness or otherwise of each and every interim order passed by the Tribunal is going to be tested in a writ Court, it will only defeat the object and purpose of establishing such Tribunal. We have already noticed that due to the intervention of the writ Court, the matter got delayed for four years defeating the very purpose and object of the Act. We therefore, find no merit in these petitions and the same are dismissed."

¶159

Further, Section 22 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, reads thus:

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22. Procedure and Powers of the Tribunal and the Appellate T ribunal.— (1) The Tribunal and the Appellate Tribunal shall not be bound the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings.

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(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:--

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(a) summoning and enforcing the attendance of any person and examining him on oath;

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(b) requiring the discovery and production of documents;

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(d) issuing commissions for the examination of witnesses or documents;

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(e) reviewing its decisions;

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(f) dismissing an application for default or deciding it ex parte;

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(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte;

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(h) any other matter which may be prescribed.

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¶171

(3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

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31. In the light of the above discussion and decision, prayer sought for in this writ petition cannot be granted and hence, writ petition is dismissed. No costs. Consequently, the connected Writ Miscellaneous Petition is closed.

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Sd/-
Asst.Registrar (CS VI)
/true copy/
Sub Asst. Registrar
ars
TO:
1. The Presiding Officer,
Debts Recovery Tribunal - II,
770-A, Anna Salai - 4th Floor,
Chennai - 600 002.
W.P.No.28327 of 2017
PVS(CO)
NR 30/11/2017

¶174

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S & S Industries & Enterprises v. Idbi Bank Ltd.

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S & S Industries & Enterprises v. Idbi Bank Ltd.

Case brief

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What the court decided

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