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Fashion Form Pvt Ltd v/s UCO Bank

    Civil Revision Appeal No. 171 of 1998

    Decided On, 18 April 2000

    At, High Court of Judicature at Allahabad

    By, THE HONOURABLE MR. JUSTICE D.K. SETH

    For the Appearing Parties: Arun Tandon, Manoj Mishra, Advocates.



Judgment Text

D.K. SETH, J.


(1) MR. Arun Tandon, learned counsel for the revisionists has raised a very short but interesting question while challenging the order dated 3rd August, 1998 passed by the learned Additional Chief Metropolitan Magistrate, Vlllth Court, Kanpur nagar in Suit No. 176 of 1997, as to whether a suit being the suit under Order 37 of the code of Civil Procedure could at all be transferred to the Tribunal, which has not been empowered under Rule 1 of Order 37 of the Code by High Court by issuing any notification to such Tribunal in terms of clause (b) of sub-rule (1) of Rule 1 of Order 37 of the Code.


(2) THE application appears to have been filed after three days of expiry of the period of limitation seeking condonation of delay by means of an application under Section 5 of the Limitation Act. Mr. Manoj Mishra had opposed the said prayer for condonation delay. It appears that the delay was only by three days, which is insignificant excluding the time taken for obtaining the certified copy. Therefore, the explanation given appears to be sufficient.


(3) THE delay, is, therefore, condoned and the application under Section 5 is allowed.


(4) THE Stamp Reporter had reported that the final order was not filed. But it appears that the final order has since been filed. Therefore, the defect is also removed.


(5) AT this slage both the learned counsels had agreed that the question being pure and simple question of law, the matter may be taken up for hearing and disposed of. By consent of the parties, the matter is treated as on day's list for hearing.


(6) BOTH the leaned counsels had made their submissions on the merit of the question that is involved in the present revision.


(7) MR. Tandon, learned counsel for the revisionists contends that in view of sub-rule (1) of Rule 1 of Order 37 of the Code, the suit filed under Order 37 of the Code is cognizable by the High Court, City Civil Court, and the court of Small Causes and by any other Courts unless by a notification in the official gazette, the High Court confers such jurisdiction on such other Courts. According to him, the Tribunal established under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as the said Act)is not a Court and as such it cannot come within the meaning of clause (b) of sub-rule (l) of Rule 1 of Order 37 of the Code. The High Court can confer such jurisdiction only on other courts. The Tribunal established under this act though Civil Court only for limited purpose and discharges judicial functions in the proceedings before it, yet it is not a Court and as such the jurisdiction under Order 37 of the code can. neither by conferred nor can be exercised by the Tribunal. He contends further that the present proceedings were instituted by the Bank under Order 37 of the Code in civil Court and as such in absence of any jurisdiction of the Tribunal to entertain a proceeding under Order 37, the instant proceedings could not be transferred by reason of Section 31 of the said Act. According to him, the summary procedure entitles the defendant to claim set off or set up counter claim. But the procedure as provided in Section 19, of the said Act does not permit any such set off or counter claim being set up by the defendant and as such transfer of the summary suit would hit the defendant's right accrued in law to claim set off or set up counter claim, which would be taken away if the suit is transferred and entertained by the Tribunal established under the act according to the procedure prescribed under the said Act. He then contends that section 31 of the said Act does not include a summary suit under Order 37 of the Code the expression 'suit or other proceeding1 used in Section 31 does not include a summary suit the word 'suit' used in Section 31 of the said act has to be interpreted in its general meaning relating to regular suits. Inasmuch as a summary suit is an exception from a regular suit and as such cannot be included in the expression 'suit' used in Section 31 of the said act in absence of any definition of suit having been given in the Act itself His other limb of argument is that the cause of action if had arisen after the establishment of the Tribunal only then a suit pending on the basis of such cause of action could be transferred It does not include pending suits in respect of cause of action that had arisen before the establishment of the Tribunal. According to him, the tribunal was established in 1999 whereas cause of action of the suit had arisen in 1997 and as such if could not have been transferred According to him, the word 'suits' as has been mentioned in Section 17 of the Act only could be transferred, which is explained by him relying on Section 18 of the said Act that the Civil court will cease to have jurisdiction only in respect of suits in relation to matters specified in Section 17 of the said Act Section 17 confers jurisdiction on the Tribunal from the appointed day, viz the jurisdiction, powers and authority to entertain and decide applications as are entertainable by the Tribunal. As such the question is relevant to the appointed day of the establishment of the Tribunal Therefore, according to him the present proceedings could not have been transferred and the impugned order cannot be sustained and is liable to be quashed.


(8) MR. Manoj Misra, learned counsel for the respondent on the other hand contends that the Act was enacted for certain specified purposes which is apparent from its long title and the definition of debt given in Section 2 (g)of the said Act, read with sub-section (4) of section 1 of the Act. The appointed day has been defined to be a date on which the Tribunal is established and as such, according to him, by reason of Section 17 of the said Act, all, matters cognizable under this Act, are to be decided by the Tribunal as soon it is established. By reason of Section 18 no Court shall have jurisdiction to decide any such matter filed within the scope of Section 17 on and from the date of establishment of a Tribunal and by reason of Section 31 all pending suits the cause of action of which is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of the Tribunal, shall stand transferred automatically on the appointed day by operation of law without there being any necessity of any order being passed by the Court. According to him, the order of transfer is a ministerial order and not a judicial order and does not purport to decide or determine any issue between the parties which can be brought within the purview of section 115 of the Code. According to him, the moment the Tribunal is established all such suits within the meaning of Section 17 pending before any Court before the establishment of such Tribunal by fiction of law stood transferred to the Tribunal. It is only the transmission of the records that are to be effected by the Court in terms of sub-section (2) of Section 31 of the said Act. The order that has been impugned is in effect an order under subsection (2) of Section 31 for transmission of the records to the Tribunal. Therefore, according to him, the revisional application should be dismissed.


(9) I have heard both the learned counsels at length. Apparently the question raised by mr. Tandon seems to be of substance to the extent that by reason of sub-rule (1) of Rule 1 of Order 37 of the Code, the Tribunal -not being a Court could not be conferred with the jurisdiction of summary procedure and as such the suit pending before a Court under Order 37 of the Code could not be transferred. Section 19 of the Act prescribes the procedure to be followed by the Tribunal which lays down a complete procedure. The entire scheme of the Act makes it a complete Code by itself. Section 22 in sub-section (1) makes it clear that the Tribunal shall-not be bound by the procedure laid down by the Code of Civil Procedure while attracting by operation of law expressed in subsection (2} of Section 22 of the Act, specified provisions of the Code of Civil Procedure relating to the matters specified under clauses (a)to (h) of sub-section (2) thereof. Sub-section (3) prescribes that the proceedings before the tribunal to be judicial proceedings within the meaning of Sections 193 and 228 and for the purpose of Section 196 of the Indian Penal code and that a Tribunal would deem to be civil Court for the purpose of Section 195 of the Code of Criminal Procedure. Thus by reason of Section 22 though the Tribunal has trippings of Court in respect of at! the matters specified in clause (a) to (h) of Section 22 of the said Act, yet it is not a Civil Court except for the purpose mentioned in sub-section (3)of Section 22 As such even by notification, it is not possible for the High Court to confer jurisdiction of Order 37 to the Tribunal by reason of the express provision provided in sub-rule (1) of Order 37 of the Code which makes such summary procedure applicable to the High court, City Civil Courts and Courts of Small causes and other Courts. Since the Tribunal is not a Court by reason of the proviso provided in sub-rule (1), the High Court cannot empower the Tribunal as other Court within the meaning of sub-rule (1) of Rule 1 of Order 37 and as such the jurisdiction under Order 37 could not be exercised by the Tribunal.


(10) NOW the question has to be examined as to whether a summary procedure pending in the Court under Order 37 could be transferred to a Tribunal and it could be tried in a mariner other than the procedure laid down under Order 37 and thereby defendant's righi to claim set off or set up counter claim under order 37 could be taken away.


(11). Admittedly, Order 37 prescribes the procedure in which the defendant is entitled to claim set off or set up counter claim by way of defence Whereas the procedure laid down in Section 19 of the Act though prescribes a summary procedure but does not provide for raising specifically any set off or counter claim but if we go by iatter's and spirit of sub-section (3) of Section 19 and if it is given a literal meaning, in that even it makes it clear that set off can be raised in defence in the process of showing cause as to why the relied prayer for should not be granted. So far as the counter claim is concerned whether that can be raised or not, is not necessary to be gone into at this stage since it would not be relevant for our purpose. Inasmuch no one can claim any right with regard to procedural law Procedural law does not confer any substantive right Therefore, if under the summary procedure any particular right was provided, the curtailment thereof shall not provide any right to claim by any person that any right was conferred on or accrued to him by operation of law and that could not be taken away by reason of subsequent enactment or change in the procedure or incorporation in some other procedure But then that would be relevant provided the vires of the Act is challenged which could not be done within the scope and ambit of Section 115 of the Code. So long the Act remains in tact and is not declared ultra wires or struck off till then'it operates in the field for which it is intended and includes the purposes and objects for which it is enacted The present Act has been gives an over-riding effect by reason of Section 34 of the said Act, which includes a non-obstante clause to the extent the even though it is inconsistent with any other Act for the time being in force, the provisions of this act shall have effect except in cases provided in sub-section (2) of Section 34 of the said Act. Therefore, despite the existence of Order 37 of the Code, the provisions of this Act would be effective so far as it is inconsistent with those of the Code of Civil Procedure and as such section 19 will prevail upon those of Order 37 even if the suit is transferred and tried by the Tribunal. So far as the provision contained in sub-section (2) of Section 34 of the said Act is concerned, it would not be relevant for our purposes since none of this exceptions are necessary to determine the question that calls upon for decision. Therefore, the contention of Mr. Tandon to the extent of taking away the right accuted by law, cannot be sustained since such accused right is taken away by operation of law itself particularly when no one can claim any right in respect of a procedure


(12) NOW let us examine the question as to whether the suit could be transferred to the tribunal The long title of the Act reads as thus "an Act to provide for establishment of tribunals for expeditions, adjudication and recovery of debts due to the Banks and financial institutions and for matters connected therewith or incidental thereto" the purpose and object of the Act can be deciphered from the long title which is an aid for the purpose of interpretation of statute The long title clearly describes the purpose and object for recovery of debts due to Banks so that such recovery could be adjudicated expeditiously. Thus all matters which are related to debts due to Banks are to be subject matter of the Act for which Tribunal has to be set up for. expeditious recovery of such debts. Debt has since been defined in Section 2 (g), which means any liability, including interest due from any person by a Bank during the course of any business activity undertaken by the Bank under any law for the time being in force in cash or otherwise whether secured or unsecured or whether payable under a decree or order of any Civil Court or otherwise subsisting or legally recoverable on the date of the application. The application as defined in clause (b) to section 2 means application to be made to a tribunal under Section 19 of the said Act therefore, any debt due to the Bank as defined in Section 2 (g) cornes within the scope and ambit on the Act in respect whereof an application is made under Section 19 to the tribunal. The Tribunal is to be established under Section 3 of the said Act, which exercise the jurisdiction under Section 17 of the Act in respect of such debts from the appointed day appointed day has been defined in Section 2 (c)of the Act as the date on which the Tribunal is established under sub-section (1) of Section 3 therefore, from the date a Tribunal is established under Section 17 it is entitled to exercise jurisdiction in respect of recovery of debts due to Banks


(13) BY reason of Section 18 from the date a Tribunal is established, Civil Court ceased to have jurisdiction in relation to matters specified in Section 17 The expression used in section 18 is positive or in other words affirmative to the extent' that it makes it clear that no Court shall have or be entitled to exercise any jurisdiction or powers in relation to matters specified in Section 17 Thus the cessation of jurisdiction is absolute by reason of section 18 from the appointed day It has defined in Section 2 (g) debt means the debt legally recoverable and the date of the application means the date after the appointed date when such an application could be made to the Tribunal The suit in respect of cause of action which might have been barred by law on the date of the application by fiction of law could not be held to be barred by law on the appointed day if such suit is instituted before the limitation has expired and such suit is pending Therefore, by reason of the pendency of the suit the debt due to bank remains recoverable even through the suit and as such on the appointed day it remains to be legally recoverable on the appointed day Therefore, no distinction could be brought in respect of cause of action involved in suits instituted before the appointed day in respect of bar of jurisdiction as contemplated in Section 18, which takes away the jurisdiction of Civil Court in respect of all matters covered under Section 17 which means that the Court ceases to have any jurisdiction even to proceed with pending suits since the debt as defined in sub-section 2{g) includes the debt sought to be recovered in a pending suit is legally recoverable and thus bringing the same within the scope and ambit of Section now these Sections 17 and 18 having overriding effect, by reason of Section 34, even if it is inconsistent with any other law the application of Order 37 of the Code is excepted sections 17, 18 and 34 are to be construed harmoniously having regard to the intent, purpose and scheme of the Act A reconciled harmonious reading of these Sections clearly indicates the intention of the legislature to bar the jurisdiction of Civil Court in respect of debts, legally recoverable on the appointed day. A debt sought to be recovered in a pending suit is surely a debt legally recoverable and is due to the Bank Therefore. Sections 17, 18 and 34 cannot be interrupted otherwise except to mean that jurisdiction of Civil Court ceases from the appointed day to proceed with matters pending before it which involves recovery of debts due to Banks so long it remains legally recoverable


(14) THE question of over-riding effect and meaning of debt was considered by this Court in C M Writ Petition No 39050 of 1999, (M/s. Harisahai Ma! Tika Ram v Punjab National Bank) disposed of on 16th September, 1999, Taking the same view


(15) IT is in such circumstances, the provisions of Section 31 has been engrafted in the act itself By reason of Section 31, all pending suits before any Court on the date of establishment of the Tribunal by fiction of law stood transferred to the Tribunal Section 31 runs as follows


"31 Transfer of pending cases (1) Every suit or other proceeding pending before any Court immediately be fore the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based 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 provided that nothing this sub section shall apply to any appeal pending as aforesaid before any Court (2) Where any suit or other proceeding stand transferred from any Court to a tribunal under sub-section (1) - (a) the Court, shall as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and (b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Section 19 from the state which was reached before such transfer or from any earlier stage or de nouo as the Tribunal may deem fit. "


(16) A plain reading of Section 31 indicates that 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 it is based, 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 Thus a suit being a suit or proceeding involving a cause of action within the jurisdiction of such Tribunal had it arisen after such establishment though in fact had arisen before and is pending in a suit by fiction of law shall stand transferred to the Tribunal. By reason of section 17 read with Section 18 and Section 34 there cannot be any alternative interpretation of Section 31 other than that all pending suits falling within the jurisdiction of Tribunal stood transferred to such Tribunal by operation of law By reason of sub section (2) upon such transfer the Court shall forward the records of such suits or other proceedings to the Tribunal. The Tribunal on receipt of such record proceed to deal with such suit or other proceedings in the same manner in the case of an application under Section 19 from the stage which was reached before such transfer or from any earlier stage or de nouo as the tribunal may deem fit. .


(17). Thus the transfer of the suit is complete as soon the Tribunal is established. The transfer is not dependent on any action of the court or any other agency It is by virtue of operation of law on the establishment of Tribunal all such suits pending in civil courts stood transferred to the Tribunal The Court has only to perform the ministerial job of forwarding the records to the Tribunal. The Court had no option or choice or discretion except forwarding record to the Tribunal. It is simply a transmission of record a ministerial job to be performed by the Court by reason of the legisla tive enactment in respect of cases the jurisdiction whereof is barred under Section 18 of the act.


(18) SIMILAR view was taken by this Court in M/s. Hari Sahai Mal Teka Ram (supra) disposed of on 16th September, 1999.


(19). The question that the proceeding under Order 37 could not be transferred to the Tribunal is completely answered by reason interpretation of clause (b) of sub-section (2) of section 31 which prescribes that the Tribunal upon receipt of such record shall proceed in the same mariner as in the case of an applica--tion under Section 19 from any stage viz , from the stage at which it was transferred or from any other earlier stage or de nouo at the discretion of the Tribunal itself


(20) THE Act had laid down a complete code in itself, providing a special procedure and the procedure provided in the Code of civil Procedure having been excepted. except to the extent provided in Section 22, and the jurisdiction of Civil Court having been barred under Section 18 of the Act, a harmonious construction of the scheme of the Act. in respect of the provisions, as referred to above. lead us conclusively to opine that whatever may be the proceeding, if it comes within the ambit of Section 17 of the Act pending in any Civil court, stood transferred to the Tribunal on the establishment of the Tribunal The expression "suit" having not been qualified it includes suit in general be it a regular suit or a summary suit. There being nothing special or specifically explained and the term 'suit' having not been defined in the Act it has to be understood to include all kinds of suits whether it is summary suit or otherwise Even if a summary suit may not be brought within the exeression 'suit' occurring in Section 31, it definitely comes within the expression other proceedings occurring therein. Section 31 had not left any scope doubtful. It is clear and unambiguous.


(21) ORDINARILY the Court has to interpret the law following the golden rule of interpretation viz. , literal construction. At the present moment no external aid is necessary for construction of the provision of Section 31. The internal aid as discussed above conclusively reflects that there was no other intention of the legislature except that all pending

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suits in Civil courts within the scope and ambit of Section 17 were to stand transferred on the establishment of the Tribunal leaving the Court to perform ministerial part of forwarding the records for transmission to the Tribunal. (22). Section 31 (2) (b) read with Section 19 dearly indicates that whatever might be the nature of proceeding in respect of the suit or other proceedings pending before the Civil court, it has to be transmitted to the Tribunal and Tribunal has to proceed in the manner proscribed in Section 19 since by reason of section 18 the civil court ceases to have jurisdiction in respect thereof and such provisions having ueen given overriding effect by reason of Section 34 of the Act, excluding the application of the procedure prescribed in the Code of Civil Procedure through Section 22 of the act. (23). For all these reasons thougn me submission of Mr. Arun Tandon seemed to be attractive and was very ably argued, with humility and respect, 1 am unable to persuade myself to agree with the contention of Mr. Tandon for the foregoing reasons. (24). In view of above, the revision fails and is accordingly dismissed. (25). At this stage Mr. Tandon contended that originally the Tribunal was established at jabalpur which had jurisdiction in respect of the suits pending in U. P. Now a Tribunal has been established at Allahabad in U. P. and had started functioning. He prays that this suit may be transmitted to the Tribunal a't Allahabad. If it is so in that event, it would be open to the revisionist to apply for transmission of the record to the Tribunal at Allahabad before, the tribunal at Jabalpur, in case the records have been received by the Tribunal at Jabalpur. If such an application is made, in that event, the tribunal at Jabalpur shall transmit the records of the proceeding to the Tribunal at Allahabad if it is established, within a penod of one month from the date of filing of such application and that the Tribunal at Allahabad, if established, shall dispose of the suit as early as possible preferably within a period of one year from the date of receipt of such records. In case the records have not been transmitted to the tribunal at Jabalpur, in such case, the records be transmitted to the Tribunal at Allahabad, which will proceed with the same accordingly. (26). However, there will be no order as to cost. Let a certified copy of this order be supplied to the learned Counsel for the applicant at the earliest. Revision dismissed.
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