1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO.963 OF 2007 WITH CHAMBER SUMMONS NO.964 OF 2007 IN EXECUTION APPLICATION NO.73 OF 2007 IN RECOVERY PROCEEDING NO.23 OF 2006 IN ORIGINAL APPLICATION NO.1324 OF 2000 IN HIGH COURT SUIT NO.1573 OF 1986 Bank of India .. Plaintiff Versus The Official Liquidator, High Court, Bombay & Anr. .. Defendants and Punarvasu Construction Pvt.Ltd. .. Assignee and Yasmeen Lukmani and Ors. .. Applicants Mr.J.P.Sen i/b. Mrs.Leena Lokare for Assignee Ms.Deepa Rahi for O.L. Mrs.Shamima Tally i/b. S.Mohammedbhai & Co. for applicants. CORAM : S.C.DHARMADHIKARI, J. DATE : 9th February 2009. P.C. . At the hearing of this chamber summons, 2 which is moved in an Application for Execution filed by a Private Limited Company claiming to be the assignee the prayer made by the Applicants is that the Execution Application be dismissed. It is urged on behalf of the applicants that the execution application is filed by Respondent No.2 Punarvasu Constructions Pvt.Ltd. It is urged on their behalf that on 11th March 1993, an order was passed in Company Petition No.613 of 1984 and a company Dyna Craft Machine Co.Ltd. was ordered to be wound up. Respondent No.4 was appointed as Liquidator for company in Liquidation. Company defaulted in respect of repayment of amounts borrowed by of way of Loans/ credit facilities from several Banks. Applicant No.1 is shareholder/ contributor of the company in liquidation whereas applicant Nos. 2 and 3 are related to her, apart from being joined as beneficiaries. 2. It is stated that first respondent bank 3 obtained Recovery Certificate No.23 of 2006 dated 16th June 2005 from the D.R.T.III, Mumbai inter alia against the company in liquidation and one Jesica Lukmani and it is further alleged that the recovery certificate is to the tune of Rs.28,79,65,106/-. 3. Another recovery certificate has also been obtained and copies of these two recovery certificates are annexed as Annexures B and C to the affidavit in support. It is stated that in the last week of May 2007, the Applicants obtained a copy of document styled as Deed of Assignment or decree dated 14th December 2006 as between first respondent Bank and the said Punarvasu as assignee. Respondent No.3 was confirming party to the same. A copy of the deed of assignment is annexed as Exh.D. It is stated in the affidavit in support that a letter was addressed for one time settlement proposal. However, while accepting the proposal, the bank 4 has assigned its rights under the recovery certificate in favour of the said Punarvasu. Various pleas are raised with regard to the binding nature of the proposal and its effect insofar as the debtors and the bank are concerned. 4. However, it is not necessary to go into the same, inasmuch as the principal contention raised is that the execution application itself is not maintainable before this Court. It is urged that the recovery certificate is obtained by Bank of India. It is a banking company within the meaning of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. It is covered by the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (for short "the RDB Act"). The assignee is a non banking company. In fact is is a builder. The assignee cannot file an execution application to execute and enforce the alleged debt under the recovery 5 certificates in this Court. Various other pleas are also raised inasmuch as it is contended that the recovery certificate can be executed in terms of R.D.B.Act and the machinery thereunder. The same cannot be displaced or by-passed by any Bank. Merely because, the recovery certificate or the debt thereunder is assigned does not mean that the assignee steps into the shoes of the Bank so as to enable it to enforce and execute the decree. Therefore, the subject execution application filed by the Asignee of the decree/Recovery Certificate is not maintainable and must be dismissed. 5. Relying upon the reply affidavit it is contended by Mr.Sen appearing for the assignee that the proceedings, for execution of the recovery certificate by taking resort to RDB Act, could have been initiated only by the Bank of India. The remedy under that Act and machinery provided for the execution of a recovery 6 certificate is available only to the bank. The assignee is not a banking company and, therefore, it can execute the recovery certificate by filing an execution application in this Court, which is an ordinary Civil Court. More so, when the suit by the Bank was originally filed in this Court and subsequently transferred to D.R.T. and registered as O.A. 1324 of 2000. The ordinary decree holder, therefore, on the strength of this recovery certificate can file the instant execution application. However, it is also urged that the R.D.B.Act cannot be interpreted in such a manner so as to deprive an Assignee under the recovery certificate/ decree which more than Rs.10 lakhs. If the claim was under Rs.10 lakhs, then, the Banking company/ Bank of India could have laid its claim before an ordinary civil court. In that event, the decree would have been enforceable and executable by filing execution application in this Court. Merely because the decree is in the sum of Rs.28 Crores and odd, 7 i.e. more than Rs.10 lakhs, does not mean that the decree, after its assignment cannot be enforced and executed by the assignees/ transferee by filing an execution application in this Court and an incongruous and contradictory situation has developed on account of peculiar and confusing Interpretation of the provisions of R.D.B.Act. Hence, it is submitted that the objection to maintainability be overruled. 6. Having perused the chamber summons and affidavits in support, reply and rejoinder, it is not possible to accept the contention of Mr.Sen. The R.D.B.Act is an Act which has been promulgated to provide for the establishment of Tribunals for expeditious adjudication and recovery of debts due to Banks and Financial Institutions and for matters connected therewith or incidental thereto. The term "bank" has been defined to mean a banking company, corresponding new bank, State Bank of India, Subsidiary Bank or 8 Regional Rural Bank. "Banking Company" is defined in the same manner as under clause (c) of Section 5 of Banking Regulation Act, 1949. The Public Financial Institution is covered by the term "Financial Institution" which is defined in the Act. The word "Debt" is defined to mean any liability inclusive of interest which is claimed as due from any person by a bank or financial institution or by a consortium of banks. 7. It is in this context that Chapter III of the Act will have to seen which confers jurisdiction, powers and authority on Tribunal. Section 19 provides for the procedure of Tribunals. A bank or financial institution, if it has to recover any debt from any person, may make an application to the Tribunal within the local limits of whose jurisdiction, defendants or each one of them or where there are more than one, at the time of making application, actually and voluntarily reside or carry on business. The 9 jurisdiction is thus confined by section 19(1)(a) to (c). The entire procedure culminating in passing of an order and recovery certificate pursuant thereto is set out in section 19 and thereafter in Chapter V the mode of recovery of debts has been set out vide section 25 and 28. 8. It is in this situation, that a bank or financial institution can enforce its claim and recover a debt due to it. It is true that the remedy is available to the bank and the financial institution. After recovery certificate is obtained and the debt is assigned to a private party like the applicant, then, it is not possible for it to pursue the mode of recovery stipulated under the RDB Act. However, Asignment of the Debt by itself does not mean that on the strength of the deed of assignment in its favour, the Assignee can file the execution application in this Court to recover monies from the opposite party - Judgement debtor. Under the deed of 10 assignment as between the bank and the Assignee, the applicant may have assigned the debt and right to recover the same but ultimately, that right must be enforceable and executable in law. Merely because, R.D.B. Act does not come to the assistance of the assignee does not mean that an execution application can be file on the strength of the recovery certificate claiming it to be in the sum of Rs.10 lakhs and above. It is for the bank to have made this claim if at all it wanted to enforce and execute the recovery certificate. Since the amount is more than Rs.10 lakhs the bank could not have by-passed and displaced the machinery under the R.D.B.Act. Remedies are available to the bank and financial institutions but not to the assignee. This is no ground to entertain the present application. 9. It is not as if the applicant is without any remedy, inasmuch as on the strength of the deed of assignment, it can obtain an appropriate 11 declaration in its favour and thereafter recover the monies from such persons, whose debts have been assigned to it. Thus, all declarations and orders based thereon can be obtained from a competent civil court. However, the execution application at the instance of the assignee cannot be entertained. 10. It is not possible to uphold the contention of Mr.Sen that an incongruous situation has developed on account of the provisions of R.D.B.Act. The R.D.B.Act has been upheld by the Court. The distinction made by the R.D.B.Act of a claim less than Rs.10 lakhs and above is based upon an rational differentia and has a nexus with the objects sought to be achieved. The Tribunals were established to expeditiously recover the sums due and payable to the bank. Merely because a sum of Rs.10 lakhs and above is provided as outer limit and for debts lesser than that, the banks and financial 12 institutions can approach a civil court does not mean that the authority and power of civil court or its jurisdiction is undermined in any way. For these reasons, it is not possible to accept the contentions of Mr.Sen. 11. Thus, there is merit in the contention of the applicants that the execution application itself is not maintainable before this Court. For the reasons set out above, the chamber summons succeed and is made absolute in terms of prayer clause (a). However, it does not prevent the applicants from pursuing the remedies as are available to them in law to enforce their rights under the deed of assignment and all pleas in that behalf are kept open. No opinion is expressed on the liability of applicants due and all pleas of both sides in that behalf, are also kept open. Chamber Summons dismissed. No costs. 13 (S.C.Dharmadhikari, J)