IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM TUESDAY, THE 4TH MAY 2010 / 14TH VAISAKHA 1932 WP(C).No. 27030 of 2009(W) -------------------------- AGAINST THE ORDER DATED 24/04/2009 IN IA. 827 /2009 IN SA.213/2009 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONER(S): --------------- 1. STATE BANK OF TRAVANCORE, M.G.ROAD BRANCH,ERNAKULAM, REP.BY ASST.GENERAL MANAGER. 2. THE AUTHORIZED OFFICER, CHIEF MANAGER (P & SB), STATE BANK OF TRAVANCORE, M.G.ROAD,ERNAKULAM. BY ADV. MR. SATHISH NINAN MR. SANTHOSH MATHEW MR. ARUN THOMAS RESPONDENT(S): --------------- SRI.AJITHKUMAR M.,S/O.K.MADHAVAN ACHARI, 'AJITH MANZIL',ELAVUNKAL ROAD, PALARIVATTOM,KOCHI-25. ADV. MR. VARGHESE C.KURIAKOSE SRI.ADEEP ANWAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16/12/2009,ALONG WITH WPC NO. 28834 OF 2009 AND CONNECTED CASES THE COURT ON 04/05/2010 DELIVERED THE FOLLOWING: WP(C).27030/09 APPENDIX PETITIONER'S EXHIBITS:- EXT.P1:- TRUE COPY OF THE NOTICE DT.14.8.08 EXT.P2:- TRUE COPY OF THE INTERIM ORDER DT.9.1.09 IN WP(C).943/09 EXT.P3:- TRUE COPY OF THE APPLICATION DT.10.2.09 EXT.P4:- TRUE COPY OF INTERIM ORDER DT.24.4.09 PASSED BY THE DRT,ERNAKULAM RESPONDENT'S EXHIBITS:- EXT.R1(A):- TRUE COPY OF THE RECEIPT FOR RS.50,000/- DT.25.5.09 EXT.R1(B):- TRUE COPY OF THE STAY PETITION DT.15.4.09 EXT.R1(C):- TRUE COPY OF THE WRITTEN STATEMENT DT.9.10.09 EXT.R1(D):- TRUE COPYP OF THE LIST OF DOCUMENTS DT.14.10.09 OKB //TRUE COPY// P.A. TO JUDGE C.K.ABDUL REHIM, J. ------------------------------------- W.P.(C).Nos.27030, 28834, 26875 and 32066 of 2009 ------------------------------------- Dated this the 4th day of May, 2010 J U D G M E N T ---------------------- 1. State Bank of Travancore is the petitioner in WP(C).Nos.27030, 28834 and 26875 of 2009, whereas WP(C).No.32066/2009 is filed by Kottayam District Co- operative Bank. In all these writ petitions, the Banks are seeking directions to the Debts Recovery Tribunal, Ernakulam for early disposal of the appeals filed by the respective respondents, under Section 17(1) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) or for disposal of the interim applications of stay, within a time frame to be set by this court. The allegations are more or less common in all these cases that, the Tribunal had granted interim stay against further steps under the SARFAESI Act and such ad-interim orders are being extended from time to time, despite non-compliance of the conditions stipulated therein by the respondent W.P.(C).27030,28834,26875 & 32066 /09 2 borrowers/guarantors in certain cases, and despite the Banks filing written statements and objections. All these writ petitions are filed invoking jurisdiction of this court under Article 227 of the Constitution of India. A basic objection regarding maintainability of the writ petition is raised by the respondents in the three cases filed by the State Bank of Travancore, contending that the supervisory jurisdiction conferred on this court by Article 227 could not be exercised against the Debts Recovery Tribunal. Since the question regarding maintainability is a common issue in all these cases, the writ petitions are disposed of together. 2. A brief narration of the facts in each case will be beneficial. In WP(C).No.27030/2009, when the petitioner Bank initiated steps under Section 13(2) of the SARFAESI Act consequent to default committed by the borrower, the respondent had approached this court by filing a writ petition. Eventhough conditional stay was granted by this court, the respondent has not complied with the condition and failed to make payment of the amounts stipulated. Subsequently possession of the secured asset was taken over by the Bank, on 13.3.2009. Thereupon the respondent W.P.(C).27030,28834,26875 & 32066 /09 3 approached the Tribunal by filing appeal, S.A.No.213/2009. The appeal was filed as early as on 15.4.2009. Initially the Tribunal granted interim stay on 24.4.2009 on condition of payment of an amount of Rs.1 lakh, to be paid on or before 25.5.2009. The respondent remitted an amount of Rs.50,000/- on 25.5.2009. Thereafter he had failed to remit the balance amount, inspite of extension of time granted. But the Tribunal had adjourned the matter on several occasions granting extension of stay inspite of completion of pleadings from the side of the Bank. Hence aggrieved by non-disposal of the stay petition or the appeal itself, the petitioner Bank is seeking direction from this court for disposal of S.A.213/2009 within a period to be fixed by this court. 3. In WP(C) No.28834/2009 the 2nd respondent is the appellant in S.A.No.200/2008 pending before the Debts Recovery Tribunal, Ernakulam. It is stated that consequent to default committed in repayment, when the Bank initiated steps under the SARFAESI act, the borrower as well as the guarantor filed separate writ petitions before this court. Eventhough this court granted time for payment, the W.P.(C).27030,28834,26875 & 32066 /09 4 stipulations in the judgment were not complied with. When the appeal was filed, the Tribunal granted interim stay on condition of remitting 20% of the amount due. Inspite of non-compliance of the condition the Debts Recovery Tribunal had extended the stay on several occasions. On 29.4.2009 the 2nd respondent sought time to make payment of the entire amount by permitting private sale of the property, for which time was granted till 30.5.2009. Thereafter the Tribunal made oral observation to keep in abeyance further steps till 29.6.2009. Eventhough the Tribunal heard the matter and reserved judgment on 29.4.2009, no order is pronounced till the filing of the writ petition. Hence the petitioner Bank inter alia seeks direction for a time bound disposal of the appeal by the Tribunal. 4. In WP(C).No.26875/2009 the 2nd respondent had approached the Debts Recovery Tribunal, Ernakulam by filing S.A.No.55/2008 challenging proceedings initiated under the SARFAESI Act. The Tribunal had granted ad- interim stay against further proceedings. Inspite of filing counter affidavit as early as on 27.8.2008, the matter was being adjourned on several occasions. A petition to advance W.P.(C).27030,28834,26875 & 32066 /09 5 hearing of the application for stay was filed. Thereafter there was no sitting of the Tribunal for some time. On 2.3.2009 when the matter was taken up inspite of stiff opposition the Tribunal had adjourned the matter for filing written statement without considering the stay petition and without passing any final order thereon. Written statement was filed on 27.7.2009. Thereafter proof affidavit was also filed on behalf of the applicant. But the matter was adjourned without taking evidence. The Tribunal is not disposing of the appeal nor passing any orders on the stay application. Hence the petitioner Bank inter alia seeks direction to the 1st respondent Tribunal to dispose of the case in tune with Section 17(5) of the SARFAESI Act. 5. In WP(C).No.32066/2009 the 1st respondent borrower had initially filed a writ petition before this court when proceedings under the SARFAESI Act was threatened. The writ petition was disposed of giving liberty to the 1st respondent to approach the Tribunal within 45 days. This court granted interim stay for a period of two months on condition of deposit of an amount of Rs.25 lakhs within four weeks. S.A.No.20/2008 was filed by the 1st respondent. But W.P.(C).27030,28834,26875 & 32066 /09 6 since the proceedings under the SARFAESI Act was only at the stage of issuing notice under Section 13(2), the petitioner Bank opposed maintainability of the appeal. However, the Tribunal granted an order of status quo and posted the matter for hearing on the question of maintainability. But the matter was not heard thereafter. Since the interim stay granted by the Tribunal expired, the petitioner Bank proceeded with further steps. Then 1st respondent filed another appeal, S.A.No.158/2008. Since the Tribunal was not sitting at that time, the 1st respondent had moved WP(C).No.28384/2008 before this court. An interim stay was granted by this court in that case. But, subsequently the Tribunal resumed sitting and therefore the writ petition was disposed of on 29.1.2009. Eventhough S.A.No.158/2008 was taken up on 20.2.2009, by a mistake the Tribunal observed as, 'both sides reported that there was a stay of the hon'ble High Court till 27.2.2009'. Eventhough the petitioner Bank had pointed out that there was no stay granted by this court after disposal of the writ petition, the case was repeatedly adjourned without any particular reason. However, the matter was finally heard on 25.8.2009. W.P.(C).27030,28834,26875 & 32066 /09 7 But on 10.9.2009 the Tribunal again directed the 1st respondent to pay substantial amount. In the meanwhile a cheque issued by the 1st respondent for an amount of Rs.5 lakhs was dishonoured. But thereafter on different occasions the case was adjourned. On 26.10.2009 the applicant sought time for settlement and the Bank was directed to consider their offer for settlement. Status quo was ordered to continue. Eventhough S.A.No.20/2008 has become infructuous in view of filing of subsequent S.A.No.158/2008, the Tribunal is considering both the cases together and the matter is being adjourned without passing any order finally disposing of the appeals or by passing final orders on the stay applications. Therefore the petitioner Bank is inter alia seeking direction for disposal of both the appeals by the 1st respondent Tribunal within a time limit. 6. Mr.C.Varghese Kuriakose, learned counsel appearing for the party respondents in three cases made submissions with respect to maintainability of the writ petitions. It is contended that the Debts Recovery Tribunal is not a “court” nor a “tribunal” upon which the High court is having power of superintendence as provided under Article W.P.(C).27030,28834,26875 & 32066 /09 8 227(1) of the Constitution of India. It is contended that the Debts Recovery Tribunal is not a subordinate court coming within the purview of Section 3 of the Code of Civil Procedure, 1908. The provision through which the Debts Recovery Tribunals are established is brought to notice of this court. As per Section 3 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDBFI Act for short) the Tribunals are constituted by the Central Government to exercise jurisdiction, power and authority conferred on such Tribunals under that Act. Section 17 of the RDBFI Act deals with jurisdiction, power and authority of the Tribunals. It provides that such Tribunals established will be having powers and authority to entertain and decide applications from the Banks and financial institutions for recovery of Debts due to such Banks and financial institutions. As per Section 17(1) of the SARFAESI Act a right to appeal is provided to any person who is aggrieved by any of the measures taken under Section 13(4) of the said Act by the secured creditor or his authorised person, by approaching the Debts Recovery Tribunal having jurisdiction in the matter. Taking note of the provisions contained in the W.P.(C).27030,28834,26875 & 32066 /09 9 two different statutes as stated above, learned counsel contended that the Debts Recovery Tribunal is a creation and establishment of the Central Government and therefore it is not a Tribunal coming within the supervisory jurisdiction of the High Court under the powers vested under Article 227 of the Constitution of India. 7. Learned counsel for the respondents further pointed out about the bar of jurisdiction of other courts, with respect to matters upon which power is conferred on the Debts Recovery Tribunal. The provisions contained in Section 18 of the RDBFI Act specifies that no court or other authority shall have or be entitled to exercise any jurisdiction, powers or authority in relation to matters specified under Section 17 of the said Act. But exemption is provided with respect to the Supreme Court and High Court exercising jurisdiction under Article 226 and 227 of the Constitution of India. Identical provisions relating to bar of jurisdiction contained in Section 34 of the SARFAESI Act was also brought to my notice. Section 34 of the SARFAESI Act provides that no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter W.P.(C).27030,28834,26875 & 32066 /09 10 which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the RDBFI Act. Further, Section 35 of the SARFAESI Act provides that the provisions contained in that Act will have the effect of overriding anything inconsistent therewith contained in any other law for the time being in force. The counsel made an argument that in view of the bar of jurisdiction ousting other courts, the exercise of superintendence under Article 227 is not justified. In this regard he had specifically pointed out that, the exemption with respect to exercise of jurisdiction under Article 227 contained in Section 18 of the RDBFI Act is conspicuously absent in Section 34 of the SARFAESI Act. Hence the bar imposed therein will operate even against the exercise of superintendence under Article 227, is the argument. 8. The two main aspects need be considered while deciding the above stated objections are that, whether there is a bar with respect to exercise of the constitutional W.P.(C).27030,28834,26875 & 32066 /09 11 jurisdiction under Article 227, and if not, whether the Debts Recovery Tribunal will come within the purview of subordinate courts and tribunals mentioned in Article 227. As pointed out above, Section 18 of the RDBFI Act specifically excludes exercise of jurisdiction under Article 227 from the purview of the bar of jurisdiction imposed on courts and other authorities. While examining the scope of Section 34 of the SARFAESI Act, it is evident that the bar of jurisdiction is only limited to civil courts. Therefore it is clear that exercise of jurisdiction under Article 227 of the Constitution of India is not expressly barred by way of the statutes relevant in the context. A contention is also seen raised based on Section 35 of the SARFAESI Act to canvass the position that the provisions of the Act shall have overriding effect on any other law. 9. But a larger question remains that even if there is any express bar provided in any legislature, whether the power of superintendence conferred on the High Courts by virtue of the Constitution of India, can be curtailed through such legislations. Mr.Sathish Ninan, learned counsel appearing for the petitioner in WP(C).No.27030/2009 W.P.(C).27030,28834,26875 & 32066 /09 12 pointed out the landmark decision of Hon'ble Supreme Court in L.Chandrakumar Vs. Union of India ((1997) 3 SCC 261) wherein a Bench of 7 Judges has re-considered the 5 Judges' Constitution Bench decision in S.P.Sampath Kumar Vs. Union of India ((1987) 1 SCC 124) and unanimously held that the power, authority and jurisdiction of the High Court under Article 226 and 227 cannot be taken away even by an amendment of the Constitution. Similarly Mr.Sathish Ninan had pointed out a Division Bench decision of this court in John V.O. Vs. M/s.Catholic Syrian Bank Ltd. and others (2009(1) ILR (Ker.) 596). It is held therein that the jurisdiction under Article 227 cannot be limited or fettered even by any Act of the legislature. It is further held that the supervisory jurisdiction is very wide and can be used to meet the ends of justice and an interlocutory order can also be set aside. Yet another decision of the Hon'ble Supreme Court in Mariamma Roy Vs. Indian Bank and others (2008(4) KHC 144 (SC)) is pointed out by the learned counsel to canvass the position that even if an alternate remedy is available to the aggrieved party against a particular order, it is open for such party to W.P.(C).27030,28834,26875 & 32066 /09 13 move a writ application and court has power to entertain the same if it is found that while passing an order there has been violation of principles of natural justice. 10. From the legal principles enumerated in the decisions cited above, especially the observations contained in the 7 Judges' Bench decision of the Hon'ble Supreme Court, it is clear that no bar can be imposed against exercise of jurisdiction under Article 227 by virtue of the provisions contained in any of the legislations. Hence the contentions of the learned counsel for the respondents in this regard need be repelled. 11. The second question as to whether the Debts Recovery Tribunal is coming within the ambit of 'Tribunals” mentioned in Article 227. Contentions of the learned counsel for the respondent cannot be accepted as the issue is no more 'res integra'. In the decision of State of West Bengal Vs. Samar Kumar Sarkar (2009(4) KLT SN 52 (C.No.46) (SC) the Hon'ble Supreme Court held that Article 227 is of wider ambit and it does not limit jurisdiction of High Court to the hierarchy of courts functioning directly under the Civil Procedure Code and Criminal Procedure W.P.(C).27030,28834,26875 & 32066 /09 14 Code alone, but it gives the High Court power to correct errors of various kinds of all Courts and Tribunals in appropriate cases. In this regard it is pertinent to note the wordings of Article 227(1) which says that every High Court shall have superintendence over all 'courts' and 'tribunals' throughout the territory in relation to which it exercise jurisdiction. It does not make any difference as to whether such tribunals are established by the State Government or by the Central Government. Learned counsel for the respondent placed reliance on the dictum laid down by the apex court in A.R Anthule's case (AIR 1988 SC 1531) to hold that jurisdiction of any particular court is legislative in character and the parliament alone can do it by law and no court can enlarge the jurisdiction of a court or advise a person of his rights of revision and appeal. But the principles contained therein has no application in the case at hand because the provisions in the constitution itself confers power and jurisdiction on the High Court regarding superintendence over the Tribunal. Therefore there is no question of creation or enlargement of jurisdiction arises in the case for exercise of supervisory jurisdiction over the W.P.(C).27030,28834,26875 & 32066 /09 15 Debts Recovery Tribunal. 12. Under the above mentioned circumstances I am fully convinced that the writ petitions herein are maintainable under Article 227 wherein writ of mandamus is sought for against the Debts Recovery Tribunal for proper exercise of the jurisdiction vested on that Tribunal. 13. The next point to be considered is as to whether any interference invoking exercise of jurisdiction under Article 227 is warranted on the facts of these cases. It is evident that inspite of granting stay against proceedings under the SARFAESI Act, appeals filed by the creditors are being adjourned from time to time without disposal. Nor the Tribunal had considered objections raised against granting of interim orders and passed any final orders in adjudication of such interim applications. In this regard my attention is drawn to Section 17(5) of the SARFAESI Act which stipulates that any application made under Section 17(1) should be dealt with by the Debts Recovery Tribunal as expeditiously as possible and disposed of within 60 days from the date of such application. The proviso to Section 17(5) stipulates that the Tribunal should record in writing the reasons for W.P.(C).27030,28834,26875 & 32066 /09 16 non-disposal of the application beyond the period of 60 days and further stipulates that at any rate the Tribunal should not keep pending any such applications beyond a period of four months. Going by the said provisions it is evident that the Tribunal is statutorily bound to dispose of applications filed under Section 17(1), at any rate within a period of 4 months from the date of such application. But in all these four cases it is evident that the applications are pending disposal before the Tribunal, after granting interim orders, since more than four months. In some of the cases the period had even crossed one year. Hence I find justification for granting the prayers in the writ petitions directing speedy disposal of the matter by the Tribunal. 14. In the result these writ petitions are disposed of directing the Debts Recovery Tribunal, Ernakulam to consider and dispose of S.A.Nos.213/2009, 200/2008, 55/2008 and 20/2008 &158/2008, if not already disposed, as early as possible, at any rate within a period of three months from the date of receipt of a copy of this judgment. In case there is any hurdle in disposal of appeals itself, the Tribunal shall consider and pass final orders on the interim stay W.P.(C).27030,28834,26875 & 32066 /09 17 petitions, after considering contentions of the Banks who are petitioners herein, within a period of one month from the date of receipt of a copy of the Judgment. C.K.ABDUL REHIM, JUDGE. okb