Ee IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 26.6.2008 CORAM: THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYA AND THE HONOURABLE MR.JUSTICE V.DHANAPALAN W.P.No.6077 of 2007 & M.P.Nos.2 and 3 of 2007 R.Prabakaran .. Petitioner vs. 1. Union of India, Ministry of Finance, Department of Economic Affairs (Banking Division), Rep. by Secretary, New Delhi. 2. Ministry of Law, Justice & Company Affairs, New Delhi. 3. The Registrar, Debts Recovery Tribunal, Trichy Road, Coimbatore. 4. The Registrar, Debts Recovery Tribunal, Madurai. 5. The Registrar, Debts Recovery Tribunal No.III, Chennai. 6. The License Officers Forum, rep. by its Secretary, Rajeevan, Debts Recovery Tribunal, Central Bank Building, V.H.Road, Coimbatore. https://hcservices.ecourts.gov.in/hcservices/ 7. The Debts Recovery Tribunal Advocates Association, DRT Building, Trichy Road, Coimbatore, Rep. by its President. .. Respondents Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Certiorari, calling for the records pertaining to the impugned notification dated 9.1.2007 in F.No.G- 26036/2/2005, published in the Gazette of India, Extraordinary, under Part II, Sec.3 Sub-Sec.1 issued by the Union of India, represented by its Secretary, Ministry of Finance, Department of Economic Affairs (Banking Division), the first respondent herein and to quash the same. For petitioner : Mr.A.L.Somayaji, Senior Counsel for M/s.P.R.Ramakrishnan For respondents : Mr.P.Wilson, Asst. Solicitor General for RR-1,2,3 and 5 Mr.P.Chandrasekaran for R-4 Ms.Ananda Gomathy Sivakumar for R-7 ORDER S.J.MUKHOPADHAYA,J The petitioner-borrower has preferred this Writ Petition against the Notification in F.No.G-26036/2/2005, dated 9.1.2007 issued by the Ministry of Finance, Department of Economic Affairs (Banking Division), Government of India, under Section 3 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the DRT Act'), notifying the establishment of new Debt Recovery Tribunal (for short, 'the DRT'), at Madurai and Chennai, carving out the jurisdiction of the earlier DRT at Chennai and Coimbatore. 2. Mr.A.L.Somayaji, learned Senior Counsel appearing for the petitioner submitted that what is under challenge is the carving out of three Districts, i.e. Salem, Erode and Namakkal from the jurisdiction of the DRT, Coimbatore and placing it under the jurisdiction of the DRT, Madurai. According to the petitioner, the Districts of Salem, Erode and Namakkal were in between 100-155 Kms. from Coimbatore (Salem-150 Kms., Erode-100 Kms. and Namakkal-155 Kms.), but now, in view of the placing of such Districts under the jurisdiction of Madurai, the parties will have to https://hcservices.ecourts.gov.in/hcservices/ move far away distance in between 200-240 Kms. to Madurai (Salem-200 Kms., Erode-240 Kms. and Namakkal-200 Kms.). It is the case of the petitioner that he has already incurred huge expenses while attending the proceedings in Chennai and further expenses were incurred when proceedings were transferred to Coimbatore and in view of the present Notification, he will have to again incur expenses and will have to go to a far-off city for conducting the proceedings. It is not just inconvenience alone to him, but he has to spend three times for the same litigation. Similar plight is faced by the other persons. Even the Banks would be inconvenienced and therefore, he has impleaded the License Officers Forum, represented by its Secretary, DRT, Central Bank Building, V.H.Road, Coimbatore, as a party to the Writ Petition. It is the further case of the petitioner that the Notification is inconsistent with Rule 6 of the DRT (Procedure) Rules, 1993. Though Section 3 of the DRT Act empowers the Central Government to constitute more than one Tribunal, it does not provide for any guideline or procedure to be followed before such Tribunals are constituted. Therefore, Section 3 of the DRT Act is arbitrary, illegal and unfettered power of the State. Giving reference to Krishnagiri District, it is pleaded that though it is a separate District, and was a part of DRT, Coimbatore, by jurisdiction, now the cases arising out of Krishnagiri District do not find a place in the Notification defining the revised jurisdiction, which shows non-application of mind. Though such pleadings are made, learned Senior Counsel appearing for the petitioner, while challenging the impugned Notification, at the time of hearing, made the following submissions: (a) The Central Government abdicated its powers to the Debt Recovery Appellate Tribunal (for short, 'the DRAT'), Chennai, by accepting its request and on the basis of the suggestions made by the DRAT, the impugned Notification has been issued without application of mind. The Notification is based on extraneous consideration, i.e. recommendations / suggestions of the DRAT, Chennai. (b) The impugned Notification has no nexus with the object in carving out the jurisdiction of the said three Districts from the jurisdiction of the DRT, Coimbatore. (c) In the absence of any material before the Central https://hcservices.ecourts.gov.in/hcservices/ Government to justify the carving out of the Districts of Salem, Erode and Namakkal from the jurisdiction of the DRT, Coimbatore for placing it under the jurisdiction of the DRT, Madurai, the impugned Notification is illegal. (d) The impugned Notification in effect, is violative of Rule 6 of the DRT (Procedure) Rules, 1993. 3. Mr.P.Wilson, learned Assistant Solicitor General appearing for the Central Government, submitted that the petitioner having challenged the entire impugned Notification dated 9.1.2007, he cannot restrict the prayer by limiting it to the Districts of Salem, Erode and Namakkal, in the absence of any amended relief, such a relief should not be granted. According to him, the Notification was issued taking into consideration huge pendency of cases of different Districts before the DRT, Chennai and Coimbatore, as also the delay in disposal of such cases and its effect on the Banks. While he relied upon the counter affidavit filed on behalf of the Union of India and the statements in regard to the pendency of cases as enclosed in the paper book, it was also submitted that the petitioner, a borrower, has filed the Writ Petition only to delay the recovery. None of the Banks have raised any grievance before any authority or a Court of law. 4. We have heard the learned counsel appearing for the parties and noticed the rival contentions and the relevant materials on record. 5. From the statement of objects and reasons of the DRT Act, it would be evident that as the Banks and financial institutions were experiencing considerable difficulties in recovering loans and enforcement of securities charged with them and the existing procedure for recovery of debts due to the Banks and financial institutions blocked a significant portion of their funds, on the basis of the recommendations of "M.Narasimhan Committee", Special Tribunals with special powers for adjudication, were constituted for the early recovery of such debts and dues. The main aim and object of the DRT Act are for early recovery of the debts and dues of the Banks and financial institutions. 6. There were three DRTs functioning in Tamil Nadu, two at Chennai and one at Coimbatore. The Central Government having noticed the number of pendency of cases, for early disposal of the cases, decided to establish more Tribunals https://hcservices.ecourts.gov.in/hcservices/ in the State. 7. According to the first respondent-Central Government, as it cannot act differently, it had to act strictly as per the advise as sought for and received from the DRAT, Chennai, which is headed by a retired Judge of the High Court and having idea with regard to the pendency of the cases. Number of cases from various Districts, existing pendencies in various DRTs, logistic support and administrative convenience were considered in arriving at a decision for allocating one or other District under the jurisdiction of one or other DRT. 8. From the records, it appears that the Central Government, by letter in Do.No.A-36011/3/2005-DRT, dated 19.8.2005, informed its intention to establish additional Tribunals, to the Chairperson of the DRAT, Chennai. By the said letter, it was informed that while considering the jurisdiction, it is to be seen that number of cases pending in the DRT-I & II, Chennai and DRT, Coimbatore, can be more or less equally divided between the new DRTs. and the existing DRTs. 9. Having received the said information, the Chairperson of the DRAT called for meeting of the Presiding Officers of the DRTs-I & II, Chennai, by letter dated 25.8.2005 and requested them to forward District-wise filing of cases, pendency of cases, immediately. By letter dated 30.8.2005, the DRT, Coimbatore was requested to send such information by return of Fax giving District-wise details of the cases filed/disposed of. 10. The statement regarding District-wise pendency of cases as on 31.7.2005 before the DRT-II, Chennai was forwarded by letter dated 30.8.2005. The following charts show the pendency/filing of cases in various Districts and also before the DRT-II, Chennai: STATEMENT REGARDING DISTRICT-WISE FILING OF CASES/PENDENCY OF CASES AS ON 31.07.2005 Sl. No. District No. of cases filed Filed in DRT-II Trans- ferred from other DRTs/ Courts Total No. of cases pending 1. Chennai North 678 1226 1904 814 https://hcservices.ecourts.gov.in/hcservices/ Sl. No. District No. of cases filed Filed in DRT-II Trans- ferred from other DRTs/ Courts Total No. of cases pending 2. Kanyakumari 21 22 43 18 3. Nagapattinam 4 13 17 7 4. Ramnad 8 13 21 8 5. Sivaganga 16 22 38 19 6. Thiruvarur 17 5 22 9 7. Thanjavur 42 66 108 38 8. Tirunelveli 40 47 87 41 9. Tuticorin 45 60 105 48 10. Virudhunagar 72 60 132 54 11. Others 16 100 116 26 Total 2593 1082 DEBTS RECOVERY TRIBUNAL-II, CHENNAI BRANCH-WISE CASES OF CHENNAI Sl. No. Name of Branch No. of cases OA TA Total Pending 1 Tondiarpet Branch 9 1 10 4 2 Washermanpet Branch 34 3 37 27 3 Royapuram Branch 22 3 25 11 4 George Town Branch 92 6 98 51 5 Rajaji Salai Branch 37 23 60 32 6 Park Town Branch 38 16 54 27 7 Chennai-1 (Parrys) 853 265 1118 461 8 Erukanchery 52 7 59 24 9 Vyasarpadi 3 0 3 1 10 Perambur 9 1 10 5 11 Periyar Nagar 3 0 3 2 12 Choolai 4 2 6 3 13 Sowcarpet 55 7 62 25 https://hcservices.ecourts.gov.in/hcservices/ Sl. No. Name of Branch No. of cases OA TA Total Pending 14 Vepery 7 0 7 5 15 Chindatripet 2 0 2 2 16 Purasawalkam 149 13 162 67 17 Otteri 2 1 3 0 18 Kilpauk 46 6 52 24 19 Kellys 33 1 34 13 20 Ayanavaram 15 0 15 4 21 Shenoy Nagar 12 0 12 9 22 Sembium 1 0 1 0 23 Villivakkam 16 2 18 5 24 Anna Nagar 88 6 94 41 25 Aminjikarai 10 2 12 10 26 Arumbakkam 2 1 3 3 27 Mogappair 2 0 2 2 28 Kolathur 17 1 18 8 Total 1613 367 1980 866 The DRT, Coimbatore, by its letter dated 31.8.2005, also forwarded its details of cases filed/pending/disposed of, including the total number of cases of the Districts of Coimbatore, Erode, Salem, etc., as shown hereunder: DISTRICT-WISE DETAILS OF CASES FILED/DISPOSED OF AS ON 31.07.2005 IN RESPECT OF DRT, COIMBATORE District Total No. of cases filed No. of disposed cases No. of pending cases Coimbatore 1967 851 1116 Dharmapuri 79 40 39 Dindigul 110 45 65 Erode 437 167 270 Madurai 355 177 178 Nilgiris 132 48 84 Pudukkotai 36 21 15 https://hcservices.ecourts.gov.in/hcservices/ District Total No. of cases filed No. of disposed cases No. of pending cases Salem 341 118 223 Theni 37 13 24 Trichy 223 117 106 Total 3717 1597 2120 By letter dated 1.9.2006, DRT-I, Chennai, forwarded the pendency of cases, as extracted hereunder: DRT-I, CHENNAI DISTRICTWISE CASES FILED & PENDING REPORT AS ON 31.07.2005 Sl.No. District Filed Pending 1 Chennai South 4664 1744 2 Cuddalore 78 27 3 Kanchipuram 124 69 4 Karur 131 63 5 Namakkal 88 51 6 Perambalur 6 4 7 Pondicherry 131 52 8 Thiruvallore 28 8 9 Thiruvannamalai 15 5 10 Vellore 267 121 11 Villupuram 33 21 Total 5566 2164 DEBTS RECOVERY TRIBUNAL-I, CHENNAI. AREAWISE DISTRIBUTION OF CASES FILED AND PENDING IN CHENNAI SOUTH Sl.No. Area No. of cases 1 Adyar 39 2 Alwarpet 51 3 Ambattur 40 4 Annasalai 361 5 Cathedral Rd. 34 6 Egmore 63 https://hcservices.ecourts.gov.in/hcservices/ Sl.No. Area No. of cases 7 Guindy 50 8 Kodambakkam 28 9 Mylapore 114 10 Nandanam 88 11 Nungambakkam 147 12 Royapetah 74 13 Saidapet 21 14 Santhome 55 15 Teynampet 28 16 T.Ngr 109 17 Tambaram 28 18 Thousand Lights 31 19 Triplicane 37 20 Vadapalani 42 21 Others 304 Total 1744 11. From the aforesaid chart forwarded by DRT, Coimbatore, it would be evident that while total number of pendency of cases of Coimbatore District is 1116, the next number of pendency is that of the Districts of Erode and Salem (Erode-270 and Salem-223), apart from Madurai being 178. 12. In view of the aforesaid facts, the Chairperson of the DRAT, by letter in D.O.No.7/1/05-DRAT, dated 15.9.2005, made the following suggestions: "Kindly refer to your D.O.letter No.A- 36011/3/2005-DRT dated 19.08.2005 seeking my guidance in bifurcating the jurisdiction of existing DRTs of Chennai & Coimbatore for establishing the new DRTs at Chennai & Coimbatore. Recently, additional bench of Madras High Court has been established at Madurai and it is fully operational now. I therefore suggest the opening of one DRT with Madurai as Headquarters instead of at Coimbatore again as bifurcating Coimbatore area-wise would be more cumbersome and complicated. Accordingly, the following districts can be brought under the proposed https://hcservices.ecourts.gov.in/hcservices/ Madurai DRT and the distance factor is also taken into consideration, which would facilitate the litigant public and it is more important at the time of constituting new Court/Tribunal: DRT, Madurai: Districts of Madurai, Kanyakumari, Tirunelveli, Tuticorin, Virudhunagar, Sivaganga, Ramnad, Theni, Erode, Salem, Namakkal, Trichy, Karur, Dindigul In view of this, the jurisdiction of existing DRT, Coimbatore can be limited to Coimbatore and Nilgiris districts, the pendency as on date being 1200 cases. As regards, trifurcation of Chennai DRTs, the jurisdiction of the 3 DRTs can be as under: CHENNAI DRT-I: Areas under Egmore- Nungambakkam & Mylapore-Triplicane Taluk limits of Chennai and Union Territory of Pondicherry. CHENNAI DRT-II: Areas under Tondiarpet & Mambalam-Guindy Taluk limits of Chennai. CHENNAI DRT-III: Areas under Perambur- Purasawalkam Taluk limits of Chennai and districts of Kanchipuram, Tiruvallur, Vellore, Villupuram, Cuddalore, Tiruvannamalai, Pudukottai, Thanjavur, Thiruvarur, Nagapattinam, Perambalur & Dharmapuri. The above suggestions have been made after taking into consideration the area- wise/district-wise, distant-wise, pendency of cases, as on date, besides geographical feasibility of places to the headquarters of DRTs. I would like to add that while opening new DRTs will certainly help in expediting the recovery of debts and it is equally important to post P.O. for all the DRTs immediately to achieve this end." 13. Taking into consideration the aforesaid suggestions, the Central Government agreed upon and issued the impugned Notification, dated 9.1.2007. 14. Learned Senior Counsel appearing for the petitioner in fact highlighted the aforesaid letter dated 15.9.2005 written by the Chairperson of the DRAT to suggest the abdication of power by the Central Government and its non- application of mind. He relied on the decision of the Supreme Court in the case of "Amirudhsinhji vs. State of https://hcservices.ecourts.gov.in/hcservices/ Gujarat" reported in AIR 1995 SC 2390, wherein, the Supreme Court dealt with the meaning of "Surrender, abdication and dictation". The said case was relied upon to suggest that the present case was a case of exercise of power on the basis of dictation of the DRAT, but we are not inclined to accept the same, as it is always open for the Central Government to know the details of the number of cases including pendency and disposal and the Chairperson of the DRAT being the head, having such idea of pendency and delay in disposal of cases, it is always open for the Central Government to consult the Chairperson of the DRAT and accept his suggestion. 15. One of the submissions was made that the impugned Notification is against Rule 6 of the DRT (Procedure) Rules, 1993, but such submission cannot be accepted, as the said Rule 6 deals with place of filing of application, which is to be filed by the applicant-Bank with the Registrar of the DRT within whose jurisdiction the Bank or the financial institution is functioning. Apart from the fact that this problem is of the Bank and financial institution, and not of the borrower, it is the Bank/financial institution to move the DRT under whose jurisdiction the Bank/financial institution is situated. 16. A counter affidavit has been filed by the seventh respondent-DRT Advocates Association, Coimbatore. However, as the lawyers have no cause of action and cannot make any claim as to where the hearing should be given, we are not inclined to deal with their submissions, which are almost similar to the submissions made on behalf of the writ petitioner. 17. We find no merits in the Writ Petition, which is accordingly dismissed. No costs. The Miscellaneous Petitions are closed. Sd/- Asst. Registrar. /true copy/ Sub Asst. Registrar. https://hcservices.ecourts.gov.in/hcservices/ cs To 1. Union of India, Ministry of Finance, Department of Economic Affairs (Banking Division), Rep. by Secretary, New Delhi. 2. Ministry of Law, Justice & Company Affairs, New Delhi. 3. The Registrar, Debts Recovery Tribunal, Trichy Road, Coimbatore. 4. The Registrar, Debts Recovery Tribunal, Madurai. 5. The Registrar, Debts Recovery Tribunal No.III, Chennai. + 1 CC To Mr.P.Chandrasekaran, Advocate SR NO.32721,32292 + 1 CC To Mr.P.R.Ramakrishnan, Advocate SR NO.32592 + 1 CC To Mr.P.Wilson, Advocate SR NO.32405 Order in W.P.No.6077 of 2007 mdr(co) pmk/27.6.08 https://hcservices.ecourts.gov.in/hcservices/