Case: Raghunath Rai Bareja  Vs. Punjab National Bank

4. The facts of the case are that on a Company Petition No. 57 of 1983 - M/s. S.P. Nagrath & Co. vs. M/s. Bareja Knipping Fasteners Ltd., the High Court vide order dated 23.10.1983 ordered winding up of the Company and an Official Liquidator was appointed who took over possession of the properties of the Company.5. The respondent-Bank filed a Suit (Company Petition No. 46 of 1984) for recovery of Rs. 14,53,577/- with pendente lite and future interest.6. A preliminary decree for recovery of Rs. 19,07,800/- with future interest @ 12% per annum was passed by the High Court in favour of the decree-holder Bank, the respondent herein, on 2.12.1985 in Company Petition No. 46 of 1984.7. Ultimately, a decree was passed in favour of the Bank on 15.1.1987 in Company Application No. 115 of 1986. The aforesaid final decree dated 15.1.1987 stated asis hereby ordered and decreed that the mortgaged/pledged/hypothecated properties in the aforesaid preliminary decree mentioned or sufficient part thereof be sold, and that for the purpose of such sale the plaintiff/petitioner shall produce before the Court or such officer as appointed, all documents in his possession or power relating to the mortgage properties.And it is hereby ordered and decreed that the money realized by such sale shall be paid in the Court and shall be duly applied (after deduction there from of expenses of the sale) in the payment of the amount payable to the plaintiff/petitioner under aforesaid preliminary decree and under any further orders that may have been passed in this petition and in payment of any amount which the Court may have adjudged due to the plaintiff/petitioner for such costs of the petition including costs of this application and such costs, charges and expenses as may be payable under Rule 10 together with such subsequent interest as may be payable under Rule 11 of Order XXXIV of the first Schedule to Code of Civil Procedure, 1908 and that the balance, if any, shall be paid to the defendants/respondents or other persons entitled to receive the same.Under Article 136 to the Schedule of the Limitation Act, 1963 the period for applying for execution of any decree is 12 years from the date when the decree becomes enforceable. Since in the present case the final decree was passed and became enforceable on 15.1.1987, the period of limitation for filing an execution application expired on 15.1.1999.9. In the present case, the Bank filed three Execution Petitions. The first one, being Execution Petition No. 14-L of 1987, was dismissed on 8.11.1990 by the followinglist of the property sought to be attached has been filed. This application is dismissed. The petitioner may, however, file a fresh execution application in accordance with law.It appears that a second Execution Petition thereafter was filed in 1994 being Execution Petition No. 3-L of 1994 by which the decree holder bank sought attachment and sale of properties which did not belong to the judgment debtors. After contest by the objectors, this second Execution Petition was dismissed by a Learned Single Judge of the High Court on 18.8.1994 holding that the decree passed against the Company cannot be satisfied by attachment and sale of properties belonging to other Companies, as these other Companies are different and distinct juristic personalities with different set of shareholders.11. Thereafter on 4.9.1998, the respondent-bank filed another Company Petition No. 236 of 1998 under Section 446 of the Companies Act, 1956 read with Rule 117 of the Companies (Court) Rules, 1959 seeking leave of the Company Court to commence the Execution proceedings before the Tribunal which had come into existence in 1993 under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as RDB Act). That petition was allowed by the Company Court vide order dated 18.12.1998 stating "Learned counsel for the parties are agreed that petitioner be granted leave to file execution petition in this Court."12. The decree-holder Bank (respondent in this appeal), then filed a third Execution Petition No. 1 of 1999 dated 11.01.1999 against M/s. Bareja Knipping Fasteners Limited through the Official Liquidator, without impleading the appellants and Shri K.M.Bareja as parties to the Execution Petition. On this third Execution Petition, the High Court on 1.4.1999 passed the followingis present on behalf of the petitioner. Counsel for the Official Liquidator submits that the decree has already been executed against the assets and properties of the Company. He further submits that no assets of the Company, moveable or immoveable, are available with the Official Liquidator. As such, there can be hardly any execution against the Company.Petition stands disposed of. Liberty to file proper petition against the other judgment debtors in accordance with law is granted as they have not been impleaded as parties in the Memo of Parties either of the execution petition of that of the application.Thereafter, on 7.4.1999, the Bank instead of filing a petition as directed by the High Court, filed Company Application No. 173 of 1999 for restoration of the Execution Petition No. 1 of 1999 along with a fresh Memo of Parties before the High Court. The High Court issued notice on this Application and then on 22.7.1999 recalled the order dated 1.4.1999.14. On 3.1.2005, the decree-holder Bank filed Company Application No. 55 of 2005 under Rule 9 of the Company (Court) Rules, 1959 read with Sections 17 and 18 of RDB Act for transfer of the Execution Petition to the Tribunal. The appellant filed a reply stating that the High Court has no jurisdiction to entertain this Application. However by the impugned order dated 26.5.2005 the High Court transferred the Execution Petition pending before it to the Debt Recovery Tribunal, Chandigarh.15. In the aforesaid order dated 26.5.2005, the High Courtdoubt, procedure for transfer of execution proceedings as mentioned in the RDB Act is applicable only with regard to proceedings pending on the relevant dated i.e. 24.6.1993 and there is no provision for transfer of application filed after the said date. There is, however, order dated 18.12.1998 on record whereby the parties consented that the petitioner may be allowed to file execution petition in this Court. In view of judgment of the Apex Court in Allahabad Bank (supra), this Court has no jurisdiction to deal with the application for execution. The question is whether in exercise of inherent jurisdiction of this Court, execution petition could be transferred to the Debt Recovery Tribunal, Chandigarh, as prayed for by the decree-holder.Inherent powers of the Court are in addition to the powers specifically conferred. The same can be exercised for advancing ends of justice, subject to the condition that exercise of such powers is not in conflict with express provisions of the statute. Learned counsel for the judgment-debtor is unable to show any decision or principle as to why inherent power cannot be invoked in the present case, to achieve the ends of justice. There is no express or implied provision against exercise of such a power, in a situation which has arisen in the present case.Accordingly, C.A. No. 55 of 2005 is allowed and execution proceedings are transferred to the Debt Recovery Tribunal, Chandigarh for being disposed of in accordance with law. Learned counsel for the decree-holder has made a statement that he wishes to proceed against the guarantors in execution proceedings. C.A. No. 415 of 1999 seeking dismissal of execution application, is accordingly, dismissed."

Reasoning: 17. Admittedly, the Debt Recovery Tribunal, Chandigarh was established in 1993 and hence after 1993 the exclusive jurisdiction regarding recovery of debts pertaining to which the RDB Act applies is with the Tribunal.18. In our opinion, the impugned order of the High Court dated 26.5.2005, transferring the Execution Petition pending before it to the Debt Recovery Tribunal, Chandigarh was clearly beyond the scope of Section 31 of the RDB Act because Section 31 states that only suits or other proceeding pending before the Court immediately before the establishment of the Tribunal under the Act, stand transferred to the Tribunal. Since, admittedly the Tribunal in the present case, had been established in 1993, and no proceeding was pending before it on the date when it was established, no transfer could take place under Section 31 of the RDB Act. At any event, the third Execution Petition which was transferred by the impugned order was filed by the respondent-Bank on 11.1.1999, i.e. much after the Tribunal had been established. Hence obviously there could be no such transfer to the Tribunal under Section 31 of the RDB Act. Apart from Section 31, there is no other provision for transferring a suit or other proceeding pending before any Court to the Tribunal. Hence, the impugned order dated 26.5.2005 was clearly illegal and without jurisdiction.Since in the aforesaid decision this Court has held that even with regard to execution the jurisdiction under the RDB Act is exclusive, we cannot agree with the view taken by the High Court merely because the appellant had given his consent to the transfer of the Execution Petition to the Tribunal. It is well settled in law that consent cannot confer jurisdiction.Since Section 24 of the RDB Act applies the provisions of the Limitation Act, 1963, to applications filed before the Tribunal, and since Article 136 of the Limitation Act provides a period of limitation of 12 years for filing an Execution Petition, hence now no such application can be filed since that period of 12 years expired on 15.1.1999. Hence, in our opinion the debt became time barred after 15.1.1999.In this connection, it may be mentioned that Section 446(3) of the Companies Act was omitted by Companies (Second Amendment) Act, 2002 and evidently the High Court has overlooked this Amendment. As a result in our opinion the High Court has no power to transfer the Execution Petition to the Debts Recovery Tribunal. At any event as held in Allahabad Bank vs. Canara Bank & Anr.(supra), Section 446 has no application once the RDB Act applies because Section 34 expressly gives overriding effect to the provisions of the RDB Act. Also, the RDB Act is a special law and hence will prevail over the general law in the Companies Act as held in Allahabad Bank vs. Canara Bank & Anr.(supra).27. In this connection, we may mention that in the impugned order dated 26.5.2005 the High Court has, while admitting that in view of the decision of this Court in Allahabad Bank vs. Canara Bank & Anr.(supra), it had no jurisdiction to deal with the execution application, it has, however, in the same order relied on the so called "inherent powers" of the Court. In our opinion there are no such inherent powers of the Court of transferring the Execution Proceedings to the Debt Recovery Tribunal, Chandigarh. Whatever powers there are of transfer of proceedings to the Tribunal are contained in Section 31 of the RDB Act, and no transfer is permissible de hors Section 31. Hence, we respectfully disagree with the High Court that it has inherent powers apart from Section 31 for transferring the Execution Petition to the Debt Recovery Tribunal.In the present case, while equity is in favour of the respondent-Bank, the law is in favour of the appellant, since we are of the opinion that the impugned order of the High Court is clearly in violation of Section 31 of the RDB Act, and moreover the claim is time-barred in view of Article 136 of the Limitation Act read with Section 24 of the RDB Act. We cannot but comment that it is the Bank itself which is to blame because after its first Execution Petition was dismissed on 23.8.1990 it should have immediately thereafter filed a second Execution Petition, but instead it filed the second Execution Petition only in 1994 which was dismissed on 18.8.1994. Thereafter, again, the Bank waited for 5 years and it was only on 1.4.1999 that it filed its third Execution Petition. We fail to understand why the Bank waited from 1990 to 1994 and again from 1994 to 1999 in filing its Execution Petitions. Hence, it is the Bank which is responsible for not getting the decree executed well in time.In our opinion, Section 31 is plain and unambiguous and it clearly says that only those suits or proceedings pending before a Court shall stand transferred to the Tribunal which were pending on the date when the Tribunal was established.50.The learned counsel for the respondent submitted that we have to see the legislative intent when we interpret Section 31.The function of the Court is only to expound the law and not to legislate vide District Mining Officer vs. Tata Iron and Steel Company 2002 (7) SCC 358. If we accept the interpretation canvassed by the learned counsel for the respondent we will really be legislating because in the guise of interpretation we will be really amending Section 31.54. The literal rule of interpretation really means that there should be no interpretation. In other words, we should read the statute as it is, without distorting or twisting its language.55. We may mention here that the literal rule of interpretation is not only followed by Judges and lawyers, but it is also followed by the lay man in his ordinary life. To give an illustration, if a person says "this is a pencil", then he means that it is a pencil; and it is not that when he says that the object is a pencil, he means that it is a horse, donkey or an elephant. In other words, the literal rule of interpretation simply means that we mean what we say and we say what we mean. If we do not follow the literal rule of interpretation, social life will become impossible, and we will not understand each other. If we say that a certain object is a book, then we mean it is a book. If we say it is a book, but we mean it is a horse, table or an elephant, then we will not be able to communicate with each other. Life will become impossible. Hence, the meaning of the literal rule of interpretation is simply that we mean what we say and we say what we mean.56. In the present case, we are clearly of the opinion that the literal rule applies, and the other rules have no application to interpreting Section 31, since the language of Section 31 is plain and clear, and cannot be said to be ambiguous or resulting in some absurdity.