2012(2) ALL MR 149
IN THE HIGH COURT OF JUDICATURE AT BOMBAY

D.Y. CHANDRACHUD AND A.A. SAYED, JJ.

International Asset Reconstruction Company Pvt. Ltd. Vs. The Registrar, Debts Recovery Tribunal-I, Mumbai & Anr.

Writ Petition No. 2209 of 2011

22nd November, 2011

Petitioner Counsel: Mr. BERJIS COLABAWALLA with Mr. NIKHIL RAJANI i/b. M/s. V. DESHPANDE & Co.
Respondent Counsel: Mr. A.S. RAO with Ms. NEETA V. MASURKAR

(A) Recovery of Debts Due to Banks and Financial Institutions Act (1993), Ss.19(24)(1), 22 - Civil P.C. (1908), O.20 R.1 - Recovery of dues - Sale of mortgaged property - Permission not granted - Appeal against it by petitioner - Appeal pending for judgment and order for almost 1 year - Though Tribunal is not bound by CPC as per S.22 of Act, it cannot ignore public policy underlying provisions of O.20 R.1 for expeditious adjudication.

2001 ALL MR (Cri) 1930 (S.C.) Ref. to. (Para 4)

(B) Recovery of Debts Due to Banks and Financial Institutions Act (1993), Ss.19(24)(1), 22 - Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (2002), S.17(5) - Recovery of dues - Application for sale of mortgaged property - Permission rejected - Appeal against pending - As per provisions pendency of application should not be more than 4 months - Directions issued for expeditious delivery of judgment. (Paras 2, 6, 7)

Cases Cited:
Anil Rai Vs. State of Bihar, 2001 ALL MR (Cri) 1930 (S.C.) =JT 2001 (6) SC 515 [Para 4]


JUDGMENT

Dr. D.Y. CHANDRACHUD, J. :- The Petitioner had filed an application for sale of immovable property that was mortgaged in its favour by the borrower on a pari passu basis with the other banks. The Application was filed before the Recovery Officer in the recovery proceedings which were pending before him. It has been averred that the borrower made a submission to the effect that there was a stay with respect to the recovery proceedings against certain other banks having a pari passu charge on the immovable property and hence, the Petitioner also stood prohibited from proceeding with the recovery. It has been averred that the Recovery Officer agreed with the view of the borrower and did not permit the Petitioner to proceed with the recovery. The Petitioner filed an Appeal against the order of the Recovery Officer before the Presiding Officer of the DRT in January 2011. The pleadings were complete and the hearing was concluded on 6 May 2011. When the Appeal was reserved for orders, the date fixed for orders was 10 June 2011. On 10 June 2011, the order was not delivered and another date, 14 July 2011, came to be fixed. Thereafter, the date for the passing of the order has been fixed on 14 July 2011 as 18 August 2011, on 18 August 2011 as 23 September 2011 and on 23 September 2011 as 20 October 2011. On 20 October 2011, the proceeding has been adjourned to 30 November 2011. The Petitioner has been constrained to move this Court in view of the delay on the part of the Presiding Officer of the D.R.T. in delivering Judgment and, necessary directions have been sought.

2. Section 19(24) of the Recovery of Debts Due to Banks and Financial Institutions Act 1993 stipulates that an application made under sub-Section (1) or sub-Section (2) shall be dealt with by the Tribunal as expeditiously as possible and an endeavour shall be made by it to dispose of the application finally within 180 days from the date of receipt of the application. This provision underlines that the primary intent is to facilitate expeditious recovery of debts due to banks and financial institutions. The Statement of Objects and Reasons appended to the Bill which was introduced in Parliament shows that the existing procedure for recovery of debts due to banks and financial institutions had blocked a significant portion of their funds in unproductive assets, the value of which deteriorated with the passage of time. The Bill sought to provide for the establishment of Tribunals and Appellate Tribunals for expeditious adjudication and recovery of debts due to banks and financial institutions. The provisions of Section 19(24) have been made in order to effectuate the salutary object underlying the expeditious recovery of outstanding dues of banks and financial institutions.

3. Order XX Rule 1 of the Code of Civil Procedure, 1908 states that after the case has been heard, the Court shall pronounce judgment in an open Court, either at once, or as soon thereafter as may be practicable and when the judgment is to be pronounced on some future day, the Court shall fix a day for that purpose. Every endeavour has to be made by the Court under the proviso to pronounce the Judgment within 30 days from the date on which the hearing of the case was concluded but, where it is not practicable to do so, on the ground of the exceptional and extraordinary circumstances of the case, the Court shall fix a future day which shall not ordinarily be a day beyond 60 days from the date on which the hearing of the case was concluded. Now, undoubtedly, the Tribunal under the Act of 1993 is not bound by the procedure laid down by the Code of Civil Procedure 1908 by virtue of Section 22, but is to be guided by the principles of natural justice. The Tribunal or the Appellate Tribunal is, subject to the Act and Rules, empowered to set down its own procedure. Obviously however, the rules and procedure must effectuate the object of expeditious adjudication.

4. Section 22 of the Act requires the Tribunal and the Appellate Tribunal to be guided by the principles of natural justice. The whole object of an oral hearing is to enable litigating parties to have an opportunity to present their rival cases before the adjudicating Officer. Delivery of judgments on an expeditious basis is as much a component of the principles of natural justice. The impact of an oral argument is lost with the passage of time. Human memory is fallible and the subtleties of points made at the Bar are lost over time. All Courts and Tribunals are duty bound, as institutions which exercise the judicial power to observe the principles of natural justice, and to abide by the norms of delivering Judgments which are reserved expeditiously. The Debt Recovery Tribunal and the Appellate Tribunal are institutions created by a statute which was intended to effectuate an expeditious realization of dues outstanding to banks. The principle that a judgment must be delivered either immediately upon the close of the hearing, and, when it is not practicable to do so within a reasonable period, must apply to the Debt Recovery Tribunal. What is a reasonable period is now stipulated in the provisions of Order XX Rule 1 of the Code of Civil Procedure, 1908. A Tribunal, which, by its very constitution is intended to provide for expeditious recovery of dues owing to banks and financial institutions cannot ignore the public policy underlying the provisions of Order XX Rule 1 on the ground that by Section 22 of the Act, it is not bound by the Code of Civil Procedure, 1908. The Supreme Court in its Judgment in Anil Rai V/s. State of Bihar JT 2001(6) SC 515 : [2001 ALL MR (Cri) 1930 (S.C.)] laid down guidelines for observance by the High Courts to ensure expeditious rendering of judgments.

5. Counsel appearing on behalf of the Petitioner has submitted before the Court that the Petitioner was constrained to move this Court as this is not an isolated case where the Tribunal has failed to expeditiously deliver Judgment. Counsel states that the Petitioner has three other Roznamas where the delivery of Judgment has been consistently postponed. This is not a fair practice. It is incumbent upon the DRT and the DRAT constituted under the Act to ensure that the provisions of the Act are enforced both in letter and spirit.

6. We accordingly dispose of this Petition by permitting the Petitioner to mention the pending proceedings before the DRT together with an authenticated copy of this Judgment. We hope and trust that the Presiding Officer of the Tribunal shall make every endeavour to deliver the judgment expeditiously. We are conscious of the fact that the burden which the Adjudicating Officers are called upon to discharge is heavy. But it is necessary that effective steps should be taken by the Adjudicating Officer not to delay the delivery of judgments. Expeditious delivery of judgments is an important facet of the overall credibility of institutions which dispense justice to citizens. The process of dispensing justice is unfortunately fraught with delays which often results in a denial of justice. Delay in the time taken between the reserving of an order and actual rendering of a judgment only compounds the sense of frustration of the litigants.

7. In sub-Section 5 of Section 17 of the Securitization Act, a similar provision has been made by which any application made under sub-Section (1) shall be dealt with by the DRT as expeditiously as possible and shall be disposed of within 60 days from the date of such application. Under the proviso to sub-Section 5, the Tribunal may, from time to time, extend the said period for the reasons to be recorded in writing, so, however, that the total period of pendency of the application before the Tribunal shall not exceed four months from the date of making of such application under sub-Section (1).

8. We have made these observations in order to emphasize the importance for judicial institutions such as the DRT and the DRAT to abide by the public interest implicit in the provisions of the Act and in particular, Section 19(24), We accordingly, dispose of the Petition. There shall be no order as to costs.

Petition allowed.