[ad_1]
Uttarakhand High Court
Punjab National Bank vs Presiding Officer Debt Recovery … on 20 August, 2025
HIGH COURT OF UTTARAKHAND AT NAINITAL
HON'BLE THE CHIEF JUSTICE MR. G. NARENDAR
AND
HON'BLE SRI JUSTICE SUBHASH UPADHYAY
20TH AUGUST, 2025
WRIT PETITION (M/B) NO. 646 OF 2025
Punjab National Bank ......Petitioner.
Versus
Presiding Officer Debt Recovery Tribunal & others
.......Respondents.
Counsel for the Petitioner : Mr. Ashish Joshi and Mr. Shobhit
Joshi, learned counsel.
ORDER:
(per Mr. G. Narendar, C.J.)
Heard learned counsel for the petitioner.
2. A plain and simple reading of the order
impugned would convey the impression that the Debts
Recovery Tribunal intends to carry out an investigation.
Whether it is within the powers of the DRT is
questionable. Fairness of loan transactions etc., prima
facie, do not appear to be within the domain of the
DRT. The DRT, being a creature under the Recovery of
Debts and Bankruptcy Act, 1993 (for short “the Act”),
prima facie, does not appear to be vested within the
authority to carry out the exercise, as recorded by the
DRT in the impugned order.
1
3. Sub-sections (1) and (1A) of Section 17 of
the Act reads as under:-
“17. Jurisdiction, powers and authority of
Tribunals.–(1) A Tribunal shall exercise, on and from the
appointed day, the jurisdiction, 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.
[(1A) Without prejudice to sub-section (1),–
(a) the Tribunal shall exercise, on and from the date to
be appointed by the Central Government, the jurisdiction,
powers and authority to entertain and decide applications
under Part III of Insolvency and Bankruptcy Code, 2016 (31
of 2016).
(b) the Tribunal shall have circuit sittings in all district
headquarters.]”
4. Sub-section (1) of Section 19 of the Act reads
as under:-
19. Application to the Tribunal.–(1) Where a bank
or a financial institution has to recover any debt from any
person, it may make an application to the Tribunal within the
local limits of whose jurisdiction–
[(a) the branch or any other office of the bank or
financial institution is maintaining an account in which debt
claimed is outstanding, for the time being; or]
[(aa)] the defendant, or each of the defendants where
there are more than one, at the time of making the
application, actually and voluntarily resides, or carries on
business, or personally works for gain; or
(b) any of the defendants, where there are more than
one, at the time of making the application, actually and
voluntarily resides, or carries on business, or personally works
for gain; or
(c) the cause of action, wholly or in part, arises:
2
[Provided that the bank or financial institution may, with the
permission of the Debts Recovery Tribunal, on an application
made by it, withdraw the application, whether made before or
after the Enforcement of Security Interest and Recovery of
Debts Laws (Amendment) Act, 2004 (30 of 2004) for the
purpose of taking action under the Securitisation and
Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (54 of 2002), if no such action
had been taken earlier under that Act:
Provided further that any application made under the first
proviso for seeking permission from the Debts Recovery
Tribunal to withdraw the application made under sub-section
(1) shall be dealt with by it as expeditiously as possible and
disposed of within thirty days from the date of such
application:
Provided also that in case the Debts Recovery Tribunal refuses
to grant permission for withdrawal of the application filed
under this sub-section, it shall pass such orders after
recording the reasons therefor.]
5. On a conjoint reading of Sections 17 and 19,
it is apparent that the authority gets vested in the DRT
only an application made by the Bank for recovery of
debt.
6. In the instant case, the contention of the
Bank is that the debt has been settled under the OTS
scheme. Whether the scheme is right or the settlement
is legal, prima facie, cannot be the matter of
engagement of the DRT.
7. That apart, a useful reference of the law laid
3
down by the Hon’ble Apex Court in the case of Nahar
Industrial Enterprises Ltd. vs. Hong Kong &
Shanghai Banking Corporation, reported in (2009)
8 SCC 646, could be made at this juncture. The
observations and the law laid down by the Hon’ble Apex
court in Paragraph Nos.84 to 96, prima facie, are
relevant for the purposes of this case. The same read
as under:-
“84. The Court in Rajasthan SRTC vs. Poonam
Pahwa: [(1997) 6 SCC 100] appears to have proceeded on
the basis that an appeal before the High Court shall lie in
terms of Section 173 of the Motor Vehicles Act, 1988 from an
award passed by the Tribunal, thus showing that it is a part of
the hierarchy of the civil court. The Motor Accidents Claims
Tribunal, thus, is a court subordinate to the High Court. No
appeal against the judgment of the Debts Recovery Tribunal
lies before the High Court unlike under the Motor Vehicles Act,
1988. The two Tribunals are differently structured and have
been established to serve totally different purposes.
85. If the Tribunal was to be treated to be a civil court,
the debtor or even a third party must have an independent
right to approach it without having to wait for the bank or
financial institution to approach it first. The continuance of its
counterclaim is entirely dependent on the continuance of the
applications filed by the bank. Before it no declaratory relief
can be sought for by the debtor. It is true that claim for
damages would be maintainable but the same have been
provided by way of extending the right of counterclaim.
86. The Debts Recovery Tribunal cannot pass a decree.
It can issue only recovery certificates. [See Sections 19(2)
and 19(22) of the Act.] The power of the Tribunal to grant
interim order is attenuated with circumspection.
[See Dataware Design Labs (P) Ltd. v. SBI [(2005) 127 Comp
Cas 176 (Ker)] , Comp Cas at p. 184.] Concededly in the
proceeding before the Debts Recovery Tribunal detailed
examination, cross-examinations, provisions of the Evidence
Act as also application of other provisions of the Code of Civil
Procedure like interrogatories, discoveries of documents and
admission need not be gone into. Taking recourse to such
proceedings would be an exception. Entire focus of the
proceedings before the Debts Recovery Tribunal centres round
the legally recoverable dues of the bank.
87. Should we adopt the principle of purposive
interpretation so as to hold that the DRT would be a civil4
court?
88. We have noticed hereinbefore that civil courts are
created under different Acts. They have their own hierarchy.
They necessarily are subordinate to the High Court. The
appeals from their judgment will lie before a superior court.
The High Court is entitled to exercise its power of revision as
also superintendence over the said courts. For the
aforementioned purpose, we must bear in mind the distinction
between two types of courts viz. civil courts and the courts
trying disputes of civil nature. Only because a court or a
tribunal is entitled to determine an issue involving civil
nature, the same by itself would not lead to the conclusion
that it is a civil court. For the said purpose, as noticed
hereinbefore, a legal fiction is required to be created before it
would have all attributes of a civil court.
89. The Tribunal could have been treated to be a civil
court provided it could pass a decree and it had all the
attributes of a civil court including undertaking of a full-
fledged trial in terms of the provisions of the Code of Civil
Procedure and/or the Evidence Act. It is now trite law that
jurisdiction of a court must be determined having regard to
the purpose and object of the Act. If Parliament, keeping in
view the purpose and object thereof thought it fit to create
separate Tribunal so as to enable the banks and the financial
institutions to recover the debts expeditiously wherefor the
provisions contained in the Code of Civil Procedure as also the
Evidence Act need not necessarily be resorted to, in our
opinion, by taking recourse to the doctrine of purposive
construction, another jurisdiction cannot be conferred upon it
so as to enable this Court to transfer the case from the civil
court to a tribunal.
90. It is difficult to accept the submission of Mr Divan
that if such an interpretation is accepted, the same would
remove the anomaly which would otherwise be present in the
cases where recovery is for a sum below Rs 10 lakhs and for
those where recovery is for a sum of Rs 10 lakhs or more.
Parliament created such an anomaly, if any, knowingly.
Expeditious recovery of the debts above Rs 10 lakhs is the
object of the Act. Casus omissus, if any, it is well known
cannot be supplied by the court. In Raghunath Rai
Bareja [(2007) 2 SCC 230] , this Court has clearly held:
(SCC p. 244, para 40)
“40. … Assuming there is a defect or an omission in
the words used by the legislature, the court cannot
correct or make up the deficiency, especially when a
literal reading thereof produces an intelligible result,
…”
91. Would the Tribunal answer the description of the
civil court must be considered having regard to the provisions
of the Act constituting civil court as also the provisions of the
Code of Civil Procedure?
92. We have held that the Tribunals are neither civil
courts nor courts subordinate to the High Court. The High
Court ordinarily can be approached in exercise of its writ
jurisdiction under Article 226 or its jurisdiction under Article
5
227 of the Constitution of India. The High Court exercises
such jurisdiction not only over the courts but also over the
Tribunals. The Appellate Tribunals have been constituted for
determining the appeals from judgments and orders of the
Tribunal.
93. The principles of purposive construction, therefore,
in our opinion, are not attracted in the instant case. Had
Parliament intended to make the Tribunals civil courts, a legal
fiction could have been raised. There are statutes like the
Andhra Pradesh Land Grabbing Act where such a legal fiction
has been raised. [See V. Laxminarasamma v. A.
Yadaiah [(2009) 5 SCC 478 : (2009) 2 SCC (Cri) 711 : (2009)
3 Scale 685] .] Whereas the doctrine of purposive
construction is a salutary principle, the same cannot be
extended to a case which would lead to an anomaly. It can
inter alia be resorted to only when difficulty or doubt arises on
account of ambiguity. It is to be preferred when object and
purpose of the Act is required to be promoted.
94. For the foregoing reasons, we are of the opinion
that the decisions of this Court laying down the principles of
purposive interpretation, whereupon strong reliance has been
placed by Mr Divan viz. New India Assurance Co.
Ltd. v. Nusli Neville Wadia [(2008) 3 SCC 279], Dilip S.
Dahanukar v. Kotak Mahindra Co. Ltd. [(2007) 6 SCC
528], South Eastern Coalfields Ltd. v. Commr., Customs
& Central Excise [(2006) 6 SCC 340] and UCO
Bank v. Rajinder Lal Capoor [(2008) 5 SCC 257], cannot
have any application.
95. On the other hand, if the principles of purposive
interpretation are resorted to, the same would amount to
rewriting of the statute. In Sri Ram Saha v. State of
W.B. [(2004) 11 SCC 497] this Court held: (SCC p. 508,
para 19)
“19. It is well-settled principle of interpretation
that a statute is to be interpreted on its plain
reading; in the absence of any doubt or difficulty
arising out of such reading of a statute defeating or
frustrating the object and purpose of an enactment,
it must be read and understood by its plain reading.
However, in case of any difficulty or doubt arising in
interpreting a provision of an enactment, courts will
interpret such a provision keeping in mind the
objects sought to be achieved and the purpose
intended to be served by such a provision so as to
advance the cause for which the enactment is
brought into force. If two interpretations are
possible, the one which promotes or favours the
object of the Act and purpose it serves, is to be
preferred. At any rate, in the guise of purposive
interpretation, the courts cannot rewrite a statute. A
purposive interpretation may permit a reading of the
provision consistent with the purpose and object of
the Act but the courts cannot legislate and enact the
provision either creating or taking away substantial
rights by stretching or straining a piece of
legislation.”
6
(See also Director of Public Prosecutions v. Bhagwan
[1972 AC 60 : (1970) 3 WLR 501 : (1970) 3 All ER 97
(HL)] .)
Conclusion
96. The Tribunal was constituted with a specific purpose
as is evident from its Statement of Objects. The Preamble of
the Act also is a pointer to that too. We have also noticed the
scheme of the Act. It has a limited jurisdiction. Under the Act,
as it originally stood, it did not even have any power to
entertain a claim of setoff or counterclaim. No independent
proceedings can be initiated before it by a debtor.”
8. In view of the above discussion, there shall
be a stay of the impugned order.
9. Issue notice to the respondent no.1.
10. Steps to be taken within a week.
11. List on 28.10.2025.
________________
G. NARENDAR, C.J.
_____________
SUBHASH UPADHYAY, J.
Dated: 20th August, 2025
NISHANT
7
[ad_2]
Source link