LexPUNJAB NATIONAL BANK versus O.C. KRISHNAN AND ORS.
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A
PUNJAB NATIONAL BANK
v.
O.C. KRISHNAN AND ORS.
AUGUST 13; 2001
B
[B.N. KIRPAL AND N. SANTOSH HEGDE, JJ.]
Constitution of India, 1950 :
Articles 226 and 227-0rder of Debt Recovery Tribunal-Remedy of
C appeal available u/s 20 of Recovery of Debts Due to Banks and Financial
Institutions Act, I993-Exercise of jurisdiction by High Court under Articles
2261227.~Decree passed by Debt Recovery Tribunal-Direction given to
Recovery Officer to proceed to realise the amount by sale of plant and
machinery and mortgaged property-Order challenged by i;uarantor whose
property was mortgaged before High Court under Article 227-High Court
D allowing the petition-Held, order of Tribunal was appea/able u/s. 20--High
Court ought not to have exercised jurisdiction under Article 227-The Act
has been enacted with a view to provide a special procedure for recovery
of debts due to bank and financial institutions-There is hierarchy of appeal
provided in the Act and this fast track procedure cannot be allowed to be
E derailed either by taking recourse to proceedings under Articles 226 and.
227 or by filing a civil suit-When there {s an alternative remedy courts
should refrain from exercising jurisdiction under constitutional provisions-
Filing of a civil suit is expressly barred-Alternative remedy-Recovery of
Debts Due to Banks and Financial lnstitutiQns Act, 1993-ss.18 and 20.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5287 of
2001.
From the Judgment and Order dated 6.6.2000 of the Calcutta High Court
in Co. No. 1305/97.
G
Mr. Dhruv Mehta, Ms. Shobha, Ms. Anu Mehta, Mr. Saptrishi Ghosh
H
and Mr. S.K. Mehta for the Appellant.
Mr. V:.J. Francis for. the Respondents.
The following Order of the Court was delivered :
466
PUNJAB NA TI ON AL BANK v. O.C. KRISHNAN
467
Special leave granted.
In the instant case, a suit was filed by the appellant for recovery of
money from the principal debtor as well as the guarantors. The suit was
transferred to the Debts Recovery Tribunal and thereafter on 17th May, 1996
decree was passed by the Debts Recovery Tribunal, Calcutta.
The said suit was decreed for a sum of Rs. 12,09, 175.39 against the
principal debtor as well as a&ainst the guarantors, along with interest thereon,
A
B
and it was further directed that the Recovery Officer shall first proceed to
realise the amount on the sale of hypothecated plant and machinery and
~ortgaged prope~ty belonging to respondents 5 and 4 respectively and
thereafter proceed to realise the balance, if any, in accordance with law. C
Pursuant thereto, certificate was issued and recovery proceedings started.
The respondent who was a guarantor and whose property was stated
to have been mortgaged filed a petition under Article 227 before the High
Court at .Calcutta. The High Court allowed the petition by observing that as D
the mortgaged property was situated in Chennai the Debts Recovery Tribunal
had no territorial jurisdiction in respect thereto and it could not have directed
·sale of mortgaged property. It, accordingly, held that the Bank would be at
liberty to proceed against defendant No. 4, respondent herein, in appropriate
forum for recovery of debts by sale of mortg~ged property. Hence this appeal.
In our opinion, the order which was passed by the Tribunal directing
sale of mortgaged property was appealable under Section 20 of the Recovery
E
of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the
Act"). The High Court ought not to have exercised its jurisdiction under
Article 227 in view of the provision for alternative remedy contained in the
Act. We "do not propose to go into the correctness of the decision of the High F
Court and whether the order passed by the Tribunal was correct or not has
to be decided before an appropriate forum.
The Act has been enacted with a view to provide a special procedure
for recovery of debts due to the banks and the financial institutions. There G
is hierarchy of appeal provided in the Act, namely, filing of an appeal under
Sectio.n 20 and this fast track procedure cannot be allowed to be derailed
either by taking recourse to proceedings under Articles 226 and 227 of the
Constitution or by filing a civil suit, which is expressly barred. Even though
a provision court under Articles 226 and 227 of the Constitution, nevertheless
when there is an alternative remedy available judicial prudence demands that H
468
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