UNION OF INDIA AND ANR . versus DELHI HIGH COURT BAR ASSOCIATION AND ORS.

Citation: [2002] 2 S.C.R. 450 · Decided: 14-03-2002 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
UNION OF INDIA AND ANR . 
.. 
v. 
DELHI HIGH COURT BAR ASSOCIATION AND ORS .. 
MARCH 14, 2002 
B 
[B.N. KIRPAL, Y.K. SABHARWAL AND K.G. BALAKRISHAN, JJ.] 
Debt Laws: 
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 
C (as amended): Section 19-Applications to the Tribunal-Pecuniary 
jurisdiction-Act vested jurisdiction in Tribunals in respect of recovery suit 
exceeding Rs. JO lakhs-Jn respect of recovery of suits for less than Rs. JO 
lakhs, jurisdiction vested in ordinary civil courts and High Courts-Validity 
of-Held: Such pecuniary jurisdiction is no ground for holding the Act as 
D invalid 
Section 22-Tribunal and Appellate Tribunal-Procedure and powers-
Effect-Held: Establishment of a Banking Tribunal does not erode the 
independence of judiciary and justice would not be denied to the defendants-
Such tribunals are effective parts of the justice delivery system like courts of 
E law-However, decision of the Appellate Tribunal is not final as the same is 
subject to judicial review by the High Court. 
Section 25 and 28-Validity of-Held: Recovery Officer has to attach 
and sell the immovable property in order to recover the debts-He has the 
F power to appoint a Receiver for protection and preservation of such immovable 
property--Hence, Ss. 25 and 28 are not arbitrary, unreasonable or without 
any guidelines. 
Section 31-Transfer of pending cases-From civil court to Tribunal-
Validity of-Held: Jurisdiction of civil courts is barred by S.18-Therefore, it 
G is logical that matters pending in civil court should stand transferred to the 
Tribunal. 
H 
Debt Recovery Tribunal (Procedure) Rule, 1993 (as amended): 
Rule 12(6)-Particularsfact or facts-Proving of-By Affidavit-Validity 
450 
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~-
T 
U.0.l. v. DELHI HIGH COURT BAR ASSOCIATION 
45 l 
of -Held: No transaction with the Bank would be oral and without proper A 
documentation-Hence, the Tribunal should be able to decide cases on the 
basis of documents and affidavits. 
Constitution of India, 1950: 
lists II and Ill of Seventh Schedule-Matters not covered by-Power of B 
Parliament to enact law relating thereto-Held: is absolute. 
Articles 323-A and 323-B-Setting up of tribunals-Scope and ambit 
of-Held: These Articles do not prohibit the legislature from establishing 
tribunals not covered by them as long as there is legislative competence under 
' ~ 
an appropriate entry in the Seventh Schedule. 
C 
-
Entry 45 List I Seventh Schedule-Banking-Tribunal -Competence of 
Parliament to legislate in relation thereto-Held: The term "Banking" would 
mean legislation regarding all aspects of Banking including ancillary or 
subsidiary matters relating to Banking-Setting up of an ac{judicatory body 
like the Banking Tribunal clearly falls under Entry 45 List I. 
D 
Banking Tribunal~Po1i•er of Parlian1ent to enact a law relating thereto--
Held: Is not taken away though the matter is not covered by Arts. 323-A or 
323-B-The power conferred by Art. 246 (/)can be exercised notwithstanding 
the existence of Arts. 323-A or 323-B. 
Words and Phrases: 
""Banking "-Meaning of-In the context of Entry 45 list I of the Seventh 
Schedule to the Constitution of India, 1950. 
E 
The respondents tiled a writ petition before the High Court challenging F 
the constitutional validity of the Recovery of Debts Due to Banks and Financial 
Institutions Act, 1993 (as amended) on the ground that the Act is unreasonable 
and is violative of Article 14 of the Constitution and that the same was beyond 
the legislative competence of the Parliament. The High Court held that the 
Act was unconstitutional as it eroded the independence of the judiciary and G 
was irrational, discriminatory, unreasonable, arbitrary and was hit by Article 
14 of the Constitution. The High Court also held that the Act lowered the 
status of the High Court inasmuch as the Tribunal, which was presided over 
by an officer who did not have the status of a High Court Judge would be 
deciding the suits for recovery of money exceeding Rs. 10 lakhs. Hence this 
appeal. 
H 
452 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. 
A 
Allowing the appeal, the Court 
_, 
). 
HELD: 1.1. The power of the Parliament to enact a law, which· is not 
covered by an Entry in List II and List III, is absolute. While Articles 323-A 
and 323-B specifically enable the legislature to enact laws for the establishment 
B 
of tribunals, in relation to the matters specified therein, the power of the 
Parliament to enact a law constituting a Trib
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