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CASE NO.:
Appeal (civil) 5287 of 2001
PETITIONER:
PUNJAB NATIONAL BANK
RESPONDENT:
O.C. KRISHNAN AND ORS.
DATE OF JUDGMENT: 13/08/2001
BENCH:
B.N. KIRPAL & N. SANTOSH HEGDE
JUDGMENT:
JUDGMENT
2001 Supp(1) SCR 466
The following Order of the Court was delivered :
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 decieed for a sum of Rs. 12,09,175.39 against the
principal debtor as well as against the guarantors, along with interest
thereon, 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 mortgaged property belonging to respondents 5 and 4
respectively and thereafter proceed to realise the balance, if any, in
accordance with law. 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 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 mortgaged 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 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 Jo not propose to go into the correctness of the decision of
the High Court an I 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 is
hierarchy of appeal provided in the Act, namely, filing of an appeal under
Section 20 and this last track procedure cannot be allowed to be derailed
either b> 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 the court refrains from exercising its jurisdiction
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under the said constitutional provisions. This was a case where the High
Court should not have entertained the petition under Article 227 of the
Constitution and should have directed the respondent to take recourse to
the appeal mechanism provided by the Act.
For the aforesaid reasons, this appeal is allowed and the impugned order of
the Calcutta High Court in CO. No. 1305/1997 is set aside.
