Sections 31,31 A, 34 of the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993( for short 'the Act') ,Or.21 , rule 10 of C.P.C. and Or.21, rule 64,66- E.P. and Sale of property for more than 10 lakhs decree obtained by Bank on mortgage - Civil court holds no jurisdiction under Or.21 , rule 10 of C.P.C. and as such the sale conducted under Or.21, rule 64,66 is void abinio due to lack of jurisdiction because of the special Act - only Debt recovery Tribunal Holds Jurisdiction to execute the Decree - though Civil court has got jurisdiction to pass a decree for Rs.6 lakhs etc., - High court set aside the order of sale with an option to proceed in Tribunal under sec.31 A of Act =
Supreme Court in the case of Punjab
National Bank, Dasuya v. Chajju Ram (2000)6 SCC 655
When the matter was taken before the Supreme Court, it was
held that as and when the amount due to the bank under decree became more than
Rs.10 Lakhs, and an application for execution can only be entertained by a
Tribunal but not the civil Court. It was further held that Order 21 Rule 10 CPC
has no application. In the present case though it is contended that filing of
suit and decree were subsequent to the commencement of the Act and that the
decree has almost been executed, but the Supreme Court clearly held that as and
when the amount due to the Bank became more than Rs.10.00 Lakhs, it can be only
entertained by the Tribunal but not by the civil Court.
When Section 31-A of
the amendment Act says that any decree or order was passed by any Court before
the commencement of the Act and has not yet been executed, then the decree
holder may approach the Tribunal for recovery of amount, it cannot be said that
the same is not applicable to the suit filed and decree obtained after
commencement of the Act.
In view of the law laid down by the Supreme Court in
the above decision, the civil Court has no jurisdiction to entertain the E.P as
the E.P amount is more than Rs.10.00 Lakhs. In view of the same, the impugned
order is liable to be set aside.
Accordingly, the Civil Revision Petition is allowed and the Auction Sale
conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file
of the Principal Senior Civil Judge, Narasaraopet, is set aside. There shall be
no order as to costs.
THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY
C.R.P.No.5717 OF 2012
dated:08-10-2013
Malampati Koteswara Rao ....Petitioner
Bank of Baroda, Nadendla Branch, Nadendla and 3 others.. Respondents
Counsel for the Petitioner: Sri V.V Ramana
Counsel for Respondent No.1: Sri K. Mallikarjuna Rao
Counsel for Respondent No.4: Sri Ch.Srinivas
<Gist :
>Head Note:
?Cases referred: (2000)6 SCC 655
HON'BLE SRI JUSTICE A. RAJASHEKER REDDY
Civil Revision Petition No.5717 of 2012
ORDER:
This C.R.P is filed against the Auction Sale conducted on 05.11.2012 in
E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file of the Principal Senior
Civil Judge, Narasaraopet.
Facts of the case, which are necessary for disposal of the C.R.P., are as under:
The first respondent Bank filed O.S.No.74 of 2002 against the revision
petitioner and respondents 2 and 3 herein on the file of the Principal Senior
Civil Judge, Narsaraopet, for recovery of a sum of Rs.8,15,499/- due in respect
of cash credit facility availed by 2nd respondent firm, for which 3rd respondent
is the proprietor. The revision petitioner stood as a guarantor for the said
transaction. An ex parte preliminary decree was passed therein on 22.11.2002
for a sum of Rs.8,35,554/- together with costs, with subsequent interest at
17.75% per annum. Subsequently, first respondent filed I.A.No.1661 of 2004 for
passing final decree and on 22.07.2005 a final decree was passed. Pursuant to
passing of the final decree, 1st respondent filed E.P.No.134 of 2005 under Order
XXI Rules 64 and 66 of C.P.C for sale of mortgaged property belonging to the
revision petitioner who was stated to be a guarantor in respect of loan obtained
by second respondent.
It is the case of the revision petitioner that he has not received any summons
from the lower Court either in the suit or in the final decree proceedings. It
is stated by the revision petitioner that he was bed ridden and only on seeing
paper publication on 27.10.2012 regarding sale of property, he filed petition on
05.11.2012 to set aside ex parte decree; that since the claim under the
execution proceedings filed by the first respondent is Rs.13,40,136/-, which is
more than Rs.10.00 Lakhs, the execution proceedings are maintainable only before
the Debts Recovery Tribunal in terms of Section 31 of the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993( for short 'the Act') and not by
the civil Court after the establishment of the Special Statute Tribunals; that
Order XXI Rule 10 of C.P.C is not applicable to the present case.
Learned counsel for the revision petitioner contends that admittedly the E.P
amount is more than Rs.10.00 Lakhs and as such the Court below has no
jurisdiction to entertain the E.P and pass orders for sale of the property and
sale notice issued is also without jurisdiction. In support of his contention,
he placed reliance on a judgment of the
Supreme Court in the case of Punjab
National Bank, Dasuya v. Chajju Ram 1.
On the other hand, learned counsel for the 1st respondent Bank contends that in
the present case the decree has almost been executed and the sale also took
place. As such section 31-A of the Act has no application. Section 31-A
applies where decree has not been executed but in the present case almost the
decree has been executed. It is only at the final stage.
He also contends that
Section 31-A of the Act applies where the decree has been passed before the
commencement of the Act but in the present case decree was passed after
commencement of the Act, as such Section 31-A of the Act has no application. He
also contends that judgment of the Supreme Court has no application because of
the above distinction.
In the present case, it is to be seen that the principal amount borrowed on
31.01.1998 is Rs.5.00 Lakhs. Suit was filed on 17.04.2002 for recovery of
Rs.8,15,499/- inclusive of interest upto 17.04.2002. A preliminary decree was
passed on 22.11.2002 for a sum of Rs.8,35,554/- with future interest at the rate
of 17.75% p.a. from the date of filing of suit.
Thereafter final decree was
passed on 22.07.2005 for a sum of Rs.13,20,307/-, which includes interest at
17.75% p.a., on Rs.8,35,554/- from 17.04.2002 to 22.07.2005.
Subsequently,
E.P.No.134 of 2005 was filed by the first respondent bank claiming amount of
Rs.13,40,136/-.
Admittedly the value of the E.P is more than Rs.10.00 Lakhs and
the sale warrant was also issued on 01.11.2012 for Rs.24,13,467/-.
In the case
stated supra, it was held at paragraph No.9 as under:
"The High Court has further erred in holding that because the original decree
which was passed was for principal sum of Rs.6,19,250/- the Tribunal would get
no jurisdiction. The decree was for a sum of Rs.6,19,250/- plus interest at the
rate of 16 1/2 per cent per annum from the date of filing of the suit till the
recovery of money. As and when the amount due to the Bank under the decree
became more than Rs.10 Lakhs and an application for execution was filed, it
could only be entertained by the tribunal and not by the civil court. It is
clear that in view of the provisions of Section 34 of the Act, the provisions of
Order 21 Rule 10 C.P.C would have no application."
In the case before the Supreme Court, the principal amount claimed in the suit
was Rs.6,19,250/- and the trial Court decreed the suit for the aforesaid amount
with interest at the rate of 16 1/2 per cent per annum from the date of filing
of suit till the recovery of the money. Subsequently, an execution petition was
filed for Rs.12,91,398/-. In those circumstances, the judgment debtor moved an
application before the civil Court stating that the same is to be transferred to
the Debts Recovery Tribunal. That application was allowed by the trial Court
and ordered the transfer of the execution proceedings to the Debts Recovery
Tribunal. The matter was taken to the High Court and the High Court reversed
the same holding that it is only the civil Court which had passed decree could
execute the same. When the matter was taken before the Supreme Court, it was
held that as and when the amount due to the bank under decree became more than
Rs.10 Lakhs, and an application for execution can only be entertained by a
Tribunal but not the civil Court. It was further held that Order 21 Rule 10 CPC
has no application. In the present case though it is contended that filing of
suit and decree were subsequent to the commencement of the Act and that the
decree has almost been executed, but the Supreme Court clearly held that as and
when the amount due to the Bank became more than Rs.10.00 Lakhs, it can be only
entertained by the Tribunal but not by the civil Court.
When Section 31-A of
the amendment Act says that any decree or order was passed by any Court before
the commencement of the Act and has not yet been executed, then the decree
holder may approach the Tribunal for recovery of amount, it cannot be said that
the same is not applicable to the suit filed and decree obtained after
commencement of the Act.
In view of the law laid down by the Supreme Court in
the above decision, the civil Court has no jurisdiction to entertain the E.P as
the E.P amount is more than Rs.10.00 Lakhs. In view of the same, the impugned
order is liable to be set aside.
Accordingly, the Civil Revision Petition is allowed and the Auction Sale
conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file
of the Principal Senior Civil Judge, Narasaraopet, is set aside. There shall be
no order as to costs.
Miscellaneous petitions pending, if any, in this C.R.P shall stand closed.
_________________________
JUSTICE A. RAJASHEKER REDDY
dated:08-10-2013
to Banks and Financial Institutions Act, 1993( for short 'the Act') ,Or.21 , rule 10 of C.P.C. and Or.21, rule 64,66- E.P. and Sale of property for more than 10 lakhs decree obtained by Bank on mortgage - Civil court holds no jurisdiction under Or.21 , rule 10 of C.P.C. and as such the sale conducted under Or.21, rule 64,66 is void abinio due to lack of jurisdiction because of the special Act - only Debt recovery Tribunal Holds Jurisdiction to execute the Decree - though Civil court has got jurisdiction to pass a decree for Rs.6 lakhs etc., - High court set aside the order of sale with an option to proceed in Tribunal under sec.31 A of Act =
Supreme Court in the case of Punjab
National Bank, Dasuya v. Chajju Ram (2000)6 SCC 655
When the matter was taken before the Supreme Court, it was
held that as and when the amount due to the bank under decree became more than
Rs.10 Lakhs, and an application for execution can only be entertained by a
Tribunal but not the civil Court. It was further held that Order 21 Rule 10 CPC
has no application. In the present case though it is contended that filing of
suit and decree were subsequent to the commencement of the Act and that the
decree has almost been executed, but the Supreme Court clearly held that as and
when the amount due to the Bank became more than Rs.10.00 Lakhs, it can be only
entertained by the Tribunal but not by the civil Court.
When Section 31-A of
the amendment Act says that any decree or order was passed by any Court before
the commencement of the Act and has not yet been executed, then the decree
holder may approach the Tribunal for recovery of amount, it cannot be said that
the same is not applicable to the suit filed and decree obtained after
commencement of the Act.
In view of the law laid down by the Supreme Court in
the above decision, the civil Court has no jurisdiction to entertain the E.P as
the E.P amount is more than Rs.10.00 Lakhs. In view of the same, the impugned
order is liable to be set aside.
Accordingly, the Civil Revision Petition is allowed and the Auction Sale
conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file
of the Principal Senior Civil Judge, Narasaraopet, is set aside. There shall be
no order as to costs.
THE HON'BLE SRI JUSTICE A.RAJASHEKER REDDY
C.R.P.No.5717 OF 2012
dated:08-10-2013
Malampati Koteswara Rao ....Petitioner
Bank of Baroda, Nadendla Branch, Nadendla and 3 others.. Respondents
Counsel for the Petitioner: Sri V.V Ramana
Counsel for Respondent No.1: Sri K. Mallikarjuna Rao
Counsel for Respondent No.4: Sri Ch.Srinivas
<Gist :
>Head Note:
?Cases referred: (2000)6 SCC 655
HON'BLE SRI JUSTICE A. RAJASHEKER REDDY
Civil Revision Petition No.5717 of 2012
ORDER:
This C.R.P is filed against the Auction Sale conducted on 05.11.2012 in
E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file of the Principal Senior
Civil Judge, Narasaraopet.
Facts of the case, which are necessary for disposal of the C.R.P., are as under:
The first respondent Bank filed O.S.No.74 of 2002 against the revision
petitioner and respondents 2 and 3 herein on the file of the Principal Senior
Civil Judge, Narsaraopet, for recovery of a sum of Rs.8,15,499/- due in respect
of cash credit facility availed by 2nd respondent firm, for which 3rd respondent
is the proprietor. The revision petitioner stood as a guarantor for the said
transaction. An ex parte preliminary decree was passed therein on 22.11.2002
for a sum of Rs.8,35,554/- together with costs, with subsequent interest at
17.75% per annum. Subsequently, first respondent filed I.A.No.1661 of 2004 for
passing final decree and on 22.07.2005 a final decree was passed. Pursuant to
passing of the final decree, 1st respondent filed E.P.No.134 of 2005 under Order
XXI Rules 64 and 66 of C.P.C for sale of mortgaged property belonging to the
revision petitioner who was stated to be a guarantor in respect of loan obtained
by second respondent.
It is the case of the revision petitioner that he has not received any summons
from the lower Court either in the suit or in the final decree proceedings. It
is stated by the revision petitioner that he was bed ridden and only on seeing
paper publication on 27.10.2012 regarding sale of property, he filed petition on
05.11.2012 to set aside ex parte decree; that since the claim under the
execution proceedings filed by the first respondent is Rs.13,40,136/-, which is
more than Rs.10.00 Lakhs, the execution proceedings are maintainable only before
the Debts Recovery Tribunal in terms of Section 31 of the Recovery of Debts Due
to Banks and Financial Institutions Act, 1993( for short 'the Act') and not by
the civil Court after the establishment of the Special Statute Tribunals; that
Order XXI Rule 10 of C.P.C is not applicable to the present case.
Learned counsel for the revision petitioner contends that admittedly the E.P
amount is more than Rs.10.00 Lakhs and as such the Court below has no
jurisdiction to entertain the E.P and pass orders for sale of the property and
sale notice issued is also without jurisdiction. In support of his contention,
he placed reliance on a judgment of the
Supreme Court in the case of Punjab
National Bank, Dasuya v. Chajju Ram 1.
On the other hand, learned counsel for the 1st respondent Bank contends that in
the present case the decree has almost been executed and the sale also took
place. As such section 31-A of the Act has no application. Section 31-A
applies where decree has not been executed but in the present case almost the
decree has been executed. It is only at the final stage.
He also contends that
Section 31-A of the Act applies where the decree has been passed before the
commencement of the Act but in the present case decree was passed after
commencement of the Act, as such Section 31-A of the Act has no application. He
also contends that judgment of the Supreme Court has no application because of
the above distinction.
In the present case, it is to be seen that the principal amount borrowed on
31.01.1998 is Rs.5.00 Lakhs. Suit was filed on 17.04.2002 for recovery of
Rs.8,15,499/- inclusive of interest upto 17.04.2002. A preliminary decree was
passed on 22.11.2002 for a sum of Rs.8,35,554/- with future interest at the rate
of 17.75% p.a. from the date of filing of suit.
Thereafter final decree was
passed on 22.07.2005 for a sum of Rs.13,20,307/-, which includes interest at
17.75% p.a., on Rs.8,35,554/- from 17.04.2002 to 22.07.2005.
Subsequently,
E.P.No.134 of 2005 was filed by the first respondent bank claiming amount of
Rs.13,40,136/-.
Admittedly the value of the E.P is more than Rs.10.00 Lakhs and
the sale warrant was also issued on 01.11.2012 for Rs.24,13,467/-.
In the case
stated supra, it was held at paragraph No.9 as under:
"The High Court has further erred in holding that because the original decree
which was passed was for principal sum of Rs.6,19,250/- the Tribunal would get
no jurisdiction. The decree was for a sum of Rs.6,19,250/- plus interest at the
rate of 16 1/2 per cent per annum from the date of filing of the suit till the
recovery of money. As and when the amount due to the Bank under the decree
became more than Rs.10 Lakhs and an application for execution was filed, it
could only be entertained by the tribunal and not by the civil court. It is
clear that in view of the provisions of Section 34 of the Act, the provisions of
Order 21 Rule 10 C.P.C would have no application."
In the case before the Supreme Court, the principal amount claimed in the suit
was Rs.6,19,250/- and the trial Court decreed the suit for the aforesaid amount
with interest at the rate of 16 1/2 per cent per annum from the date of filing
of suit till the recovery of the money. Subsequently, an execution petition was
filed for Rs.12,91,398/-. In those circumstances, the judgment debtor moved an
application before the civil Court stating that the same is to be transferred to
the Debts Recovery Tribunal. That application was allowed by the trial Court
and ordered the transfer of the execution proceedings to the Debts Recovery
Tribunal. The matter was taken to the High Court and the High Court reversed
the same holding that it is only the civil Court which had passed decree could
execute the same. When the matter was taken before the Supreme Court, it was
held that as and when the amount due to the bank under decree became more than
Rs.10 Lakhs, and an application for execution can only be entertained by a
Tribunal but not the civil Court. It was further held that Order 21 Rule 10 CPC
has no application. In the present case though it is contended that filing of
suit and decree were subsequent to the commencement of the Act and that the
decree has almost been executed, but the Supreme Court clearly held that as and
when the amount due to the Bank became more than Rs.10.00 Lakhs, it can be only
entertained by the Tribunal but not by the civil Court.
When Section 31-A of
the amendment Act says that any decree or order was passed by any Court before
the commencement of the Act and has not yet been executed, then the decree
holder may approach the Tribunal for recovery of amount, it cannot be said that
the same is not applicable to the suit filed and decree obtained after
commencement of the Act.
In view of the law laid down by the Supreme Court in
the above decision, the civil Court has no jurisdiction to entertain the E.P as
the E.P amount is more than Rs.10.00 Lakhs. In view of the same, the impugned
order is liable to be set aside.
Accordingly, the Civil Revision Petition is allowed and the Auction Sale
conducted on 05.11.2012 in E.P.No.134 of 2005 in O.S.No.74 of 2002 on the file
of the Principal Senior Civil Judge, Narasaraopet, is set aside. There shall be
no order as to costs.
Miscellaneous petitions pending, if any, in this C.R.P shall stand closed.
_________________________
JUSTICE A. RAJASHEKER REDDY
dated:08-10-2013
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