Recovery Proceeding No. 199 of 1997 and Transfer Application No. 121 of 1996. Case: UCO Bank Vs Ushanil Mercantile Pvt. Ltd. and Ors.. Kolkatta Debt Recovery Tribunals

Case NumberRecovery Proceeding No. 199 of 1997 and Transfer Application No. 121 of 1996
CounselFor Appellant: P.C. Ghosh and S.N.P. Bhatta, Advs. and For Respondents: R.S. Tiwari, Adv. for Defendant No. 1
JudgesS.D. Singh, Presiding Officer
IssueRecovery of Debts Due to Banks and Financial Institutions Act, 1993 - Sections 19, 26 and 29; Code of Civil Procedure, 1908 (CPC) - Order 21, Rule 89 - Order 23, Rule 3 - Order 48 - Order 56; Income Tax Act, 1961; Income Tax (Certificate Proceedings) Rules, 1962 - Rule 3; Banking Regulation Act, 1949 - Section 35A and 35A(1); Securitisation and...
Citation3 (2006) BC 162
Judgement DateJanuary 04, 2006
CourtKolkatta Debt Recovery Tribunals

Judgment:

S.D. Singh, Presiding Officer

1. This order purports to dispose of the petition dated 24th June, 2005 filed by the certificate holder UCO Bank and the reference made by learned Recovery Officer vide his Order No. 56 dated 24th June, 2005.

2. The brief facts relating to the petition and the said reference are that the Case No. T.A. 121/96 was decided by this Tribunal vide judgment passed on 24th September, 1997 on contest and a certificate was issued under Sub-section (7) [now after amendment corresponding Sub-section (22)] of Section 19 of the RDDBFI Act, 1993. The said sub-section reads as under:

(22) The Presiding Officer shall issue a certificate under his signature on the basis of the order of the Tribunal to the Recovery Officer for recovery of the amount of debt specified in the certificate.

3. After the issuance of the certificate the recovery proceeding look place in R.P. 199 of 1997 arising from said T.A. 121/96. During the recovery proceeding, on 11th July, 2002 the learned Counsel Ms. D. Dutta appeared before the then Recovery Officer, Mr. Tapan Mitra along with Mr. Subrato Mukherjee, Bank Officer and on the submission of the Bank Officer the learned Recovery Officer vide his Order No. 22 dated 1lth July, 2002 has recorded as under:

Learned Advocate Ms. D. Dutta is present for the Bank along with Mr. Subroto Mukherjee Bank Officer. Mr. Mukherjee submits that certificate debtor entered into a compromise yesterday i.e. on 10th July, 2002 during the conciliatory proceeding held in respect of UCO Bank cases. Amount of compromise is Rs. 16, 72, 000/-. Out of this compromise amount certificate debtors have paid Rs. 7, 77, 000/- balance of Rs. 9 lacs is to be paid by the certificate debtor within 30th September, 2002. to 9th October, 2002 for payment position by the Bank.

4. It is obvious from the, above quoted order of the learned Recovery Officer that in the order there is nothing about the recording of such compromise by this Tribunal and the order of the Tribunal on the compromise. It is further obvious from the compromise filed by the parties and available on the record of the instant R.P. No. 199 of 1997 that the same has been signed by the compromising parties and at the end of the compromise there is place indicated as Presiding Officer, D.R.T-1, Kolkata, which is unsigned by the then learned Presiding Officer. It is obvious that such unsigned document by the learned Presiding Officer cannot bear an authentic proof that the compromise was accepted by this Tribunal. Further more, as the learned Recovery Officer has not recorded anything regarding the said document of compromise or the order of this Tribunal on such document it may easily be inferred that he has not taken any trouble to look into such fact which are required to be looked into before passing the order. It is obvious from the records that no order has been passed by this Tribunal on said compromise filed by the parties. As such the aforesaid order passed by the learned Recovery Officer in respect of the execution of the compromise, on which no order has been passed by this Tribunal, has been passed in exercise of a jurisdiction not vested in him by law.

5. In para 2 of the said compromise, it has been recorded that "the defendants shall pay the entire settled amount to the Bank on or before 30th September, 2002."

6. Further more para 4 of the said compromise reads as under:

That in the event of default of payment of any part of the settled amount or interest and/or part of any instalment as stipulated hereinabove and/or if there is any prejudice to the securities of the plaintiff Bank and/or breach of any terms of settlement, the relief and concession granted to the defendant/ defendants shall stand withdrawn without any further reference to the defendant and the certified for the amount claimed in this proceeding as stipulated in para I hereinabove shall be enforceable and such amount shall carry interest at the agreed rate with cost, subject to adjustment of the amount that would be paid by the defendant/defendants in the meantime.

7. The learned Recovery Officer vide his subsequent Order No. 23 dated 9th October, 2002 has recorded as under:

Learned Advocate Ms. Dipa Dutta is present, for the Bank along with Mr. S. Mukherjee, officer of the Bank. It is submitted that the certificate debtor has failed to honour compromise settlement treaty and has not paid outstanding amount of Rs. 9 lacs which was stipulated to be paid by 30th, September, 2002 and the Bank prays for resumption of recovery proceedings.

This prayer is accepted, Bank is directed to take appropriate steps. To 13th December, 2002.

8. Though there was no verdict of the Tribunal on the compromise, yet it is obvious from the records available and the orders of the learned Recovery Officer passed in exercise of the jurisdiction not vested in him by law that the said compromise had been failed in view of above quoted para 4 of the compromise and the further recovery proceeding took place.

9. It is further obvious from Chapter V of the Recovery of Debts Due to Banks and Financial Institutions (hereinafter referred to as the RDDBFI Act, 1993) that after issuance of the certificate, the learned Recovery Officer has to give effect to certificate without considering the compromise on which no settlement has been effected by this Tribunal, Where no verdict has been passed on such compromise by this Tribunal, the entertainment by the learned Recovery Officer of such compromise is obviously an exercise of the jurisdiction which is not vested in the learned Recovery Officer by law. Sub-section (1) of Section 26 of the RDDBFI Act, 1993 provides that it shall not be open to the defendant to dispute before the learned Recovery Officer, the correctness of the amount specified in the certificate, and no objection to the certificate on any other ground shall also be entertained by the learned Recovery Officer. Furthermore the learned Recovery Officer had to proceed to recover the amount of debt specified in the certificate and he had no jurisdiction under law to entertain any compromise filed before this Tribunal on which no order had been passed by this Tribunal. It is a glaring instance of the exercise of the excessive jurisdiction and the jurisdiction not vested under law.

10. Be that as it may, when the further steps were taken for the recovery of the amount of debt specified in the certificate, a petition was filed by the certificate holder Bank during the proceeding before the learned Recovery Officer referring the settlement in the said compromise and praying inter alia therein to drop the recovery proceeding in view of the settlement between the parties in the said compromise and the learned Recovery Officer referred the matter to this Tribunal vide his Order No. 56 dated 4th June, 2005 observing as under:

Learned Advocate for the certificate holder Bank files a petition, verified by the Assistant General Manager and Principal Officer of the certificate holder Bank, wherein it is submitted that during the pendency of instant recovery proceeding, the matter was settled in a conciliatory camp held at the Tribunal, for an amount of Rs. 16, 77, 000/-. It is further submitted that certificate debtors have failed to liquidate such dues within the stipulated time and the said compromise settlement failed and subsequently, the certificate holder Bank has agreed to accept the settlement amount along with interest for delayed payment plus other costs. In view of the aforesaid submission, it has been prayed that the instant recovery proceedings be dropped in view of the settlement between the parties. It is observed from the terms of settlement annexed to the petition that, vide Clause 4 it is stipulated that in the event of default of payment of any part of the settled amount or interest or part of any instalment as stipulated in the terms of agreement, the relief and concession granted to the defendants shall stand withdrawn. It may be recorded here that certificate holder Bank had filed the statement of claims to the tune of Rs. 92, 47, 148 60 p. on 22nd March, 2005, praying for an order of sale of the...

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