Automatic transfer of bank recovery proceedings includes receivership matters, while court retains limited transitional control over assets

Pending suits and proceedings within the Debts Recovery Tribunal's jurisdiction were held to transfer automatically on the notified date, and the transfer extended to interlocutory, execution and receivership matters; the deletion of any de novo requirement confirmed that transferred matters did not restart before the Tribunal. At the same time, property already in the Court Receiver's custody remained custodia legis until a Tribunal-appointed receiver actually took charge, so the High Court could continue issuing limited protective directions for preservation, management and related asset-control measures during the transition.

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Issues: (i) Whether suits and proceedings in which a Court Receiver had been appointed before the appointed day under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 stood transferred to the Debts Recovery Tribunal, including the interim receivership proceedings. (ii) Whether the High Court could continue to issue directions to its Court Receiver in respect of properties already in the Receiver's custody until the Tribunal or the Central Government created an alternate mechanism and the Tribunal's Receiver took charge.

Issue (i): Whether suits and proceedings in which a Court Receiver had been appointed before the appointed day under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 stood transferred to the Debts Recovery Tribunal, including the interim receivership proceedings.

Analysis: The statutory scheme treated pending suits and other proceedings falling within the Tribunal's jurisdiction as automatically transferred on the notified date. The Act was read as a complete code for recovery of bank dues, and the transfer provision was construed to include not only main suits but also execution and interlocutory proceedings. The appointment of a Court Receiver did not conclude the proceedings, because management of property in custodia legis remained an ongoing part of the litigation. The deletion of the expression de novo reinforced that transferred matters were not to restart afresh before the Tribunal. The Court therefore rejected the contention that only the main suit moved and that the receivership proceedings remained with the High Court.

Conclusion: The issue was answered in the affirmative. Pending suits and proceedings, including receivership proceedings, stood transferred to the Debts Recovery Tribunal.

Issue (ii): Whether the High Court could continue to issue directions to its Court Receiver in respect of properties already in the Receiver's custody until the Tribunal or the Central Government created an alternate mechanism and the Tribunal's Receiver took charge.

Analysis: Although the suits and proceedings stood transferred, the properties already under the Court Receiver's control remained custodia legis until a Tribunal-appointed receiver actually took charge. The High Court held that the absence of immediate infrastructure with the Tribunal created a transitional situation requiring protection of the assets. Since the Court Receiver had been appointed by the High Court and had not been expressly discharged, the High Court retained the authority to issue directions for preservation, management, fixation and recovery of royalties, implementation of agency arrangements, and allied steps necessary to safeguard the property until handover.

Conclusion: The issue was answered in the affirmative. The High Court could continue to give directions to its Court Receiver for protection and management of the properties until the Tribunal's receiver assumed charge.

Final Conclusion: The statutory transfer to the Tribunal was upheld, but the High Court preserved a limited transitional supervisory role over properties already under receivership so that the assets would not suffer prejudice pending the Tribunal's effective assumption of control.

Ratio Decidendi: Where a pending suit or proceeding falls within the Tribunal's jurisdiction, the transfer is automatic and includes interlocutory and execution matters, yet property already in custodia legis remains under the appointing court's supervisory control until the Tribunal's receiver actually takes charge, unless the court expressly discharges the receiver.

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