1997 (4) TMI 528 - HC - Companies Law

Writ Petition Dismissed: Appeal Process to be Followed for Recovery of Debts

M/s. Shoes East Ltd. Versus Allahabad Bank

The petition was dismissed as the court held that the writ petition under Article 227 was not maintainable due to the availability of an adequate remedy ... - Issues:1. Maintainability of the writ petition under Article 227 of the Constitution of India.2. Interpretation of Sections 17, 19, and 20 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.3. Right of appeal under Section 20 of the Act.4. Adequacy and efficacy of remedies provided under the Act versus constitutional jurisdiction.Analysis:1. The main issue in this case was the maintainability of the writ petition under Article 227 of the Constitution of India. The petitioner sought quashing of an order passed by the Debt Recovery Tribunal, and the respondent raised a preliminary objection regarding the availability of an adequate remedy under Section 20 of the Act since the Appellate Tribunal had been constituted.2. The interpretation of Sections 17, 19, and 20 of the Act was crucial in determining the right of appeal in this case. Section 17 outlines the jurisdiction of Tribunals, while Section 19 deals with the filing of applications before the Tribunal and the power to pass orders. Section 20 provides the right of appeal to the Appellate Tribunal from an order made by the Tribunal under the Act.3. The Court emphasized that Section 20 of the Act gives a right of appeal to a party aggrieved by any order made or deemed to have been made by the Tribunal under the Act. This includes interlocutory orders passed under Section 19(6) if they affect the rights or liabilities of any party. The decision in a previous case further supported the view that the impugned order refusing to stay proceedings was subject to appeal under Section 20(1).4. The judgment highlighted the adequacy and efficacy of remedies provided under the Act compared to constitutional jurisdiction. It was noted that the Act offers a suitable remedy for challenging improper orders by the Debt Recovery Tribunal, and resorting to Article 227 of the Constitution should not supersede the statutory appeal process. A precedent case underscored that aggrieved parties should not bypass the statutory appeal process and directly approach the constitutional jurisdiction.In conclusion, the petition was dismissed, and the petitioner was directed to pay costs to the respondent Bank and bear their own costs. The counsel's fee was quantified at Rs. 10,000.