TaxTMI 
TaxTMI 
2007 (3) TMI 381
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....in the O.A. and the O.A. is pending adjudication before the Tribunal. In the O.A., the 1st respondent-bank had filed I.A. No. 247 of 2001, seeking appointment of a receiver for taking possession of the property mortgaged to the 1st respondent and for sale of the same. The Tribunal appointed an advocate commissioner by the orders dated 5-9-2001 and the advocate commissioner/receiver took possession of the properties. The Tribunal had directed the receiver to take all necessary steps for selling the properties. No sale has however taken place, as yet. 3. On 30-8-2006, the 2nd respondent issued a notice under section 13(2) of the Act to the petitioner, intimating that under an agreement dated 30-9-2004, the 1st respondent has sold, assigned and transferred to the 2nd respondent the security and all the rights and obligations in relation to the transaction between the petitioner and the 3rd respondent; that the 2nd respondent is thus authorized to exercise all the rights of the 1st respondent (in terms of the provisions of section 5 of the Act); and that the petitioner and the 3rd respondent should pay the stipulated amount within the stipulated period, failing which further proceedin....
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....into between these respondents for the said purpose in accordance with the provisions of section 5 of the Act), the 2nd respondent steps into the shoe of the 1st respondent and inherits all the rights the 1st respondent had, including the right to pursue remedies under the provisions of the Act. 7. The statutory position in this regard is clear. Section 5(2) of the Act ordains that where the bank or a financial institution is a lender in relation to any financial assets acquired under sub-section (1) by the securitisation company or the reconstruction company, such securitisation company or reconstruction company shall, on such acquisition, be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company in relation to such financial assets. 8. The right of the 2nd respondent to step into the position of the 1st respondent and pursue proceedings under the provisions of the Act, is therefore incontestable. The provisions of section 5(2) of the Act are clear on this aspect. Section 5(4) of the Act reads : "(4) If, on the date of acquisition of financial asset under sub-section (1), any suit, appeal or other proceeding of whatever natu....
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....laws is not barred and accordingly the provisions of the Act shall be in addition to and not in derogation of the provisions of the 1993 Act. 13. A creditor has a plurality of choices. He may pursue remedies for recovery of his debt under the provisions of the 1993 Act or take recourse to the speedier remedy under the provisions of the Act. Even in a threshold situation, after the coming into force of the provisions of the Act, such a choice is not extinguished, to seek remedies under the provisions of the 1993 Act or the Act. As the dominus litus, a creditor has the choice of forum subject to jurisdictional constraints of Tribunals constituted under the provisions of the 1993 Act. 14. In case on hand, the 1st respondent had initiated processes under the provisions of the 1993 Act, by way of O.A. No. 308 of 2000. The provisions of section 5(4) are only to the effect that any suit, appeal or other proceeding relating to a financial asset pending by or against the bank or financial institution shall not abate or be discontinued or be in any way prejudicially affected by reason of the acquisition of financial asset by the securitisation company or reconstruction company but such sui....
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.... generically be classified as financial assets, but are outside the provisions of the Act. Section 31 enacts that the provisions of the Act shall not apply to assets enumerated in clauses (a) to (j) of section 31. All the assets enumerated in section 31 of the Act are assets against which normally a creditor may proceed for recovery of the amounts due to him. Section 31 of the Act merely excludes these assets from the purview of the stringent provisions of the Act. Section 13(10) of the Act reiterates the position that after recourse to the provisions of the Act and the possession and sale of the secured assets (which can be proceeded against under the provisions of the Act), if there is yet an outstanding liability due to the creditor, a bank or a financial institution, the bank or financial institution may pursue appropriate remedies either under the provisions of the 1993 Act or before the civil court of competent jurisdiction for recovery of the balance liability. Section 13(10) neither expressly nor by any compelling implication of language, text or purpose, enact a clog on a secured creditor's right to pursue the remedies explicated under sub-sections (2) and (4) of section 1....
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....ich invites applicability of NPA Act. It is for this reason, that section 13(1) and 13(2) of the NPA Act proceeds on the basis that security interest in the bank/FI; needs to be enforced expeditiously without the intervention of the Court/Tribunal; that liability of the borrower has accrued and on account of default in repayment, the account of the borrower in the books of the bank has become non-performing. For the above reasons, NPA Act states that the enforcement could take place by non-adjudicatory process and that the said Act removes all fetters under the above circumstances on the rights of the secured creditor. 45. The question still remains as to the object behind insertion of the three provisos to section 19(1) of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 vide amending Act 30 of 2004. The DRT is a Tribunal, it is the creature of the statute, it has no inherent power which exists in the civil courts. Order XXIII rule 1(3) CPC states inter alia that where the court is satisfied that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim then the civil court may, on such....