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2019 (7) TMI 1631
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....en lakh rupees to twenty lakh rupees for filing application for recovery of debts in the Debts Recovery Tribunal by banks and financial institutions. The notification has provided that the provisions of the Act of 1993 shall not be attracted where the amount of debt due to any bank is less than twenty lakh rupees. Ms. Anita Aggarwal, learned counsel for petitioners, submitted that as per the provisions of Section 1(4) of the Act of 1993, the provisions of the said Act are not applicable where the amount of debt due to any bank or financial institution etc. is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify. A plain reading of this provision reveals that while the provisions of the Act of 1993 shall be applicable to debts of ten lakh rupees and above but the Central Government with a view to bring more cases in the domain of the Debts Recovery Tribunal, can reduce the amount of ten lakh rupees to one lakh rupees but it has no authority to increase the amount of ten lakh rupees to any higher amount. Relying on the judgment of the Supreme Court in Union of India and Another Vs. Delhi High C....
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....hout amending the Act, merely by notification of the Central Government. Doing so would be acting contrary to the intention of the Parliament in providing speedy trial, disposal of such claim cases and would result in throwing away the cases falling from the range of ten lakh rupees to twenty lakh rupees, in the arena of civil courts/commercial courts having applicability of principles of Civil Procedure Code which is a long and tardy procedure. It would be the anti-thesis, retrograde move defeating the very object of the Act of 1993. Even if there are two views possible on interpretation of Section 1(4) of the Act of 1993, the Court has to choose such interpretation which fulfills the object of the Act. The argument advanced on behalf of the Central Government that the limit of ten lakh rupees has been increased to twenty lakh rupees on account of fall in intrinsic value of rupee due to inflationary pressure on the economy cannot find any countenance and justification for raising this limit. This would tantamount to legislation which is quite impermissible. In case the Central Government intends to do so, the same cannot be done only by amending the provisions of Section 1(4) of t....
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.... AIR 1951 SC 69, wherein the Bombay High Court, while interpreting Sections 3 and 4 of the Bombay City Civil Court Act, 1948 held that the legislation entrusted on the provincial government particular powers or a limited discretion and the discretion can be exercised within defined limits of it. It was further observed that the policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by Sections 3 and 4 of the Act and it was to the effect that initially its pecuniary limit is ten thousand and in future if the circumstances make it desirable and this was left to the determination of the provincial government, it could be given jurisdiction upto the value of twenty five thousand rupees. In the present matter, the legislature itself has decided the maximum pecuniary jurisdiction by providing that no cases less than ten lakh debt shall be entertained by the Tribunal or such other amount, being not less than one lakh rupees, as the central government may, by notification, specify. It is argued that although Section 1(4) of the Act of 1993 does not suffer from vice of excessive delegation since the legislature has clearly provided t....
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....ferred on it by Section 1(4) of the Act of 1993 has issued the impugned notification. It is argued that the impugned notification could be rendered invalid only on the ground of being issued without jurisdiction, mala fide, unreasonableness and arbitrariness alone. Not only the petitioners have not alleged any mala-fide, they have failed to show how the aforesaid notification is arbitrary or unreasonable. Learned Additional Solicitor General, submitted that the minimum limit of ten lakh rupees for filing the Original Applications before the Tribunals, when it was originally fixed in the year 1993, i.e., 25 years ago, was justified. As per the inflation indicator, the worth of ten lakh rupees in the year 1993, when the Act was introduced, is same as Rs. 49.23 lakh in the year 2017. The Chairpersons of various Debts Recovery Tribunals in the interactive session held in Department of Financial Services on 17.07.2018 also pointed out the necessity of raising minimum limit. This was again suggested during the review meetings with the General Managers (Recovery) of various Public Sector Banks on 13.07.2018 and from 27.07.2018 to 01.08.2018 that enhancement of the limit can be consider....
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....similar allowance...". It is argued that when the language of the provision is clear and simple and does not leave any doubt in interpretation, it has to be given effect to. We have given our anxious consideration to rival submissions and perused the material on record and also studied the cited precedents. We may at the outset make it clear that what is challenged before us is the notification purported to have been issued by the Central Government in exercise of powers conferred by subsection (4) of Section 1 of the Act of 1993 and not that provision as such. Our endeavour would therefore be only to find out whether the Central Government, by issuing the aforesaid notification, was competent to raise the threshold limit of ten to twenty lakh rupees for maintainability of a petition for recovery of debt before the Debts Recovery Tribunal by any bank or financial institution. In order therefore to fully comprehend the controversy, we deem it appropriate to reproduce Section 1(4) of the Act of 1993, which reads as under:- "1. Short title, extent, commencement and application.(1) .... (2) .... (3)&....
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....the Respondent no.1 both approached the Supreme Court by filing separate appeals on leave being granted. Section 3 of the Bombay Act provided that the Provincial Government may, by notification in the Official Gazette, establish for the Greater Bombay a Court, to be called the Bombay City Civil Court. Notwithstanding anything contained in any law, such Court shall have jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature, not exceeding ten thousand rupees in value, and arising within the Greater Bombay, except suits or proceedings, which are cognizable by the High Court. The proviso thereto however stipulated that "the Provincial Government may, from time to time, after consultation with the High Court, by a like notification extend the jurisdiction of the City Court to any suits or proceedings" which are cognizable by the High Court. Section 4 of the Act provided that "subject to the exceptions specified in Section 3, the Provincial Government may, by notification in the Official Gazette, invest the City Court with jurisdiction to receive, try and dispose of all suits and other proceedings of a civil nature arising within the Greater Bombay....
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....untries. ......" Hon'ble Mr. Justice M.C. Mahajan (as His Lordship then was), in his separate opinion, which is to be found in para 37 of the report, held as under:- "37. I find it difficult to accept this view. Without applying its mind to the question as to whether the new Court which it was setting up should have a jurisdiction higher than Rs. 10,000, how could the legislature possibly enact in Section 4 that the pecuniary jurisdiction of the new court would not exceed Rs. 25,000. The fixation of the maximum limit of the court's pecuniary jurisdiction is the result of exercise of legislative will, as without arriving at this judgment it would not have been able to determine the outside limit of the pecuniary jurisdiction of the new court. The policy of the legislature in regard to the pecuniary jurisdiction of the court that was being set up was settled by Sections 3 and 4 of the Act and it was to the effect that initially its pecuniary jurisdiction will be limited to Rs. 10,000 and that in future if circumstances make it desirable - and this was left to the determination of the Provincial Government - it could be given jurisdiction to hear cases up to the va....
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....een v. Burah [5 I.A. 178], where the taking effect of a particular provision of law is made to depend upon determination of certain facts and conditions by an outside authority." His Lordship Justice S.R. Das, while rejecting the argument that the legislature has not applied its mind or has not laid down any policy, observed in para 85 of the report as under:- "85. xxxx Adopting the same method of construction and adopting the language of Lord Selborne it may well be said that in enacting Section 3 the Legislature itself has determined, in the due and ordinary course of legislation, to establish an additional Court of civil jurisdiction with jurisdiction to entertain suits and other proceedings arising within the Greater Bombay of the value up to Rs. 10,000 leaving it, by Section 1(2), to the Provincial Government to say at what time that change should take place. Likewise, it may be said that in enacting Section 4 the Legislature itself has decided that it is fit and proper to extend the pecuniary jurisdiction of the new Court, not necessarily and at all events or all at once but, if and when the Provincial Government should think it desirable to do so and accordingly ....
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....d as under:- "10. ............. Such legislation is termed conditional, because the Legislature has itself made the law in all its completeness as regards "place, person, laws, powers'' leaving nothing for an outside authority to legislate on, the only function assigned to it being to bring the law into operation at such time as it might decide,. And it can make no difference in the character of a legislation as a conditional one that the legislature, after itself enacting the law and fixing, on a consideration of the facts as they might have then existed, the period of its duration, confers a power on an outside authority to extend its operation for a further period if it is satisfied that the state of facts which called forth the legislation continues to subsist." In Vasu Dev Singh and Others Vs. Union of India and Others - (2006) 12 SCC 753, the distinction between the conditional legislation and delegated legislation was succinctly delineated in para 16 of the judgment in the following terms:- "We, at the outset, would like to express our disagreement to the contentions raised before us by the learned counsel appearing on behalf of Respondents that the impu....
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....umstances a completed Act of the parent legislation which has already come into force is to be partially withdrawn from operation in a given area or in given cases so as not to be applicable to a given class of persons who are otherwise admittedly governed by the Act. When such a power by way of conditional legislation is to be exercised by the delegate, a question may arise as to how the said power can be exercised. In such an eventuality if the satisfaction regarding the existence of condition precedent to the exercise of such power depends upon pure subjective satisfaction of the delegate; and (3) the exercise of conditional legislation would depend upon satisfaction of the delegate on objective facts placed by one class of persons seeking benefit of such an exercise with a view to deprive the rival class of persons who otherwise might have already got statutory benefits under the Act and who are likely to lose the existing benefit because of exercise of such a power by the delegate. It was held that in first two categories of cases hearing the parties is not obligatory, however, in cases falling in the third category opportunity must be given to other class of persons to submit....
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....d on the ground of delegated legislation by suggesting that the question of policy has been left to the delegate. The statement of objects and reasons given in the Act of 1993 clearly demonstrates that the banks and financial institutions at present have been experiencing considerable difficulties in recovering loans and enforcement of securities charged with them. The existing procedure for recovery of debts due to the banks and financial institutions has blocked a significant portion of their funds in unproductive assets, the value of which deteriorates with the passage of time. The Committee on the Financial System headed by Shri M. Narashimham recommended the setting up of the Special Tribunals with special powers for adjudication of such matters and speedy recovery as critical to the successful implementation of the financial sector reforms. In 1981 a Committee under the Chairmanship of Shri T. Tiwari examined the legal and other difficulties faced by banks and financial institutions and suggested remedial measures including changes in law. The Tiwari Committee also suggested setting up of Special Tribunals for recovery of dues of the banks and financial institutions by fol....
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....some cases where strict adherence to any provision of the statute or rules may result in great hardship, in a given situation, where exercise of such power of exemption is to remove this hardship without materially effecting the policy of the Act, viz., development in the present case then such exercise of power would be covered under it. All situation cannot be culled out which has to be judiciously judged and exercised, to meet any such great hardship of any individual or institution or conversely in the interest of society at large. Such power is meant rarely to be used. So far decisions relied by the petitioner, where the provisions were held to be ultra vires, they are not cases in which court found that there was any policy laid down under the Act. In A.N. Parasuraman and Others Vs. State of Tamil Nadu - (1989) 4 SCC 683, the Court held Section 22 to be ultra vires as the Act did not lay down any principle or policy. Similarly, in Kunnathat Thathunni Moopil Nair etc. Vs. State of Kerala and Another - AIR 1961 SC 552, Section 7 was held to be ultra vires as there was no principle or policy laid down." The Supreme Court in Prabhudas Damodar Kotecha and Others Vs. Manhabala J....
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.... Vs. State of Kerala and Others - (2016) 2 SCC 161, held that in a modern progressive society it would be unreasonable to confine the intention of a legislature to the meaning attributable to the word used at the time the law was made, for a modern legislature making laws to govern a society which is fast moving must be presumed to be aware of an enlarged meaning the same concept might attract with the march of time and with the revolutionary changes brought about in social, economic, political and scientific and other fields of human activity. Indeed, unless a contrary intention appears, an interpretation should be given to the words, used to take in new facts and situations, if the words are capable of comprehending them. An enactment of former days is thus to be read today, in the light of dynamic processing received over the years, with such modification of the current meaning of its language as will now give effect to the original legislative intention, held the Supreme Court. We have stated at the outset that we are not examining the constitutional validity of Section 1(4) of the Act of 1993 as the vires thereof have not been challenged in the present writ petition. The....
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....uction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short, 'the Act of 2002') for recovery of such NPAs. Such small value cases also have alternate recourse to one time settlement by banks under their schemes or referring the case to Lok Adalats. If the minimum pecuniary limit is enhanced, then the banks can also approach Civil Courts for the recovery of amount involving amount upto twenty lakh rupees. Raising of pecuniary limit would further speed up the recovery process as the Tribunals would be focused in recovering the cases with recovery amount of more than twenty lakh rupees. The Civil Courts would not be burdened of many additional cases as alternate means such as SARFAESI action, one time settlement and Lok Adalats, etc. Raising of pecuniary limit by issuing the notification does not in any way affect the provisions of the Act of 2002. The Act of 1993 is a separate Act under which recovery of dues is initiated by filing of Original Application with the Tribunals by filing the securitisation application under Section 17 of the Act of 2002. There is no pecuniary limit assigned for filing of securitisation application before the Tribunal under the Ac....