TaxTMI 
TaxTMI 
2001 (1) TMI 1018
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....on 20 of the DRT Act and once a statutory alternative remedy was provided this Court should not entertain the petition under Articles 226 or 227 of the Constitution of India. In support of this contention Mr.Thakore stated that the application being Original Application No.459 of 1999 was moved by respondent no.1 before the Debt Recovery Tribunal some time in December,1999 while the petitioner had been declared as a relief undertaking under the BRU Act by the State of Gujarat only on 17.05.2000. Thus, he wants to show that there was a proceeding pending when the notification was published by the State Government, and that the Tribunal was seized of the matter already and the petitioner had submitted to the jurisdiction of the Tribunal. It was further contended that as the Tribunal's order dated 21.12.2000 was appealable under section 20 of the DRT Act an appeal could be filed within a period of 45 days from the said day. He further submitted that there was no lack of jurisdiction in the Tribunal and if that was so, it was not open to this Court to entertain this petition in light of the availability of the statutory alternative remedy. In support of his contention, he relied up....
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....edit facilities. The petitioner filed an application praying for stay of recovery proceedings on the basis of the notification issued under the BRU Act. Similar applications for stay were filed in relation to each of the O.As. The Tribunal vide its order dated 21.12.2000 (Annexure 'B') rejected these stay applications. This impugned order is under challenge in this petition before us. 5. For the purpose of deciding the controversy at hand we may reproduce preamble and provision of section 4 of BRU Act. "An act to make temporary provisions for industrial relations and other matter to enable the State Government to conduct, or to provide loan, guarantee for financial assistance for the conduct of, certain industrial undertakings as a measure of preventing unemployment or of unemployment relief". xxx xxx xxx xxx "Section - 4 : Power to prescribe industrial relations and other facilities temporarily for relief undertakings - (1) Notwithstanding any law, usage, custom, contract instrument decree, order, award, submission settlement, order or other provision whatsoever, the State Government may by notification in the Official Gazette direct that - ....
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....ns for industrial relations and other matters for the conduct of industrial undertakings as a measure for preventing unemployment. While the underlying object of DRT Act pertains to making a provision for establishment of a Tribunal for expeditious adjudication and recovery of debts due to banks and financial institutions. The Apex Court in the case of Inderjit C.Parekh v. V.K.Bhatt (1974) 15 GLR 573, while dealing with the provisions of Section 4(1)(a))(iv) of the BRU Act has explained the object of the said provision as under : "6. The object of sec. 4(1) (a) (iv) is to declare, so to say, a moratorium on actions against the undertaking during the currency of the notification declaring it to be a relief undertaking. By sub-clause (iv), any remedy for the enforcement of an obligation or liability against the relief undertaking is suspended and proceedings which are already commenced are to be stayed during the operation of the notification. Under sec. 4(b), on the notification ceasing to have force, such obligations and liabilities revive and become enforceable and the proceedings which are stayed can be continued. These provisions are aimed at resurrecting and rehabilita....
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....ides for sufficient guidance and checks on the exercise of the power by the State Government while acting under sec.4. If in a particular case the Government finds that the industry cannot stand on its legs without getting some temporary relief in the payment of its huge wage bill, then the Government would issue notifications under any of the first three sub-clauses of sec.11(1)(a). But if the Government finds that the payment of the wage bill is not much of a financial problem for the industry and that it is the protection from its creditors which the industry requires, then instead of taking action under sub-clauses (i), (ii), (iii), the Government may well take action under sub-clause (iv) and suspend all or any of the rights, liabilities and obligations under that clause. Whatever action the Government proposes to take under sec.4, would obviously be guided by one supreme consideration, namely that of putting the industry on a sound footing so that the apprehended unemployment resulting from the closure of the industry can be avoided xxx xx xxx " (Emphasis supplied). 9. As against this, if provisions of the DRT Act are taken into consideration it is primarily an Ac....
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....laid down as under : "11. As regards the contention about the applicability of the provisions of the DRT Act, the Court is of the view that the BRU Act and DRT Act operate in different fields. The BRU Act empowers the State Government to temporarily suspend the rights and privileges of the creditors and the obligations and liabilities of the relief undertaking and so long as the notification under BRU Act remains in force the creditors cannot avail of any remedy to enforce their substantive rights. The provisions of DRT Act merely provides for the forum and the procedure for adjudication and recovery, but they do not expand the rights and remedies of public financial institutions and banks nor do they purport to remove the embargo imposed by or under another statute upon the enforcement of the rights of the creditor-institutions. At this stage the Court would like to clear one misconception entertained by the respondents that what Sec. 4(1)(a)(iv) suspends is the substantive rights. In M/s.D.S.Patel vs. GSTC, the Division Bench has held that by the said sub-clause the right is not suspended but only the remedy for enforcement of the right is suspended. The Division Bench e....
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....sion, this Court has stated that " Now, the term 'order' is not defined in the Act but it is settled law that 'order' may mean 'interim order' as also 'final order". It was in this context that this Court has come to the conclusion that it is clear that any order passed by the Debt Recovery Tribunal is subject to challenge under section 20 before the Appellate Tribunal and it was further held that as the alternative remedy was available to the appellant in the said matter it was open to it to approach the appellate forum. 13. The next decision on which reliance was placed on behalf of the respondents is in the case of M/s.Kavita Pigments and Chemicals (Pvt.) Ltd. and Others Vs. Allahabad Bank and Others reported in AIR 2000 Patna 43. Mr.Thakore read extensively from the said decision from paragraph 44 onwards to show that once alternative remedy is available it was not open for the High Court to entertain the petition under Article 226 of the Constitution and this was laid down by the Supreme Court in number of decisions and the Patna High Court had extracted the relevant portions in paragraphs 45 and 46 of the said decision. We find that even the sai....
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....tice. However, it is specifically contended that in view of the notification under the BRU Act, the Tribunal did not have any jurisdiction to proceed ahead with the matter. In so far as the unreported decision dated 14.12.2000 rendered in Special Civil Application No. 9013 of 2000 is concerned the same need not detain us any further in light of what is reproduced hereunder: "It is submitted by Mr.Joshi, learned counsel appearing on behalf of the petitioner that because of the few holidays intervening it was not possible for the petitioner Bank to approach Appellate Tribunal at Bombay and to obtain any stay order and therefore the petitioner Bank was constrained to file the present petition along with prayer for stay of the order passed by the Debt Recovery Tribunal on 17/8/2000". (Emphasis supplied). Thus, it can be seen that it was specifically contended on behalf of the petitioners that they were invoking extra ordinary jurisdiction of this Court only for a limited purpose and for a limited period i.e. in the interregnum protection was sought from the Court till the appeal was filed in the Appellate Forum. 16. Mr.Soparkar, learned Counsel for the petitione....
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....upra) has been approved by the Supreme Court in the later decision of Whirlpool Corporation (Supra) wherein it has laid down that : "14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for "any other purpose. 15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has bee....
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..... We need only add that the broad lines of the general principles on which the Court should act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus pre-eminently one of discretion, it is not possible or even if it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court'. 19. Another Constitution Bench decision in Calcutta Discount Co. Ltd. v. ITO,Companies Distt. laid down : 'Though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts will issue appropriate orders or directions to prevent such consequences. Writ of certiorari and prohib....
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....ther. As stated by the Apex Court, the BRU Act is framed for the purpose of resurrecting and rehabilitating industrial undertakings by temporarily suspending remedies to enforce fulfillment of obligations and liabilities so as to prevent unemployment and thus give immunity from legal actions so as to render working of such undertakings in smooth and effective manner. At the same time the DRT Act has been brought on the statute book to subserve the purpose of protecting public money of which the banks, and financial institutions are custodian, and to recover dues of such money expeditiously; if that is so, both the statutes are beneficial in nature with an underlying public purpose. Under the BRU Act what is suspended is the remedy against the right to enforce the liabilities which have already been incurred and in the event of notification prevailing over the DRT Act all that happens is that the undertaking is permitted to run and there is no question of public money being siphoned away in the interregnum. To the contrary, if DRT Act operates inspite of notification under the BRU Act, the entire legislative intent of framing the latter would be frustrated as the moratorium on the c....