TaxTMI 
TaxTMI 
1997 (1) TMI 567
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....reupon lent it a total sum of Rs. 37.50 lakhs. In consideration of the loan so advanced, the loanee executed and got registered a mortgage deed. This was on 10 February, 1975. Subsequent thereto, the parties entered into yet another loan agreement and with regard to it an agreement of hypothecation was executed on 31 July, 1978. As the loanee allegedly did not honour the agreements and neglected to pay the outstanding amounts, the Industrial Finance Corporation of India filed a petition under section 30 of the Industrial Finance Corporation Act, 1948, for sale of properties mortgaged in its favour and for appointment of receiver in respect of the said properties. This was in December, 1979, and the said petition is still pending disposal. ....
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.... 31 of the Act. It has, however, fallen to my good fortune to pen the opinion. 4. Before I proceed to refer to the arguments advanced, it needs to be noticed that it was common case of the parties that the petitioner is a financial institution within the meaning of section 2(h) of the Act of 1993. It was also not disputed that the relief claimed in the petition is principally based on the allegation that debt is due from the respondent company and that the claim is of an amount more than rupees ten lakhs. It was also not in issue that the petition is not a suit as we understand it under the Code of Civil Procedure. 5. It was contended by Dr. S. Ghosh who appeared for the petitioner institution that as the petitioner was admittedly a finan....
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....ed within the meaning of debt. This is the general law and settled trend of judicial opinion. However, Act 51 of 1993 incorporates the definition of debt in its interpretation clause by way of abundant caution and gives it out a very wide meaning. The quintessence of the definition is the existence of any liability founded on an allegation as due from any person, the creditor being a bank or a financial institute or a consortium of the two. The liability may be in cash or otherwise. It may be secured or unsecured. A decree or order of any civil court or otherwise may intervene or not; the only rider being that the liability must be legally recoverable. The definition would cover all the cases where the liability is secured by a mortgage, ch....
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....or otherwise and subsisting on, and legally recoverable on, the date of the application;... 17. Jurisdiction, powers and authority of Tribunals.--(1) A Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain and decide applications from the banks and financial institutions for recovery of debts due to such banks and financial institutions. (2) An Appellate Tribunal shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made, by a Tribunal under this Act. 18. Bar of 'jurisdiction.--On and from the appointed day, no court or other authority shall have, or be entitled to exercise, any ....
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.... jurisdiction of the Tribunal. Does section 31 then stand attracted and the proceedings stand transferred to the Tribunal by virtue of that section? 11. The answer to the question posed above, to my mind, is to be found not in sections 17, 18 and 31 of the Act but in section 34 and more particularly, in its sub-section (2). This is how section 34 runs: "34. Act to have overriding effect.--(1) Save as otherwise provided in sub-section (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. (2) The provisions of this Act or the rules made thereunder shall be in ....
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....9; 14. As we all know, the word 'derogation' relates to the partial repeal or abolishing of a law, as by a subsequent Act which limits its scope or impairs its utility and force. In other words, when we say 'in derogation of we mean, more generally, the Act of taking away, or destroying the value or effect of anything, or of limiting its extent, or of restraining its operation. If that be the meaning and purport of the word 'derogation', when section 34 uses the words 'and not in derogation of the Industrial Finance Corporation Act, 1948', it is clearly conveyed that the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, neither limits the scope nor impairs the utility and force of the Industri....