High Court · 2008

Ee IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 26.6.2008CORAM:THE HONOURABLE MR.JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR.JUSTICE V.DHANAPALANW.P.No.6077 of 2007& M.P.Nos.2 and 3 of 2007R.Prabakaran .. Petitionervs.1. Union of India, Ministry of Finance, Department of Economic Affairs (Banking Division), Rep. by Secretary, New Delhi.2. Ministry of Law, Justice & Company Affairs, New Delhi.3. The Registrar, Debts Recovery Tribunal, Trichy Road, Coimbatore.4. The Registrar, Debts Recovery Tribunal, Madurai.5. The Registrar, Debts Recovery Tribunal No.III, Chennai.6. The License Officers Forum, rep. by its Secretary, Rajeevan, Debts Recovery Tribunal, Central Bank Building, V.H.Road, Coimbatore. https://hcservices.ecourts.gov.in/hcservices/

7. The Debts Recovery Tribunal Advocates Association, DRT Building, Trichy Road, Coimbatore, Rep. by its President. .. RespondentsWrit Petition filed under Article 226 of theConstitution of India, praying for issuance of a Writ ofCertiorari, calling for the records pertaining to theimpugned notification dated 9.1.2007 in F.No.G-26036/2/2005, published in the Gazette of India,Extraordinary, under Part II, Sec.3 Sub-Sec.1 issued by theUnion of India, represented by its Secretary, Ministry ofFinance, Department of Economic Affairs (Banking Division),the first respondent herein and to quash the same.For petitioner : Mr.A.L.Somayaji, Senior Counsel forM/s.P.R.RamakrishnanFor respondents : Mr.P.Wilson, Asst. Solicitor Generalfor RR-1,2,3 and 5 Mr.P.Chandrasekaran for R-4 Ms.Ananda Gomathy Sivakumar for R-7ORDERS.J.MUKHOPADHAYA,JThe petitioner-borrower has preferred this WritPetition against the Notification in F.No.G-26036/2/2005,dated 9.1.2007 issued by the Ministry of Finance,Department of Economic Affairs (Banking Division),Government of India, under Section 3 of the Recovery ofDebts Due to Banks and Financial Institutions Act, 1993(hereinafter referred to as 'the DRT Act'), notifying theestablishment of new Debt Recovery Tribunal (for short,'the DRT'), at Madurai and Chennai, carving out thejurisdiction of the earlier DRT at Chennai and Coimbatore.2. Mr.A.L.Somayaji, learned Senior Counsel appearingfor the petitioner submitted that what is under challengeis the carving out of three Districts, i.e. Salem, Erodeand Namakkal from the jurisdiction of the DRT, Coimbatoreand placing it under the jurisdiction of the DRT, Madurai.According to the petitioner, the Districts of Salem,Erode and Namakkal were in between 100-155 Kms. fromCoimbatore (Salem-150 Kms., Erode-100 Kms. and Namakkal-155Kms.), but now, in view of the placing of such Districtsunder the jurisdiction of Madurai, the parties will have to https://hcservices.ecourts.gov.in/hcservices/ move far away distance in between 200-240 Kms. to Madurai(Salem-200 Kms., Erode-240 Kms. and Namakkal-200 Kms.).It is the case of the petitioner that he has alreadyincurred huge expenses while attending the proceedings inChennai and further expenses were incurred when proceedingswere transferred to Coimbatore and in view of the presentNotification, he will have to again incur expenses and willhave to go to a far-off city for conducting theproceedings. It is not just inconvenience alone to him, buthe has to spend three times for the same litigation.Similar plight is faced by the other persons. Even theBanks would be inconvenienced and therefore, he hasimpleaded the License Officers Forum, represented by itsSecretary, DRT, Central Bank Building, V.H.Road,Coimbatore, as a party to the Writ Petition.It is the further case of the petitioner that theNotification is inconsistent with Rule 6 of the DRT(Procedure) Rules, 1993. Though Section 3 of the DRT Actempowers the Central Government to constitute more than oneTribunal, it does not provide for any guideline orprocedure to be followed before such Tribunals areconstituted. Therefore, Section 3 of the DRT Act isarbitrary, illegal and unfettered power of the State. Giving reference to Krishnagiri District, it is pleadedthat though it is a separate District, and was a part ofDRT, Coimbatore, by jurisdiction, now the cases arising outof Krishnagiri District do not find a place in theNotification defining the revised jurisdiction, which showsnon-application of mind. Though such pleadings are made, learned Senior Counselappearing for the petitioner, while challenging theimpugned Notification, at the time of hearing, made thefollowing submissions:(a) The Central Government abdicated its powers to theDebt Recovery Appellate Tribunal (for short, 'the DRAT'),Chennai, by accepting its request and on the basis of thesuggestions made by the DRAT, the impugned Notification hasbeen issued without application of mind. The Notificationis based on extraneous consideration, i.e. recommendations/ suggestions of the DRAT, Chennai.(b) The impugned Notification has no nexus with theobject in carving out the jurisdiction of the said threeDistricts from the jurisdiction of the DRT, Coimbatore.(c) In the absence of any material before the Central https://hcservices.ecourts.gov.in/hcservices/ Government to justify the carving out of the Districts ofSalem, Erode and Namakkal from the jurisdiction of the DRT,Coimbatore for placing it under the jurisdiction of theDRT, Madurai, the impugned Notification is illegal.(d) The impugned Notification in effect, is violativeof Rule 6 of the DRT (Procedure) Rules, 1993. 3. Mr.P.Wilson, learned Assistant Solicitor Generalappearing for the Central Government, submitted that thepetitioner having challenged the entire impugnedNotification dated 9.1.2007, he cannot restrict the prayerby limiting it to the Districts of Salem, Erode andNamakkal, in the absence of any amended relief, such arelief should not be granted. According to him, theNotification was issued taking into consideration hugependency of cases of different Districts before the DRT,Chennai and Coimbatore, as also the delay in disposal ofsuch cases and its effect on the Banks. While he relied upon the counter affidavit filed onbehalf of the Union of India and the statements in regardto the pendency of cases as enclosed in the paper book, itwas also submitted that the petitioner, a borrower, hasfiled the Writ Petition only to delay the recovery. None ofthe Banks have raised any grievance before any authorityor a Court of law.4. We have heard the learned counsel appearing for theparties and noticed the rival contentions and the relevantmaterials on record.5. From the statement of objects and reasons of the DRTAct, it would be evident that as the Banks and financialinstitutions were experiencing considerable difficulties inrecovering loans and enforcement of securities charged withthem and the existing procedure for recovery of debts dueto the Banks and financial institutions blocked asignificant portion of their funds, on the basis of therecommendations of "M.Narasimhan Committee", SpecialTribunals with special powers for adjudication, wereconstituted for the early recovery of such debts and dues.The main aim and object of the DRT Act are for earlyrecovery of the debts and dues of the Banks and financialinstitutions.6. There were three DRTs functioning in Tamil Nadu, twoat Chennai and one at Coimbatore. The Central Governmenthaving noticed the number of pendency of cases, for earlydisposal of the cases, decided to establish more Tribunals https://hcservices.ecourts.gov.in/hcservices/ in the State. 7. According to the first respondent-CentralGovernment, as it cannot act differently, it had to actstrictly as per the advise as sought for and received fromthe DRAT, Chennai, which is headed by a retired Judge ofthe High Court and having idea with regard to the pendencyof the cases. Number of cases from various Districts,existing pendencies in various DRTs, logistic support andadministrative convenience were considered in arriving at adecision for allocating one or other District under thejurisdiction of one or other DRT.8. From the records, it appears that the CentralGovernment, by letter in Do.No.A-36011/3/2005-DRT, dated19.8.2005, informed its intention to establish additionalTribunals, to the Chairperson of the DRAT, Chennai. By thesaid letter, it was informed that while considering thejurisdiction, it is to be seen that number of cases pendingin the DRT-I & II, Chennai and DRT, Coimbatore, can be moreor less equally divided between the new DRTs. and theexisting DRTs. 9. Having received the said information, theChairperson of the DRAT called for meeting of the PresidingOfficers of the DRTs-I & II, Chennai, by letter dated25.8.2005 and requested them to forward District-wisefiling of cases, pendency of cases, immediately. By letterdated 30.8.2005, the DRT, Coimbatore was requested to sendsuch information by return of Fax giving District-wisedetails of the cases filed/disposed of.10. The statement regarding District-wise pendency ofcases as on 31.7.2005 before the DRT-II, Chennai wasforwarded by letter dated 30.8.2005. The following chartsshow the pendency/filing of cases in various Districts andalso before the DRT-II, Chennai:STATEMENT REGARDING DISTRICT-WISE FILING OFCASES/PENDENCY OF CASES AS ON 31.07.2005Sl.No.DistrictNo. of cases filedFiledinDRT-IITrans-ferredfromotherDRTs/CourtsTotalNo. ofcases pending1.Chennai North67812261904814 https://hcservices.ecourts.gov.in/hcservices/ Sl.No.DistrictNo. of cases filedFiledinDRT-IITrans-ferredfromotherDRTs/CourtsTotalNo. ofcases pending2. Kanyakumari212243183.Nagapattinam4131774. Ramnad8132185.Sivaganga162238196.Thiruvarur1752297.Thanjavur4266108388.Tirunelveli404787419.Tuticorin45601054810.Virudhunagar72601325411.Others1610011626Total25931082DEBTS RECOVERY TRIBUNAL-II, CHENNAIBRANCH-WISE CASES OF CHENNAISl.No.Name of Branch No. of casesOATATotalPending1Tondiarpet Branch911042Washermanpet Branch34337273Royapuram Branch22325114George Town Branch92698515Rajaji Salai Branch372360326Park Town Branch381654277Chennai-1 (Parrys)85326511184618Erukanchery52759249Vyasarpadi303110Perambur9110511Periyar Nagar303212Choolai426313Sowcarpet5576225 https://hcservices.ecourts.gov.in/hcservices/ Sl.No.Name of Branch No. of casesOATATotalPending14Vepery707515Chindatripet202216Purasawalkam149131626717Otteri213018Kilpauk466522419Kellys331341320Ayanavaram15015421Shenoy Nagar12012922Sembium101023Villivakkam16218524Anna Nagar886944125Aminjikarai102121026Arumbakkam213327Mogappair202228Kolathur171188Total16133671980866The DRT, Coimbatore, by its letter dated 31.8.2005,also forwarded its details of cases filed/pending/disposedof, including the total number of cases of the Districts ofCoimbatore, Erode, Salem, etc., as shown hereunder:DISTRICT-WISE DETAILS OF CASESFILED/DISPOSED OF AS ON 31.07.2005IN RESPECT OF DRT, COIMBATOREDistrictTotal No.of casesfiledNo. ofdisposedcasesNo. ofpendingcasesCoimbatore19678511116Dharmapuri794039Dindigul1104565Erode437167270Madurai355177178Nilgiris1324884Pudukkotai362115 https://hcservices.ecourts.gov.in/hcservices/ DistrictTotal No.of casesfiledNo. ofdisposedcasesNo. ofpendingcasesSalem341118223Theni371324Trichy223117106Total371715972120By letter dated 1.9.2006, DRT-I, Chennai, forwarded thependency of cases, as extracted hereunder:DRT-I, CHENNAIDISTRICTWISE CASES FILED & PENDINGREPORT AS ON 31.07.2005Sl.No.DistrictFiledPending1Chennai South466417442Cuddalore78273Kanchipuram124694Karur131635Namakkal88516Perambalur647Pondicherry131528Thiruvallore2889Thiruvannamalai15510Vellore26712111Villupuram3321Total55662164 DEBTS RECOVERY TRIBUNAL-I, CHENNAI.AREAWISE DISTRIBUTION OF CASESFILED AND PENDING IN CHENNAI SOUTHSl.No.AreaNo. ofcases1Adyar392Alwarpet513Ambattur404Annasalai3615Cathedral Rd.346Egmore63 https://hcservices.ecourts.gov.in/hcservices/ Sl.No.AreaNo. ofcases7Guindy508Kodambakkam289Mylapore11410Nandanam8811Nungambakkam14712Royapetah7413Saidapet2114Santhome5515Teynampet2816T.Ngr10917Tambaram2818Thousand Lights3119Triplicane3720Vadapalani4221Others304Total174411. From the aforesaid chart forwarded by DRT,Coimbatore, it would be evident that while total number ofpendency of cases of Coimbatore District is 1116, the nextnumber of pendency is that of the Districts of Erode andSalem (Erode-270 and Salem-223), apart from Madurai being178.12. In view of the aforesaid facts, the Chairperson ofthe DRAT, by letter in D.O.No.7/1/05-DRAT, dated15.9.2005, made the following suggestions:"Kindly refer to your D.O.letter No.A-36011/3/2005-DRT dated 19.08.2005 seeking myguidance in bifurcating the jurisdiction ofexisting DRTs of Chennai & Coimbatore forestablishing the new DRTs at Chennai &Coimbatore.Recently, additional bench of Madras HighCourt has been established at Madurai and it isfully operational now. I therefore suggest theopening of one DRT with Madurai as Headquartersinstead of at Coimbatore again as bifurcatingCoimbatore area-wise would be more cumbersomeand complicated. Accordingly, the followingdistricts can be brought under the proposed https://hcservices.ecourts.gov.in/hcservices/ Madurai DRT and the distance factor is alsotaken into consideration, which would facilitatethe litigant public and it is more important atthe time of constituting new Court/Tribunal:DRT, Madurai: Districts of Madurai,Kanyakumari, Tirunelveli, Tuticorin,Virudhunagar, Sivaganga, Ramnad, Theni, Erode,Salem, Namakkal, Trichy, Karur, DindigulIn view of this, the jurisdiction ofexisting DRT, Coimbatore can be limited toCoimbatore and Nilgiris districts, the pendencyas on date being 1200 cases.As regards, trifurcation of Chennai DRTs,the jurisdiction of the 3 DRTs can be as under:CHENNAI DRT-I: Areas under Egmore-Nungambakkam & Mylapore-Triplicane Taluk limitsof Chennai and Union Territory of Pondicherry.CHENNAI DRT-II: Areas under Tondiarpet &Mambalam-Guindy Taluk limits of Chennai.CHENNAI DRT-III: Areas under Perambur-Purasawalkam Taluk limits of Chennai anddistricts of Kanchipuram, Tiruvallur, Vellore,Villupuram, Cuddalore, Tiruvannamalai,Pudukottai, Thanjavur, Thiruvarur, Nagapattinam,Perambalur & Dharmapuri.The above suggestions have been made aftertaking into consideration the area-wise/district-wise, distant-wise, pendency ofcases, as on date, besides geographicalfeasibility of places to the headquarters ofDRTs.I would like to add that while opening newDRTs will certainly help in expediting therecovery of debts and it is equally important topost P.O. for all the DRTs immediately toachieve this end."13. Taking into consideration the aforesaidsuggestions, the Central Government agreed upon and issuedthe impugned Notification, dated 9.1.2007.14. Learned Senior Counsel appearing for the petitionerin fact highlighted the aforesaid letter dated 15.9.2005written by the Chairperson of the DRAT to suggest theabdication of power by the Central Government and its non-application of mind. He relied on the decision of theSupreme Court in the case of "Amirudhsinhji vs. State of https://hcservices.ecourts.gov.in/hcservices/ Gujarat" reported in AIR 1995 SC 2390, wherein, the SupremeCourt dealt with the meaning of "Surrender, abdication anddictation". The said case was relied upon to suggest thatthe present case was a case of exercise of power on thebasis of dictation of the DRAT, but we are not inclined toaccept the same, as it is always open for the CentralGovernment to know the details of the number of casesincluding pendency and disposal and the Chairperson of theDRAT being the head, having such idea of pendency and delayin disposal of cases, it is always open for the CentralGovernment to consult the Chairperson of the DRAT andaccept his suggestion.15. One of the submissions was made that the impugnedNotification is against Rule 6 of the DRT (Procedure)Rules, 1993, but such submission cannot be accepted, as thesaid Rule 6 deals with place of filing of application,which is to be filed by the applicant-Bank with theRegistrar of the DRT within whose jurisdiction the Bank orthe financial institution is functioning. Apart from thefact that this problem is of the Bank and financialinstitution, and not of the borrower, it is theBank/financial institution to move the DRT under whosejurisdiction the Bank/financial institution is situated.16. A counter affidavit has been filed by the seventhrespondent-DRT Advocates Association, Coimbatore. However,as the lawyers have no cause of action and cannot make anyclaim as to where the hearing should be given, we are notinclined to deal with their submissions, which are almostsimilar to the submissions made on behalf of the writpetitioner.17. We find no merits in the Writ Petition, which isaccordingly dismissed. No costs. The MiscellaneousPetitions are closed. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar. https://hcservices.ecourts.gov.in/hcservices/ csTo1. Union of India, Ministry of Finance, Department of Economic Affairs (Banking Division), Rep. by Secretary, New Delhi.2. Ministry of Law, Justice & Company Affairs, New Delhi.3. The Registrar, Debts Recovery Tribunal, Trichy Road, Coimbatore.4. The Registrar, Debts Recovery Tribunal, Madurai.5. The Registrar, Debts Recovery Tribunal No.III, Chennai.+ 1 CC To Mr.P.Chandrasekaran, Advocate SR NO.32721,32292+ 1 CC To Mr.P.R.Ramakrishnan, Advocate SR NO.32592+ 1 CC To Mr.P.Wilson, Advocate SR NO.32405Order inW.P.No.6077 of 2007mdr(co)pmk/27.6.08