O.A. Kunju Beevi vs Syndicate Bank and Others

P.A. Mohammed, J.—This appeal is directed against the order in I.A. No. 1507 of 1997 in O.S. No. 250 of 1995 on the file of the Additional Sub Judge''s Court, Kochi. The second defendant in O.S. No. 250 of 1995 is the appellant before us. He filed the above I.A. under Order IX Rule 13 seeking to set aside the ex-parte decree passed on 15-6-1996 in O.S. No. 250 of 1995. The suit was for realisation of the money due to the first respondent Bank. After enquiry the court below passed the impugned order rejecting the application on the ground that it has no jurisdiction to entertain the petition. Being aggrieved by the said order, the present appeal has been filed by the second defendant. Heard learned counsel appearing for the appellant and also the respondents.

The court below in the impugned order observed that the decree amount was above Rs. 10 lakhs and the decree holder had already filed execution petition before the Recovery Tribunal and that therefore the court had no jurisdiction to entertain the petition. As observed above, what is involved in this case is that an ex parte decree passed on 15-6-1996 and the right of the appellant to file an application to set aside such a decree under Order IX Rule 13 cannot be disputed. This court is not concerned with the result of the petition. But we are anxious to protect the right to move the application to set aside the ex-parte decree. While examining this question, it is apposite to note the relevant provisions contained in the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Section 18 of the said Act provides that on and from the appointed day, no court or other authority shall have, or be entitled to exercise, any jurisdiction, power or authority in relation to the matters specified in Sec. 17 except the Supreme Court and the High Court exercising the powers under Art.226 and 227 of the Constitution. The matters specified in Sec. 17 are the applications from the Banks and financial institutions for recovery of debts due to such Banks and Financial institutions. When the Banks or financial institutions filed applications for recovery of debts due to them, the Tribunal constituted under the Act shall exercise on and from the appointed day the jurisdiction, power and authority to entertain and decide such applications. In this case it is admitted that the decree holder the respondent Bank had already filed application before the Tribunal invoking the powers under Sec. 17 of the Act. Therefore when the banks filed application under Sec. 17 for recovery of debts, the jurisdiction of the court or other authorities as specified in Sec. 18 is ousted to deal with any such matters specified in Sec. 17. That means when the respondent-Bank filed application under Sec. 17, all the matters in relation to such application shall be dealt with thereafter by the Tribunal alone. Therefore, we can safely conclude as far as the present matter is concerned the court has no jurisdiction to deal with the petition filed by the appellant. The question now remains to be considered is as to how such application is to be dealt with. The court below has dismissed the application observing that it has no jurisdiction. The proper course would have been to transfer the present application to the Recovery Tribunal to deal with in accordance with the provisions contained in Sec. 31 of the Act. Sec. 31(1) provides that every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based, is such that it would have been, if it had arisen, after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such tribunal. The proviso thereon states that the above sub-section (1) shall not apply to any appeal pending before any court. In this case the decree was passed on 15-6-1996 and the ''appointed day'' as contemplated in Sec. 17 is the date on which the Tribunal is established in view of Sec. 2(c) of the Act. There is no dispute between the parties that the tribunal was established on 4-11-1996 and hence the ''appointed day'' as contemplated in Sec. 17 would be 4-11-1996. What is before us is an application to set aside the ex-parte decree in O.S. No. 250 of 1995 passed on 15-6-1996. In the normal course the court has jurisdiction to deal with the said application inasmuch as the suit is pending before it. But the jurisdiction has been taken away by reason of Sec. 18 of the Act from the appointed day. That does not mean it was not a suit pending before the court immediately before the date of establishment of the Tribunal. We are of the view that since the suit in which I.A. No. 1507 of 1997 has been filed is pending before the court, the application is liable to be transferred to the Tribunal under Sec. 31 of the Act. We, therefore, direct the court below to entertain the application, I.A. No. 1507 of 1997 in O.S. No. 250 of 1995 and transfer the same to the Recovery Tribunal, Chennai under Sec. 31 of the Act. In order to pave the way for the early disposal we direct both parties to appear before the court below on 2nd November, 1998.

The appeal is disposed of as above.