INDIAN OVERSEAS BANK vs SHREE SIDDHI VINAYAK ENTERPRISES on 15 October 2019

1. Applicant claims to have provided R ee Term Loan of Rs. 37,00,000/- to the Defendant Firm, a Sole Proprietary Firm (Sole Proprietor Ms. Manisha U Poojary), for its business and the Defendant Firm defaulted in servicing the Loan. lat held on 08/07/2017, the Applicant efendant Firm to the District Legal tigation Conciliation and Settlement I-A of The Legal Services Authorities

2. Applicant a efendant appeared before the Lok Nyayalay, le. alyan an oth the Parties signed Compromise Memo where dues-of Applicant / Judgement Creditor was determined at 00,000/- to be paid by Defendant / Judgement Debtor in tain instalments ending on 28/02/2018. Lok Nyayalay, Kalyan accordingly passed an Order capturing the Compromise Terms between Applicant / Judgement Creditor and Defendant / Judgement Debtor.

5. However, the Defendant / Judgement Debtor failed to pay and clear the amount settled under the terms of Compromise.

6. Applicant / Judgement Creditor filed MA 31 of 2018 under Sec. 31-A of the Recovery of Debts and Bankruptcy Act, 1993 ("RDDB Act") seeking Recovery Certificate for the amount of Rs. 22,00,000/- covered by Order passed by Lok Nyayalay, Kalyan, based on Compromise Memo between Applicant / Judgement Creditor and Defendant / Judgement Debtor.

Issue for consideration:

7. The Tribunal had doubt as to the Maintainability of the MA on the following Issue and called upon the Advocate for Applicant / Judgement Creditor to clarify - "Whether the Award / Order passed by Lok Nyayalay, Kalyan purportedly under Sec. 22E (of Chapter VI-A) of The Legal Services Authorities Act, 1987 can be enforced through Sec. 31A of the RDDB Act by DRT issuing Recovery Certificate."

8. Advocate for Applicant / Judgemen CI Written Argument holding that the am Award passed by Lok Nyayalay, Kalyan RDDB Act and hence recoverable under Rec issued under Sec. 31A of R Act. tor merely filed )vered by the bt" within Certificate Evolution of Legal Provisions :

9. Section 31A was intr amendment enforcemen e \ecuTi Court before t date Sec. 31A provide those D r or 0 recov terms of cover bility 17/01/20 oduced in tfi RDDB Act by way of (w.e.f. 17/01/2000) to take care of of the Decree or Order passed by any I has not been executed till that date. ing Recovery Certificate in respect of s for proceeding with execution and the Section, it has no connection to or of Decree or Order passed post 2E of The Legal Services Authorities Act, 1987 forms part pter VI-A of the Act, which was introduced under an Alendment of 2002 w.e.f. 11/06/2002. <-4 Sub-Section (2) of that Section declares that every Award of Permanent Lok Adalat is deemed as "Decree of a Civil Court"; and Sub-Section (5) of the said Section stipulates that Permanent Lok Adalat shall transmit the award to civil court having jurisdiction for executing the same as "Decree of the Court". View of the Tribunal on the Issue:

11. Tribunal has following views on the Statute evolution -

(i) When Sec. 22E was introduced in The Legal Services Authorities Act, 1987 in 2002, the RDDB Act was in ermanent Lok Adalat under Sec. 22E of 'es Act, 1987 cannot be enforced under (T. S. Aso Presiding Offic , DRT- III, Mumbai.

existence but was not amended to make RDDB Act and DRT as the avenues through which an Award of Permanent Lok Adalat to be enforced (though Legislature could have done it, if it so desired, by introducing a Section similar to Sec. 31A in RDDB Act).

(ii) Alternatively, without amending the RDDB Act also, taking note of the existence of DRT, Legislature could have provided in Sec. 22E itself that Award of Permanent Lok Adalat, in so far as it covers Banks / Fi ncial Institutions in respect of their recovery, be enfivc through DRT under RDDB Act by issuing Recov v rti to based on the Award (similar to enforcement rough it Court contemplated under Sub-Section (5) of Sec. Neither of the above chan ook place in either RDDB Act or The Legal Services Auth ct, 1987. Decision in M A No. 31 of 2018 In the light of View expressed in Para It above, the Tribunal is of the view that Aw The Legal Servi Sec. 31A of RDDB According) MA No. 2018 seeking Recovery Certificate in respect of Order of Lok Nyayalay, Kalyan, passed under Sec. 22E o kl Services Authorities Act, 1987 cannot be granted, as of maintainable. entiv, MA No. 31 of 2018 stands disposed of without any r a +ought by the Applicant / Judgement Creditor. TR> disposal of the MA is without prejudice to the right of Applicant / Judgement Creditor to enforce the Award / Order obtained from Lok Nyayalay, Kalyan under any other avenue under Law available to it. Place: Mumbai Date: 15.10.2019