HDFC BANK vs SADASIVA BHATT on 12 April 2017

FINAL ORDER

The OA is filed on 09.11.2015 under S.31A of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as ‘the Act’) by the applicant herein [successor-in-interest of the erstwhile Lord Krishna Bank Ltd. - the decree holder bank in OS No.46/2002 of the Subordinate Judge Court, Cherthala] for issuance of a Recovery Certificate in terms of the decree dated 20.12.2003 to recover the amount due thereunder.

2. The defendants were duly served with summons. Though the 1st defendant appeared in person and filed written statement, the said written statement was rejected for want of curing the defects noted by the Registry. Even though the 2nd defendant had entered appearance on 08.01.2016, subsequently he chose to remain absent and was not represented and as such, he was set exparte on 01.09.2016.

3. The erstwhile Lord Krishna Bank Ltd. had filed OS No.46/2002 before the Court of Subordinate Judge, Cherthala for recovery of the amount due and obtained decree dated 20.12.2003 allowing it to recover the sum of Rs.5,44,337/- with further interest @11.5% per annum from the date of decree (20.12.2003) till realisation and also its costs amounting to Rs.49,322/- from the defendants personally and the decree amount is charged on plaint ‘A’ and ‘B’ schedule properties.

4. According to the applicant bank, the defendants did not pay the amount due under the decree, and it is entitled to get the sum of Rs.5,44,337/-, the principal sum adjudged as due on 20.12.2003 and Rs.7,44,667.93 as the interest thereon @11.5% per annum from 20.12.2003 to 09.11.2015 and Rs.49,322/- as the costs awarded, aggregating to Rs.13,38,326.93 under the decree as on 09.11.2015. The prayer is to issue Recovery Certificate for recovery of the said amount of Rs.13,38,326.93 with further interest @11.5% per annum from the defendants and by sale of decree A’ and ‘B’ schedule properties. 5.1 The decision of the Hon’ble Supreme Court in Punjab National Bank, Dasuya v. Chajju Ram and others [reported in (2000) 6 SCC 655] and the subsequent amendment made to the definition of

‘debt’ under S.2(g) of the Act would show that both the principal and the amount payable as interest and costs under the decree have to be taken into account for determining whether the debt exceeded the minimum postulated in S.1(4) of the Act. As per the calculation shown in the OA, the amount claimed as due under the decree on hand as on 09.11.2015, the date of the OA exceeds Rs.10 lakhs. 5.2 The decision of the Hon'ble High Court of Kerala in Glenny v. The Catholic Syrian Bank Ltd. [reported in 2003 (2) KLT 973 (F.B.)] would show that once the amount of debt due under a decree passed by a court exceeds Rs.10 lakhs, such a decree has to be treated as a deemed decree passed by the Tribunal. Therefore, in view of S.19(22) r/w Ss.1(4), 17(1) and 18 of the Act, jurisdiction of civil court to execute the decree is barred and it is the Tribunal which alone has jurisdiction to recover the amount due thereunder and, the Tribunal, therefore, has to issue Recovery Certificate for recovery of the amount due under the decree.

6. While the position being so, incidentally it is worth considering another aspect with regard to the date of decree. Though S.31A incorporated by way of amendment made to the Act as per Act 1 of 2000, which came into force on 17.01.2000, deals with issuance of Recovery Certificate in respect of decrees for recovery of debt passed by any court prior to the commencement of Act 1 of 2000 and which remained unexecuted, I am of the view that S.31A r/w Ss.1(4), 17(1) and 18 of the Act bars jurisdiction of civil court to recover the amount of Rs.10 lakhs and above due to a bank or a financial institution or a consortium of banks or financial institutions under a decree passed by any court subsequent to the commencement of Act 1 of 2000, and this by necessary implication empowers the Tribunal to issue Recovery Certificate for recovery of amount due under such a decree also (i.e., the decree passed on or after 17.01.2000). Any other interpretation will make S.31A of the Act redundant and a decree holder bank, which obtained a decree subsequent to the commencement of Act 1 of 2000 for recovery of amount in excess of Rs.10 lakhs, would be unable to approach for recovery of such amount either before the Tribunal or the civil court in view of the bar under Ss.17(1) and 18 r/w S.1(4) of the Act.

7. Therefore, in the instant case though the decree had been passed after 17.01.2000 i.e., on 20.12.2003, in view of S.31A r/w Ss.1(4), 17(1) and 18 of the Act, the Tribunal is of the view that Recovery Certificate has to be issued to recover under the decree on hand the sum of Rs.13,38,326.93 with further interest on the sum of Rs.5,44,337/- @11.5% per annum from 10.11.2015 till realisation from the defendants personally and by sale of decree ‘A’ and ‘B’ schedule properties.

8. In view of the above discussion, the applicant bank is entitled to get a final order directing to issue Recovery Certificate on the following lines:- In the result, it is ordered to issue Recovery Certificate in terms of the decree dated 20.12.2003 in OS No.46/2002 of the Subordinate Judge Court, Cherthala for recovery of a sum of Rs.13,38,326.93 (Rupees thirteen lakhs thirty eight thousand three hundred twenty six and Paise ninety three only) with further interest on the sum of

Rs.5,44,337/- (Rupees five lakhs forty four thousand three hundred and thirty seven only) @11.50% per annum from 10.11.2015 till realization and also the costs of the applicant bank in this proceedings from the defendants personally and by sale of decree ‘A’ and ‘B’ schedule properties.

9. ‘A’ and ‘B’ schedules to the decree shall be appended to this order.

10. The applicant bank shall file memo of costs within ten days from the date of this final order.

11. The Registry is directed to communicate copy of the order to the parties concerned by speed post or registered post with AD. [Dictated to the PS, transcribed by her, corrected by me and then pronounced in the open court on this the 12th day of April, 2017]

(S.V.GOWRAMMA)

IN THE DEBTS RECOVERY TRIBUNAL- 2, KERALA AT ERNAKULAM

Dated this the 12th day of April, 2017

Present: S.V.Gowramma, B.A., LL.B Presiding Officer

T.A No.1378/2016 (O.A No.539/2015) Between

HDFC Bank Ltd.

…Applicant And Sadasiva Bhatt & another. …Defendants

FINAL ORDER