CORPORATION BANK Vs. RUIA COTEX LTD
LAWS(DR)-2004-7-14
DEBTS RECOVERY APPELLATE TRIBUNAL
Decided on July 09,2004

CORPORATION BANK Appellant
VERSUS
Ruia Cotex Ltd. and Ors. Respondents

JUDGEMENT

Ronojit Kumar Mitra, J. - (1.) THIS appeal was preferred against an order dated 14th August, 2003, made by the learned Presiding Officer, Debts Recovery Tribunal (1), Kolkata, hereinafter referred to as "the DRT". The respondent No. 6, which has been impleaded in the Memorandum of Appeal, was the proforma defendant in the claim petition. According to the Bank the respondent No. 6 was the holder of the first charge over the immovable properties, which had been mortgaged by the respondents in favour of the Bank by way of securing the financial assistance, extended by the Bank and enjoyed by them. The subject matter of dispute before the DRT was, whether after having initiated proceedings for the recovery of its debts under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, hereinafter referred to as "the Act", the Bank was entitled to issue simultaneously notice, for the recovery of the same debts, by invoking the provisions of Section 13(2) of the Securitisation and Reconstructions of Financial Assets and Enforcement of Security Interest Act, 2002, hereinafter referred to as "the Securitisation Act". Admittedly the Bank had issued the notice dated 31st January, 2003 under the Securitisation Act during the pendency of the recovery proceedings before the DRT. The learned Presiding Officer upon hearing the parties, disposed of the respondents' application by the impugned order, and held that the notice issued under the Securitisation Act was not maintainable in law.
(2.) THE Bank's case in a nut -shell was, that the Securitisation Act had come into effect after the filing of the claim petition before the DRT, and that the Bank did not have the opportunity, to which it was entitled in law, to exercise its option as to whether it should proceed under the Act or the Securitisation Act. It was urged by Advocate on behalf of the Bank, that upon payment of ad valorem fees the Bank had filed the claim petition, and if the claim petition was to be abandoned, it would be required to pay the fees again in the event the full amount of the debt was not recovered by adopting the process under the Securitisation Act, which would amount to waste of public money. He argued, that it was not a case of the Bank carrying on parallel proceedings, because the claim petition was for a money award, whereas by adopting the procedure under the Securitisation Act the Bank would only be entitled to the possession of the securities charged in its favour. According to him the Bank did not take any step in the recovery proceedings under Section 19 of the Act, and that in law it was entitled to proceed under the Securitisation Act for obtaining possession of the securities. In support of his submissions he cited and relied on the decisions reported in and AIR 2000 SC 1535. The fact that the Bank had filed the claim petition, it was contended by , Advocate for the respondents, indicated without any doubt that the Bank had opted to recover its alleged debts through the procedure laid down by the Act. The law, he argued, does not permit the Bank thereafter to seek to recover the same debts by proceeding under the Securitisation Act, without withdrawing the earlier proceedings. According to him the Bank had purported to continue parallel proceedings to obtain the same reliefs, and the DRT in accordance with law had put a stop to it. In support of his submissions he cited and relied on the decision reported in .
(3.) IN those circumstances, it would appear to me that the Bank was not denying that in the event its prayer was allowed, it would not amount to carry on simultaneous proceedings, but that the law laid down in the two legislations in fact envisaged simultaneous proceedings, and therefore as the Securitisation Act was a subsequent enactment the Bank could not be denied its rightful opportunity to exercise its option without having to withdraw the pending recovery proceedings. If such contention by the Bank was allowed then, I am afraid, there would be a clear denial of the very basics of the law of the land and the principles of natural justice. Indeed there were two sets of procedures provided in the two enactments, which the Bank was at liberty to avail in order to recover its debts. There was, however, no provision in either of the two legislations, as there could reasonably be none, which entitled the Bank to carry on simultaneous proceedings, not even in the present circumstances where the Securitisation Act had been subsequently enacted. It is a settled principle of law that it shall not be permissible for any litigant to carry on simultaneous proceedings, to obtain similar relief on the basis of the same cause of action. It could not be assumed, even for the sake of argument, that the reliefs available under the two procedures available to the Bank were different in nature, for the simple reason that the underlying principles of the two procedures were for the sole purpose of recovery of debts. Payment of ad valorem duties was a statutory requirement, and the Bank would be required to comply with the law as any other litigant before the law Courts in this country. There was in my view no scope for the adjudicating authority to decide the matter in any way other than as was done in the impugned order.;


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