Motilal B. Naik J. (Chairman) -
(1.) THE appellants are defendants in O. A. No. 655 of 2002 filed by the respondent-financial institution seeking to recover more than Rs. 70 crores. THE O. A. proceedings are in progress. However, this respondent-financial institution filed Miscellaneous Application No. 3275 of 2003 seeking certain directions from the Tribunal. THE said application came to be considered by the Tribunal, and the Tribunal, on the basis of submissions made by both the parties and in the facts and circumstances of the case, by order dated December 12, 2003, directed the appellants herein to hand over within 15 days the leased assets as detailed in the lease agreement to the respondent-financial institution herein. Against this order the present appeal is filed.
(2.) Mr. B. S. Nagar, learned counsel for the appellants-defendants mainly contended that the provisions appearing under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (for short "the Act"), do not empower the Tribunal to direct the defendants to hand over a property which is though owned by the plaintiff-financial institution. Counsel specifically drew my attention to the provisions of Sub-sections (12) and (18) of Section 19 of the Act, and stated that these provisions do not visualise a situation as ordered by the Tribunal. He contended that on this ground the order impugned be set aside.
Learned counsel for the respondent-financial institution, on the contrary, stated that in order to meet the ends of justice in a given case the Tribunal is competent to make such arrangement to prevent abuse of judicial process. Counsel stated that the leased assets are owned by the financial institution, which were leased out to the appellants-defendants on certain terms and conditions. The lease agreement was terminated thereafter. Though notices were issued to the lessee to hand over the leased assets, the lessee failed to act upon, and thus the financial institution was forced to move the Tribunal in the pending proceedings for a direction to the appellants herein to hand over the leased assets of the applicant, i.e., the financial institution. Counsel stated that this direction issued by the Tribunal has to be looked at from various angles in order to protect the interests of the parties, and pleaded that the impugned order passed is in accordance with the scheme of the Act, and that no interference is required from this court.
(3.) IN order to appreciate whether the order of the Tribunal, which is impugned in this appeal, falls within the ambit of Sub-sections (12), (13) and (18) of Section 19 of the Act, these provisions are extracted hereunder :
"(12) The Tribunal may make an interim order (whether by way of injunction or stay or attachment) against the defendant to debar him from transferring, alienating or otherwise dealing with, or disposing of, any property and assets belonging to him without the prior permission of the Tribunal.
(13)(A) Where, at any stage of the proceedings, the Tribunal is satisfied, by affidavit or otherwise, that the defendant, with intent to obstruct or delay or frustrate the execution of any order for the recovery of debt that may be passed against him,--
(i) is about to dispose of the whole or any party of his property ; or
(ii) is about to remove the whole or any part of his property from the local limits of the jurisdiction of the Tribunal; or
(iii) is likely to cause any damage or mischief to the property or affect its value by misuse or creating third party interest, the Tribunal may direct the defendant, within a time to be fixed by it, either to furnish security, in such sum as may be specified in the order, to produce and place at the disposal of the Tribunal, when required, the said property or the value of the same, or such portion thereof as may be sufficient to satisfy the certificate for the recovery of debt, or to appear and show cause why he should not furnish security.
(B) Where the defendant fails to show cause why he should not furnish security, or fails to furnish the security required, within the time fixed by the Tribunal, the Tribunal may order the attachment of the whole or such portion of the properties claimed by the applicant as the properties secured in his favour or otherwise owned by the defendant as appears sufficient to satisfy any certificate for the recovery of debt.
(18) Where it appears to the Tribunal to be just and convenient, the Tribunal may, by order,--
(a) appoint a receiver of any property, whether before or after grant of certificate for recovery of debt;
(b) remove any person from the possession or custody of the property ;
(c) commit the same to the possession, custody or management of the receiver ;
(d) confer upon the receiver all such powers, as to bringing and defending suits in the courts or filing and defending applications before the Tribunal and for the realisation, management, protection, preservation and improvement of the property, the collection of the rents and profits thereof, the application and disposal of such rents and profits, and the execution of documents as the owner himself has, or such of those powers as the Tribunal thinks fit ; and
(e) appoint a Commissioner for preparation of an inventory of the properties of the defendant or for the sale thereof.";