O.P. Garg, J. - (1.) The woodcut profile of the case of the petitioner No. 1, a company duly registered under the Companies Act, carrying on the business of manufacturing Ferro Silicon and of which the petitioner No. 2 is the director is that an agreement was executed in 1990 between petitioner company and respondent No. 2 State Bank of India, Industrial Finance Branch, Sarvodaya Nagar, Kanpur for grant of credit facility. It was renewed on 3-11-1997. The credit facility was granted to petitioners on hypothecation of stock, stores, spares and finished goods etc. That apart, U.P. Financial Corporation Limited and Pradeshiya Industrial and Investment Corporation of U.P. have also granted term loans to the petitioner and they have the first priority/charge to claim fixed assets of the company, such as, land, building, plant, machineries etc. On the amount of loan, the respondent No. 2 Bank had charged interest of about Rs. 20 Lacs, with the result that the petitioners company could not pay off the loan amount, and it became sick unit in 1998. Thereafter, the promoters had taken over the company and the respondent no. 2-Bank had issued clean credit to the tune of Rs. 70 lacs to the promoters. The petitioners claim that they have repaid a sum of Rs. 46,56,565 to the Bank however, despite this, the Bank continued to charge excess interest from the petitioners. The amount of interest sought to be charged by the Bank swelled to Rs. 13,25,000. The petitioners filed a complaint and referred the matter to the Banking Ombudsman, Kanpur, an authority constituted under a scheme (Annexure 1) formulated by the Reserve Bank of India under the Banking Regulation Act, 1949. A notice was issued to the Bank which submitted its reply on 15-7-2000, a copy of which is Annexure 3 to the petition. The Banking Ombudsman, thereafter called upon the petitioners to furnish details, as required by the Bank. The petitioners submitted their reply and thereafter the matter remained pending before the Banking Ombudsman, During the pendency of the aforesaid matter before the Banking Ombudsman, the respondent No. 2-Bank called upon the petitioner through a notice dated 12-6-2000 (Annexure 5) to make payment of cash credit to the Bank within 10 days from the date of receipt of the notice. The petitioners were warned that in case they fail to make afgoresaid payment, proceedings under Section 19 of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 'the act') shall be initiated. The petitioners failed to make payment and instead they submitted a reply to the Bank on 23-6-2000. The respondent No. 2-Bank, therefore, moved an application before Debt Recovery Tribunal (for short called 'the D.R.T.') registered as O.A. No. 90 of 2000, under Section 19 of the Act for recovery of Rs. 39,24,379.52 from the petitioners. The petitioners moved an application duly supported by an affidavit praying for stay of the proceedings under Section 19 of the Act on the ground that the matter is sub judice before Banking Ombudsman. The application of the petitioners has been rejected by the D.R.T., Allahabad respondent No. 1 by the impugned order dated 1-12-2000, Annexure 8 to the petition. It is this order which has given rise to the present writ petition under Article 226 and 227 of the Constitution of India. The petitioners have prayed for quashing of the order dated 1-12-2000 passed by respondent No. 1 Tribunal and for a direction in the nature of mandamus commanding the respondent No. 2 to stay the proceedings till the complaint No. 75 of 2000 is finally decided by the Banking Ombudsman, Kanpur.
(2.) Heard Sri R.N. Singh, learned Senior Advocate, assisted by Sri Rakesh Kumar and Sri Satish Chaturvedi for the State Bank of India as well as learned Standing counsel.
(3.) The learned Standing counsel raised a preliminary objection that the present petition is not maintainable in view of the fact that the D.R.T. has been constituted under Section 3 of the Act and an appeal against an order passed by the Tribunal lies under Section 20 of the Act before the Debts Recovery Appellate Tribunal, (for short called the D.R.A.T.) constituted under Section 8 of the Act. Section 17 (2) of the Act, provides that an Appellate Tribunal (D.R.A.T.) shall exercise, on and from the appointed day, the jurisdiction, powers and authority to entertain appeals against any order made, or deemed to have been made by a tribunal under the Act. Sri R.N. Singh, learned Senior counsel repelled the aforesaid submission and urged that this Court has the jurisdiction, under Articles 226 and 227 of the Constitution, to analyse and Scrutinize the correctness, properiety or otherwise of the interim order passed by a tribunal or subordinate court. To fortify his submission, he placed reliance on a decision of the apex court in Industrial Credit and Investment Corporation of India Ltd v. Grapco Industries Ltd. AIR 1999 SC 1975. The provisions of Section 3 (1) and 19(6) of the Act came to be interpreted in the said case. In paragraph 14 of the report, it was held :-" 14..... There was no bar on the High Court to itself examine the merits of the case in the exercise of its Jurisdiction under Article 227 of the Constitution if the circumstances so require. There is no doubt that High Court can even interfere with interim orders of the Courts and tribunals under Article 227 of the Constitution if the order is made without jurisdiction. But then a too technical approach is to be avoided. When facts of the case brought before the High Court are such that High Court can itself correct the error, then it should pass appropriate orders instead of merely setting aside the impugned order of the Tribunal and leaving everything in vacuum." The provisions of Section 18 of the Act bars the jurisdiction of other Court or authority, in relation to the matters specified in Section 17, (sic) Hon'ble Supreme Court and a High Court exercising jurisdiction under Articles 226 and 227 of the Constitution. Therefore, this legal position that this Court has the power to interfere, if the circumstances so require, is beyond the pale of challege. In appropriate matters, this Court will not hesitate to intervene if the justice demands, even though there is an alternative statutory remedy of appeal under Section 20 of the Act.;