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/' HIGH COURT OF DELHI
W.P.(C) 7646/2011
LATA STEEL AGENCY (P) LTD AND ORS ..... Petitioner
Through: Mr.Ajay K.Shanna, Advocate.
.
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/' HIGH COURT OF DELHI
W.P.(C) 7646/2011
LATA STEEL AGENCY (P) LTD AND ORS ..... Petitioner
Through: Mr.Ajay K.Shanna, Advocate.
.
VERSUS
THE JAMMU AND KASHMIR BANK LTD ..... Respondent
Through: Mr.Sudhir Nandrajog, Sr.Adv. with Mr.Rohit Singh for the
Respondent/Bank. ·
Through: Mr.Sudhir Nandrajog, Sr.Adv. with Mr.Rohit Singh for the
Respondent/Bank. ·
W.P.(C) 7647/2011
SUNIL ENGINEERING CORPORQATION AND ORS ..... Petitioner
Through: Mr.Ajay K.Shanna, Advocate.
SUNIL ENGINEERING CORPORQATION AND ORS ..... Petitioner
Through: Mr.Ajay K.Shanna, Advocate.
VERSUS
THE JAMMU AND KASHMIR BANK LTD ..... Respondent
Through: Mr.Sudhir Nancb:ajog, Sr.Adv. wi~h Mr.Rohit Singh for the
Respondent/Bank.
Through: Mr.Sudhir Nancb:ajog, Sr.Adv. wi~h Mr.Rohit Singh for the
Respondent/Bank.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MS. JUSTICE INDERMEET KAUR
21~1200 ~- .
·• .
The present writ petition under Article 226 of the Constituti\)ll of
India seeks to impugn the order passed by the DRAT on 30.08.2011 on
WP(C) No.7646/2011 and 7647/2011 Page 1 of7 . .
·.
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Miscellaneous Application No.82/2011 in Appeal No.51 of2011 arising frmn OA No.44 of 2006. As per the itnpugned order, the appellant·has been called upon to deposit 40°/o of the amount as a pre-condition· for hearing ofthe appeal.
A perusal ofthe i1npugned order shows that there have been even earlier proceedings ai~sing on this issue. TI1e DRAT had earlier diredecJ. .
~ 50?/o of the arriount to be deposited which had given rise to .the proceedings before this Court and this court had granted leave t? .the petitioners to file a fresh application seeking waiver of costs along with copy ofincmne tax retmns and statement ofbanks etc.
The finding ofthe DRAT is that on the basis ofthe 1naterial placed before it, the petitioners did not have sufficient liquid money withthem · for payment as per directions passed earlier by the DRAT· on
09.02.2011. The question thus posed by the DRAT was as to what should the direction to be passed in such a situation. The DRAt opined that merely because the petitioners do not have funds to pay will not b_e a
-reason for waiver as per Section 21 of the Recovery of Debts Du:e· to
. ~ .
Banks and Financial Institutions Act, 1993 ('RDDBFI Act' for short)
.and ifthe petitioners have no funds and adn1ittedly the amount is·due to be reccvered, "then one of the 1nodes of recovery shall be civil irt;1prisonment". It thus observed that non-availability of funds or poverty by itself would not entitle the petitioners to claim complete
WP(C) No.7646/2011 and 7647/2011 Page 2_of7 _:~ ..
·~ :
2013:DHC:7682-DB.- ..
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\ ": ....· :" ...... ·. waiver and thus waiver cannot be granted especially as they are paying income tax. The amount required to be deposited was thus reduced to
40%).
. .
We had issued .notice vide our order dated 21:10.2011 notic~ng .
· . that the occasion for civil imprisomnent can only arise if a party havfng a) attachment and sale of the movable and inunovable property ofthe defendant; b) arrest ofthe defendant and his detention in prison; c) appointing a receiver for the manage_ment of the m.:ovable or immovable properties ofthe defendant."
.. .
On a reading ofthe aforesaid provision, there are different modes of recovery ofdebt prescribed for the Recovery Officer. Attachment
WP(C) No.7646/2011 and 7647/2011 Page 3"of7 2013:DHC:7682-DB. ~ . .;.
. . ·. . ~ .
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. ::". ·. and sale of the moveable and immovable property is one of them ·and appointn1ent ofreceiver for the managen1ent ofmovable and inui10va~Ie
. . property is the otherone. Thus, it is pre-supposed that there is movable ·
' and immovable property capable of satisfying the debt It is in ·that c<?ntext that clause (b) refers to the arrest of the defendant and his detention in prison. It cmmot imply that even where there are no assets whatsoever available with a person, who n1ay have genuinely suffered . business loss and gone into penury, he must be detained in a civil prison.
This would be depriving a person of his fundamental rights. In I:olly
George Varghese's case (supra) while dealing with the provisions ofth_e
Code of Civil Procedure, 1908, it was observed that the executing court
.can enquire into the financial status and .ability of the debtor to satisfy the debt. It was siJ.nultaneously observed that no one could :be ·· pen11itted to be in1prisoned merely on the ground of inability to fulfir_a .· contractual obligation. To cast a person in prison because of· his poverty and consequential inability to meet his contractual liability was held to be too flagrantly violative ofArticle 21 unless there is a proof of the minimwn fairness ofhis wilful failure to pay in spite ofhis sufficient
1neans and absence ofmore terribly pressing clain1s on his means su~h as n1edicd bills to treat cancer or other grave illness. In that context;
Article 11 of the Inten1ational Covenant on Civil and Political Rights was referred as also the law propounded in various cases by the Supreme ·
WP(C) No.7646/2011 and-7647/2011 P'!-ge 4 Cif7 · .
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/ I \ .
. Coiirt including Maneka Gandhi
HON'BLE MS. JUSTICE INDERMEET KAUR
21~1200 ~- .
·• .
The present writ petition under Article 226 of the Constituti\)ll of
India seeks to impugn the order passed by the DRAT on 30.08.2011 on
WP(C) No.7646/2011 and 7647/2011 Page 1 of7 . .
·.
..
2013:DHC:7682-DB :: ·. :.
·... ·.
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Miscellaneous Application No.82/2011 in Appeal No.51 of2011 arising frmn OA No.44 of 2006. As per the itnpugned order, the appellant·has been called upon to deposit 40°/o of the amount as a pre-condition· for hearing ofthe appeal.
A perusal ofthe i1npugned order shows that there have been even earlier proceedings ai~sing on this issue. TI1e DRAT had earlier diredecJ. .
~ 50?/o of the arriount to be deposited which had given rise to .the proceedings before this Court and this court had granted leave t? .the petitioners to file a fresh application seeking waiver of costs along with copy ofincmne tax retmns and statement ofbanks etc.
The finding ofthe DRAT is that on the basis ofthe 1naterial placed before it, the petitioners did not have sufficient liquid money withthem · for payment as per directions passed earlier by the DRAT· on
09.02.2011. The question thus posed by the DRAT was as to what should the direction to be passed in such a situation. The DRAt opined that merely because the petitioners do not have funds to pay will not b_e a
-reason for waiver as per Section 21 of the Recovery of Debts Du:e· to
. ~ .
Banks and Financial Institutions Act, 1993 ('RDDBFI Act' for short)
.and ifthe petitioners have no funds and adn1ittedly the amount is·due to be reccvered, "then one of the 1nodes of recovery shall be civil irt;1prisonment". It thus observed that non-availability of funds or poverty by itself would not entitle the petitioners to claim complete
WP(C) No.7646/2011 and 7647/2011 Page 2_of7 _:~ ..
·~ :
2013:DHC:7682-DB.- ..
. _; . ~ ·. _ .. ..... .
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. ·.
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\ ": ....· :" ...... ·. waiver and thus waiver cannot be granted especially as they are paying income tax. The amount required to be deposited was thus reduced to
40%).
. .
We had issued .notice vide our order dated 21:10.2011 notic~ng .
· . that the occasion for civil imprisomnent can only arise if a party havfng a) attachment and sale of the movable and inunovable property ofthe defendant; b) arrest ofthe defendant and his detention in prison; c) appointing a receiver for the manage_ment of the m.:ovable or immovable properties ofthe defendant."
.. .
On a reading ofthe aforesaid provision, there are different modes of recovery ofdebt prescribed for the Recovery Officer. Attachment
WP(C) No.7646/2011 and 7647/2011 Page 3"of7 2013:DHC:7682-DB. ~ . .;.
. . ·. . ~ .
_ ..._ ·....· " ·.· -....·. ...... .
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."'·..~ ....· ..
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. .
;-...·._ ··...
. ::". ·. and sale of the moveable and immovable property is one of them ·and appointn1ent ofreceiver for the managen1ent ofmovable and inui10va~Ie
. . property is the otherone. Thus, it is pre-supposed that there is movable ·
' and immovable property capable of satisfying the debt It is in ·that c<?ntext that clause (b) refers to the arrest of the defendant and his detention in prison. It cmmot imply that even where there are no assets whatsoever available with a person, who n1ay have genuinely suffered . business loss and gone into penury, he must be detained in a civil prison.
This would be depriving a person of his fundamental rights. In I:olly
George Varghese's case (supra) while dealing with the provisions ofth_e
Code of Civil Procedure, 1908, it was observed that the executing court
.can enquire into the financial status and .ability of the debtor to satisfy the debt. It was siJ.nultaneously observed that no one could :be ·· pen11itted to be in1prisoned merely on the ground of inability to fulfir_a .· contractual obligation. To cast a person in prison because of· his poverty and consequential inability to meet his contractual liability was held to be too flagrantly violative ofArticle 21 unless there is a proof of the minimwn fairness ofhis wilful failure to pay in spite ofhis sufficient
1neans and absence ofmore terribly pressing clain1s on his means su~h as n1edicd bills to treat cancer or other grave illness. In that context;
Article 11 of the Inten1ational Covenant on Civil and Political Rights was referred as also the law propounded in various cases by the Supreme ·
WP(C) No.7646/2011 and-7647/2011 P'!-ge 4 Cif7 · .
•. _.~ ·. :.
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/ I \ .
. Coiirt including Maneka Gandhi
VERSUS
Union of India; (1978) 1- SCC. . .
248.
We thus have no hesitation in cmning to the conclusion that the provisions of Section 25(b) of the RDDBFI Act have to be understood and appreciated in that context and thus the threat held ·out in the impugned order to put the petitioners in civil i1nprismm1ent despite their having no sufficient means cannot be sustained and is uncalled for ·A· waiver ofpre-deposit would arise ifthe petitioners were not possessed of the means to make the pay1nent to Ineet the requirements of the · pre-dep0sit. The impugned order, in fact, has no discussion qua the
. . . docrunents submitted-by the petitioners on the basis ofwhich it could:be·_
· concluded that they were possessed of sufficient means. In fact; the conclusion is to the contrary.
We may notice that learned counsel for the petitioners at the stage of seeking entertainment of the writ petition had pleaded that his real grievance against the order of the DRT dated 11.11.2010 was that the application for recovery was filed in the year 2006 in respect of loan documents executed in the· year 1996 and declared as NPA on
01.10.1997 on the basis of a mortgage suit for which the prescribed perioct-oflimitation was 12 years, yet the suit, on the one hand, has bee.n treated (;lS being within time while on the other hand passing directions in
·the operative portion .ofthe order for recove1y of amo.unt from ~1e
'WP(C) No.7646/2011 and'7647/2011 ·.
:
:
2013:DHC:7682-DB. ~: - . . :' ; -,_ -:'\.. .- ..
·• - . - .
. . . .
• • - • • • • 0
.
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. ·.
:-..·. ··....
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\ ·... -· secured assets followed by a further direction that in the event of non-payment of full amount "balance, if any, shall be recovered from their personal assets". We could have limited the matter to this issue before the DRAT ifthere was consent on the part ofthe respondent/B~nk
. to a complete waiver with only this aspect to be examined. However,· tJ:!e respondenVBank has chosen to oppose the complete waiver with the result that the issue ofwaiver would have to be determined by the DRAT in the ·conspectus of our discussion~ aforesaid and in case. _of waiver/cmnpliance of the directions as condition of entertaim:nent: of· .
· appeal, the entire appeal on the various grounds raised therein, 'Nould ·~ have to be exatnined.
The writ petition is allowed setting aside the impugned order and remanding the matter back for fresh consideration by the DRAT.
As a sequitur to the impugned order being set aside, the appeal which has been dismissed for non-deposit of the amount despite the pendency ofthe matter before this court, would stand restored.
Parties are left to bear their own costs.
Let the parties to appear before the DRAT on 11.02.2013 and we would expect an earlier ·.consideration of the matter in view of the previoas history, preferably within six months.
WP(C) No.7646/2011 and 7647/2011 Page 6·of7 ·~
:
2013:DHC:7682-DB..
. -~. . . .
. : . . .
. ·.. · . ....:.·:._' ..· :·- ·..· .
. ~: .. ·.. . : -~ ..
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. ·.__ ..
-I • • • •
. ~ . . ...
. . :.
-~ . . . . . .";
. . . . . l . ~' ,, / A copy ofthe order be sent expeditiously to the DRAT.
SANJAY KISHAN" KAUL, J ~ .
INDERMEET KAUR, J JANUARY 21, 2013 .:
WP(C) No.7646/2011 and 7647/2011 Page 7of7
248.
We thus have no hesitation in cmning to the conclusion that the provisions of Section 25(b) of the RDDBFI Act have to be understood and appreciated in that context and thus the threat held ·out in the impugned order to put the petitioners in civil i1nprismm1ent despite their having no sufficient means cannot be sustained and is uncalled for ·A· waiver ofpre-deposit would arise ifthe petitioners were not possessed of the means to make the pay1nent to Ineet the requirements of the · pre-dep0sit. The impugned order, in fact, has no discussion qua the
. . . docrunents submitted-by the petitioners on the basis ofwhich it could:be·_
· concluded that they were possessed of sufficient means. In fact; the conclusion is to the contrary.
We may notice that learned counsel for the petitioners at the stage of seeking entertainment of the writ petition had pleaded that his real grievance against the order of the DRT dated 11.11.2010 was that the application for recovery was filed in the year 2006 in respect of loan documents executed in the· year 1996 and declared as NPA on
01.10.1997 on the basis of a mortgage suit for which the prescribed perioct-oflimitation was 12 years, yet the suit, on the one hand, has bee.n treated (;lS being within time while on the other hand passing directions in
·the operative portion .ofthe order for recove1y of amo.unt from ~1e
'WP(C) No.7646/2011 and'7647/2011 ·.
:
:
2013:DHC:7682-DB. ~: - . . :' ; -,_ -:'\.. .- ..
·• - . - .
. . . .
• • - • • • • 0
.
·.....
'_: _-._·: ; "'- . .
:-...·.. ··..
. . .
. .
. ·.
:-..·. ··....
.. •.. ·.
. 'I •
\ ·... -· secured assets followed by a further direction that in the event of non-payment of full amount "balance, if any, shall be recovered from their personal assets". We could have limited the matter to this issue before the DRAT ifthere was consent on the part ofthe respondent/B~nk
. to a complete waiver with only this aspect to be examined. However,· tJ:!e respondenVBank has chosen to oppose the complete waiver with the result that the issue ofwaiver would have to be determined by the DRAT in the ·conspectus of our discussion~ aforesaid and in case. _of waiver/cmnpliance of the directions as condition of entertaim:nent: of· .
· appeal, the entire appeal on the various grounds raised therein, 'Nould ·~ have to be exatnined.
The writ petition is allowed setting aside the impugned order and remanding the matter back for fresh consideration by the DRAT.
As a sequitur to the impugned order being set aside, the appeal which has been dismissed for non-deposit of the amount despite the pendency ofthe matter before this court, would stand restored.
Parties are left to bear their own costs.
Let the parties to appear before the DRAT on 11.02.2013 and we would expect an earlier ·.consideration of the matter in view of the previoas history, preferably within six months.
WP(C) No.7646/2011 and 7647/2011 Page 6·of7 ·~
:
2013:DHC:7682-DB..
. -~. . . .
. : . . .
. ·.. · . ....:.·:._' ..· :·- ·..· .
. ~: .. ·.. . : -~ ..
·'.
• • • • ~ • !"
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·.· ......
- ..- .... •.
- ...
. .
.· ·,. .·.
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. ::'. ·.
: . ...
. ·.__ ..
-I • • • •
. ~ . . ...
. . :.
-~ . . . . . .";
. . . . . l . ~' ,, / A copy ofthe order be sent expeditiously to the DRAT.
SANJAY KISHAN" KAUL, J ~ .
INDERMEET KAUR, J JANUARY 21, 2013 .:
WP(C) No.7646/2011 and 7647/2011 Page 7of7
JUDGMENT