DRT Does Not Have Any Inherent Powers And It Is Clear That Section 19(25) Confers Limited Powers

Hon’ble Supreme Court in Standard Chartered Bank V. Dharminder Bhohi and others {(2013) 15 SCC 341; Decided on 13.09.2013} has, inter alia, observed as follows.

 

             27. The tribunal does not have  any  inherent  powers  and  it  is limpid that Section 19(25)  confers  limited  powers.   In this context, we may refer to a three-Judge Bench decision in  Upper  Doab  Sugar  Mills  Ltd.  v.  Shahdara  (Delhi) Saharanpur Light Rly. Co. Ltd.[ (AIR 1963 SC 217] wherein it has been held that when the tribunal has not  been  conferred  with  the jurisdiction to direct for refund, it cannot do  so. The  said principle has been followed  in  Union  of  India  v. Orient Paper and Industries Limited[(2009) 16 SCC 286]. (emphasis supplied)

 

             28. In Union of India v.  R.  Gandhi,  President,  Madras  Bar Association [(2010) 11 SCC 1], the Constitution Bench, after referring to the opinion of Hidayatullah, J. in Harinagar Sugar  Mills Ltd. v. Shyam Sunder Jhunjhunwala [AIR 1961 SC 1669],  the  pronouncements in   Jaswant  Sugar  Mills  Ltd.  v.  Lakshmi Chand [AIR 1963 SC 677], Associated Cement Companies Ltd. v.  P.N.  Sharma [AIR 1965 SC 1595]  and Kihoto Hollohan v. Zachillhu [1992 Supp (2) SCC 651], ruled thus: -

 

           “45. Though both courts and tribunals  exercise  judicial  power and  discharge  similar  functions,  there  are  certain   well-

           recognised differences between courts and tribunals. They are:

 

(i) Courts are established by the State and  are  entrusted with the State’s inherent judicial power for administration of justice in general. Tribunals are  established  under  a statute to adjudicate upon disputes arising under the  said statute, or disputes of a specified nature. Therefore,  all courts are tribunals. But all tribunals are not courts.

 

                (ii)…………..x………..x…………….x…………..x

                                                                                                                                                                                                                                                                                                                                                                                                                                                            

(iii) While  courts  are  governed  by  detailed  statutory                  procedural rules, in particular the Code of Civil Procedure  and the Evidence Act, requiring an elaborate  procedure  in                 decision making, tribunals  generally  regulate  their  own procedure applying the provisions  of  the  Code  of  Civil Procedure only where it  is  required,  and  without  being restricted by the strict rules of the Evidence Act.”

(emphasis supplied)

                         

    30.  Section 34 of the RDB Act  provides  that  the  said  Act  would  have overriding effect.  We have referred to the  aforesaid  provisions  to singularly highlight  that  the  sacrosanct  purpose  with  which  the tribunals have been established is to  put  the  controversy  to  rest between the banks and the  borrowers  and  any  third  party  who  has acquired any interest.   They  have  been  conferred  jurisdiction  by special legislations to exercise a particular power  in  a  particular manner as provided under the Act.  It cannot  assume  the  role  of  a  court of different nature which really can grant “liberty to  initiate  any action against the bank”.  It is only required to decide  the  lis that comes within its own domain.  If it  does  not  fall  within  its sphere of jurisdiction it is required to say so.   Taking  note  of  a submission made at the  behest  of  the  auction  purchaser  and  then proceed to say that he is at liberty to file any  action  against  the bank for any omission committed by it has no  sanction  of  law. The said observation is wholly bereft of jurisdiction, and indubitably  is totally unwarranted in the obtaining factual  matrix.” (emphasis supplied)

 

Thus, in September, 2013, hon’ble Supreme Court held that DRT and DRAT do not have  any  inherent  powers  and  it  is clear that Section 19(25) of DRT Act confers  limited  powers on the Tribunals and Appellate Tribunals.   A three-Judge Bench of hon’ble Supreme Court in Upper  Doab  Sugar  Mills  Ltd.  v. Shahdara (Delhi) Saharanpur Light Rly. Co. Ltd.[ (AIR 1963 SC 217] held that when the tribunal has not  been  conferred  with  the jurisdiction to direct for refund, it cannot do  so. The said principle has been followed  in  Union  of  India  v. Orient Paper and Industries Limited [(2009) 16 SCC 286].

 

      Further, a Constitution Bench of Supreme Court in Union of India v.  R.  Gandhi,  President,  Madras  Bar Association [(2010) 11 SCC 1], ruled that Courts are established by the State and  are  entrusted with the State’s inherent judicial power for administration of justice in general. Tribunals are  established  under  a statute to adjudicate upon disputes arising under the  said statute, or disputes of a specified nature. While  courts  are  governed  by  detailed  statutory procedural rules, tribunals  generally  regulate  their  own procedure.

                         

Hence, hon’ble Supreme Court in Standard Chartered Bank (supra) concluded that Section 34 of the DRT Act  provides  that  the  said  Act  would  have overriding effect.  Thus, the  sacrosanct  purpose  with  which  the tribunals have been established is to  put  the  controversy  to  rest between the banks and the  borrowers  and  any  third  party  who  has acquired any interest. They have  been  conferred  jurisdiction  by special legislations to exercise a particular power  in  a  particular manner as provided under the Act.  It cannot  assume  the  role  of  a  court of different nature.  It is only required to decide  the  lis that comes within its own domain. If it does  not  fall  within  its sphere of jurisdiction it is required to say so. It is pertinent to note here that hon’ble Supreme Court observed that the Tribunals and Appellate Tribunals have been established to put the controversy  to  rest between the banks and the  borrowers, however, there is no reference to guarantors. It is settled law that the terms ‘borrowers’ and ‘guarantors’ convey altogether different legal persons.

DRT Has No Jurisdiction

























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